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Sony Tightens ES Distribution Strategy

7/06/2010 08:00:00 AM Eastern

Los Angeles - Sony
will limit distribution of its high-end ES series of A/V receivers and Blu-ray
players to custom installers and A/V specialty retailers while prohibiting telesales
and sales over the Internet.

Sony's ES business and product strategies are spearheaded by (from left) digital home business unit manager Jonathan Lin, home A/V group VP Brian Siegel, digital home business unit manager Michael McCole, and digital home product manager Amy Lloyd.

Sales through
SonyStyle.com will also come to an end.

Sony executives
drew a sharp contrast between their new distribution strategy and the policies
of competitors who are broadening distribution and expanding Internet sales.

The changes were
announced here in conjunction with the introduction of a new 2010 ES lineup and
the July 1 replacement of a unilateral pricing policy with a more flexible MAP
policy. The MAP policy makes it possible for installers to pass through dealer-cost
reductions announced after a customer contract is signed but before a
months-long install is complete.

All three new ES multizone
A/V receivers (AVRs), priced from a suggested $1,099 to $1,999, are the first ES
AVRs with embedded Ethernet hubs to connect TVs and Blu-ray players to the
Internet, 3D-ready HDMI 1.4a inputs and outputs with Audio Return Channel, Dolby
Pro Logic IIz post processing to add front-height channels, and an iPhone/iPod
Touch app. The app controls AVR functions, including multizone functions and
connected sources, from anywhere in the house if the AVRs are connected to the
home network. An Android-smartphone version of the app is in the works.

 Other features, such as IP-Ethernet control
and embedded DLNA-certified network client, have expanded throughout the line, and
other features, such as two HDMI outputs, expand to more models from only one.

The new $399-suggested
ES Blu-ray player will be the first in the series with built-in Wi-Fi,
iPhone/iPod app and Quick Start startup time. It is 3D-capable out of the box
and is the first ES single-play Blu-ray player with IR input.

All new ES
products are due in August, except for the top-end AVR, which is due in
September. They'll join a carryover $499 two-channel receiver and $1,899 400-disc
Blu-ray megachanger, which lacks 3D capability but features IR input.

During a press briefing,
the company also:

--previewed its
first 3D front projector, a non-ES model due sometime this year. The prototype used
in a demonstration delivered 3D in 720p, but the finished product will deliver
1080p 3D.

--introduced a
mainstream-series $799 AVR that is the company's first mainstream AVR with
Ethernet hub. It sits at the top of the mainstream-series AVR line.

The ES
distribution change "will help reinvigorate" the specialty and custom channels,
reward those installers and specialists "who have been loyal to Sony for many
years," and provide an opportunity for ES to expand its custom/specialty dealer
base, said Brian Siegel, VP of Sony's home A/V group.

"ES has been for
the past few years essentially widely distributed" and available through "many
national accounts" and Internet sellers, Siegel said. A/V specialists and
installers, he continued, have said ES offers great products and programs but
that the previous distribution strategy "made it easier to do business with
other manufacturers."

Sony ES "should be
the No. 1 AVR brand in the specialty channel, and this [distribution strategy]
is a way to do that," Siegel asserted.

A focus on the
installer and specialty channels will also help boost customer satisfaction
after an ES product is purchased, he continued. Consumers who buy ES products
off the Internet or off the shelf often don't understand all the features they
could be using and therefore often use them less than consumers who buy through
other channels, he explained.

With AVRs offering
such complex features as multiroom-audio capabilities and integration with
home-control systems and 3D displays, consumers need dealers who can provide
education, installation, and demonstration, Siegel stressed.

When asked, Siegel
acknowledged that Magnolia Home Theater (MHT) stores within Best Buy stores would
qualify as a specialty A/V outlet under the new strategy, although ES is not
currently in MHT.

Although the
company is tightening ES distribution, it will continue to use distributors to
fulfill shipments to ES-approved dealers and installers, Siegel noted. Sony
will continue to manage the dealer/installer accounts centrally.

Regarding MAP
policies in general, Siegel said dealers view them as a positive, especially
when MAPS are similar to suggested retails. ES's shift to MAP is part of a
corporate-wide move to MAP, he added.

The new policy
prohibiting Internet sales will begin with the new 2010 models, allowing time
for inventories of previous ES models to be sold out through Internet channels.
Under that policy, ES dealers aren't allowed to sell online but can continue to
use the Internet to promote ES and educate consumers about ES advantages,
Siegel noted.

In launching the
new ES AVRs, Sony is maintaining a three-SKU AVR assortment. The new models,
all with seven-channel amps, are the $1,099-suggested STR-DA3600ES, $1,499
STR-DA4600ES, and $1,999 STR-DA5600ES, all believed by Sony to be the industry's
first AVRs with embedded Ethernet hub, in this case with four ports.

With the new
models, Sony is expanding embedded DLNA-certified network clients to all three
models from one to stream music, video and photos from a networked PC. The top
model also serves as a DLNA server, a feature that last appeared in the 2008 ES
lineup.

Like all AVRs in
the previous ES series, all of the new AVRs access Shoutcast-aggregated
Internet radio stations and the Rhapsody Internet music service.

As with the previous
line, all three new AVRs include an embedded database of IR codes to control
connected sources regardless of brand. The trio also carries over proprietary HD
Digital Cinema Sound, which replicates the acoustics of the Sony Pictures
dubbing studio used by many filmmakers, but the new models extend the
capability to home theaters with front-height channels.

Other features
common to all three models include SACD decoding, Digital Media Port to connect
MP3 players and Bluetooth modules, and integration capabilities with Control4,
AMX, Crestron, Savant, Universal Remote and RTI home-control systems. All three
also feature A/V passthrough from a connected video source via HDMI to a TV
even when the AVRs are off and in standby mode.

Automatic phase
matching among front, center and surround speakers has been extended to all
models from one model as part of the company's Digital Cinema Auto Calibration
(DCAC) speaker-setup technology.

The opening-price AVR,
rated at 7x100 watts into 8-ohm loads, features on-screen GUI that overlays
first- and second-zone video programs, second-zone video via component output,
third-zone audio, Faroudja 1080p main-zone up-scaling, four HDMI inputs and one
HDMI output.

The 7x120-watt $1,499
model adds second-zone CAT5e output for long A/V runs, second-zone 1080i up-scaling
and two HDMI outputs, which can be set for switching or simultaneous use.

The flagship $1,999
model adds DLNA-certified server, 7x130-watt amp, five rear-panel HDMI inputs,
two back-panel HDMI outputs, one front-panel HDMI input, and proprietary clock
synchronization for HDMI and SACD sources. DCAC speaker calibration is upgraded
to compensate not just for speaker distance but also speaker angle.

The new ES Blu-ray
player is the $399 BDP-S1700ES, which is the first ES player with embedded Wi-Fi
(802.11n), embedded DLNA-certified client, IR input and control via an
iPhone/Touch app. It's 3D-capable out of the box.

Like its
predecessor, the player offers SACD playback and access to Sony's Bravia
Internet audio and video services. Other features include access to Gracenote's
on-line entertainment database, 1GB of embedded memory, and playback of music,
video and photos via USB.

The new non-ES AVR
is the $799 STR-DN2010, the mainstream series' first AVR with embedded Ethernet
hub (with four ports), first with embedded DLNA-certified network client, and
first with Internet radio (SHOUTCast and Rhapsody). It also features HDMI 1.4a
inputs and HDMI's Audio Return Channel function.

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