AV.Technology was given the rare opportunity to sit down with Daniel Sennheiser for an exclusive interview while he was in Sydney, as part of his post-Covid tour of APAC markets.

Daniel discussed the current state of play in the region, sharing his insights on how the pandemic accelerated the audio industry, and particularly how Sennheiser was able to meet the demand for quality audio in the growing AV and IT market. He also talked through the sale of Sennheiser’s consumer audio division, where we dived into the strategic realignment of the Sennheiser business units to focus on professional and B2B audio, and how that is shaking out. Looking to the future, Daniel shared his take on 3D audio, and where Sennheiser’s legacy of innovation is heading in this space.     

You can view the full video of the interview here. The following is an abridged transcript of that interview edited for AV.Technology.

Christopher Holder: I know you’ve been on an APAC tour, visiting markets such as Japan and Korea as well as Australia. Do you still notice distinctive market differences or are those peculiarities disappearing? 

Daniel Sennheiser: Certain things are specific to certain markets, for example, the Central Asian markets have their own rules and perceptions. That said, globally we see, increasingly, the markets coming together, with increasingly similar products and production methods. So not so many differences at all. 

CH: I imagine this trip is the first to this region since COVID. What are your reflections on Covid as co-CEO of Sennheiser?

DS: Covid resulted in some business changes, like the live audio business, the theatre business and others, going down for a while. At the same time, we saw other businesses, like the home studio and content production businesses go up significantly. It was a surprise to everybody to what extent it actually did. There was no way of predicting how the market responded.

CH: Right. Some of that demand was beyond extraordinary. Has it permanently changed the market?

DS: It didn’t completely change the market because some of those trends were already ongoing, but it accelerated it. Ten years ago, content production was a very professional pursuit, requiring a full team. Today, everybody is a content producer, and that was hugely accelerated. At the same time, musicians or artists who couldn’t go on tour or those who were usually out in professional productions, now stream from home and used the time [during Covid] to create new productions. 

Daniel Sennheiser (right) with co-CEO Andreas Sennheiser. The brothers joined forces to the lead the family business back in 2013.

ZOOMING INTO COVID

CH: When Covid lockdowns hit, everyone became a Zoom or Teams native almost overnight.  That said, the audio could be horrific. What was your response to hearing what we were putting up with, even on national TV?

DS: It was interesting to see what we were willing to put up with to get the conversation across, but I think to really create a connection, the audio quality has to be better. And very often I was thinking, okay, it doesn’t take a lot to improve the audio quality here. Sure enough, people started to upgrade, then everybody saw how it could be better and word got around. We saw a significant upgrade in audio equipment on one side and democratisation in content production on the other side.

CH: You have meeting room products led by the premium TeamConnect Ceiling 2 mic array. What has Covid done for meeting rooms?

DS: Prior to COVID, there were more discussions about meeting in person or hybrid meetings, and now, even after Covid, hybrid meetings aren’t going away — somebody is always calling in. And that requires higher quality audio, especially when it’s a long meeting, otherwise you suffer fatigue and you have misunderstandings. In business, when you’re negotiating, misunderstandings can lead to a lot of difficulties down the road. And when you’re on a call for, say, six hours, you better have good quality audio otherwise you’ll be exhausted and unproductive. So, we see products like the TeamConnect Ceiling 2 proving to be extremely successful in that space, but also our intelligent desktop conferencing device, the TeamConnect Intelligent Speaker, enabling people to have a better understanding and better interactions.

CH: TeamConnect Ceiling 2 is another Sennheiser product that relies on digital audio with sophisticated control software. Where’s conference room audio headed?

DS: First of all, Sennheiser is system agnostic — we believe in open systems; we believe that we should play with everyone who wants to play with us. And as a result, TeamConnect can be found in all sorts of applications — it’s amazing what people come up with, applications we never foresaw — so we see new markets growing from there. At the same time, we also know that TeamConnect Ceiling 2 is most suitable for larger meeting rooms, but people want to conduct in-person and hybrid meetings in smaller rooms as well, such as huddle spaces. Obviously, the whole industry is going that way and we are producing smaller solutions to support this, while also expanding our portfolio to allow more end users in all kinds of environments to enjoy the benefits of the automatic beamforming that TeamConnect Ceiling 2 allows — providing directed and crisp audio, while cancelling out any unwanted sound.

