Coping with the Death of Audio

At a macro level, it’s pretty clear that audio component sales are dropping, while displays – flat panel and DLP rear projection sets in particular – are consuming the bulk of consumer outlays.  So what is a company that specializes in selling high end audio components to do?  Audio Advisor started out as a catalog retailer of high end audio toys (they’re now on the Internet as well), and each catalog used to feature pages after page of amps, preamps, integrated amps, high end CD players, extremely expensive record players for analog lovers, and digital audio doodads that supposedly improved CD audio quality for digital lovers.  At the other end of the catalog retailing price range, Crutchfield used to sell dozens of entry level and mid-priced receivers and DVD players. 

With sales of these products down, these retailers could try to compete for video dollars and sell plasmas and LCD panels, but going up against big box retailers and PC-based online outlets (such as Dell.com) is a recipe for suicide – without incredible volume, margins on displays can actually be negative.

Crutchfield has instead decided to focus on the auto side of its business.  Auto sound has remained strong, and auto displays – for movies or GPS navigation – have absolutely exploded.  While local stores still have an advantage in terms of installation, Crutchfield’s online store benefits from selection tools and advice wizards that simplify the process of figuring out what you can actually use in your car.

AudioAdvisor never sold auto sound products, so that route would be a significant departure.  Instead, the company is turning to furniture and cables.  Cables are high margin products that have always been featured in the catalog, but now more than a quarter of the catalog features at least one interconnect, speaker cable, or replacement power cable as part of the layout.  The other new gear category is furniture.  AudioAdvisor has a 16 full pages (out of 76) dedicated entirely to furniture – mostly stands for the video displays its customers are buying elsewhere instead of upgrading that preamp.

-avi

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CES 2005: Logitech Sweetens the Harmony

Logitech has done really well with their acquisition of Intrigue Technologies, makers of the Harmony remote control line. With the broadened marketing and distribution muscle behind it, Logitech announced that they have overtaken Philips and Sony as market share leaders for programmable remote controls. This doesn’t surprise me, as most remote controls have a serious drawback – you have to program them. The Harmony essentially programs itself once you walk through a questionnaire online. While it took them a year or so before they had enough codes online to work consistently, I now consider the Harmony the reviewer’s best friend: add a new piece of gear in the rack; add a new piece of gear online to the remote. Done. And, because it’s task-oriented (“watch TV,” “watch DVD”), it’s spouse and babysitter friendly.

I’d heard rumors that a color Harmony was on the way, but they didn’t make much sense – the Harmony just uses its small monochrome LCD for simple status and help messages. Logitech unveiled the Harmony 880 at CES in Las Vegas this past week, and it has a color screen along with a strong rationale for the addition. The new screen is about twice the size of the traditional screen, is not terribly high resolution and is not a touch screen. The notion is that a larger color screen allows the Harmony to display more information and provide after-macro customization options (buttons flank the screen on both sides). Task-oriented remotes are great, but they can’t always deal with complex options. For example, if you have a widescreen TV, once you’ve “watched a DVD,” you may need to adjust the aspect ratio. Or not – depending on the movie. In my home theater, we added a “slowly dim the lights” command every time you pressed “play.” Unfortunately, that meant that any time you paused the movie, it was pitch black in the room, and the lighting controls were buried in a separate menu. With the new 880, you’ll be able to place those commands on the color screen after the main activity has launched. Colorful TV station logos for a favorites menu (part of the canned demo on the prototype units shown at the show) are merely a bonus.

The price point on the unit will be an astonishingly low $249, which is less than the original monochrome unit retailed for when it launched three years ago.

