EXCLUSIVE: Sennheiser Co-CEOs Talk Consumer Division Sale And Plans For Pro Business

Sennheiser co-CEOs, brothers Daniel and Andreas Sennheiser, have spoken exclusively to Headliner about the recent sale of the company’s consumer division, their plans for the pro audio market and their strategy for targeting new markets.

In an in-depth interview, the Sennheiser brothers open up on the sale of their consumer business to global medical hearing solutions provider Sonova and the investment opportunities it has opened up for the professional side of the firm. The siblings also discuss the dynamic of their relationship as co-CEOs and take us inside their strategy for future growth. You can also listen to an extended podcast version of our exclusive interview at Headliner Radio…

Daniel and Andreas, thank you very much for joining us. Before we discuss the company’s recent business activities, what can you tell us about your working relationship as co-CEOs? How does this joint role function?

DS: For us it only works if we work collaboratively. We look at things from two very different views. Andreas is an engineer and looks at supply chain, I look at things more as a marketeer and an advertising person. But we run the company together and we make all our decisions together.

AS: If you are trained as an engineer, you look at things from a perspective of ‘does this work? Is it precise? Is the performance and quality right? Is it predictable?’ All the things that matter when you want to produce something at the highest class. That’s the logical perspective I take. My brother looks from a more emotional perspective, such as ‘is this the right thing to do? Is this making not just our customers but also our employees happier? Can we make non-tangible value through such a decision?’ We look at the same topics but through very different eyes. We get to better decisions by having more facets than one person can encompass alone.

Did you always anticipate that you would work together in this way?

DS: Not really. It looks like a big plan in hindsight, but I was very clearly on a different track. I didn’t want to do anything with the company; I studied design and did advertising and so on. I had that freedom because Andreas positioned himself rather early as somebody who wanted to work in the company, so there was no pressure on either of us to take over. Doing this together only happened when we both decided we wanted to work for the company. We started discussing how we would share the role and the responsibilities. And we decided it didn’t make sense to split the company into two areas that each of us would take over individually. We wanted to take the co-lead together, having a shared load on our shoulders, which was a good decision.

Sennheiser recently sold its consumer division to Sonova. What was the thinking behind this sale, and what made Sonova the right buyer?

AS: It came from a very clear strategic outlook for all four of our business divisions – Neumann, business communication, pro audio and consumer. We made strategic plans for all four units and looked at what they would require to be successful, and we found they all had their individual strategies. But when we put them together, we realised it would be better if we focused on the three areas that have the most commonalities, so that was business comms, Neumann and pro. So, we needed to find a strong partner to invest in the consumer part. And Sonova is the right partner.

When we took the decision, it was about who has the spirit and culture and the willingness to continue the Sennheiser legacy in the way we would like. We are using the Sennheiser brand so you have to have a partner you can speak to well and come to conclusions with very swiftly.

What does the acquisition mean for the pro division?

AS: We have very clear plans and strategies for investment, future growth, and with a 100% focus on the pro business we can really exploit accelerated growth for all those areas. Because we can now give it everything we have, all the attention, funds and power of the Sennheiser organisation will lead to accelerated growth and success. We are very confident of that.

How has the pro division coped with the challenges posed by the pandemic?

DS: It’s a very mixed bag. Live music and sports all came to a complete halt. That is a significant part of our business. On the other side, we saw massive success in anything to do with wire bound mics, especially with Neumann. A lot of artists who couldn’t go on stage started upgrading their studios, a lot of people started streaming from their home or studio, and that business picked up very nicely and is continuing to do so. The corporate meeting space and business communications part also suffered because people weren’t in offices.

Now, all of those businesses are picking up again. Universities are equipping their campuses with mics and our assistive listening systems. We also see a lot of planning going on for live events, we just saw the Euro 2020 tournament take place, lots of live music picking up and people are investing in gear. All the artists who were locked away have produced a lot of content and want to bring it out. Next year we will see a massive flood of festivals, events and live music and we are all very much waiting for that.

You mentioned Neumann. Presumably the brand will also benefit from the pro division’s increased investment?

AS: Yes, we have an innovation pipeline for the next 12-24 months which will bring a lot of smart products to market.

You recently launched Evolution Wireless Digital – a new product designed for those in need of high-end wireless audio, but who may not be experts in the field of RF and UHF technology. Was this launch fast-tracked by the Sonova acquisition?

DS: Evolution Wireless Digital is not just a new product line, it shows the beginning of a paradigm shift. Between the product itself and the digital service provided via the app, it makes the whole experience very intuitive, especially for someone going out onstage for the first time who doesn’t have a monitoring engineer or has to do it themselves. That’s exactly the market we are targeting. And this is only the beginning, as more and more software-enabled products will come out under the Evolution Wireless Digital line.

How versatile is the product? Potentially it can be used across a whole host of applications.

AS: The versatility of the product comes from the simplicity of operating it - whether you want eight channels for your band in a venue, or one channel for a lecture. It’s being used by people from very different professions who usually have no knowledge or background in audio. A lot of people grow their career with Sennheiser. They may start with a single channel product, getting rid of a wire at home, and maybe next a small multi-channel system as an ambitious amateur, and eventually some end up with stadium tours and they’ll be using the top range products. We want people to grow their career with us without losing the simplicity of use.

How important is education with a product like this? Is it a challenge convincing people with no audio experience that they really can use it straight out of the box?

AS: We learn from our consumer side. When you interact with a consumer product you expect it to work like an Apple product – you switch it on, it works and it tells you what to do. The pro audio business has for many decades been a dark art of people who know how to set the frequencies and do all the things that are difficult to achieve, like multi-channel systems for the Eurovision Song Contest. A huge amount of expertise is required. We now see more budgets being reduced for crews and they get into a situation where they don’t have a huge crew to operate everything, so our product still needs to operate at the absolute highest level, but they have to be more like consumer products, telling you what you need to know and how to use it.

How big a focus is the vlogger and content creation market for Sennheiser?

DS: It’s a big focus for us. We have a nice portfolio for the ambitious vlogger and blogger, but there isn’t a lot of education around. Most producers know how their cameras work but treat audio as an afterthought. But it is through the audio that you convey emotions. We can play a big role in helping content creators focus on what they want to get across without worrying so much about the audio complexities, because the products just work.

How big a problem is there with audio being considered an afterthought in this market?

AS: We’ve seen audio getting much more attention over the past two or three years, but it’s still not come close to a saturation point. With TVs, they get bigger and bigger and higher resolution but the audio is nothing a TV manufacturer would care much about. But over these last few years, as the other technology parts came to a certain saturation point, more and more producers realise that the real thing they miss when conveying the emotion of their art is the audio part.

What can you tell us about AMBEO and your plans for the immersive audio market?

DS: We’re only scratching the surface. AMBEO immersive audio is allowing the person creating content to reproduce it as realistically as possible. More and more content is being produced in AMBEO, and if you hear the difference, it is quite striking, as it makes the audio more natural and less in your face. Audio, especially in 3D, is the direct channel to your emotions. Try doing the test yourself – switch off the image of a horror movie and have only the audio and it’s quite scary. If you switch off the audio and only watch the image it’s just strange and you don’t have the emotion coming across.

Is there anything new coming throughout the year that you can tell us about?

DS: We are heavily investing in more software enabled features and more software and hardware combinations. We’re looking forward to disclosing more smarter, intuitive products that are supporting you while keeping the products at the absolute highest level.