Malcolm Steward: audio journalist

Branko Glisovic

This interview was first published in The BAJ in around 1999. The show then took place in the GravenBruck Kempinski Hotel in Frankfurt but has now relocated to the M.O.C in Munich

Come Together, Right Now

Imagine this: competing manufacturers and distributors working in harmony to increase the appeal of high-end hi-fi for ordinary people who don’t regularly, if ever, pick up hi-fi magazines. It’s not a utopian dream: it’s happening now in Germany. Malcolm Steward spoke to the man who has been co-ordinating the process for eighteen years, Branko Glisovic.

Malcolm Steward: What exactly is the High End Society? Is it an alliance of manufacturers, a trade body …?

Branko Glisovic: Let me tell you the story. In 1980 we had two big shows in Germany – Funkausstellung, which covered all consumer electronics, and an audio show called Hi-Fi Dusseldorf – each of which ran every other year. When the organiser of the Dusseldorf show elected in 1981 to include video and TV a few hi-fi companies decided to forsake the event. So, in 1982, seventeen companies took two floors in another Dusseldorf hotel and staged their own show, which we decided to call The High End Show.

MS: What were you doing in 1981?

BG: I was working as the importer for Chartwell, Jordan Watts and Rogers. In 1982, however, we organised The High End Show and the customers really enjoyed it. They could talk directly with the manufacturers, which was never possible at the bigger shows, and they could hear music because a normal hotel room provided a better environment than a big exhibition hall. The show was such a brilliant success that we decided to do it again in Frankfurt, the centre of what was then West Germany. We found the Hotel Kempinski and we have been here since 1983.

We then founded The High End Society and around ten or twelve members – all small companies – helped make the show possible every year for around ten years.

MS: Were they manufacturers or distributors?

BG: Both. One company would take responsibility for producing the show guide while another would take care of the contracts, and so on. This worked for ten years and the show grew.

MS: Was it a truly co-operative effort? Did every member do something towards staging the show?

BG: Yes. Every society member contributed something to make the show possible and it was a major success – the hi-fi and video show in Dusseldorf no longer exists. We were right in presuming that shows like that don’t work. The only thing was the high end.

However, because so many different companies worked on our show it was difficult to manage. In 1991 we decided to change the concept – to have an office and a managing director to organise the show more professionally. I wrote a job description for the managing director. It was fifteen pages long because after ten years I knew exactly what he would have to do. Many people applied for the role but it proved impossible to find one person of whom all the member companies approved. In the end, they offered me the job and I accepted. I stopped working as an importer and since 1991 I have been the managing director of the High End Society.

Once an organisation has an office and someone on the phone, you soon discover you are being asked many questions: not only about the show but many other requests for help. So, the office developed in many ways. For instance, we have large databases that are open to, say, any manufacturer who wants a distributor in Spain, or the name and address of an American importer. We also have a license from the government to act as an employment agency within our industry. We also promotes concerts. But our main task remains the High End Show, which has grown over eighteen years to become the largest show in Europe. And, believe it or not, to put this show together takes a full twelve months.

MS: So, the High End Society is your “full time” job.

BG: Absolutely. The Society does other things, which I’ll tell you about later, but the main activity is The High End Show. It is now the only audio show in Germany and it’s becoming increasingly international. We are very glad about this because we are a united Europe and we have to look to see how we can work together as one big family. On that point, it’s important to note that a society member can be a company from England, Switzerland or wherever – it’s not only for German companies. At the moment we have around forty members – from small, one-man companies to Pioneer, Marantz, and B&W. I guess that allows us to say that we represent the industry in many respects – not only staging a show but in every other respect.

For example, for the past three years, we have been staging a road show. We have The High End Show but, as you know, many customers in Germany and around Europe know nothing about it: they’re not interested in high-end hi-fi. However, our industry is fighting with other industries – cars, mountain bikes, holidays, whatever – and it was very clear to me that we had to introduce the idea of living with high quality music to the public in Germany. So, I developed the road show idea under the name of The World of Hi-Fi. It is a completely different concept to a show like The High End Show. What we do is find a location – normally a hotel – and invite the German industry to attend. Invite means I send them a letter that says we will have in this particular hotel eight rooms and I would like to have for the first room a complete system costing around 3000DM. I would like a source costing no more than 800DM, an amplifier no more expensive than 1,000DM, and a pair of loudspeakers costing no more than 1,000DM. I would also like a second room with a system costing 10,000DM . . . another costing 20,000 . . . finishing with a room housing a cost-no-object system. Everyone who receives this invitation can offer to provide, say, a speaker for the 5,000DM system or whatever. I then put together good sounding systems from all the brands and models offered.

