PRO Group’s Dave Workman and George Manlove also addressed some key technology and competition issues during the spring meeting, here.
Media Center PCs: “I don’t see the PC as a form factor that will be effective in the living room in its present configuration. I do see [PCs] morphing into a multi-room controller. It doesn’t have to be a full-blown PC. It could be in the TV,” Workman said. “Plus, in its current configuration, Media Center PCs can’t handle HDTV.” Manlove added, “The Xbox should have more immediate relevance in the market than Media Center.”
HD DVD and/or Blu-ray: “We are not picking a format,” Workman said, “but as we’ve said before, we need a format war like a hole in the head. We need common playback. The difference between this format war and the Beta/VHS battle of years ago is that back then there was no legacy product behind it. Consumers are saying, ‘How many times you buy the same titles?’ They have huge movie libraries now and can’t switch on a whim. For many, DVD still looks pretty good. And by the way, Moviebeam didn’t exist back in 1977. It is a different world.”
Best Buy’s Magnolia Home Theaters: “Best Buy now has the brands we’ve wanted, but we can work around that,” Manlove said. ‘The problem is that the market pie is the same size. But a larger piece is going to Best Buy.” Workman said the Magnolia departments and Best Buy’s customer centricity format “keep consumers in their stores. Some have said, ‘The Magnolia departments have had no effect on our business.’ That’s because when a competitor fails you see more customers in your store to cross-shop you. Some aren’t seeing that traffic.” The real issue for Best Buy, according to Workman is, “Can you be all things to all people? At what point does scale and size continue to keep you sharp? It is a challenge.”