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Overview/History

From a small beginning in the late 1980’s, through the rapidly growing bubble years of 1997-2001, to the sustained growth of today, the VDV industry in Northern California generates billions of dollars each year and logs millions of man hours. Growth for 2010-2012 is projected to be stronger than growth for 2006-2009.

The development of the industry is closely tied to the development of technology. At the industry’s inception in the mid-80's, LAN networks from Ethernet to fiber backbones were a fast growing area. During the period from 2002-2008, Audio Visual systems were the most rapidly growing segment of the industry, as new technologies and systems came online and most companies invested in sophisticated conference rooms with full AV equipment.

Today, AV is still strongly growing, with the fastest growing AV products including displays, AV conferencing equipment, streaming media and webcasting and wireless connections and software. Programming and maintenance are the fastest growing AV services. In coming years, wireless is slated to be one of the strongest growth areas.

The VDV industry got its start in Northern California in the 1980's, when the telephone company breakup spawned new startup companies in the installation and service businesses. In 1987, IBEW Local 202 in Northern California became the first local to distinguish technical workers from inside wiremen and negotiate a regional contract. The market was estimated at $16.5 million in 1994, grew to $150 million in 1999, and then expanded to $250 million in 2000. Today, it is valued at over $1 billion.

The number of NECA-IBEW VDV workers in Northern California has grown as well. In 1994, there were 300 VDV workers. In 1999, there were 1,660, and today there are over 2,200 VDV workers. The number of participating VDV contractors has increased from 71 in 1994 to more than 130 today.

Contractors reported an average of 6.7% growth for the industry in 2007, with 2008’s growth projected to be 6.1%. Numbers for the recession year of 2009 are not yet available.

As Sound and Communications points out in its 2009 24th Annual Survey of The Integration Business, the industry isn’t recession proof, “but the traditional base keeps growing because of the technology that is offered.”

Some of the factors leading to the continued growth of the VDV industry are:

  • The need for installation and integration services driven by the growing demand for applications such as digital signage and videoconferencing.
  • The convergence of AV with IT, security, voice and data, is driving the need for integration services.
  • Programming has become increasingly complex and represents a growing percentage of most AV installations.
  • Audio and video have become a virtual requirement across the board for most businesses. Within AV, videoconferencing is the fastest growing product.
  • AV is heading toward “anywhere AV,” with users being drawn toward solutions that provide greater flexibility.
  • Education is the fastest growing customer segment. Other fast-growing segments are government, corporate and hospitality.
  • Schools are being upgraded as a result of government stimulus programs and other initiatives, with the result that schools need to have their IT and AV facilities updated.
  • California Senate Bill 1953 requires improvement of seismic standards in California and ensures that many hospitals must be renovated or rebuilt, resulting in technology upgrades.
  • State-of-the-art corporate and institutional security systems are more in-demand since 9/11.
  • Commercial/industrial fire systems are in a new generation and are being upgraded in many commercial buildings.
  • New categories such as Audio Over IP Systems, Digital Signage and Lighting Systems/Control are more in demand.
  • About 64% of NECA-IBEW contractors offer service/maintenance contracts which provide consistent and growing income.
  • Green VDV is a key issue in California and means that every installation must be more energy efficient and environmentally friendly.
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