The Specialty Performance Electronics Future
After much trepidation that what I have written will cause concern, I have decided to go forth and publish this editorial because of recent developments that have caused me concern, as the future is darkening for performance products and the manufacturers and media who support and advocate their merits.
I put the editorial together hastily while on deadline for this January 2013 issue, drawing from my past writings on the subjects. I apologize that there is a degree of repetition, but I thought it important to proceed in any event.
As Widescreen Review enters 2013 with 20 years of publishing in the rear-view mirror, it is timely that I share my personal thoughts on industry trends and the impact on enthusiasts and specialty dealers. Since 2008, the impact of the “Great Recession” has been felt especially throughout the higher end of the consumer electronics industry, which has caused disruptions and frustrations for manufacturers of leading-edge performance and enthusiast home theatre products.
The impact of the meltdown of the economy is significantly impacting the specialty consumer electronics industry. This meltdown has been especially frustrating for me and our dedicated team at Widescreen Review due to a marked decline in advertising support for publications aimed at the consumer electronics serious enthusiast, specialty dealer, and custom installer/integrator markets. As a result, magazines have folded and others have downsized significantly in page count; all have notably defocused on the enthusiasts’ performance home theatre experience.
Widescreen Review has sought throughout our 20 years to educate enthusiasts who want to experience “the real thing,” as intended by the filmmakers and artists who create the movies and multichannel surround music recordings we enjoy.
Dwindling advertising support due to budget cuts, or no budget at all, has impacted us too—not only during the summer months but throughout the year.
Even with more focus put on our Webzine, the support in terms of manufacturers has dramatically dwindled.
For the past 20 years, we’ve written about the latest audio and video technology and have reviewed the home theatre equipment that enables the best possible picture and sound experience in your home. Our mission has been to help our readers to make better decisions when shopping for home theatre equipment.
As anyone who has sought out to purchase a home theatre system knows, there is a huge selection of high-definition home theatre electronics with similar “claimed” specifications. Sorting through the complexities can certainly be confusing. You’re confronted with dozens of technical specifications, different audio and video technologies, and picture and sound enhancement features. Of course, there’s also a huge range of prices.
Without a fundamental knowledge of the technical workings of these offerings and the technologies in play, one’s experience can easily be under optimized.
Over the years we have touched on all of these issues and have attempted to clear up some of the confusion when it comes to selecting the right equipment for your home theatre.
We have also placed much importance on the need for you to make sure that your system is properly set up and the video display, whether CRT, flat panel, or projector/screen, is calibrated to the source components in accordance with industry standards and test signals.
We have written about and shown you how to do these tasks in numerous articles and letter responses during this time.
We have made you aware that there are many differences in the performance of home theatre audio and video components.
We’ve advised that you can’t solely rely on the specifications and features that you’ll read about in product brochures or on the Internet, especially those sites that also sell the equipment they evaluate. Our advice has always been to seek out a knowledgeable dealer who can provide you with personal, detailed demonstrations of the equipment you’re considering, and who can clearly explain the performance features to you. As well, we have always recommended that a qualified calibrator optimize the performance of your system in your home.
But that avenue to personal experience is sadly disappearing at an alarming rate.
A Declining Specialty Dealer Network
With a declining specialty dealer network, it is truly unfortunate that so many high-end performance-minded companies are barely still in business.
Companies that traditionally have defined high performance, especially in the category of audio products, are introducing fewer and fewer products.
Instead, these companies are desperate to lower their costs and reduce end-user pricing. This, in turn, has resulted in a “dumbing down” in overall performance and build quality, and less profitability for the specialty dealers that performance-equipment manufacturers rely on to present, demonstrate, and sell their products. As well, products in the ultra high-end, are no longer affordable for most people.
The once-upon-a-time healthy specialty dealer environment has now deteriorated significantly to the extent that few dealers are equipped with suitable showrooms to properly demonstrate the nuances between source, processing and amplification, and reproduction components, so that consumers can be educated to appreciate the performance differences (often nuanced to the unaware) that superbly designed and crafted components deliver.
The extent of this phenomena is rapidly headed to eventually end in a “commodity” marketplace where “the real thing”–– that is, the optimum performance experience––will only be known to relatively few enthusiasts who are passionate enough and wealthy enough to become educated and find “dealers” who can educate and demonstrate what true optimum performance is all about. Without dealers to properly demonstrate a range of comparative components, there can be no education or appreciation for an optimum performance experience that is “the best that it can be.”
To simply rely on essentially other “consumers,” especially in the context of Internet forum postings, and even “professional reviewers,” to decide your purchase is not wise. In the end, you should experience for yourself the performance attributes of the components you are considering purchasing.
A few performance manufacturers have resorted to “mail-order” manufacturer-direct marketing and sales but are finding that this approach is more difficult than they expected. This has become a secondary and less desirable approach proceeded with first attempting to motivate customers to call their specialty retailer within their immediate market area. Of course, with no dealer within reasonable distance, manufacturers and customers are challenged. Customers are reluctant to try models available on a dealer-direct program, in part, because of the cost and hassle factor of returning the product if they don’t want it. This applies to performance products sold via Internet dealers and other non-manufacturer catalog outlets. The customer dreads the responsibility to pay the return shipping costs should they not end up wanting the product. Of course, manufacturers can offer free freight both ways, but I know of no manufacturer that does. Even then there is the issue of the terms of return––that the product must be packed as originally shipped and pristine in condition. Increasingly, even with the manufacturer-direct approach and with specialty dealers failing, the ability to reach most of the United States market is not working in the way that the manufacturer needs to sustain operations.
The Impact Of Lower-Cost Overseas Manufacturing
The other aspect of this “dumbing down” phenomenon is the ascendance of Chinese manufacturers, who have and will continue to penetrate our, and other nations’, consumer electronics market. This is having, and will have, a far significant impact on the future of high-performance home theatre than is presently realized. More specialty high-performance manufacturers will be less able to compete, and the dealers they rely on to demonstrate their products will be fewer. This will be so because American manufacturers and dealers will be unable to compete with globally sourced products that are marketed by a “race-to-the-bottom pricing” mentality for global dominance.
Sadly, the Chinese position has been facilitated by American manufacturers who have ceased manufacturing in the United States and invested in new productive capital assets in China. They partnered with state-owned Chinese manufacturers who unfairly undercut the production cost and pricing of an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia. As a result, America is experiencing the deindustrialization of our country. Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations–– which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive.
In an effort to increase profits, large mass-market retailers, such as Best Buy®, Costco®, Sam’s Club®, and Walmart®, are increasingly directly sourcing components from China and elsewhere and are expanding their stores globally––selling to their customers “house brands” under different brand names at prices lower than established brand manufacturers can compete against, especially smaller specialty companies. Certainly these mass-market retailers will never know as much about high-performance products as the companies that create true innovation and specialty dealers who are specialized.
From cables to flat screen HDTVs, direct sourcing has become a high priority for large retailers. Thus, numerous audio and video products are fast becoming characterized as “commodities.” Everyone is racing to lower prices, resulting in relatively lower quality, with consumers unaware of performance differences.
As well, the “commodities” race is diluting and eliminating profitability for manufacturers and their dealers.
This is a world phenomenon and is impacting every product we are familiar with, from clothing to 60-inch flat-panel HDTV displays. Even high-end car manufacturers, known icons of quality, are cheapening their vehicle offerings.
The Non-Specialty Dealer Model Is Not Working
This is not a healthy environment for manufacturers seeking to create high-performance components that perform better than the mass-market offerings. This push to price reduction at the expense of superior quality and performance will have the continued effect of forcing smaller, specialty high-end manufacturers and the specialty dealers they must rely on out of business.
