July/August Editorial
Dear Gary,
I just finished reading your “Editor’s Couch” from the July/August 2007 issue (I’m a few months behind, I know). You were talking about the deterioration of the specialty A/V dealer. I, first hand, experienced the neglect by many manufacturers at the CEA (Consumer Electronics Association) conference recently. It was my first time attending, since I just started my consulting and calibration business this past year. I am only 29, and this is my first business, so I’m excited and motivated. I was sitting in the Audio Group meeting, and there was a lot of complaining about the current state of the market, but no one was offering solutions. I spoke up and said a lot of the things that you said. Basically, I feel the key to success is to educate (not just train) dealers and even the end users. It fell on deaf ears, and several of the other members who agreed with me, but didn’t speak up, came up to me afterwards and thanked me for bringing it up.
People just simply don’t know quality until they see it. I did a demo at a party comparing an upconverting DVD player with an HD DVD player and a Blu-ray Disc player. Everyone in the room said “Wow, I want one” after they saw the increase in overall quality. The women were more impressed than the men (I used Phantom Of The Opera as one of my demos).
Getting to my point, what can I do to help? I currently do not have the means to open my own showroom, which I eventually want to do. I speak up in the meetings, but since I’m a new guy, the established guys don’t listen. I try to talk to people about quality, but I have no way to show them at this time. I’m just looking for ways to help, and I am open to any of your suggestions.
Tom Angelopoulos, President, High Def Interiors LLC, THX® Certified Home Theater Technician II, HAA Certified Home Acoustical Calibrator, ISF Certified Calibrator, CEDIA Certified Install Technician I
Editor-In-Chief and Publisher Gary Reber Comments:
I am impressed with your passion for home theatre and with the level of educational achievement you have attained. The industry should embrace your willingness to help turn around the “disappearing demo” environment to one that facilitates A/B comparisons between home theatre components. Remember that every one of your clients has the potential to become enthusiastic client-advocates for the performance home theatre experience. It is important that you continue to educate yourself by reading, attending seminars, and understanding optimum performance solutions so that you are better able to prescribe compromise solutions to your clients, who do not have the financial resources to realize “the best that it can be.” But make sure they understand and appreciate what optimum performance is all about so that they can affirm for upgrades in the future.
The audio/video home theatre industry needs to “recalibrate” itself and realize that comparative demonstration is the key to pushing the envelope of performance. Without demonstration, the products will simply become commodities with limited appreciation for the nuance-to-striking differences in performance among components and setups. Today home theatre product manufacturers are selling wherever they can. No longer do the majority of manufacturers protect their “dealers with demonstration facilities,” so that these prime retailers can make a profit and remain in business to demo and educate potential client-enthusiasts. Performance manufacturers, hopefully, will eventually realize that to survive, they must return to the “in-store demonstration” model. The market is due for a shakeout of retailers, custom installers, and manufacturers, who have lost sight of this necessary tool for presentation of their products. Instead of long-term thinking, they have adopted short-term thinking, concentrating on end-of-month or quarterly numbers. This is the primary reason that profitability has significantly sunken and competition has become greater. The result is that high-performance products are threatened and will eventually become extinct or exceedingly expensive and challenging to find.
Limited distribution used to be the hallmark of the electronics industry. The performance sector of the audio/video industry needs to return to this distribution model to succeed. Retailers with demo facilities need to stay true to those manufacturers who will fully support them and protect their investments in stores that have the facilities and staff to educate potential client-enthusiasts. Such retailers will never be able to compete with commodity warehouse clubs and mass-market retailers, who can survive on 15 percent or less gross margins. The successful performance retailer needs the support of manufacturers whose products define the performance range of home theatre options and who ensure that their specialty retailers enjoy at least a 40 percent gross margin. This is necessary for such retailers to make money and stay in business. There is no way that specialty retailers can compete in the low-cost home theatre market, whether comprised of Internet, warehouse clubs, mass-market retailers, or integration companies buying from distribution companies, which provide no comparative demonstration facilities. Likewise, the specialty home theatre retailers need to stay loyal to the manufacturers who support them and their efforts to educate potential client-enthusiasts.
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