At first the industry was wary. People said that they were worried about what amplifier I would use with their speakers. But, as I said to them, when you send a speaker to a dealer you have no guarantees about what sources and amplifiers will partner it. It was difficult in the beginning but now the manufacturers are more confident.

We then place the systems in a suitably large room – 50, 60, 70 square metres depending upon the cost and capabilities of the components – along with seating for the public. I hire entertainers (presenters) – say three women and five men – who are not allowed to say anything about the systems. They don’t discuss prices, technical specifications and so on. They are there to play music – nothing more. All the companies who have provided the equipment are invited to be in a separate ‘showroom’ to present their products and brochures on a static display and to talk to the visitors. The presenters tell any member of the public who has a question where to find a good dealer or to go into the ‘showroom’ and talk to the manufacturers.

We have discovered that members of the public enjoy listening to a good system and really appreciate having it demonstrated by someone who is not there to make a sale. They enjoy the fact that they don’t get involved in arguments such as whether three-way speakers are better than two-way speakers.

MS: So the visitors don’t feel threatened.

BG: That’s right. They hear only music. Nothing more. We have now staged fifteen of these shows across Germany and the industry has discovered that they are very effective. We know from the dealers, for example, than ten or twelve days after the show, many new people are going into their stores.

MS: How do you publicise these events?

BG: We have a partnership with a magazine in Germany called Stereo. We also put up posters in the towns we visit and we have other partners – record shops who put leaflets in all the CDs that people buy.

We set up on a Friday night and run the shows over Saturday and Sunday. It works well. It is very cheap for the industry and very effective for the dealers. It is also very important in that it takes the idea of high-end hi-fi out of the circle of hi-fi freaks.

MS: In a big town, such as Munich, what sort of attendance would you expect?

BG: The average is around 1,800 people but we have had shows in East Germany with around 1,000 visitors and shows in the Rohr area with around 3,000. Honestly, though, it is not my policy to have too many visitors because we tell people that if they are coming to The World of Hi-Fi they will be able to hear good music in a relaxed atmosphere without stress. If we had too many people it would be counter productive. To bring more people in I want to run more shows. Switzerland has asked us to run shows there and so has Austria.

The greatest thing is to play music to the public. You can see their eyes brighten. You can see, sometimes, a tear. That is food for my soul

Everything we do is designed to help the high-end industry: to explain to everyone that music is food and that no human can live without music. Our industry certainly wants to sell products but we need to explain that a customer who walks into a hi-fi shop doesn’t walk in to buy loudspeakers or amplifiers – he goes in to buy emotions for his home. If the dealers and manufacturers understand that then we are in a very, very good position. We have to sell things that people can’t live without. Music. That’s what we try to explain to everybody. And it works.

I want to be one of the entertainers at The World of Hi-Fi Shows. I can’t do that at the High End Show because I am the organiser. But the greatest thing is to play music to the public. You can see their eyes brighten. You can see, sometimes, a tear. That is food for my soul. If that works for you, you will have success.

MS: In the United Kingdom, our industry organisations are very poorly supported. Only a small percentage of retailers, distributors and manufacturers seems prepared to be an active part of any industry body. How have you managed to knit together and motivate the German industry? What’s the secret of making an industry alliance attractive?

BG: I guess this is easy to explain because, I have told you, for ten years we staged The High End Show by using resources from all of our members. That doesn’t work. If you have an office, if you have a person with enthusiasm, if everybody knows there is a person who can answer questions while being discreet about everything they hear, someone everybody can trust, it works. It has to be someone who loves music; it has to be someone who loves people; it has to be someone who enjoys helping others. It also has to be someone who can bring all these companies together by offering something that is productive and good. I’ve been a guest of the BFA in London and I know that companies come together for meetings. But, after the meeting, it seems, nobody works on any ideas to make them successful. They go to the meeting and then forget it.

