Hartley Peavey on Crest Now and the future By Keith Clark Editorial Director ProSoundWeb

(Editor’s Note: I began a conversation about Crest with Mr. Peavey at 2002 NSCA Expo, but time prevented us from finishing up. In a follow-up discussion via phone, he shared his experiences and future plans for Crest following its acquisition two years ago.)

Hartley Peavey

KC: At this year’s NSCA Expo, we saw some notable new products from Crest, including NexSys 4 and the new CKi line of amps. What’s been the hold-up on new products these past two years? Hartley: We have to look at the history of what transpired when we ended up purchasing Crest. It all got started when (Crest founder) John Lee called me up and asked if Peavey would be interested in doing some contract manufacturing, because Crest had lost the lease on their power amplifier production facility.

John didn’t feel like he could do everything that needed to be done in this regard at their other manufacturing facility, which was primarily dedicated to mixing console production. One thing led to another, and we came to find that Crest was having some difficulties, and to make a long story short, we ended up buying the company.

Pretty quickly, we found a lot of serious problems. Crest had all sorts of people up there in New Jersey that we never did figure out exactly what the heck they did. So we had to make some personnel changes. And the problems extended to almost every part of the company - production, product development, advertising, you name it - and there wasn’t any apparent focus. That’s what we’ve been trying to fix.

This resulted in a blackout on significant new products up until recently. I had assumed that there were quite a few new products in the pipeline. Unfortunately, we discovered there were few to none, and most of what was there was not worth pursuing.

Now, when you operate at the top end of the market, as Crest does, you just don’t say, “well, today, we’ll do a new NexSys system.” It’s a process that has a longer gestation period, but we’re starting to see results.

KC: Do you see Crest staying in New Jersey and retaining its identity in the pro industry?

Hartley: We want to maintain Crest as an independent entity, with its own R & D and sales effort, and in fact, we just moved them into a brand new facility in New Jersey.

So in my view, this is a commitment, and if you see the new facility, you’d see what I mean. The industry is wondering what’s going to happen to Crest. Well, if you don’t have new, state-of-the-art products, you have to start a development program to get it going, which we’ve done.

You don’t just say “we’re going to have something new in six weeks.” Huh-uh. Especially when you’re trying to make a better mousetrap. If you’re on the bottom end of the spectrum, making me-too products, it’s a heck of a lot easier to do it quickly and easily. But when you’re offering state-of-the-art products that compete with the best and sometimes leapfrog past them, it’s a substantial effort.

KC: Do you see Crest and Peavey combining their efforts?

Hartley: One of the first things we did is move the assembly of Crest circuit boards, at least most of them, to our facilities in Mississippi. At first, we left the metal work and final assembly in New Jersey, but it became blatantly obvious that this needed to be done at Peavey as well.

It’s just a logical business move. Peavey is an extensive audio manufacturer, one of the few companies around that makes everything from loudspeakers to microphones to mixers to power amps to digital processing - every link in the audio chain, we make in our own facilities.

This is very important - it is not my intention to make Crest a “Peavey.” That would be really stupid. A lot of people who should know better have assumed, wrongly, that this is what we will do. People ask me if I’m going to put Peavey logos on Crest products, and vice versa. Would that be a smart thing to do? Absolutely not. If it’s that blatantly obvious, do they really think I’m that stupid?

Of course, in certain areas there may be some crossover, say at the upper end of the Peavey range and the lower end of Crest range. In all candor, at Peavey, we make some of the finest products out there. There are very few companies in the pro audio and music markets that have been under the same ownership and management for 37 years. We have.

I’ve watched a lot of “hot-shots” come and go in this industry, watched all the “going public” and conglomerated this and that, and brand names trying to be rejuvenated. One of the things that the audio industry seems to forget from time to time: Companies die, but names never do. To assume that a company with a once-famous name is still the same company today shows a lot of naivete. We have the same thing in the music end of the business - some of my competitors have been bought and sold 16 times but the name is still the same. And the same thing is now happening in the pro audio business.

KC: Will we see Crest products in the MI market?

Hartley: Crest has traditionally not been in certain markets, like music stores, and we want to take it there. Honestly, most of our major competitors in amplifiers have been in music stores for years, which I frankly don’t see anything in the world wrong with.

Crest is a premium brand. There’s no question about it. But so are other brands in music stores. The problem is that it’s one thing to be Crest, but it’s another thing to be in business, in competition.

KC: So what else will we be seeing in terms of new products from Crest?

Hartley: One of the significant things that we have done, recently, is to start combining some of the efforts of our MediaMatrix division with Crest, and primarily the NexSys line. Right now, for example, we’re trying to work on the look and feel of the next generation of all of this, which we hope to show in the very soon.

Everybody and their brother are trying to jump on this whole DSP-based sound system idea. It’s significant to note that we showed ours all the way back in 1993 at the AES convention in New York.

Interestingly enough, people who should have known better thought it was a drafting system. An equal number of people thought this was just a crazy thing to do - why in the world would Peavey be showing a computerized, software-based system? Interestingly, a lot of those people, and the companies they work for, have come out with their own attempts at MediaMatrix.

What they are going to discover are the problems we encountered years ago, Just showing a DSP system, even having one that works, is all well and good. It would be naïve to think that others can’t duplicate what we’ve done.

But what they will find is the amount of support that this requires. When you’re in the software business, there’s tremendous backup and support that you have to do. And some of our friendly competitors think that they are going to come in and under-price us, but they’re thinking like hardware people. They will find out, and so will the consultants and contractors, that just having a DSP-based system similar in look and feel to MediaMatrix, but without the backup, the training, the support, is a whole different ballgame.

What happens is a lot of times consultants and certainly contractors design a system based on the belief that “whatever the specs say is accurate.” And then literally, the DSP runs out of gas - the day before the installation, they find out it doesn’t work, and then they’ve got a big problem. We’ve been there and done that, and so we know.

Some folks believe they can just come up with a system and put a price on it to undermine us, but when they find out the cost of the backup that’s necessary, they’ll finally know what we found out long ago. In the meantime, there’s going to be a lot of people out there who get their fingers burned with hot promises that can’t be backed up.

Business today, almost any business today, is conducted in a minefield. Certainly in my 37 years of doing this, I’ve stepped on my share of mines. It hurts, but you learn. Experience is the great teacher. With MediaMatrix in particular, this is really the case.

We know what to expect.