Unless specialty high-end and top-tier manufacturers of leading-edge audio and video equipment, and their dealers, cannot counter this movement, there will no longer be a sufficient demand for high-performance components. And without high-performance components, consumers will never be able to fully experience high-definition Blu-ray Disc™, HD, SA-CD, Dolby TrueHD®, DTS-HD® Master Audio™, HD 1080p and Ultra HD 2160p 2D/3D (according to prescribed, precise industry standards), and will have no appreciation for high-performance quality, nor will they be able to rationalize spending their money on things they don’t appreciate because their systems are not up to the task of resolving the inherent high-performance capabilities such formats offer.
Take DVD-Audio and SA-CD, for example, due to a lack of proper demonstration to create consumer demand, those formats died. They do not translate to MP-3 compressed audio quality or two-channel headphone listening.
Ultra HD 2160p, 3D and higher-frame-rate video also will suffer death without direct personal consumer exposure and experience to appreciate the performance benefits.
Without education, consumers will not know what to look and listen for because there will be no place to experience components that seek to perfect the performance capabilities prescribed by the format standards.
I personally believe that DVD-Audio and SA-CD failed due to the lack of personal experiences with these multichannel formats, and not because they were two incompatible formats. (Of course, a single format would have strengthened the category offering, as would be preferable for the 3D category.)
Movies, on the other hand, have had the benefit of exposing millions to theatrical experiences with widescreen motion pictures and surround sound soundtracks, and so it was desirable for people to re-create this experience in the home with widescreen displays and Dolby and DTS surround sound. But sadly, attendance at movie theatres has been on a downside slope for years, countered by rising ticket pricing.
Without continuous and focused education of consumers to the sonic and visual benefits of performance audio and video, there will be no continuation of the enthusiasts market in the magnitude of order to feasibly support manufacturers of performance products and their dealers.
Steadily replacing the specialty dealer is now a range of “custom installers/integrators” and “hybrid dealers.” Manufacturers have created and reached out to this new category of “retailer” by making their products available to large distributors or by selling direct. Increasingly, specialty manufacturers are also selling directly on the Internet or to operations that sell products on the Internet. For example, high-end loudspeaker manufacturer Thiel Audio was among the first to announce that their product line would be sold by Internet retailer Crutchfield. The attraction was the belief that it would result in “added” sales––an effort to connect with “customers with money” beyond the reach of fewer specialty demonstration-capable dealers. But over time, manufacturers are dangerously digging their graves by putting too much emphasis on the “installer/integrator” and Internet channels, with no requirements for properly demonstrating the products they have designed, engineered, and manufactured.
The Custom Electronic Design & Installation Association (CEDIA) no longer is in a growth mode, and has experienced a decline in member support as membership-paying custom installer/integrator businesses become increasingly less sustainable.
What is puzzling about this scenario is that manufacturers cannot deny that knowledgeable education, demonstration, and installation are key parts of getting a good home theatre experience.
No longer are specialty dealers protected in a territorial manner, but now just about anyone establishing a DBA (Doing Business As) can purchase from a number of manufacturer-supported national distributors without having to commit to a product line or inventory the product. This category of “retailer” includes one- or two-person operations and “hybrid” companies with a showroom. But unlike the traditional specialty retailer with a range of demonstration rooms and components to compare, the “hybrid” showroom is more limited to a single set of components displayed as a system, without the facility to compare different components.
It is more lifestyle-driven, without the appreciation for the importance of the performance capabilities of differing components that can be integrated into the lifestyle system. It reflects the “model home” approach, which is designed to create “awe” without revealing what the quality and workmanship of the interworkings of the structure are.
The consumer must entrust the component selection to the “custom installer/integrator,” who they must trust to ensure that the system will be integrated and installed properly in their home (a good rule of business to follow for traditional specialty dealers as well). This approach puts the responsibility for the selection of components almost entirely on the “installer/integrator.”
Manufacturers who support this distribution process essentially eliminate the prospects for their products being evaluated by end users against their competitors. Often is the case that the “lifestyle” system is sold as a package, including the installation. Without the customer knowing the performance quality or real value of the components selected by the “installer/integrator,” there is no way for the customer to know whether they are getting the best possible performance for his or her budgeted expenditure.
Where the specialty manufacturer supports Internet sales (directly or indirectly), end users are at times directed to purchase such products on the Internet for installation by the custom installer/integrator.
The key point that I want to make is that many custom installers/integrators push a few products (those available through distributors). The customer loses out on seeing the product comparisons that a full-service specialty dealer or hybrid custom installation dealer may (but not always) provide but should.
Truth is, that is why consumers need magazines like Widescreen Review even more. And, of course, we could publish even more informative articles with greater advertiser support. Although they should be looking at all of the products themselves and making their own comparative decisions (with some help from us to know what performance attributes to look for and why), many consumers simply cannot experience performance products without going to unusual lengths.
From what I, and others, have read on home theatre forums, and have been told personally, there are a lot of enthusiasts who simply make purchases based on our reviews, and may not experience the product they buy before they receive it, or may not experience the alternative products. This is a true testimonial to the importance of Widescreen Review when it is getting increasingly difficult to experience all of the product alternatives firsthand.
As with supported advertising for the specialty dealer with proper showrooms to demonstrate products, manufacturers who wish to create demand for their products in the custom arena also need to advertise and market their products directly to potential end users. Otherwise, it will come to be as it is now becoming apparent––that performance distinctions will not be recognized or appreciated by end users because they will be sold a “package” that fits their budget without their input on specific components or knowledge of performance differences and nuances, which will result in a higher-performance experience. Thus, further deterioration of knowledge and experience in component performance selection will occur, and the knowledge about and experience of “the real thing” will be lost on potential customers.
This is not to say that there are no “installers/integrators” who care as much about performance as the really good specialty dealers with proper demonstration facilities and product knowledge. They are out there, but how does one know without their providing a showroom? References perhaps, but from other non-experienced clients?
Internet Advertising Versus Specialty Magazines
Those specialty manufacturers that rely on Internet advertising at the expense of education-slanted advertising in magazines, both print and digital editions, limit their ad message to logos and small brand banner notices. At best, this advertising is designed to attract Internet users to click on the banner and be transported to the manufacturer’s Web site. Once at the Web site the manufacturer must successfully invite the site visitor to learn about the company and its products. But this approach to banner advertising is less than ideal for creating the best impression that effective print and digital edition advertising does for reinforcing brand recognition and product knowledge, in addition to letting consumers know where to learn more about the company (via its Web site or by phone), its products, and its dealers who can provide a demonstration experience. Furthermore, computerized apps are available for site visitors to ignore such ads.
Forget the numbers game that trade-only publications play because you know free doesn’t make sales. While other trade magazines boast numbers of free subscribers and Internet sites with free content to attract visitors, Widescreen Review trade subscribers are actual trade members, money-spenders, and decision-makers. Widescreen Review also has more than double the amount of trade subscribers, with end-user subscribers purchasing subscriptions to the magazine to learn about great products and the technologies underlying those products. Our subscription rate is $34.00 for 10 issues, unless special rates are offered. And we reach the owners/buyers of member organizations such as CEDIA, HTSA, Pro Group, etc., as well as serious enthusiast end users wanting to stay abreast of new technologies and new products to improve their home theatre systems, or simply to purchase their first system.
