When mondo*dr last interviewed Ken Berger back in 1999, EAW had recently launched the Avalon series of dancefloor orientated loudspeakers - a product with real clubland credentials. Much has occurred since that time with Berger having left the company he co-founded only to make a return in 2003. Today, under the LOUD Technologies umbrella, rebranding the company has become a key focus for Berger, particularly with the formation of the EAW Commercial sub-brand. Jerry Gilbert used this year's PLASA show for a spot of catch up...

When Ken Berger returned to Mackie Designs (or LOUD Technologies as it would become) in January 2003, the world had become a very different place.

Having forsaken his position in Whitinsville, Massachusetts running Pro Sound Web (along with his trademark pigtail), EAW's charismatic co-founder headed out to the West Coast and took up base in Woodinville in the Pacific North West, leaving the world's biggest online pro audio community in the capable hands of Mark Herman.

Once in Woodinville, Ken Berger had to come to terms with the extent to which market share had migrated to competitors as the company struggled to manage (and fully integrate) its acquisitions, and reschedule its debt.

January 2003 was the same month that Mackie CEO Jamie Engen confirmed that Sun Capital would acquire approximately 9.8 million shares (or around 65%) of Mackie stock through the purchase of 7.4 million existing shares and 2.4 million newly issued shares, to raise around $10 million in cash.

By September the new umbrella company Loud Technologies Inc had been set up "to eliminate confusion between Mackie the company and Mackie the brand" and the task facing the new Senior Vice President of Marketing in distancing the corporate identity, while rebuilding brand recognition and focused messaging, became immense.

"When I returned, one of the things that Mackie was struggling with was the concept of branding, and that became one of my first objectives," Ken recalled during a break from the coalface during the recent PLASA Show.

"It was easy when Mackie were just making mixers and EAW was also focused as a high-end speaker company. Both companies had strong images ... and one of the keys to success is having your customers know who you are."

But of course the problems were already deep-rooted, having set in after Mackie took over Italian commercial loudspeaker company, RCF spa back in June 1998 (two years ahead of the EAW deal) - eventually rebranding it Mackie Designs Italy. "Mackie really became diluted after taking over RCF - there was no clear branding message," Berger observes.

The low point arrived prior to the eventual sale of the company at the end of 2003 after the parent company had been forced to suffer huge losses attributable to "discontinued operations" of $3.8m during the six months ended June 30, 2003.

There were not only cultural differences but a siege-like mentality checking progress. From an American perspective it must have looked like Mackie had walked into a Communist town when they entered Reggio Emilia; to the residents of the town, who had given their lives to a company that had been founded back in 1949, the subjugation of their roles (and laying off of workforce) from a management based 6,000 miles away was a bitter pill to swallow. But the product strategy clearly hadn't been fully thought through.

"The Commercial products represented the worst example of what was going wrong," Ken Berger continued. "When I came back I could see RCF operating in Europe and Mackie Industrial operating in the States with ranges that were only slightly different from each other. For example in one market RCF was the lead brand, in another RCF Industrial - and it clearly didn't work. While it was by no means the only thing that was wrong, it was a good example."

And so the company took steps to turn their fortunes around. "The first thing was to change the name of the holding company to Loud Technologies. We wanted the industry to understand that Mackie was a brand, so we created the name as a brandholder - and have one brand worldwide for the commercial market space."

He explained the problems facing the operation in Italy. "They couldn't comprehend that for political reasons RCF products could now be made somewhere else. We needed to get rid of the RCF name, and ultimately that operation wasn't one that was sustainable, although EAW had a relationship with RCF going back 20 years."

By bailing out when they did Loud Technologies were not only able to rid themselves of the debt and the political problem with the staff - "but the total lack of focus that having that brand on board created."

Ken Berger explained, "The resources going in at management level to fix a fundamentally-broken operation was draining us. Losing it was a tremendous financial bonus, freeing up management resources." But it left a hole in the branding.

The company were quick to turn it into a win win. For on the supply side came the birth of the new EAW Commercial initiative. Divested of RCF, Loud Technologies were able to focus on a new united commercial offering, and they embarked on what has so far been an outstanding year by announcing the formation of the new Commercial Group, with Mark Madison brought into head it up as Group Manager.

