The Daniel Sennheiser Interview, Co-CEO of Sennheiser

AudioTechnology 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 revealed the current state of play in the region, sharing his insights on how the pandemic accelerated the audio industry. Following the sale of Sennheiser’s consumer division, we dived into the strategic realignment of the Sennheiser business to focus on its pro audio, business communications and Neumann business units. Looking to the future, Daniel shared his take on 3D audio, and what’s to come next in that space.

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

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 there aren’t 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, they now stream from home and used the time [during Covid] to create new productions. 

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 how 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. 

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

HEADPHONES GRAND SALE

CH: You sold your consumer headphone 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 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, 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.

NEUMANN IN THE FAMILY

CH: Sennheiser purchased Neumann back in 1991 and still runs as a separate business unit. What are the differences between Sennheiser and Neumann that set them apart?

DS: Neumann is very much a heritage brand, which doesn’t mean that it’s not innovative — Neumann made the first digital microphones… which were probably ahead of its time.

CH: Solution-D.

DS: Yeah, exactly. And now finally the market is ready for that. Neumann really explores innovation but brings it in a very classic way to the market. For example, the new Miniature Clip Mic system is a true music capsule that has Neumann’s signature sound. It’s absolutely the reference for close miking instruments live, but very much based on recording and the studio. Whereas, at Sennheiser, we have DNA that is also rooted in the broadcast field as well as the music industry. Sennheiser is probably designed to be a bit more rugged. For example, you can find an MKH microphone that is sitting outside on a ski slope for two weeks and it’s working perfectly at -20°. You couldn’t do that with a Neumann as it should be stored in a humidity-controlled cabinet. So, there are different applications, different uses, and different signature sounds to both brands. And that’s why we keep them apart. We have a lot of customers that own both brands for different applications, and they choose the best tool for that production.

3D AUDIO FUTURE

CH: Sennheiser is a 3D audio pioneer, and it feels immersive audio’s time has 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.

For example, while 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 at the time because the market wasn’t asking for 3D audio yet.

You’ve now got the rise of virtual reality, 3D audio, and the metaverse on one side, and also the consumer who is 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 and hearing work. So, immersive audio just 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 productions. For example, in some Netflix productions, we created an algorithm that is using AMBEO two-channel spatial audio to create a binaural stereo signal which is much more immersive 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 talking to other 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 Ceiling 1 was also just a prototype which we sold to some leading customers, initially. So TeamConnect Ceiling 2 is the real product coming out of that.

This co-creation with our industry partners and 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 guide what the possible applications really are.

SENNHAUSER: BEWARE OF PALE IMITATIONS

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, whom I’m running the company with 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. 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.