MS: This is what I don’t understand. Companies who would benefit from the statistics to which the BFA has access – plus information on upcoming legislation and all manner of data that might help improve their business – don’t bother to join. Even my small media company has joined: if only because the hi-fi industry has given me a comfortable living doing what I enjoy – messing around with music and hi-fi, working with people whose company I enjoy – and it seems appropriate to give something, however small, back. It’s good to be a part of the industry, getting involved with the talks, arguments and decisions rather than just sitting back, moaning and criticising. Too many people seem happy just to take: to say “you’re the industry organisation so sort this stuff out for me.” Ask them to come to a meeting for an hour or two, though, and they’re too busy washing their hair or playing golf.

BG: That’s a big difference. To be a member of the High End Society means that if there is a meeting the person who represents the member company has to be there to take responsibility for any decisions made that might affect his company. You cannot send a proxy to make decisions. It is not allowed. We decided very early on that only decision-makers could attend our meetings – people who had the authority to make decisions for their companies and so for the industry as a whole.

If we have a meeting and decide, let’s say, that each member has to contribute 1,000DM to the society for some reason, we can be sure that decision will be agreed and upheld immediately. This is vital: it doesn’t help to have a society in which there are people who are not able to make important decisions.

MS: I suppose I’m particularly curious why you seem to have members who appear to be so enthusiastic and committed.

BG: To be honest, I guess this was not always the case but I have learned over the years that first of all you have to offer your industry worthwhile benefits. If you do that people eventually realise that it’s worth becoming a member of your organisation. You have to offer a service: something that is helpful. If you do that for a few years, the companies will come. For example, with The High End Show, it is now cheaper for a company that is a Society member to attend than it is for a non-member company. Companies who are not members now look at our price list and realise it is worth joining. I guess, though, that you have to start first . . .

MS: You have the advantage of having this show as your base product . . . the attraction you can offer.

BG: But we’ve had more than that for the past few years. It’s not just the show. We have the office. We have the telephone line. Everybody knows they can give me a call. Say, for example, a manufacturer has made contact with a new dealer and he doesn’t know much about him. My databases will tell me everything that manufacturer needs to know about that dealer. Or vice versa – dealers can call me and ask about new products.

You have to be helpful for everybody. I often help companies find new staff. If you do these things – show people that you are genuinely providing a service – they will want to join your organisation.

MS: In the past eighteen years you must have amassed an encyclopaedic knowledge of the German hi-fi industry.

BG: I have been working in this industry for thirty-two years so I guess I know every brand, every person, the connections between companies . . . but to use this knowledge positively I have to be secretive. People have to trust me. If they didn’t I would be out – very, very quickly. I’m very proud that people have chosen to trust me.

MS: What does it cost to become a member of the High End Society?

BG: It’s very, very expensive . . . 1,000DM a year!

MS: That’s around £300 per year, which isn’t a great deal.

BG: To be honest, members don’t bother too much about the 1,000DM. The benefits greatly outweigh the cost of membership.

MS: I asked because I know that running an office, providing yourself and your staff with a salary, and putting together databases – as I’ve found from my experience with the British Audio Journal – involves a huge amount of time, effort and expense.

BG: Let me explain how it works. We started as a society – and I don’t know what the English equivalent is – but looking into the German tax rules, it posed difficulties. If a society does something like a show and it fails, the government’s financial authorities can recover the debt from each of the society’s member companies. For that reason we decided in 1995 to form a separate limited liabilities organisation. So we now have the High End Society and the High End Society Marketing organisation of which I am the managing director. Everything the Society decides to do is carried out by the limited liabilities company, which is owned by the Society. No companies or persons have any interest in the limited company – the Society is the only shareholder. This provides security for the members. The marketing company does not depend upon the Society’s membership fees: it has to work like any other company. I have to ensure that I make a profit on all the things I do but all those profits go back to the Society.

MS: I still wonder what generates the funds required to run the company.

BG: The High End Show, the roadshows, the catalogue, the concerts, the CDs we produce . . . we are involved in many activities.

MS: I’m still amazed by the co-operation exhibited by all these companies who are in competition with each other.