CH: How can systems such as TeamConnect Ceiling 2 get even smarter?

DS: When we work with other manufacturers from the industry to build solutions, the results are going beyond. For example, you can use the positional data from TeamConnect to steer a PTZ camera to more accurately focus on the person who is speaking. We believe that by allowing the metadata to be used, it will produce better results and superior meeting experiences.

JOINING AN IT WORLD

CH: You could argue that TeamConnect is as much an IT product as it is an audio product. What are your thoughts on Sennheiser joining the IT world?

DS: Every microphone will have an IP address one day. So, it’s not a question of whether that’s coming, but only when and what the application is. And that opens new opportunities, in my opinion. Is IT a threat to our business? We are really strong in our position at the crossroads of the analogue world and the digital world. I believe good audio and a good interface from the analogue sound world to the digital end will remain important.

CH: How is the move to digital and software changing your business?

DS: If you look at a product like TeamConnect, it’s already largely a software product. It has microphone capsules, but then the rest of it is a computer. Today, we have significantly more software engineers than traditional engineers. We’re in the process of hiring more than 100 engineers, and those are largely software engineers because today we know that every product is an IT product.

SELLING HEADPHONES, FOR GOOD

CH: You sold your consumer division recently. What was behind that decision?

DS:We looked strategically at all four of our business units at the time [Consumer Audio, Pro Audio, Business Communications and Neumann] and we developed strategies for each of them, realising that there are great opportunities for all four business units. Our next step was to think: how can we really drive and maximise those strategies?  We saw that we had limited resources to focus on the B2B businesses that we were leading — particularly our Pro Audio, Neumann and Business Communications divisions. As a privately-held, family-owned company with an engineering-minded workforce, we decided that the consumer business and especially the consumers themselves would be better served by a different owner. So, as a result, we believe it is better for our customers that we focus on these business areas so that we can  bring even stronger solutions to market in those fields.

CH: That’s good news for audio people, but do you have any regrets?

DS: No, absolutely not. It was a difficult decision. I am going to be honest about that. The consumer business bears my family name. It was Sennheiser who invented the music headphone, the HD414 in 1968. We were specialists in that field, but today it’s not a specialist market anymore. Other rules apply. It’s a huge market that has exploded and we believe we are better in niche markets where there’s a very clear benefit for the customer. The customer is seeing the use of our products and the German engineering. And as a result, the consumer business is better served in a different way. It was a difficult decision, but I see the results already on the pro side being very positive.

CH: How so?

DS: Coming out of the pandemic, the professional audio business is growing again significantly, and we as a company are growing significantly. We have a lot of control over our supply chain, and that has been an advantage this year as supply disruptions are happening everywhere. We didn’t have a major disruption because we produce everything ourselves and we have a very deep understanding of the different components. That was a strategic decision we made several years ago, and we are now seeing the fruits of that.

CH: Did you have to retool for the shortage of components?

DS: Oh, yeah. And that’s a constant over the past three years, actually. We see that getting slightly better now, but a significant part of our R&D workforce used their skills to design new components that were available. As a result, we didn’t have any major disruptions.

AUDIO IN 3D

CH: Sennheiser is a 3D audio pioneer, and it feels immersive audio’s time is finally come. Where is Sennheiser currently at with immersive and 3D audio?

DS: Our mission is to build the future of audio. And we’ve done that since 1945 for Sennheiser and since 1928 for Neumann. If you always try to look ahead and create new innovations, you need to be ahead of the curve. We did a lot of research in the field of spatial audio. Back in the ’70s we brought out the dummy head recording mic — actually, both Neumann and Sennheiser did.

While, for example, The Beatles were recording Sgt Pepper’s at Abbey Road in mono, bands like Pink Floyd were recording in binaural 3D audio. It wasn’t a big success because the the market wasn’t asking for it yet.

