Russound, vNet Prepare Broad Product, Program Launch

By Joseph Palenchar -- TWICE, 7/26/2010

Newmarket, N.H. - Russound and Colorado vNet are rolling out new products and programs while maintaining their separate market identities and putting the finishing touches on revised distribution strategies, executives said during a day-long presentation to the trade press.

From left: Colorado vNet sales and marketing VP Petro Shimonishi, Russound CEO Charlie Porritt, Russound president Maureen Baldwin and Russound marketing director Rich Guida

Privately held Russound rescued Colorado vNet last October from closure and has been combining key vNet and Russound business functions, excluding sales and marketing. During that time, vNet has also been replacing its Colorado-based inside sales force with independent reps, expanding the brand's independent installer base in a controlled manner, bringing to market most of the products in the previous management's roadmap, and preparing additional product and program initiatives.

 vNet's planned new products include an iPad app that dealers will sell to consumers to control vNet's IP-based Vibe multi-room-audio/home-control system, which distributes content over an Ethernet network. The brand is also developing an upgraded wireless-RF dimming system, its first line of custom-installed speakers, its first component amp controllable from Vibe's in-wall touchscreen/amps, and a new 7-inch in-wall touchscreen/amplifier.

vNet's new programs include downloads of customizable flyers, online training to replace three-day courses in vNet's Colorado facilities, online demo tools on You Tube,  and online training on the basics of lighting control and home automation. The latter is designed for dealers before they go through the process of becoming authorized vNet dealers. Lighting basics will become available in August, followed by additional courses over the following four months.

For its part, Russound significantly cut back its roster of distributors and recently added AVAD, the nationwide distributor of custom-installed products, to reduce pricing pressure and leverage AVAD's marketing prowess and dealer support. Russound primarily uses distributors to reach installers and sells direct only to some accounts.

In other initiatives, Russound is launching new online webinars to better educate dealers about the retrofit potential of the company's recently launched IP-based Collage Media and Intercom system, which uses a home's existing power lines to distribute audio and control signals around the house. Collage was designed to reduce installation time and end-user costs in retrofit applications and expand dealers' potential client base to owners of existing home.

Collage's acceptance has been "pretty good," but the company believes the new webinars, which will supplement existing ones, will accelerate sales by focusing more on educating dealers about the value and sales potential of the system rather than on the technical aspects of the technology used, said product manager Walt Zerbe. Collage, he explained, can reduce the installed cost of a retrofitted four-room system to $5,250 with only four hours of installation from $13,000 for a traditional hardwired system. One of the webinars will provide sales-building marketing tips on how to find potential retrofit customers.

Another Russound initiative is a new website for dealers and consumers. Among other things, the site focuses on the sale of systems rather than individual products, provides multilingual support, simplifies navigation, and provides more dealer support.

While it rolls out these initiatives, Russound is preparing to launch a wide selection of new products from now through the end of the year. Those products include a second C-series multizone controller/amplifier, a new in-wall touchscreen, a new rock-speaker series, the brand's first full series of two-channel amps and a new two-channel local-source amp.

Russound is also launching the first outdoor speakers in its Acclaim 5 series of speakers to address what it calls the "next zone" in multizone audio. A firmware update for its TCH1 Touchpoint system, which enables iPhone and iPod Touch control of its R-Net multizone-audio systems, will allow for iPad control and add new features.

For its Collage system, the company plans a firmware upgrade in the coming months to add the Radiotime Internet-radio-station aggregation service to the on-demand Rhapsody music service. Internet music sources are accessed through Collage's in-wall amplified keypads, which incorporate RDS FM tuner and ability to stream music from network-attached storage devices.

The Russound and vNet product and program plans are part of a long-term effort by the company "to evolve into the modular, net-connected world" whether using hardwire, powerline or Wi-Fi as the pipeline to distribute digital content around the house, said Michael Stein, research and technology senior director. In just a few years, he predicted, "almost any music, movie or TV show ever produced will be immediately available" in the home through a personal area network, local area network or wide area network.

In the nearer term, the key goal is to grow both brands by leveraging each other's strengths, executives said. To grow, Russound must integrate control of lighting, thermostats, security and other home systems into its multi-room-audio keypad and touchscreen controllers, said CEO Charlie Porritt. "vNet will help us take that step," he said, pointing to in-wall vNet touchscreens that control vNet-branded wired and wireless lighting-control systems as well as other-brand home systems.

In turn, the vNet brand benefits from Russound's seasoned management, business acumen and contract-manufacturing experience to deliver bulletproof products, said Petro Shimonishi, vNet's sales and marketing VP.

For the past nine months, Russound has been consolidating many vNet business functions with its own, including accounting and purchasing, said Russound president Maureen Baldwin. vNet shipping will also transition to New Hampshire, added Shimonishi, but engineering and tech support will remain in Colorado, as will a training facility, which will supplement Russound's own East Coast facility.

In another transition, vNet has signed up eight rep firms to date to cover about 90 percent of U.S. geography and will hire additional reps in time for the CEDIA Expo to cover the remaining U.S. territories, Shimonishi said.

With the rep additions, vNet has been adding dealers in a "slow and smart" manner, having started with less than 300 active dealers at the time of its acquisition and putting on 75 new dealers since January, Shimonishi said. The vNet and Russound dealer bases overlap little, and 27 percent of vNet's dealers are electricians and electrical contractors, she noted.

For these dealers, vNet plans a variety of new products, but the brand is dropping plans for a Wi-Fi-equipped tablet, given the rise of Wi-Fi-equipped iPhones and iPads as a means of controlling home systems, Shimonishi said. The brand is also dropping plans for a multi-room Vibe video server, in part because the brand sees video servers being supplanted in the future by cloud-based on-demand video services and because the server's soundtracks couldn't be amplified by the amps built into Vibe touchscreens.

 For details on Russound's product plans, see accompanying story.