-avi

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CES 2005: New Remote for Custom Installers

UEI launched the Nevo SL "Pronto killer" touch screen remote control here last night in Las Vegas, and it’s got two really interesting features: a better programming interface than Philips offers for the Pronto (not that that’s saying much – the Pronto programming environment is terrible), and built in WiFi. WiFi could be used for just about anything – the remote is based on a version of Windows Mobile – but at least initially the idea is to stream media from one PC to another. Now, that may seem a bit ahead of its time, but according to Current Analysis*, 11% of all consumer PCs sold this holiday season were XP Media Centers, so there’s beginning to be an installed base for this sort of thing. Store your digital photos on the PC in the bedroom, stream them over to the Media Center in the den – all using the same remote. An adapter will be available to use WiFi to act as an IR blaster; not quite as good as full RF support (coming later in the product life cylce, I’m told) but it should allow installers to hide gear in a cabinet or closet and control it via the Nevo SL.

The Nevo SL isn’t as comprehensive as offerings from Crestron, nor does it offer state-sensing add-ons (also coming later in the product life cycle). At $799, it’s also nowhere near as expensive as those offerings, and competes directly against the Philips Pronto. UEI’s extensive code database is included, but unlike recent versions of the Pronto, no provision for automatic configuration is included. This would be a deadly omission if the product was aimed at consumers, but UEI assures me that the product will be sold through the CEDIA custom install channel. That makes sense, but someone should tell their marketing department: none of their literature, press releases, signage, or press kits breathes a word about custom installers or how this product can benefit them. This isn’t just a failure to communicate benefits, it actively works against UEI: if I were a custom installer, I’d be afraid that consumers – enthusiasts, mostly – would think that they could buy this remote themselves, leading to channel conflict. As Home Theater View has advocated in the past, channels need to be considered for their individual needs.

-avi

*Note: Avi Greengart is a Principal Analyst for Current Analysis

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Are Furniture Vendors In Too Deep?

It’s right before CES, and I’m inundated with press releases.  Bell’O sent over a preview of their 2005 lineup, and I noticed something that struck a nerve: like all furniture vendors, they claim that their stands are ideal for hot selling rear projection TVs using digital technologies (DLP, LCD, and LCOS).  They even go so far as to list a few specific models such as Sony’s 60" Grand WEGA LCD TV.  Except that the stand doesn’t match the TV’s depth.  None of them do.  All the stands are at least 19" deep, and most are 21" – 24", while the new TVs range from 6.75" deep for new DLP sets from RCA and InFocus to 14 – 17" deep sets from nearly everyone else. 

This isn’t unique to Bell’O – when I went to buy a stand for my shiny new LCOS-based HDTV I couldn’t find any stands that were the right depth (I ended up making a short term compromise and just getting something super-cheap at IKEA, but that stand will eventually be replaced).

Consumers are willing to spend more money on shallow non-CRT HDTVs precisely because they don’t stick out and dominate the room as much.  Why would they want furniture that negates the shallow depth they paid extra for?

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Secrets Debunks Its Own Review: No Audible Differences Among Power Cables

Here’s an experiment/article that’s going to echo throughout the audiophile world and possibly hurt sales of high end accessories

The online magazine Secrets of Home Theater is renowned for taking a geeky enthusiast’s view of home theater and audio; they’re best known for publicizing the DVD chroma bug, an obscure problem in some DVD players that makes bright colors in certain scenes bleed slightly into the next color. (I like to think my reviews and articles for Secrets have been a bit more accessible). Lately, Jason Serinius has been writing glowing reviews of CD demagnetizers and aftermarket power cables for Secrets, and the email and forum backlash has been palpable.  It’s one thing to get worked up about minor issues that are clearly visible if only you look for it in certain scenes (enthusiasts like to get worked up about that sort of thing).  It’s another thing entirely to ascribe audible powers to products that arguably cannot possibly produce those effects in any scientifically measurable way (enthusiasts like to argue about that sort of thing).