Previously the company had been struggling to figure out which brand to use - but EAW became the logical choice. However, EAW Commercial will NOT be a separate division but a sub-brand. modelled on the successful EAW Cinema Systems operation. Ken Berger explained, "It was clearly part of EAW but it had totally different distributors and price structuring ... and that's the same model we are using for EAW Commercial."

Customers can expect a number of benefits across the two tiers of EAW activity. "As EAW develops technologically-led products and is able to spin it off to a lower cost base, so that will move to Commercial."

In particular it will impact on the now mature DSA (Digitally Steerable Array) series, which represents a radical step forward for small to mid-sized permanent installation applications by permitting digital steering. Using EAW's free DSA Pilot software programme, engineers can vary the vertical coverage pattern while each driver in a DSA Series loudspeaker enjoys its own individual amplification and DSP.

"We are working on techniques using less powerful processing, with switchable three or four position patterns for the DSA - and EAW 'steerable' product using driver placement in ceiling panels with exceptionally-consistent coverage; in the next twelve months you will see a tremendous leverage of EAW technology," he promises.

But Ken Berger emphasises that EAW Commercial isn't merely dedicated to loudspeakers. The EAW Commercial line already includes DSP matrix mixers and amplifiers. And EAW will further broaden its product range to sell other parts of the system wholesale. "It will enable us to do things we couldn't before. For instance the DSA series has the amps built in, with signal processing between every driver. It will give us more control over the component parts of the system."

This ethos had been one of the prime drivers in Mackie's desire to hook up with EAW in the first place. "We could see the future. DSA technology already existed (when the merger took place). The KF900 offered the same beam steering technology but we knew that to advance in that direction we needed amplifier and processing technology ... and Mackie had already developed the modelling."

For Ken Berger it presented the gilt-edged opportunity to develop on an "OPM basis" (or Other People's Money)! He smiles, "That was the fundamental!" Unfortunately in the ensuing time frame there was a lot of turmoil at Mackie and DSA was developed three years before it eventually reached the market.

Being an outsider during that period he had been able to see with absolute clarity the extraordinary length of time it was taking to bring products to market, and that this was fundamental to Mackie's problem. "They had great products at various stages of development in all the design groups - but this frustration was one of the reasons I originally left!! It had to do with a certain size the company had become and the lack of anyone with a unified vision. There was a lot of fractionalisation.

"The company had grown so quickly and there had been a lot of acquisitions which hadn't been properly integrated. A lot of the early success was when they were Greg's (Mackie) own products - the SRM-450 and the 1604VLZ were products that (the design team) wanted for themselves.

"That approach worked for the first $100m - but then Greg became uncomfortable. It was the small groups he worked best with. As the company grew, he struggled with bringing new people in ... it's corporate adolescence."

The growing pains manifested themselves at one grizzly Frankfurt Pro Light+Sound show (in 2001) when unannounced the company announced wholesale distribution changes - and loyal EAW distributors were cast aside in the quest for a common 'corporate distributor'. This was one symptom of the problem, agreed Ken. "There was a broad systems approach taken, but this business is not that big and it's equally about relationships. But relationships were tossed aside in a day."

The setting up of Pro Sound Web offered a retreat point - but Ken Berger soon felt isolated. "It was a lot of fun but I missed being in the thick of what I had done for 20-plus years. "I came back primarily because I missed it but also because there were still a lot of people in Mackie/EAW who were great friends. There was a part of me that was always waiting for that phone call. I would talk to Frank (Loyka) and Kenton (Forsythe) and would see them at lunch in Whitinsville every day. Greg and I also got together regularly.

"It's bizarre being outside your company ... it gives you a weird perspective. Everyone that felt unhappy inside the company, felt obligated to contact me."

In any event it was Frank Loyka who finally invited Ken Berger to fly out and meet Jamie Engen, Mackie Designs' CEO. "At that point I didn't know quite how much trouble they were in, and they were already well involved in the sale of the company (to Sun Capital). When we sat and talked, Jamie wanted me involved in product development but it took a long time before that became effective - in fact just getting our messaging, and the marketing group turned around, took some time."

