That Audio Guy recently had the opportunity to field some reader questions and a couple of our own to Uli Behringer regarding one of the most hotly debated topics within our industry. Uli has been very busy travelling thoughout China, however we were able to contact him via e-mail and he was more than willing to assist us! Firstly, thanks to Uli for taking some time out of his busy schedule to answer the questions, secondly thanks to the readers of our page who sent through questions, unfortunately due to Uli's busy schedule we had to cull the list down considerably, however these answers should settle your collective minds somethat! 

That Audio Guy: You have acquired Klark Teknik and Midas as part of your group which are two of the most respected brands in the industry, how are these companies going to change if at all?

Uli Behringer: All the brands will keep their current brand values and positioning. There will be absolutely no change in this. What would be the point of changing? Midas, Klark Teknik and Behringer are all brand leaders in their respective markets. We would be crazy to change a winning formula.

I always had ultimate respect for the legendary Midas/Klark Teknik brands and for the people who built this incredible Company. There is no doubt that Midas/Klark Teknik is the undisputed leader in terms of sound quality, reliability, innovation and cutting-edge technology and we will make sure this will remain.

Personally, I always had a strong desire to move into the concert sound arena and I have been waiting to join forces with a market leader. This dream has come true but to believe acquiring a brand is the end goal is a huge mistake. 

We see this acquisition as a marriage which is all about give and take. Once the honey-moon is over, the real work starts and we will help to provide all needed resources and infrastructure to Midas/Klark Teknik to allow them to pursue the execution of their technology and products in the shortest possible time. All I can tell you is that their roadmap is mind-blowing and we can all look forward to the products that will be brought to market.

That Audio Guy: Klark Teknik and Midas have been some would consider a mainstay of the audio industry for a number of years now, they also have a price point to match, will they begin to prescribe to Behringer's pricing model or will they remain premium brands and Behringer stay at its price point i.e: Gibson/Epiphone relationship?
 
Uli Behringer: The really important thing is that Midas/Klark Teknik are now part of the Music Group which is an organization that holds various brands such as Behringer and Bugera etc. Midas/Klark Teknik have not been “bought by Behringer” as some of the more colourful postings to web forums would have you believe.

The Music Group is a corporation with two very separate operational structures. 

On one side we have what you can call “common operational assets” such as sourcing, high volume manufacturing, engineering services, logistics and warehousing, information technology and infrastructure services, system development, finance, back office operations such as graphic, technical authoring, internet and legal services etc. Those are functions which benefit from “scale and critical mass” and by design are provided through separate companies employing best industry practice and technology. They are wholly owned by the group and are there to provide strictly where applicable a shared services resource.

On the other side we have the brands such as Midas, Klark Teknik, Behringer and Bugera. Those are distinct and separate companies with their own identities and intrinsic critical infrastructure such as management, R&D, sales, marketing, channel distribution and even medium scale manufacturing which all goes towards making them who they are. This separation is essential as the brand values are different and the intended use of the products is in very different market segments. We believe that this kind of operational frame work provides all our brands with a competitive advantage and tremendous operational efficiencies which would be otherwise unattainable economically within each entity.

I would like to strongly emphasize that rather than lowering the prices of the products, we will be using the profits to re-invest in R&D. In the long run this will translate into a clear advantage to Midas/Klark Teknik customers and also enhance the brand equity and resale value of the products.

That Audio Guy: Some people within the audio industry aren't particularly fans of the Behringer product, some believe that they are a product that is catered to a certain market position/price point. How do you think that Behringer's reputation will affect the Klark Teknik / Midas Brands?

Uli Behringer: First of all I respect everyone’s view and also I believe every product is catered to a certain market.
Our products are largely sold by word of mouth as we don’t spend much money on advertisement. Behringer does indeed have a large fan base and we ship 2.5 million products a year. The vast majority of our customers have a great experience otherwise we wouldn’t be growing at such a fast rate. 
Behringer is currently the largest mixing console manufacturer worldwide and we also have one of the lowest failure rates in the industry based on feedback from dealers and service centers. We are intending to make those numbers public as we’re actually very proud of our manufacturing quality. Our facility “Behringer City” is an open book and its related website (www.eurotec.cn) can provide some more information for interested people.
As with everything I would agree that there is always room for improvement and our Company culture strongly encourages the Japanese “Kaizen” philosophy of constant improvement.
We’re tremendously excited to learn a lot from the Midas/Klark Teknik engineering team and I am sure this partnership will help Behringer to get to a new level.

That Audio Guy: Will the R & D within both these companies continue independently, or will their R & D be absorbed into the Behringer model?
 
Uli Behringer: I am completely blown away by the amazing technology in the Midas XL8 and PRO6 digital mixers and the way the Midas/Klark Teknik R&D team developed these mixers in such an incredibly short time. 
We intend to expand the current Midas/Klark Teknik R&D team to build a cutting-edge “centre of excellence” for digital mixing and networking technology. We are currently hiring more engineers to accelerate the roll-out of the cutting-edge products that are in the Midas/Klark Teknik roadmap.

That Audio Guy: You must be excited with the acquisition of these brands. It's an amazing opportunity for both the companies being acquired and the group acquiring them. Did you have any reservations in acquiring these companies, if so, what were they?
 
Uli Behringer: Allow me to zoom out for a moment. When you acquire a company what do you really buy? Finished goods, raw material, some IP, a building? 20 years of experience in the business have taught me that a company is about people which are the only real asset.

So before you go out and acquire a company you have to truly believe whether this potential marriage will work. Does the culture fit, do people want to work together and does everyone believe in the new vision? History has demonstrated that only 10% of all mergers and acquisitions work out and our industry is no exception as there is a massive graveyard of companies. 10% is not a high number and one would be very stupid to ignore the fact and become sentimental over companies and brands.

With Midas/Klark Teknik it is even more about people as they truly live for their brands. Over the last few months I had the pleasure to really get to know John Oakley and his team. All I can tell you is that these are the most amazing and passionate people I have ever met. It is a great honor for our CEO Michael Deeb and I to work with this world-class team and we will provide them with all the resources needed to enhance their position as dominant player in the high-end audio arena.

That Audio Guy: I refer your press release from both Klark Teknik and Behringer sites dated "December '09" that distribution chains will not change after the acquisition, however there has been a rumor that National Audio Systems will be taking the distribution over as of 2010 for Australia and New Zealand (see below) is this true? and if so will other distribution chains change? And if so how if at all will this affect the product/price point? 

Uli Behringer: The distribution change in Australia is the last of the changes which had to be made before Bosch could divest Midas/Klark Teknik. This has happened in nearly all territories where Midas/Klark Teknik was distributed by wholly owned Bosch subsidiaries. 
We keep pricing comparable all round the world and hence the change in Australia should have little or no impact.

Thank you for reaching out to us. We wish you and your readers a wonderful and Happy New Year. 

That Audio Guy: Thanks Uli for your time and we all wish The Music Group a happy and prosperous New Year!

A note to members: Uli has agreed to field any additional queries you may have. Please visit http://www.thataudioguy.net/index.php?option=com_fireboard&Itemid=64&func=view&catid=29&id=330 to post them. Cheers, Admin.