In a tremendously courageous move, Jason decided to take on the critics directly: he got two groups of volunteers, and, together with the Bay Area Audiophile Society, created a well organized, reasonably scientific double blind test of the expensive power cord he’d reviewed so positively.  Before he gets to the test results,

  • Lots of HTML is used in a preamble that references Galileo, Quantum physics, psychoacoustic principles, and perception/reality constructs.
  • Lots of HTML is used to describe the (solid) credentials of those who created the test.
  • Lots of HTML is used to describe the test environment, how the test was conducted, and how things could have been better.

Bottom line: nobody could tell the difference between generic power cords and Nordost’s $2,500 Valhalla cables.  Nobody even scored above 50%…

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RTI Focused on Dealer Training

RTI makes complicated programmable remote controls, and they’ve hit upon a winning strategy – focus on their customers.  Brilliant!  (It should be obvious, right?) Well, there is a twist – one that many CE companies selling to the CEDIA (custom install) channel haven’t quite figured out: RTI’s customers are not end users, but the custom installers who buy the remotes and program them for the end users. 

The whole purpose of a custom programmed remote control is the programming, and this is an area where RTI can stand out (more on this later).  Therefore, RTI announced online training earlier this year.  Last week they sent me a new press release (curiously absent from their site) that they now have an entire downloable video course for their dealers.  I have no idea how good/bad/effective their course is, but it’s a great way to reach the small, geographically dispersed custom installation community.

RTI doesn’t have much choice – the remote control market is surprisingly competitive.  At the low end, there are literally hundreds of offerings sold direct to consumers.  At the high end of the consumer market, Philips lucked into the lead with their Pronto line, which are almost infinitely configurable and have generated a devoted cult over at http://www.remotecentral.com despite the convoluted programming interface.  Logitech is trying to broaden the consumer market with Harmony remote controls (Logitech bought Intrigue Technologies earlier this year) by providing the flexibility of a custom remote without the programming; users fill out an online questionnaire, and the remote programs itself. So what is left for custom installers?

At the high end, Crestron and others provide expensive solutions suitable for high end home theaters, boardrooms, and whole house automation.  For more affordable solutions, custom installers can turn to the high end of the consumer market – where the vendors are focused on the end customer – or RTI – where the vendor is focused on the custom installer.  Brilliant!

-avi

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Digital TVs as Oversized Picture Frames

Convergence is such a loaded word.  Often people assume it means that your TV is networked to your TiVo which plays MP3s off your PC.  While that vision is well and good (and my 4 year old assumes everyone lives that way), most people adopt point solutions that meet their needs at much lower price points.  It’s not just home theater; even in the PC world, this is true.  Sneakernet is a prime example: rather than wire up their homes to share files, many people burn a CD or DVD, or put the files on a USB keychain drive and then walk the files over – thus using their sneakers – to the other PC.

SanDisk does a great job of enabling this slightly lower tech, less featured, mainstream-useful form of convergence.  Disclaimer: I think SanDisk is a great company for a lot of reasons, not least of all because they send me basically everything they make, sometimes without my having to even ask for it.  One of those products showed up the other day, their latest iteration of their Photo Viewer.  For $30 – 50, the first version of this product was cheap, ugly, and performed as advertised: plug the unit into your TV, place the memory card from your digital camera into the unit, and your pictures appear on your TV.  Simple, useful functionality included a remote control, the ability to rotate the picture, and basic slideshows.

Today’s version is a sleek gray/silver box, about the size of a thick checkbook. Aesthetically, it perfectly matches every gray/silver digital TV on the market. It still sells for under $50. It still has composite video outputs (limiting it to 480i resolution), but the user interface is dramatically better, it now supports xD memory (used in Fuji and Konica-Minolta cameras), it plays back the MPEG movies digital cameras take, and it plays back MP3 files and can use them as background music for slideshows.  In a naked push to increase memory card sales (the largest part of SanDisk’s product portfolio), it also has an additional memory card slot in back to allow you to move pictures off your digital camera’s memory and onto the secondary memory. This lets you create a master slide show always available for viewing on your TV, even when the other memory cards are back in their cameras.  I actually found this feature quite useful, and could envision this as a perfect “grandma gift” – whenever you come over, you upload the latest pictures to the rear memory card, leaving the memories behind.  [audience: awwwwwww.]

