French Suppliers Eye U.S. Market

Article from July 21, 1999 issue of Radio World

"French Suppliers Eye U.S. Market" by Randy J. Stine

Equipment shoppers can be forgiven for wondering if there isn’t a French invasion happening in the U.S. radio industry.

A healthy economy here has helped foreign equipment manufacturers in general compete in the U.S. marketplace. This, despite the fact broadcasters here historically have preferred to buy critical gear – consoles, computer systems and transmitters – from American manufacturers.

For some reason, many of the recent entrants arrive with a French accent.

French companies that in recent years have either entered the U.S. market or substantially increased their visibility include Dalet Digital Media Systems USA, Netia Americas Ltd., Digigram Inc. and ATA Audio. French on-air processor maker IDT plans to release a new FM processor in the United States this fall, and is seeking U.S. distribution for it. All five have developed solid reputations in their home country for delivering a variety of pro audio gear.

Why are these companies succeeding where many other foreign manufacturers have failed? Timing appears to be a key element. As a result of the strong U.S. economy, foreign-made products have been competitively priced, while U.S.-made products have seen price increases both here and overseas.

Representatives of the companies said the private commercial radio market in France closely resembles that of the United States, so they are better suited to compete here.

The French companies also have been aggressive in their pursuit of major radio groups planning new facility and studio projects as the industry in this country continues to consolidate.

Welcome to America

"I don’t believe the stigma of buying from foreign firms is there anymore. It has truly become a global market," said Jim Woods, vice president of radio broadcasting for Harris Corp. Harris introduced ATA POTS codecs to the United States in 1995.

"I think the French companies have adopted a classic ‘enter the market’ strategy. Their products are competitive from a feature standpoint and are priced very aggressively," Woods said.

Audio Broadcast Group handles U.S. distribution of Dalet digital audio software.

"I’ve been very impressed with the work ethic of the French companies," said Dave Howland, vice president of sales and marketing for ABG. "Dalet has come here with the attitude that they’ll bend over backwards to make it work for their customers."

For their part, the French companies said their U.S. operations are sufficiently established that they consider them separate from operations in their homeland.

"We view ourselves as an American company," said Mark Kaltman, president of ATA Audio. "One of the goals when we opened the U.S. office was to make sure sales, service and everything else was U.S.-based."

U.S. office

The codecs maker opened its U.S. office in New Jersey early this year. ATA’s dealer network includes such companies as Broadcast Supply Worldwide, Crouse-Kimzey and RF Specialties.

Kaltman said he spent many months re-writing ATA manuals while engineers redesigned the functions and the look of the product line to "Americanize" the look and function of its codecs.

"Nothing can kill a company quicker than to have manuals with a foreign feel to it. It’s very important to make sure everything has an American feel to it," Kaltman said.

Kaltman said as ATA competes in an environment with major players such as Telos, Comex and Musicam USA, it will certainly draw on the expertise of its French roots.

"With ATA in France and the history of French Telecom in ISDN development and France leading the way in standardization, we were a natural fit in the U.S.," he said.

Kaltman said ATA plans to introduce more broadcast products in the United States later this year, including a small portable field mixer and a mic pre-amp.

Other companies have experienced strong growth in U.S. sales.

"Our sales have doubled every year since 1995," said Anna Mae Sokusky, president of Dalet’s UniteStates operations. Dalet opened its New York office in 1994. It has more than 110 U.S. customers, many with multiple installations.

"With consolidation here in the United States, people are wanting to connect locations and stations, either via WAN or some other customized method," Sokusky said. "We take our worldwide experience and apply it to U.S. customers. Somewhere around the world, we have come across just about every imaginable circumstance and application."

Local hires

Sokusky typifies the strategy of "hiring local," which foreign manufacturers can pursue to woo domestic clients. She is well-known to U.S. radio managers; she served as head of CBS Radio’s AM station group for eight years.

French suppliers have succeeded in winning major clients here. In one notable deal, Dalet announced a contract with National Public Radio in December 1998. The Dalet5 will provide NPR with a digital system of more than 70 workstations linked by a 100 megabits-per-second network.

Mike Starling, vice president of engineering for NPR, said if all things had been equal, NPR would have liked to have bought American.

"We like to buy local just for parts availability and presumably a wider presence in the market. But it was Dalet that came the closest to our very specific needs," Starling said. "They had the most flexible and reliable architecture we could find."

NPR had used a smaller Dalet network prior to purchasing the Dalet5 system.

Digigram

Since opening its U.S. operations in 1997, Digigram has established itself in the sound card and audio technology field. The company’s sound cards are incorporated into audio management systems such as those made by RCS, Arrakis, Enco, Computer Concepts and Scott Studios.

"Our situation is a little different in that these companies use our sound card in their live-assist and editing systems," said Neil Glassman, president of Digigram. "People know our name, certainly, but we work very closely with our development partners to make sure everything works together."

While Glassman acknowledges that the United States is the largest and possibly the most important market in the world, he said the country has lagged behind Europe in terms of computer-based audio.

Step by step

"That really happened in European countries quite a bit earlier. Therefore, with the dawning of independent commercial radio in Europe in the late 1980s, Digigram and other French companies were in position when many stations went from nothing to digital. There was no intermediary step like you had in the U.S. market," Glassman said.

Glassman said another key to his company’s success has been hiring people who know radio in America.

"To be considered local, you have to sound local. Nothing will scare off a customer faster and intimidate them more than hearing a guy with a French accent giving them tech support," Glassman said.

Most of Digigram’s sales go directly to its business partners, but it still gives technical support to any customer, regardless of what system the customer owns.

"One of the things we found out when we got to the U.S. was that people really didn’t know there was a difference between sound cards. So it’s been an educational process along the way," Glassman said.

The company has more than 20,000 sound cards being used by radio stations and recording studios worldwide, Glassman said.

Digigram also makes digital audio boards and multitrack editing software.

A recent entry in the U.S. market has been Netia. The audio management systems company opened an office in Columbia, Md., after displaying its products at NAB99 in April.

No obstacle

Larry Gross, president of Netia’s U.S. operations, said he doesn’t see being based in a foreign country as a large obstacle to selling products in the United States.

"We have found that American broadcasters are extremely receptive to new technology. While they may hesitate to go out on a limb with somebody new, if you have well-grounded technology, they’ll go with you," Gross said.

While Netia has not formalized sales agreements with U.S. distributors, it plans to make a major announcement regarding its U.S. sales network by late summer.

Gross said Netia took the best components of its products and packaged them to appeal to American broadcasters.

"The functionality of your software must be what U.S. broadcasters are used to seeing and working with. Certainly there is some customizing that goes into competing in the States," he said.

Time will tell

Howland of ABG said the viability of the French companies is still questioned by U.S. audio equipment makers. But he sees broadcasters accepting the French companies.

"When you think globally, which more and more audio equipment manufacturers are doing, you must succeed in America. I think most will gain enough market share to survive."

Woods of Harris is not totally convinced.

"It’s still too soon to tell whether they are all long-term players or not," he said. "Dalet and Digigram have certainly had success, but can they stand the test of time? I think U.S. customers may put up with off-shore service initially, but fairly quickly you must deliver it from a local standpoint."