Critical to the financial turnaround was the ability to manufacture overseas. Today just under 50% of their output is made in China - in factories dedicated to their products - while products like the dXb digital production console are built in Malaysia under a contract arrangement. "China is OK for some products but for high size products it's important logically to manufacture in the US. We don't want to lose control as we did in Italy."

Ken Berger promises that the company will not walk away from any segment in which they have historically enjoyed a strong market presence - such as the concert touring market.

He rues the under-selling of the 760 Line Array system at a time when he was no longer with the company. "We did not do a strong enough job with the marketing," he believes. "The product is as good as anything. One of the mistakes was the messaging to the market, stating merely that we made a Line Array rather than explaining what made it better." While that drop in market share has subsequently been more than redressed, he acknowledges that "there has unquestionably been some lost momentum. Ten years ago we had a dominant position but the market is way more competitive today."

Yet, while the KF850 is one of the all-time iconic touring boxes, it is way eclipsed by large-scale install business, with EAW having a presence in more major stadia in the world than any other company, and the Avalon carrying that tradition forward.

The future will also be underpinned by the new AX arrayable technology, with virtual point source and common magnet assembly, announced at this summer's InfoComm, which will appear not only in the next generation touring systems but also the active Mackie systems in the MI market, just as Mackie-developed algorithms will migrate in the other direction.

"Once we get the company firing on all fronts we will be able to leverage that technology; over the next three-year phase we hope we will have advanced technology which is both proprietary and protectable.

"On the product side we have made amazing strides, and have put out more product in the last twelve months than in the previous three years, including the Digital X-Bus console, Onyx mixer and so on." And alongside the Onyx mixer at InfoComm, Loud Technologies introduced the TT24 - a 24-mic input digital mixer developed specifically for the live market, and built from the ground up.

However in future, says Ken Berger, strategies will be more about "building platforms ... starting from the TT24, rather than going from scratch."

On product-to-market development time they have made huge advancements. "We are now only about three months behind where I'd like us to be, whereas when I came back the product cycle was nearly three years. It would take so long to gestate that by then the market cycle had shifted."

So as Loud Technologies nears the end of a great recovery year, mitigating some of the nagging fiscal difficulties with Sun Mackie along the way, what lessons has Ken Berger learnt?

"The greatest lesson is just how strong the Mackie brand is. Many of the big retailers have an amazing sweet spot in their hearts - many are pulling for Mackie - the strength of the brand is unmatched. We are looking at data on the retail channel and Mackie in the speaker business is number one active speaker company in the world and highest end product in the $500 and up category. So never forget the strength of a great brand."

The second lesson (partly borne out of the European experience) is to think more globally. "US pro audio companies have a tendency to look at the world as gravy, whereby anything from export is a nice bonus. But that's not us.

"For instance we spent $30,000-$40,000 on the Digital X-Bus on giving it localisation qualities whereby we could come out with a Chinese version as well as German, French, Spanish, Japanese and Cantonese versions. We sold 50 consoles in China because it was the only console with a Chinese set translator.

"We are very very committed to Europe and Asia, which we see as the fastest growing territory in the world.

"Presently the US represents about 40% of our market for our consoles but we see that shrinking. Some countries are exploding ... in Europe we see the former Communist countries as having massive opportunities."

Finally, in anticipation of the two questions he is clearly tired of hearing, Ken Berger slips into rhetorical mode.

"Would I buy back EAW if the opportunity arose? Absolutely, but I don't think it's on the cards ... and it probably doesn't make sense because EAW is really integrated into the company, with its parts and sub-assemblies, and the engineering team could not be supported any more.

"Mackie sells more speakers than EAW and a lot of transducer engineers are supported by that level of business so I don't see that model happening, nor is it Sun Capital's MO to slice up companies into little pieces.

"So then do I want to start a speaker company? Absolutely not. It's a major effort. Having great products and marketing helps but it takes long hard work. One lesson learnt is to build on your strengths. It's fine to grab market segments but don't lose focus on primary markets.

"For now EAW Commercial is a major undertaking and a major commitment ... and that will take at least a year to get off the ground."