BG: They have to co-operate. Each company has its own interests and competes in the market. It is normal that they are competitors but they understand that they are all sitting in one boat – if everyone in that boat is rowing in the same direction everybody benefits.

MS: That is similar to, say, Sony co-operating with Philips to develop Compact Disc before each company produced its own players to do battle in the market. That doesn’t seem to happen too often elsewhere.

They [companies] have to co-operate … they are competitors but they understand that they are all sitting in one boat – if everyone in that boat is rowing in the same direction everybody benefits.

BG: Well, any company or industry body, from Britain or anywhere, is welcome to get in contact with us. We are strong in marketing and it would probably help all concerned if we pooled resources and worked together.

MS: Talking about your show for a moment, I wonder how different it is to British shows. Do you find you are bringing in new visitors or are you attracting the same crowd of familiar faces and brochure collectors, which is something I regularly see at British shows?

BG: Be careful about saying that because my view is different. Of course, we need new people and we do everything we can to attract them, but we also have the same people every year here, and I would argue that this is not a bad thing. When a ‘normal’ person buys a very expensive amplifier at a show and takes it home, he has to explain to his family and friends why he has spent so much money on a piece of hi-fi from a company that nobody has heard of. I ask manufacturers what they have done to help this person explain his actions. Do they have a leaflet inside the box? Do they supply any information about their company? Do they have that customer’s address so they can mail him every two months saying what shows they are attending and asking whether he’s satisfied with his purchase? They should: this person is, after all, the best advertisement for them and their product because he will tell his family, friends and neighbours how wonderful the product is.

Now, here’s the point about shows, which will explain why my view is a little different to yours. If this person has bought your company’s product he thinks he has become part of your company. He feels like part of your ‘family’. He views your advertising with different eyes than he does advertising from other companies. For that reason the customer will come to shows every year to visit ‘his family’. I ask companies if they have sent their customers an invitation to visit them at the show and join them for a glass of champagne, or sent them a T-shirt or whatever, to make sure those buyers remain a member of that ‘family’. If they don’t do that they are wrong. To find a new customer costs ten times more than keeping an existing customer satisfied.

MS: Do your members do what you suggest?

BG: Yes. Not every one, of course, but many do. And we do all we can to help them. For example, we have an arrangement for all our members to have their products professionally photographed for brochures and press pictures. We keep a copy of all the pictures on CD-ROM for sending out to the press. A high quality, professional product picture for 150DM is very helpful for a small company that does not perhaps have the budget to employ a professional photographer.

We help in other ways, too. We have, for example, worked for three or four years on the EMC regulations. We have arranged for all society members to be able to have their products properly tested at a cheap price.

MS: I like the idea of the CD-ROM. If an editor of, say, a high circulation women’s magazine needs pictures of hi-fi to illustrate an article it means that your members stand a good chance of exposure that they might never otherwise obtain.

BG: We had this a few weeks ago with Playboy. They wanted pictures of hi-fi and we were able to give them product shots and room-sets – everything they needed. But that’s just a small part of what we do for our members.

MS: One would hope that your members, especially the smaller companies, appreciate what you’re doing for them. As I said earlier, I know from experience that maintaining a customer database and keeping in contact with those customers can be prohibitively expensive. Furthermore, in Britain, there’s the contentious issue of high retailer margins, which many manufacturers say are biting hard into their profitability. Are German manufacturers blessed with greater resources or are German retailers working on smaller margins?

BG: I don’t think so. A German dealer will buy a loudspeaker typically for, say, 100DM and sell it for 200DM. With electronics the margin is smaller – an amplifier that costs the retailer 100DM will sell for around 160DM. I don’t know why – loudspeakers are easier to sell and less costly to maintain than electronics.

MS: Is there much competition on price in Germany?

BG: We have the same sort of competition and problems that you probably have in England. Manufacturers simply have to be careful in selecting their dealers. If you avoid the big shops and sell into the high quality specialist dealers it is possible to maintain prices. It’s the same problem everywhere but this is an area where the society can’t help: it’s not my place to make judgements on such matters. We can, however, supply our members with detailed information about German dealers that will help them select appropriate outlets for their products.

MS: Branko, before you go back to running the show I must thank you for finding the time to talk to me.

BG: It has been a pleasure. I believe that talking to people is vital. Exchanging information benefits everybody.