At the very high end of the market, Roku has a Digital Media Player that displays high resolution photos from memory cards or off a networked PC.  It’s beautiful, and, Roku, if you’re reading this, I want one.  But it costs $299, and the SanDisk product is likely “good enough” for most people.  Roku should watch out, too – if SanDisk’s next version supports high resolution output, Roku will be limited to the market segment that cares about home theater networking.

-avi

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Cables: Are Other Monsters Lurking About?

There have been several new entrants into the A/V cables market lately. 

Accell has been an OEM for others’ products for a while, and has decided to launch their own brand.  The packaging isn’t especially eye-catching, but the products are well priced and well constructed.  Accell sent over a large box of goodies around the beginning of the year, and I’ve been using them interchangeably with traditional AV brands such as Monster and Acoustic Research with no noticeable performance problems.  I haven’t seen them distributed anywhere at retail yet in New York/New Jersey, so that could be a bigger hurdle than anything else.  (I wrote a report for JupiterResearch — where I used to head up home theater research — on home theater distribution models; it should be published soon.)  Secrets of Home Theater – for whom I’m a Staff Writer – has a short review of Accell’s cables as well, faulting them primarily for the unopenable packaging.

Belkin is well known for their computer cables, and you could easily make the case that A/V cables are a logical brand extension for them.  While their analog audio cables are nice, I’m particularly impressed with the DVI-to-HDMI breakout cable.  It’s long and shrink wrapped in a semi-flexible plastic jacket.  The overall construction is top notch, and the moderate stiffness can save the cable’s life by preventing sharp bends. I have nothing on hand to compare it to, but I’m using it to connect an LG HDTV tuner/upsampling DVD player to JVC’s 50” D-ILA (LCOS) HDTV, and there were times during the 720p World Series broadcast that I could tell which direction the player had shaved in. The packaging looks fabulous, the pricing is competitive with Monster, and I’ve started seeing the Pure AV line at retail.  If my experience is a guide, it should do well.

Note: Belkin’s packaging is semi-openable, as it has a pre-cut “window” in the back.  Unfortunately, it doesn’t extend far enough into the rounded box, so you can put your hand in, but can’t get the actual cable out without resorting to a chainsaw.

-avi

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Unusual Home Theater Accessories

One of the hottest areas of home theater – consumer electronics in general, actually – is accessories. Accessories have high margins for everyone in the chain, don’t require frequent discounting, and (compared to TVs, anyway) don’t take up much shelf/inventory space. Now, when you think of accessories, you probably think of cables, remotes, and perhaps furniture. There are other interesting opportunities, such as label makers. Yes, label makers, one of the most critical tools in any home theater owner or installer’s toolkit. All those wires look the same when they’re plugged in, so if you don’t label them, you’re asking for trouble. But paper labels rip, and, let’s face it, you can’t read your own handwriting anyway.

Dymo sent over their model LabelPoint 200 over a year ago, and I’ve used it to label both ends of every audio, video, and power cable since then. I still haven’t run out of the original label cartridge, so this appears to be an exception to the razor/blade business model. The handheld shape and soft touch plastic coating make it easy to hold, though the unusual arrangement of the qwerty keys makes typing a hunt-hunt-hunt-and-peck affair.

Recently, Brother sent over a P-Touch 1400, which they promised would perform better than the Dymo. And it does, because it manages a few tricks especially useful for tagging wires: it prints vertically across for short text tags, and it will automatically print horizontal text on either end of a label strip – wrap it around the wire, and you can see the text on either side of the tag. The alphabetical keyboard arrangement is no easier to use than Dymo’s and the unit is physically larger. Either unit is a must, and the Brother is highly recommended.

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