The Commission Model
There's a cost to AV that's hidden from planners, but it shapes nearly every AV quote that crosses your desk: in-house AV vendors often pay the venue up to 50% of your AV charges in commission.
That's not a small expense that can be managed. That kind of operational overhead isn't sustainable in an open and fair market.
That commission starts a cascade of costs that follows through the rest of your AV budget, even if you don't use the in-house vendor.
No company can hand over half of every invoice and still stay competitive on price. That cost doesn't disappear. It gets rebuilt into the numbers you do see:
Once that pricing structure exists, it has to be protected. That's where understanding contract mechanics becomes a negotiation advantage.
How the vendor commission drives up the cost.
The Barrier Tactic. The clearest example is internet service. Use the in-house vendor, and Wi-Fi or hardline pricing looks almost reasonable, at first. Bring in an outside production partner, and that same connectivity can jump five times higher.
Nothing about the bandwidth changed. What changed is which vendor you selected, and the contract was written to make sure that choice came with a price.
None of this means the in-house vendor is automatically the wrong choice. Familiarity with the venue and established relationships with venue staff have real value.
What matters is knowing the structure exists. Commission percentages, internet pricing tiers, and penalty clauses can all be raised, capped, or removed, but only if you identify them and ask before you sign the venue contract. Once the contract is executed, your leverage is gone.
Understanding where your AV budget is really going, before you commit to a venue, is critical. Ask why pricing changes based on vendor selection. Get the answers in writing.
You can leverage your sleeping room and F&B revenue against these fees to keep your options open, and it can be effective.
That's the work we do at Your AV Department: reviewing venue agreements line by line so there are no artificial barriers keeping you from using the AV production partner YOU choose...., someone you trust.
If you'd like to discuss this, and other ways to protect your AV budget, reach out to me at michaelh@youravdept.com.
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