In that context, manufacturers should question what’s more important—numbers or people with money to buy products? And who is more likely to spread the word? Someone who throws a free ad away and pays no attention to Internet banner ads, or someone who has invested in learning about home theatre technologies and products? The answers are clear. Widescreen Review has always put manufacturers’ products in the right hands and in front of the eyes that matter. And with further help from manufacturers there can be an even wider, more extended audience.
Not only does Widescreen Review’s print edition excel in presentation, we extend bonus exposure in ALL of our digital editions of the print edition, whether pdf downloads from our Web site, or on the Mac and Android smartphone and tablet platforms. As a result, you would think that every projector manufacturer would advertise frequently in Widesceen Review, or every screen, or every flat panel, or every processor, or every receiver, or every subwoofer, or every loudspeaker, or every cable manufacturer would, but you would be wrong. This should be a no-brainer proposition, but surprisingly relatively few manufacturers of performance products take advantage of this comprehensive marketing opportunity that reaches trade decision makers and end-user enthusiasts.
Well, I obviously got carried away with some feelings that have been troubling me for some time now. In the end, the impact of this transition from a specialty dealer market––strongly supported by manufacturers and relied on by manufacturers to properly present and demonstrate their products––to a market subjected to price erosion and no up-selling or demonstration of component performance attributes, is resulting in lower profits for specialty manufacturers and their dealers, and lower advertising revenue for enthusiast magazines, print and digital, as with Widescreen Review.
The effective result is a “dumbing down” of consumer expectation and demand for high-performance quality.
What Is Needed?
I believe that what is needed is for manufacturers to realize that if they do not reach out to the enthusiasts who want to and really can and will appreciate their performance achievements and educate new generations, they have nowhere to go. I believe that retailers need to support proper demonstration to create more demand for higher-performance products. I believe that the enthusiasts that read Widescreen Review can support these retailers and manufacturers by buying their products and sharing with their friends the excitement of a high-performance audio and video experience. I believe that our readers can support specialty retail and buy from such retailers and not through the Internet.
If the actions I have advocated are not followed, I believe that eventually brand recognition will become meaningless. And selling on the Internet won’t really help because to appreciate a specialty product’s performance attributes requires a demonstration, which the Internet, no matter how wordily descriptive, cannot deliver. And for specialty dealers to continue to embrace such manufacturers will require that those manufacturers support their dealers with advertising and education that helps to drive potential customers to their stores to personally experience specialty high-performance audio and video components.
The other impact this phenomena is having, which I have previously noted, is that America is now losing its specialty high-performance component manufacturing to China and elsewhere globally where slave labor, non-regulation, government investment incentives, and low or no taxation is the norm. Mass-market consumer electronics were lost to Japan decades ago, and now Japan is losing their competiveness to China and Korea, and established Japanese quality brands are now struggling to cope.
Products once manufactured in America are now being manufactured in Asia and elsewhere so that the manufacturer can remain in business in a world fixed on “bottom pricing.” Brand recognition is deteriorating rapidly, and mass-market retailers are contracting directly with Chinese and Korean manufacturers to produce product exclusively to be branded and sold in their vast network of stores and on the Internet in an effort to squeeze more profit. As alluded to, this is driven by consumer demand for lower and lower prices. The consumer, faced with deteriorating income sources, will always seek the lowest competitive price.
As a result, higher-performance-based products are struggling to survive or are having a tough time coming to market and competing with lower-priced Asian-made products. Thus, American specialty performance manufacturers will be challenged to recoup their R&D investments and sell successfully in a consumer market that is not educated to appreciate and demand pedigree components with documented optimum performance.
An example is the SED HDTV technology, which was never brought to market because of the fading market for premium performance at non-competitive pricing with plasma and LED displays.
The end result is undeniable. America will not be able to compete as long as manufacturers allow their brands and products to become “commoditized” and “dumbed down” as a result of “race-to-the-bottom pricing.”
I believe that we collectively, in the consumer electronics industry, have done a very poor job of positioning high-performance components as top-tier “best-in-class” products that offer performance capabilities to create “the real thing” experience in home theatre and surround music. I just hope that it is not too late to educate up-and-coming generations to appreciate what real high-performance audio and video quality is all about beyond that of headphone and car audio listening and smartphone and tablet viewing. Otherwise, it won’t be just enthusiasts’ magazines unable to flourish but an entire quality performance-driven consumer electronics industry.
The significance is that the performance-setting segment is vital to uplifting overall performance of down-market products. The “Great Recession” has challenged performance specialty manufacturers in their ability of seize the opportunity to gain market share and strengthen their brand recognition and performance reputations. The challenge for them continues to be to figure out how to uplift their status, as perceived by consumers, or concede the current economic climate as a threat to their survival.
This is an unprecedented time and imperative for performance manufacturers to strengthen their brand recognition before consumers, who are increasingly motivated to spend their disposable money much more carefully. Consumers need to be educated and made excited about better performance offerings as the smart buying choice. Manufacturers need to play to consumers’ pent-up dreams for a real home theatre experience. Manufacturers need to penetrate the consumer mind-set to influence his or her desire to want only the best performance products.
Now is the time to put flagship products and technologies and their less-expensive pedigree products out in front of those consumers and to support the dealers who can effectively present and demonstrate performance products.
Widescreen Review can help manufacturers and their dealers “stay focused” and reach those consumers who put quality, performance, and service before price alone. We can help manufacturers and their dealers reach their performance-targeted audience—our readership—and at the same time educate those consumers who are considering lower-end, more affordable performance products that reflect the pedigree of the more pricey flagship products.
While Widescreen Review has been a pioneer in the idea and optimum realization of “home theatre” for 20 years and is widely acknowledged as “the essential home theatre resource,” what has been a frustrating occurrence and observation is that a vast majority of performance manufacturers never reach out to explore with us their technologies and their product offerings for review. As it turns out, we nearly always must approach the manufacturers, and even then months and even years can pass without their marketing heads committing to a story or a product review. And this is a no-charge service we provide as space permits. More troubling is the reality that the majority of marketing heads do not return phone calls to discuss opportunities, or answer and follow-up on e-mails. This results in a poor lack of communication and opportunity.
Still, we are trusted by consumers, other appreciative manufacturers, and dealers who recognize our value proposition.
Home theatre is still very much an experiential in-home family entertainment that the majority of people haven’t experienced in terms of “the best that it can be.” With the “dumbing down” that is occurring, the majority have limited their HDTV experience to soundbars and home-theater-in-a-box (HTIB), having no idea how real discrete 5.1-, 7.1-channel, and 11.1-channel surround sound immerses listeners and creates a visceral experience.
Our readers and those manufacturers who have supported our advocacy optimum performance editorial mission during the past 20 years appreciate Widescreen Review, and we are committed to extending our mutual support. Others, less appreciative, simply expect us to publish their PR with no mutual support.
Struggling To Understand
Our nation is struggling to understand the economic slowdown and significantly what solutions need to be adopted. The “Great Recession” is still ever present and is no longer questionable. Unfortunately, it is not only a reality of life today in the United States but also in the rest of the world. The impact has been daunting and disruptive. Not only are performance specialty manufacturers and their dealers, as well as mainstream consumer electronics companies, facing a lingering recessive economic climate, we at Widescreen Review are facing the most challenging market we have ever experienced.
The impact is threatening our very existence as a publication. Like other small companies, and large companies as well, in this economic climate, we have had to take further steps to reduce our operational costs in order to weather the broken economy.
