By Lisa Johnston
New products on display at the American International Toy Fair, held in N
TWICE: We've talked about demonstration, presentation and product simplification. But will a focus on these factors be enough to put us back on the growth path? Have we lost the attention of youth? Are there just too many alternatives for youth to spend money on? Everyone feels they must buy a new PC or upgrade every couple of years. Kids spend $50 on video game titles. And they're listening to their music on PCs, headphone stereos and car stereos.
Eli Harary, Infinity: My two teenage girls come home from school and go to work on their PCs, which is where their music exists. Each has a multichannel audio systems in their bedroom, but they use the PC to access the music they want.
Certainly over the past seven years, clothing has become a big issue for teenagers, and there's more money going there than ever before.
I think it's somewhat the retailer's responsibility, and the manufacturer's responsibility, to figure out how to convince people that there is in fact value in audio. Imagine going into a mall and letting everyone there hear the difference between a $300 entertainment sound system and a $1,000 entertainment system, or between MP3 and real high-end hi-fi. But we don't expose them to it. And yet we're wondering why they don't want to buy.
Franklin Karp, Harvey: If they walk around thinking compressed music is what it's supposed to sound like, we're in trouble. And a lot of them do.
T. Paul Jacobs, Klipsch: But if you ignore what kids are listening to based on their lifestyle, then we miss an opportunity to give them their first step-up audio experience. We got into the computer-speaker business not because we necessarily wanted to sell computer speakers. It's a pretty tough business. But we believed that long-term, we can meet kids where they are listening and at least give them the opportunity for a step-up audio experience.
We've tried to sell more expensive PC speakers and differentiate ourselves by delivering a great experience. But our message has never been that this is where it stops. The message has been that our home speaker systems are the ultimate PC experience and can make compressed audio sound better.
You can address kids where they're listening to music. When you ignore that, we become my father's Oldsmobile. This is where they're listening today, and we've got to touch and reach them and bring them into the step-up audio experience.
Over the long term, if we can develop a singular message, over a period of time, we can change things. Until then, the opportunity to sell a lot more still exists. Go back 10 or 12 years ago when cocooning was first discussed. That hasn't changed. Look at what people spend on cooking appliances. People are spending money to make their homes better.
So the potential exists for us to sell better audio — if we create a consistent message, if we start to reach kids where they're listening to music, and we get back to the passion of music.
I think kids are just as passionate about music as ever. We just haven't made it very easy for them to be passionate about the way we do it. We keep trying to force them into our preconception that this is how you must do better audio, and we're going to ignore compressed audio on computers.
Kerry Moyer, CEA: One thing behind CEA's TechKnow Overload college tour was to expose college students to something better than compressed audio. The idea was to take their MP3 files, play it through a component system, and not only could it sound better, but you could also have surround sound and a home theater experience.
TWICE: What products do we need to get kids to appreciate better sound? Can it include bridge products that get MP3 files off the PC?
Moyer: Probably one of the most successful CE products right now is Apple's iPod. It's a wonderful form factor. It fits in your pocket and hand. It's cool looking and simple to use. It's odd that the upgrade there is not in terms of audio quality but in terms of how much more compressed music you can store.
Don Milks, Onkyo: I think that's very much based on where that product originated from — the computer industry, where memory is of utmost importance.
Eli Harary, Infinity: From the kids' perspective, having more memory is important because it means that you can get more music on it.
TWICE: That's a portable experience. Within the home, should we develop more products that get MP3 files off the PC? Do we need more minisystems with USBs to connect to a PC? Maybe the potential exists in transferring the music on my PC to a home audio server that delivers the music through no-new-wires network technology to all the rooms in a house?
Milks: One of the most overused terms in this industry has been convergence. Gateway's Destination system, introduced some eight or nine years ago, was an admirable attempt but a commercial flop. They basically had a CRT-based TV, PC, a receiver and speakers.
But in the very near future, that idea will start to materialize into valid, usable products that easily interface with a computer. Instead of preaching that MP3 or WMA is bad, the industry can go after a very large user base that has embraced this type of technology and wants to use it. But manufacturers and retailers must try to convince them that there's a better way to enjoy it than PC speakers.
Karp: I think the CEA needs to come up with a Got Milk campaign. Maybe it's Got Sound.
TWICE: Perhaps home audio's problem is that music has become a more mobile- or personal-listening experience for today's youth than it was for the baby-boom generation.
Moyer: The industry split in two different directions when the first Walkman was introduced. Many of today's 20-year-olds, and certainly all the younger kids, are growing up listening to music through headphones while they're on the go, and then listen to high-quality music through their car systems when in the car.
Harary: Car audio is still a way to get these kids into better audio. There's still a pretty good-sized aftermarket business out there, and there are kids spending absurd amounts of money on car audio. Eventually they're going to stop spending all their Saturday nights in the car, and maybe at that point we can capture their attention.
Moyer: With my kids, most of their hard-drive space seems to be taken up with music. And they don't seem to be quite as retentive about music as I am. I have LPs going back to the '60s, but with MP3, after a few months, once a song is no longer cool, they just purge it and then load up with more.
So when we're talking about server-based home audio systems, for many kids, I'm not sure that's what they'll want a few years from now. They may be content just to take their computer hard drive, or even their iPod, load it up, and then when they want something new, purge what's old.
We really need to focus on how you might take a product like an iPod out of your car, bring it into the house, plug it into your stereo, and through the stereo's control panel, view and select the names of the songs on your iPod.
Milks: Our Net Tune receivers don't address all of those issues, but they use the PC as a centralized music hub, which ultimately transfers files to iPod-type portables. As the pricing came down, it's really starting to catch on. Not only does it let you play back MP3s and WMAs from your PC, but it really bridges the gap between the PC and whole-house distributed audio. You can have 12 Net Tune clients with truly independent control over 12 different rooms or zones.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.