You’ve now got the rise of virtual reality, 3D audio, and the metaverse on one side, and also the consumer who looking for more 3D audio because it’s just a more natural experience. Instead of listening to channels, you’re actually listening to a sound object in space. And that’s how our human brain; how our human hearing works as well. So it feels more natural.

We have always believed it will one day come. As a privately owned company, we can afford to believe in it and keep on going with it.

CH: Right. You can afford to have some passion projects.

DS: And this curiosity is very much ingrained in our DNA. We are always challenging the status quo. My grandfather, Fritz, who founded the company, was a scientist. He was not an entrepreneur, initially. And that scientific approach to everything we do is still there. We do a lot of research which doesn’t necessarily have an immediate application, but we understand better audio this way. We understand materials and then processes, and as a result, that intense science work leads to a more intense audio solution, which in the end leads to more intense emotions because that’s what audio is all about.

CH: With the likes of Dolby Atmos Music gaining momentum, how does Sennheiser benefit?

DS: I think we do benefit from it because we have a lot of research in that field. We have Ambeo recording standards. In virtual reality we have wonderful software that allows you to create 3D content in space. Then there’s Dolby Atmos being a standard in a lot of, for example, Netflix productions, and we created an algorithm that is using that and creating a binaural stereo signal which is much more spatialised than the standard stereo signal. In many of the new Netflix productions, you’ll have the Sennheiser-enhanced stereo because most people listen on traditional stereo devices. So if you compare, for example, Season 4 of Stranger Things to Season 3, Stranger Things, you really hear the difference.

CH: How much do you know about Apple’s version of binaural foldown algorithm?

DS: We don’t know exactly where they’re going. We know a lot of our former employees went there. So some of the knowledge obviously also went there. But they did obviously do their own research as well. We focus on creating a very specific application that creates a more natural hearing environment, whether it’s on the recording side or on the playback side. And as a result, we believe that our technology is very advanced in that field and we look forward to the whole industry moving towards that because that’s better for everybody.

CH: You must spend quite a bit of time considering what the metaverse will look like and talk to other  industry leaders at high level. Are you excited about the future?

DS: Absolutely! Usually with such advanced products, we would bring our prototypes and discuss them with the industry under NDA. One example is our Ambeo VR mic. We never intended to make a commercial product out of it. We simply wanted to discuss it with the industry. And then Facebook came along and said, ‘okay, this mic is the standard for VR production’. So we immediately had to scramble and make a product out of it.

TeamConnect was also just a prototype which we sold to some leading customers, initially. So TeamConnect2 is the real product coming out of that.

So this co-creation with our industry partners, with our application specialists, is something we have done since the beginning of the company. After all, the first wireless microphone system was developed together with German TV in 1958. So we have this long standing customer focus — bringing our technology and letting the customer understand what the application really is.

SENNHEISER IN THE PHONE BOOK

CH: Out of interest, Daniel, how common is the surname Sennheiser where you’re from?

DS: Not common at all. I am not aware of anybody else with that surname except our family. There are similar names in Switzerland, but apart from our family and a few fake accounts on social networks, we don’t know anyone else.

CH: So you never really stood a chance! You had to join the family business.

DS: Growing up, I was always very much the rebel in the family. I didn’t want anything to do with the family business. Meanwhile, my brother Andreas, with whom I’m running the company now, was very clear about joining the business since the beginning. He studied engineering and did a PhD in logistics, while I was more in the marketing, sales and design side. It was interesting to see us come together more or less at the same time, being ready for the company when the company needed us. And I think we were able to add quite a lot to the strategy of the company taking it over to the third generation.

CH: It’s quite a unique situation.  I guess we’re safe in saying you’re not likely to sell the business any time soon.

DS: No. We believe there’s a great future for us and the market is proving right now that we bet on the right horse. So we’re very confident we can bring out lots of new products and invest heavily in our production. We’re tripling our capacity in our Romanian manufacturing plant right now. We’re heavily investing in our production in Germany. We’re investing heavily into R&D. And so we’re looking forward to shaping the future of audio.

CH: Anything interesting about to land that you can tell me about?

DS: Christmas is coming. And we all love surprises at Christmas! But I wouldn’t want to reveal anything before the market.

CH: Thanks for your time.