Unless you live in an information void, it’s hard to escape the endless stream of negative news. This is impacting not only our own small, independent publishing company, but that of the significantly larger publishing houses as well: sliding ad pages and thus, less revenue; skyrocketing distribution costs; slashed marketing budgets; company consolidations; and downsized staffs, both internal and outside writers. Digital publishing is not escaping the gloom either. Notably, several large publishing enterprises are still for sale or have recently been acquired and absorbed into still larger conglomerates. Others have unfortunately folded and no longer have a presence. All are seeking ways to reduce operational costs. All are reducing page count and/or publishing frequency.
The economic climate has never been so daunting and challenging. As a result, back in October 2008, in order to sustain the magazine, we reduced our page count to 68 pages and implemented other cost-reduction actions to be able to continue publishing. At the same time, we put more effort into our Webzine content.
Yet advertising support, which is a necessity to publishing, continues to dwindle throughout the publishing world.
While I have argued in past editorials that this is an unprecedented
time for performance manufacturers to strengthen their brand recognition and product performance attributes, the old saying that “you get what you expect” is overshadowing their efforts and too many are having to concede the current economic climate as a threat to their survival.
They, or we in publishing, should not be blamed because what can you do when there is significantly less revenue to operate your business? What is the blame is out-sourcing manufacturing and lax trade laws that create an unfair trade balance, as well as the hoarding of productive capital asset ownership that restricts ordinary Americans who are non- or under-capitalized from acquiring a viable income-producing capital estate paid for out of future earnings of the investments (see the subsection “The Absent Conversation”).
Consumer desires for a better electronic lifestyle are still strong, and the drive for product success is still there. Manufacturers want to create consumer desire and demand for their products, and retailers want consumers to purchase these products in their particular stores.
Unfortunately, the performance end of the consumer electronics market has lost countless specialists stores that had the capability for excellent demonstration and personalized sales support. Ever since the advent of home audio, stereo, and home theatre, this has been the proven method for educating consumers on performance products. Undeniably, consumers still need to be educated and be made excited about better performance offerings as the smart buying choice. But increasingly in-home tech support and in-store demos, which users indicate are often lacking in their consumer sales experiences, are harder to come by.
As previously argued, the Internet is not the solution to this need. The Internet cannot deliver personalized face-to-face interaction and education. The Internet cannot replace the reallife demonstration and personal communication that a good store/salesperson experience can deliver. Selling on the Internet, other than commodity products not requiring demonstration, is a mistake increasingly being made by manufacturers of high-performance products, and ultimately will bring doom and gloom to their existence, destroying their good store/salesperson family, which they worked so hard to enlist, engage, educate, and support.
Nor are the “regional” consumer shows that showcase manufacturers and dealers in demonstration mode in cramped hotel rooms. While they offer the opportunity for consumers to experience products, the norm for these shows is limited to stereo with, at best, a smattering of home theatre system experiences. Still, “regional” shows are better than no in-person experience at all.
While I have argued that in an economic downturn the worst thing manufacturers and retailers can do is to cut back on advertising and marketing, I recognize that during these times, where money may be tight, companies more than ever need to instill in potential customers an extraordinary reason to buy and a sense of immediacy.
While there is no doubt that these times are extremely trying, the performance-oriented customer, if not most people still employed, still has discretionary funds, but are far more careful about how they spend these funds. Manufacturers and their retailers need to play to consumers’ pent-up demand.
During this time period, manufacturers need to have penetrated the consumer mind-set to influence his or her desire to want only the best performance products so that when the economy does strengthen, they will have targeted the products they want.
Thus, now is the time to put flagship products and technologies out in front of those consumers and to support the dealers who can effectively present and demonstrate performance products, and the publication who writes about such products.
Manufacturers who solely rely on so-called “custom installers/integrators” (the name describing the new “demo-room-less dealer”) are risking deflating their brand reputation, which they have earned through face-to-face product education and comparative demonstration.
While everyone wants the economy to burst out once again, and in the not-too-distant future, in both the poorest and best of times, consumer product education will remain key to successful product introductions and sell through.
As noted previously, Widescreen Review helps manufacturers and their dealers “stay focused” and reach trade dealers and consumers who put quality, performance, and service before price alone. We have helped manufacturers and their dealers reach their performance-targeted audience—our readership (both trade and end users)—and at the same time educate those consumers who are considering lower-end, more affordable performance products that reflect the pedigree of pricier flagship products. At the same time, manufacturers are reaching the specialty and “custom installer/integrator” dealer channels through Widescreen Review, which is widely read by the owner/retailers who believe in staying abreast of technologies and new product performance attributes—in essence, those bent on staying educated.
So, with the support of manufacturers, we will do our best to continue providing such support during these recessive times, as well as provide our readers with content that is valuable in both education and performance.
The Economy And The Specialty Consumer Electronics Industry
As noted previously, the meltdown of the economy is significantly impacting the specialty consumer electronics industry. Because of the industry shakeout, manufacturers, specialty dealers, distributors, and buying groups serving the high-performance product category are re-evaluating their businesses and sell-through channel strategies. If there was ever a time to re-embrace the specialty high-performance retailer with the consultative sales and product demonstration floor, now is the time.
Traditionally, the specialty dealer has provided face-to-face education, product selection, demonstration, and service. Manufacturers traditionally supported this channel and relied on these dealers to reinforce product brand awareness and performance through education and demonstration.
During the past two decades, manufacturers began to pay more attention to new product delivery channels to grow sell-through numbers and gross sales volume––even though less profitable, based on a per unit sale. This has resulted in manufacturers supporting discount warehouse retailers, online Internet stores, and individual or small company “custom installer/integrators,” serviced by large distributers, who stock product for these new sales channels.
As a result of this shift in manufacturer support, the specialty retailer is now unable to compete with “sales” operations that have no comparative costly brick-and-mortar operations, nor can they avoid, as do many Internet companies, collecting the sales tax. Nor can they compete with warehouse retailers who operate on extremely low profit margins, low labor cost expenditures, and provide no product education or consultative sales support. Warehouse discount and Internet retailers can operate on far less profit than specialty retailers, who thus cannot compete on price.
Without profitability, there is no prosperity.
For the specialty performance retailer to survive, manufacturers need to help them improve their operations, to cut costs and draw potential customer traffic.
Manufacturers will have to clearly define themselves in the marketplace––manufacturing commodity products or differentiated performance products. If they opt for brand recognition as a performance-product manufacturer, then they need to support specialty retailers, and they need their distributors to provide specialty retailers with performance products with minimal inventory investment, while extending the credit to do so.
Without this support, specialty retailers will not survive in an otherwise retail world that is in a race-to-bottom pricing and selling commodity products at the lowest price.
Extending support to specialty dealers is more critical than ever, especially now, since the credit system is so dysfunctional, and there’s limited money available for customers to buy product or to finance product purchases. And if there are fewer and fewer “customers with money,” then there will be fewer sales attributed to “pricey” performance products.
There is also the reality that consumers, given the current economic environment, will be hesitant to spend without prudent consideration. It is simply an unrealistic expectation that consumers with limited and dwindling income will purchase differentiated performance product without researching the product and engaging in consultative face-to-face interaction with a specialty retailer. Some manufacturers with specialized products argue that the end user is not a factor, that the custom installer/integrator’s recommendation is all that is necessary for their product to be purchased. While this seems logical for basically “hidden” components, including switching, matrixing, and distribution products, it does not seem well suited to performance source, amplification, and reproduction products. I have been told that the owner/decision makers of custom integration companies are secondary to product purchases because it is the field people who are the real decision makers. This enlightenment came about as a result of discussions with manufacturers who were informed that Widescreen Review is requested and subscribed to by the owner/members of CEDIA, PRO Group, HES, Nationwide, and HTSA and provided at no charge as a support service, though not free of charge to the people working under the owner/member. These manufacturers are not concerned with recognition on the part of end users who purchase their products through a custom installer/integrator. Nor do these manufacturers seek independent product reviews to confirm performance and value.
