Nature Of The Industry
By Steve Smith -- TWICE, 3/26/2007
If you were in my shoes, you could do a "The industry is changing" editorial every print issue. (And do a blog on the same subject every day.) Change is the nature of this industry. It just seems to be happening faster now than ever before.
Stories throughout this issue bring the industry's constant and eternal trait to the forefront. During the taping of the PBS show "CEO Exchange" a couple of weeks ago, Sir Howard Stringer was asked what his biggest challenge is as chairman/CEO of Sony. He said, "How do you keep Sony a premium brand during an age of commoditization? I'm not complaining, it is very, very exciting this ... ever-changing chaos of the market."
Later Stringer said, "You can't be complacent. Sometimes you are in a perpetual state of panic."
Fellow guest and CEO, as well as vice chairman of the largest CE chain in the country, Best Buy's Brad Anderson said he finally realized, "What makes you win today will kill you tomorrow. You constantly have to find the 'next offer.'" Between customer centricity, the Geek Squad and Magnolia Hi-Fi stores and departments, Anderson seems to practice what he preaches.
Richard Glikes, executive director of the Home Theater Specialists Association (HTSA), spoke of change at his group's recent meeting in Savannah, Ga. "Traditionally it was retailers [who went out of business] but now it looks like we're going to see a change and might lose some vendors."
He said his members "can't be in the $999 for a 42-inch TV bracket" since "nobody is making money there anyway." Glikes said HTSA is broadening its product offerings and services to take advantage of its high-end customer base.
Well, not all 42-inch TVs are $999, but HDTV is becoming a mainstream market. The clock is ticking on the digital transition with the deadline set for Feb. 17, 2009. Plenty will buy HDTVs and some will opt for the digital-to-analog converter box coupon program.
There are concerns about how the industry will make a profit as HDTV goes mainstream. Randy Waynick, Sony home products division marketing senior VP, spoke at the recent Display Search conference. He volunteered that Sony's average selling price in LCD TV is higher than the industry. In discussing the aggressive price cutting on Black Friday last year, he noted, "I think certain people have proved that it is very easy to sell a dollar for a nickel, but what does it get you in the end?" And how can the industry make enough to reinvest in coming technology?
And there is another subtle hint about HDTV going mainstream. CEA will hold its annual Washington Forum in D.C. this week. It used to be called the HDTV Summit. While there will be one seminar about the HDTV transition at next week's event, the conference's name change shows that CEA, and the industry, has been successful in getting the word out about HDTV.
Things change, seemingly every day, all day in what Stringer called the "ever-changing chaos" of the industry.
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