Consumer electronics is a never-ending parade of new product introductions on an annual or semi-annual basis, whether based on new technologies or improvements to old technologies. This reflects the constant evolving nature of technological prowess. Those manufacturers who cannot invest in technological innovation and invention are left behind.
Manufacturers and specialty dealers must constantly reach out to potential customers to educate them to these new introductions, otherwise, there will be no awareness and fostering of the state of the art. And without awareness there can be no demand for products consumers don’t even know about.
Performance-product manufacturers need to introduce new products, through press releases, to the performance-enthusiast media and through trade shows that are attended by specialty dealers and the press. These are the two fundamental steps to introduction of new products. Yet not all manufacturers actually pursue these steps and rely on potential customers discovering their Web sites without media reference. Furthermore, few manufacturers reach out to the media to explore story development and to review their products in trusted print and digital edition publications. Instead, they rely on the media to contact them, and, even then, often stories are never developed nor are their products provided for review. This is a complete failure on the part of marketing heads and their departments employed by manufacturer owners.
After all is said and done to project product awareness, the consultative sales experience is crucial. This is the step in which the potential customer interacts with the dealer to further their education of the product and in-person evaluation. The demo gets the deal.
While reviews in trusted print and digital edition publications followed with Internet discussion forums are pluses, surprisingly few manufacturers optimize these opportunities. Still, all the research, reading, and discussion will never substitute for the consultative sales and demonstration experience in which the consumer can personally evaluate a product’s features and performance attributes.
Demonstration is key to, for example, showing plasma versus LCD, LCD 240 Hz versus 120 Hz, Ultra HD 2160p versus HD 1080p, screen gain versus no screen gain, 3D versus 2D, 11.1-channel versus 7.1-channel versus 5.1-channel surround, full-range loudspeaker performance versus limited-range loudspeaker performance, large widescreen projection versus flat panel viewing, Blu-ray Disc versus streaming, lossless versus lossy compressed audio, or the D-BOX® Motion experience versus non-motion, etc.
That’s where the retail experience has the advantage, where a visceral experience can be demonstrated. And that’s what performance manufacturers and specialty retailers have to communicate to potential customers.
The specialty retail channel offers the best opportunity for manufacturers to present their performance products and to educate current and upcoming generations to appreciate quality.
But for this retail channel approach to be successful, manufacturers must stop making available their performance products for sale online and to large distributors servicing the so-called “custom installer/integrator” and other individuals, small companies, and Internet “stores” without the requirement or minimum requirement to stock and display, and demonstrate product.
Without this policy change, the steady demise of the specialty retailer will continue. When there are too few specialty retailers left, performance-product manufacturers will find they have no other channel to replace this traditional storefront-personalized-operation that stocked, displayed, and demonstrated a variety of performance products, while providing education to consumers through face-to-face interaction and A/B product and system comparisons.
While most of the blame for the deterioration of the specialty retailer and the differentiated performance-product category should be attributed to manufacturers, specialty retailers have played a big part over the years in the quick commoditization or reduction of profit levels, in an effort to stay competitive in the race to bottom-pricing.
Retailers need to regain their competitive advantage as educators that explain and demonstrate to the consumer that there’s an experience to be had with performance products that commodity products cannot deliver. Otherwise, if manufacturers decide to position their performance products as priced-shopped commodities, then profitability will significantly decline, and there will be no economic incentive to pay for R&D to develop new technologies related to product development, and less opportunity to recoup their investment through sales to quality-appreciative consumers. The bottom line is performance manufacturers cannot function if their products are priced at the entry or commodity level, because there would be significantly less money generated to pay for the technology. And at some decisive point, the manufacturer will find that it is no longer profitable to further innovate and manufacture upscale performance product.
This is already occurring as, unfortunately, manufacturers have become focused on how many boxes they can move and how much market share they can grab, no matter how they have to get there. For far too long, short-term gains have been prized over long-term regard for the health and prosperity of specialty-performance-product retailers with a consultative sales floor and performance product demonstration capability.
As manufacturers race to “bottom pricing,” the result has been internal consolidation with substantially less employees and substantially increased workloads and responsibility expected of those not laid off. Of course, this further exasperates the national problem of the decline of “customers with money” to purchase the products and services our economy is capable of providing.
Another problem increasingly facing specialty-performance-product manufacturers is the availability of product on the Internet. New generations are developing habits where they do not shop at brick-and-mortar stores. Instead they research and purchase products online. And often when they do shop at a specialty retailer, it is for the purpose of getting educated about and experiencing the product in-person, with no intention to purchase until they have searched for the best price on the Internet. Numerous apps are available to smartphone and tablet owners to verify instantly (even by scanning the product’s bar code) where else the product can be purchased at less cost. The specialty retailer simply cannot win in this scenario, in which the lowest price determines the sale, or in which price, not brand recognition, performance, and service, is the driving force. As argued above, this trend will eventually cause the collapse of the brick-and-mortar retail experience and the demise of traditional brands who cannot compete on pricing, or who cannot sustain profitability on entry-level or low-cost products.
Increasingly large electronics retailers are investing in direct OEM product sourced from China and elsewhere in Asia to sell as their own brand. Additionally, large electronics retailers such as Best Buy and Magnolia are struggling to survive as the race-to-bottom pricing squeezes the last pennies of profitability.
This scenario is a vicious circle driven by the race to bottom pricing and by consumers strapped, with less and less money to spend on non-essential products for survival. It is quite amazing that millions of people are now engaged with their smartphones and tablets as their personal “home theatre” delivery source brought to them by a “headphone” set. They have no idea what visceral experience can be had with a real home theatre system, or if they do, they do not have the income to support such an experience.
Who is to blame here?
Well, squarely, it is the manufacturers who have made the decision to sell their products to this retail channel fixated on selling at the lowest price and lowest-profit margins. This has developed into a domino effect, with those manufacturers, failing to comply, struggling to sustain their business.
Should performance-product manufacturers subscribe to bare margin online sales and discount warehouse sales, then the specialty retailer will die, and there will be no place for consumers to experience through demonstration differentiated performance attributes, and to become aware of real visceral performance differences.
Manufacturers need to ask themselves what they will do when the specialty retail channel is gone, or for that matter the custom installer/integrator channel. Who will they partner with, and which channel can actually sell the products that they make money on as a manufacturer?
As performance manufacturers move to embrace online and discount warehouse retailers, they degrade their brand, which for most, has been established over many, many years of proven performance. Remember that specialty retailers have always helped such manufacturers by playing up the earned mystique associated with their products in their showrooms. Educated and experienced salespeople were able to explain features and demonstrate performance, aided by trustworthy product reviews and media editorials that provided education related to the technologies and optimum setup scenarios. And as the products gained further recognition in the marketplace, consumers had to go to the specialist retailer to experience them for themselves and purchase them. There were no alternative “wholesale” or “cost plus” online or warehouse store outlets where these products could be purchased. But once manufacturers dilute the market and spread their product out to non-specialty retailers, then the mystique is degraded to “meaningless” status. This trend is now in play.
That’s what is happening now to manufacturers who make performance products and are opting to sell their products online or to discount warehouse retailers.
A further decline in specialty retail will cause specialty products to disappear, and there will be less differentiated product. I blame the manufacturers for this, as they control whom they sell their products to. Magnolia’s, The Good Guys’, Tweeter’s, and Harvey Electronics’ lack of success was caused from the inability to compete with “discounters” who offer the lowest price but do not have to invest in operations such as these specialty retailers had to in order to properly provide consumer education and demonstration, as well as follow up service and warranty. Manufacturers allowed this crash to happen.
Often the CEOs who are hired by the publicly owned and stock-traded manufacturers, and those of equity “buy out” firms, are mandated to reduce costs and to fatten profitability, no matter what the cost. As they fail, one after another, they often still receive “golden parachute” sums upon their departure followed by the next CEO who has convinced the owners that they have the “secret formula” to turn losses to gains. The constant decline of potential “customers with money” translates to less R&D, product innovation, and marketing and advertising, which results in less performance brand recognition. It also leads manufacturers to create “the next big thing” to obsolete the previous technology. This is the case of Ultra HD 2160p, even though to fully appreciate Ultra HD 2160p requires a screen width greater than 12-feet wide. Already, to fully appreciate HD 1080p requires a 5.5-foot or wider screen. How many potential consumers are there with the interior real estate in their homes to support such a wide screen and the associated volume, to comfortably view the picture, and experience an immersive soundtrack?
In these stressful economic times, it very important for manufacturers to declare whom they’re going to support and where they’re going to place their effort, and then for retailers to do the same. There needs to be a new partnership between performance-product manufacturers and specialty retailers to re-establish the consultative sales floor to sell step-up differentiated performance product with education and demonstration and follow-up service and warranty.
The Internet’s Impact
The Internet has brought us reading and visual content that is utterly staggering and mind-boggling. There are thousands of blogger sites that claim “magazine” status and many end-user discussion or “mini-blogger” forums. Some even unethically sell the equipment that they discuss or review. And, of course, every manufacturer has a Web site. Some manufacturers, as well, offer their products directly via their online Web site or through telesale transactions or dealer-direct via the manufacturer. Information is available as never before. Whether it is reliable and truthful and to be trusted is another question.
An increasing aspect of the Internet is the blogger sphere in which press releases issued by manufacturers are rehashed and published as “news.” In reality, it is PR for the manufacturers at no cost. In recent years, the blogger contingent has invaded the International Consumer Electronics Show (CES) in unprecedented numbers, focused essentially on “news” reporting of the latest product introductions obtained from distributed press releases during the event.
While the Internet has widened the access to information, and consumers can see and read about more audio and video products than ever before, it is ironic that there are today actually few opportunities to “experience” all that is available. The marketplace for brick-and-mortar “experience” showcases is not what it used to be, and you won’t find “the best that it can be” at Best Buy or Magnolia, nor are you able to experience all the truly great performance gear that is available that you may have read about in Widescreen Review and other publications, including on the Internet, even if you have an independent specialty dealer in your area.
Today’s market is geared to what the “box store chains” perceive will appeal to the majority of consumers without having to educate consumers on performance nuances. You may be able to find choice performance products at independent specialty stores, but then increasingly, such retailers with capable demonstration and education wherewithal are sadly folding. There just are not enough left, with, in many markets, only one still in business if any at all. So, increasingly, there are fewer and fewer opportunities to “experience” true high-performance products. This in turn is resulting in a “dumbing down” in performance quality to the commodity level, and worse, is depleting the very necessary one-on-one personal education and demonstration that is necessary to insure the appreciation of “the best that it can be” by future generations.
Why? I have written extensively about this phenomenon and have repeated myself even within this editorial. I blame the meltdown on manufacturers bent on the immediacy of “quick” revenues and growing sales, without regard for the consequences. Ownership and management tends to be solely focused on “numbers” couched in short-term time frames and factory output. Sadly out-sourced manufacturing to China and Asia is the trend as well. And, as noted previously, this has caused a domino effect.
The Internet cannot effectively bolster high-performance product manufacturers, especially long term, because in the final analysis, manufacturers will need dealers to educate and demonstrate to potential customers their performance products, to be fully understood, appreciated, and wanted. Only brick-and-mortar stores can provide the proper personal experience setting to educate about the existence of select products and excite the desires of potential customers to want to buy better performance gear in the pursuit of “the best that it can be.” The virtual world of the Internet is not structured to provide the personal interaction that “live” demonstrations can deliver. This is why it is so crucial that small business independent specialty dealers with education and demonstration capabilities are supported by manufacturers of performance products. It is why I have always stressed that Widescreen Review is “the essential home theatre resource” that should be read by enthusiast consumers and dealers to appreciate the technologies, the proper setup, the performance attributes of the equipment, and the content that results in “the best that it can be” home theatre experience.
Today, as previously noted, too much emphasis is put on advertising to the dealer network through trade publications, with the expectation that the dealer will dictate the product sale. Manufactures overlook or ignore the fact that it is the end user consumer that is their real customer. There is the notion shared by some manufacturers that the “custom installer” makes the purchase decisions for the consumer. The opinion is that the consumer doesn’t care about how his or her money is spent on a system. I can certainly agree that there are some consumers who are rich enough not to be concerned with making such purchasing decisions and who instruct their “custom installer/integrator” to purchase what the installer/integrator believes is the “best that money can buy,” or the best performance value for the money, or the most prestigious. But I seriously doubt that consumers making less than $250,000 a year are inclined to regulate their purchase decisions to a “custom installer/integrator,” without their personal understanding as to what that performance-value equation means (and deny themselves the thrill of evaluation). Yet, certain manufacturers of performance products have decided to market and promote (advertise) only to the “custom installer/integrator” via trade journals focused on news and business advice to that segment that are provided free to anyone claiming to be a “custom installer/integrator.” They are largely abandoning marketing and promoting to the end user, as has been the wisdom for centuries, for products meant to be purchased by consumers. This movement among those manufacturers largely marketing to “custom installers/ integrators” has impacted all performance-content magazines, both print and digital editions, read by serious enthusiast end users.
While the manufacturer-supported large distributors maintain showrooms with competitively priced products and manufacturer training, this is for the benefit of the custom installer/integrator, not the end user. The “selling” is to the custom installer/integrator, who is then expected to “sell” and “push” the product to the end user. This is similar to the traditional role manufacturers have had with specialty retailers, except that end users benefited directly by visiting brick-and-mortar stores and conversing with trained salespeople who could explain and demonstrate through A/B product comparisons. There are, for the most part, no requirements for the custom installer/integrator to stock and display and demonstrate product. Individual custom installers/integrators can simply purchase as needed, without regard to quantity, a product or products for an install. Some custom installer/integrator services are divisions of brick-and-mortar stores with “demo/education” facilities, but a large majority of custom installers are small operations with no storefronts and no capability to demonstrate product. Distributor showrooms are restricted to resellers with a tax ID.
Some custom installers/integrators purchase products as needed through licensed and manufacture-authorized retailers, which is generally not supposed to be permitted under the selling terms set by manufacturers.
Manufacturers who are allowing their performance products to be sold through non-brick-and-mortar and non-demo/education custom installers and on the Internet are a problem for the specialty retailer, and thus, for consumers who desire to experience in person what performance products are all about. If this scenario persists, the complete demise of specialty dealers with brick-and-mortar stores with “demo/education” facilities will result.
It seems strange that as a society we are increasingly adopting “catalog” Internet purchase searches rather than the in-person shopping experience due in large measure to lower cost. The opportunities and choices for being able to see, touch, and experience specialty audio and video products that potentially interest us is becoming more and more scarce as Internet, “warehouse,” and “box store chains” win the consumers’ dollars, with lower prices for the same product showcased at specialty dealers. These conditions significantly result in the demise of specialty dealers and specialty high-performance product manufacturing. A far more sustainable use of the Internet would be to direct interested consumers to exclusively authorized brick-and-mortar stores with “demo/education” facilities to transact sales. Such policies would incentivize specialty retailers to broaden their territories and widen their product offerings.
Today, consumers are enticed with the “lowest” prices on the Internet or at the “warehouse” or “box store chain” and are able to ignore the in-person experience, or to opt for the in-person experience and then purchase the product on the Internet––if they can find it being sold. This hurts brick-and-mortar retailers.
Today’s specialty retailers are increasingly dealing with enthusiasts, who have gathered opinions from magazines, Web sites, and Internet forums. These interested consumers come into their stores (when they can find them) to confirm for themselves the performance qualities and benefits of products they have read about (if the store carries them).
But the store experience is increasingly used to verify product claims with the interested consumer ending up leaving the store to seek the lowest price elsewhere at a discount “warehouse” store or on the Internet. Often, the end user, who has purchased the product elsewhere at the cheapest price, will return to the specialty retailer to request installation service or specific guidance, even though the product was not purchased there.
So, it comes down to the manufacturers of performance products and their decision to sell their product to non-brick-and-mortar specialty retailers––thus no longer assuring specialty retailers of exclusivity. Thus, those manufacturers opting to do so are contributing to the demise of the specialty retailer and the service that they can provide for enriching the positive perception of consumers toward their products.
Brand recognition and respect and praise are important. The specialty retailer, as well as the enthusiast press, has always driven such consumer perceptions. But without specialty retailers, brand appreciation for performance products will eventually disappear. That will end up creating the perception that except for “features,” there is no “real” difference in performance, so the lowest price will dominate the purchase decision. No longer will there be the respected and trusted specialty dealer who educates and demonstrates, and thus instills the perception and reality of performance attributes and the appreciation for such.
Because of this movement to the Internet, “discount outlets,” and the non-brick-and-mortar “custom installer/integrator” operations, manufacturers are digging a hole that will eventually bury the performance products category because consumers will have nowhere to experience in person the benefits and nuances, which can be subtle but distinguishing and appreciative, and that result in “the best that it can be” picture and sound experience.
This movement to non-personal involvement in performance product selection and purchase decisions is not suddenly going to reverse itself and return to the esteemed position that specialty retailers once claimed, wherein they provided their customers with product education, demonstration, after purchase in-home installation, service, and warranty. It will take some time before manufacturers of performance products realize what they helped to destroy. But will it be too late? Currently manufacturers are largely existing on their brand’s reputation that has been fortified through advertising and marketing in traditional media and through specialty stores over a period of years (up to 2007 when the economy began its downturn). But will such reputations last in a world where the lowest bottom price is what drives consumers to the Internet, unknowing about performance and why true performance products cost more? Even with all the dissemination of information, both in print and digital delivery and online, and through moving pictures, without the real world of personal experience there will be no way to grow real appreciation for performance products. It has been nearly six years since the meltdown started to take hold, with no end in sight, and the clock continues to move precariously forward but at an all too unsure pace. This is true for the hardware, as well as the content reproduced through the hardware. In the meantime, manufacturers of performance products and content producers continue to lose the proven means to create excitement and demand for their innovation and creativity.
Widescreen Review Distribution
As a publication, we are constantly being challenged by this developing scenario. Our distribution is three-prong: 1) direct our content to the enthusiast, whether the end-user consumer who purchases performance products or the specialty retailer or “custom installer/integrator” who seeks knowledge to better represent performance products to consumers; 2) distribute the magazine to the owner/decision makers belonging to the influential manufacturer and retailer member trade groups (CEDIA, PRO Group, HES, Nationwide, and HTSA) to keep the “specialty dealer” and “custom installer/integrator” side of the business aware of our educational role; and 3) maintain a mirror replica of the magazine (we call it a Webzine), plus other information such as industry news, back issues, and searchable databases on the Internet (www.widescreenreview.com). As well, the print edition is published as a digital formatted edition optimized for smartphones and tablets, both Apple and Android platforms, and pdf downloads.
But these three avenues of enthusiast education cannot continue without the advertising support of manufacturers of performance products and the content producers who value our role in the big picture and who desire to protect their share of an increasingly smaller market. Unfortunately, and increasingly, manufacturers see publications such as Widescreen Review, and especially Internet sites, as free PR outlets and expect coverage without reciprocal support with ad placements to support the infrastructure for accurate information dissemination. Amazingly, there are an unbelievable number of performance manufacturers who are not yet prepared to publish a
“full-page” ad for either print or digital smartphone, tablet, and pdf download. Their marketing does not extend beyond a simple Web site banner ad or PR news release placement, or ad monies for dealers placing local newspaper ads promoting “sales” and competitive pricing.
Widescreen Review remains the single print and online publication that speaks to serious home theatre enthusiasts and various trade channels, who desire a technology education and in-depth educational product reviews, as well as expert picture and sound 2D and 3D Blu-ray Disc reviews. We don’t cover the cheapest source players, HDTVs, projectors, screens, amplifiers, receivers, loudspeakers, or other so-called “home theatre” products, so we’re not about reaching people who are just looking for the cheapest home theatre products. You will only find in Widescreen Review coverage of true performance products. We are a trusted, enthusiast performance magazine that focuses exclusively on what higher-end manufacturers produce and specialty dealers/custom installers/integrators sell and service. We have been carrying the high-performance flag for 20 years, earning the respect of end-user serious enthusiasts and home theatre installers/specialty dealers/ integrators, who must sell, install, and explain how to use and operate performance products. Our publication is better able to reach the targeted home theatre consumer who will be most interested, and most receptive, and most appreciative of the information offered.
I would like to reinforce Widescreen Review’s long-standing reputation for writing honest, factual, and non-biased equipment reviews and honest reviews of the picture and sound quality of optical discs, specifically 2D and 3D Blu-ray Disc releases. While there is certainly the desire by manufacturers to receive glowingly positive reviews of their products, we write our evaluations honestly, as we see them, based primarily on performance. In fact, over the years we have withheld publishing some product reviews because we found the products to be seriously deficient in performance by our standards. Our critiques have, at times, been valuable to manufacturers for making improvements to their products. Our mission has always been to share products that we have reviewed and found to perform well in their respective category and that we can recommend to our readers.
Fortunately, because we deal with “higher-end” performance products, such products typically perform better and often set the performance benchmark for all other products in their respective category. Not all manufacturers appreciate our honesty, but our mission is to always remain true to our readers.
Free Is A Dead End
LaserDisc spawned the seeds of home theatre and gave birth to an appreciative enthusiast audience. DVD (and now 2D and 3D Blu-ray Disc) has been the driving force behind the growth of home theatre. The start of DVD technology spread the idea for the common consumer to embrace home theatre; businesses expanded; and others sadly disappeared. Widescreen Review was born in the twilight of the LaserDisc era and has blossomed throughout the DVD and Blu-ray Disc eras. Now, 173 issues later, we continue to advocate for an era of high-performance home theatre propelled by high-definition 2D and 3D Blu-ray optical discs with lossless multichannel surround sound. Without the steady growth of DVD and Blu-ray Disc releases, studios will be challenged to keep making blockbuster movies, which cost upwards of $175 million to make and market––a figure no studio is likely to recoup from theatrical ticket sales alone, no matter how strong. As well, this scenario is true for the escalating costs of television shows. But there are signs that the growth in optical disc sales and multichannel pay HDTV services is slowing down.
The reason simply put is that people will choose not to purchase optical discs or buy subscription programming services if they can get the same content for low cost or free. And that holds potentially significant implications for home theatre enthusiasts. While there has been a successful transition to high-definition via Blu-ray Disc and HDTV, free cannot replace pay.
Will new Internet delivery technologies (low cost or free) further threaten optical disc sales and HDTV subscription services? To do so will mean that viewers are moving from the big widescreen experience to the small computer, tablet, or smartphone screen. Any content provider that allows this to happen will jeopardize future revenue and wreck the opportunities for continued content creation. The Internet model of “free” content has wrecked the publishing world (self-imposed), and Internet distribution has wrecked so many other sectors with low-price commoditization (manufacturer self-imposed). This phenomenon also is not bolstering the appreciation of a high-performance experience.
Sure, you can “watch” high-definition-derived content on a computer, tablet, or smartphone screen, but how does that image compare to the viewing experience on a 46-inch or larger wide screen? In addition to the small screen size, Internet-delivered video is heavily compressed and buffered. Seldom will content be available in the 1080p/1080i/720p/60 format. And even when so, the small screen is incapable of fully displaying the resolution and full image fidelity.
Of course, the sonics are degraded as well with spatial compression and low fidelity, not to mention the absence of holosonic® discrete multichannel soundfield engagement that no headphone can deliver (except for the Smyth Research Realiser A8 Headphone Surround Simulator system). On a truly optimal home theatre system, with well-produced content, the experience can be excitingly visceral.
This scenario should not be welcomed or embraced by content creators or manufacturers pursuing “the best that it can be” in moving picture creativity and master audio reproduction. Nor is it a healthy direction for the future of performance products and the nurturing of future generations to fully appreciate “the best that it can be” home theatre experience. While undeniably, technology will continue to offer new delivery and viewing options; but without money paid to content owners, motion pictures, television shows, music performances, and video games will cease or diminish in quantity and quality.
This, in turn, will result in diminishing demand for video and audio products that are capable of master quality reproduction, because a home theatre/surround music system can never perform better than the quality limits set by the source material. People will pay for premium performance when the source content delivers quality and they can experience the differences. Note: to read more related to this theme please see my article “150 Issues Of Widescreen Review” published in Issue 150. Also read Tricia Spears’ “The Future Of Retail” published in Issue 167.
The Absent Conversation
Recently I was invited by The Huffington Post to write an article based on past and current endeavors as an economist advocate for economic justice. I have authored over 850 articles, commentary, and blog posts on www.ForEconomicJustice.org and numerous daily posts on Facebook at http://www.facebook.com/pages/For-Economic-Justice/347893098576250 and http://www.facebook.com/editorgary.
In the article for The Huffington Post entitled “The Absent Conversation: Who Should Own America?” (http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html), I focused on productive capital as an income source that to acquire is prohibitive for ordinary Americans without savings. Why the focus on "productive capital?" Physical capital is non-human "things" owned by people used to produce products and services (productive land, resources, structures, infrastructure, tools, human-intelligent machines, super-automation, robotics, biobots, digital computerized processing and operations, etc. and certain intangibles that have the characteristics of property such as patents and trade names). The consumer electronics products, and all other products, that are pervasive around us in our home and place of work environments are the result of the increasing importance of productive capital, not labor.
The reality, which is ignored in our political discussions and even by conventional economists and the media is that productive capital is increasingly the source of the world's economic growth and, therefore, should become the source of added property ownership incomes for all. The ownership of productive capital is the source of wealth and income for the richest Americans––not a job.
Businesses, whether small or large, or sole proprietors, partnerships, or business corporations are formed to provide products and services at a profit. Their success or failure is dependent on whether or not there are “customers with money.”
Unfortunately, as a society our focus is on job creation as the only way to create “customers with money” and provide a source of income for peoples’ livelihood. Yet the demand for people (labor workers who contribute manual, intellectual, creative, and entrepreneurial work) is being made less necessary as productive capital is increasingly the source of the world’s economic growth. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. What should we conclude from this assessment of reality? Well, simply that if both labor and productive capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property and right to own (and access to the means of acquiring and possessing property) must in justice be extended to all.
Increasingly, the headlines read that 100, 1,000, or tens of thousands of workers are no longer needed and no longer have a job–– their only source of income. What will happen to them and their families––doomed to taxpayer-supported government welfare and non-opportunity as good-paying job opportunities decline?
The role of physical capital is to do ever more of the work, which produces income to the business owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profit. But such realized efficiencies can only succeed so far. Without “customers with money” there are simply no sales and business ceases.
The function of research and technology is to invent tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological innovation and invention.
The primary reason that there are fewer and fewer “customers with money” is that the value of labor has exponentially declined and continues to do so as the non-human factor replaces the need for labor to manufacture products and deliver services. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well being.
If we are to significantly expand the population of “customers with money” and significantly grow the economy, then the ownership of productive capital must be spread more broadly and simultaneously with economic growth, without taking anything away from the 1 to 10 percent of the people who now own 50 to 90 percent of the wealth. As a result, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader, also benefiting the traditionally disenfranchised poor and working and middle class. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth.
Until we address the issue of concentrated capital ownership and ensure that future economic growth is financed to create new owners of expanding existing and future businesses, we will not be able to ensure that the consumer populous is able to get the money to buy the products and services produced as a result of substituting “machines” for people. This is the crux of the problem why there is the devastating race-to-the-bottom pricing that is destroying the specialty performance manufacturer and performance dealer. It is also the reason for manufacturers seeking the lowest cost production and out-sourcing and to scrounge up those “customers with money” no matter where they reside on the Earth.
The solution is to build an OWNERSHIP CULTURE and ensure a balance between production and consumption, with capital ownership sources of income accruing to every child, woman, and man via their income-producing capital estate, which would grow simultaneously with the growth of the economy and concurrently sustain economic growth.
The small, but dedicated staff of the magazine and Webzine, our writers, and I thank you all for your continued support. Without you and far healthier advertiser support, we will not be able to stay the course and continue to educate.
While a struggle, we hope to continue our mission to educate through the print edition, pdf digital edition, smartphone/tablet editions, and with new initiatives exclusive to our Widescreen Review Web site (www.WidescreenReview.com). We plan to announce a new blog—Gary’s Industry Blog—where I will comment on industry developments and new technologies that hold the promise of delivering higher-quality performance formats and components.
We will continue to offer “full-access” subscriptions to our Web site for $15, less than half the price of a year’s subscription to the print magazine.
Of course, those who subscribe to the print edition will continue to have the no-charge “full-access” privilege inclusive of 20 years of downloadable content and the viewing of back issues digitally as they actually appeared in print, including the supportive advertising. This “full-access” privilege will also encompass access to our interactive 225-field searchable database on Blu-ray Discs.
Also, follow us on Facebook at http://www.facebook.com/Widescreenreview.
I hope that the continued educational focus and these humble initiatives we will be launching on our Web site will help to further enlighten our readers to better appreciate how to achieve “the real thing” in your home theatres.
As previously stated, we are a small, independent publishing company—now in our 20th year. We started as a husband and wife team. Our resources are limited and dependent on subscription and advertising support. When our revenue returns to normalcy, we will reward our magazine readers with expanded content.
If you have any comments or ideas that address our current struggle, our staff and I would appreciate hearing from you. Our dedicated staff, and Marlene and I, thank you all for your continued support. Without you, we would not be able to stay the course and continue to educate.
- editor's couch -