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Baxter: CE Industry Needs 3D TV To Be Successful

3/23/2010 06:34:00 AM Eastern

NEW YORK — Having enjoyed the
successful launch of an extensive LED
TV lineup in 2009 and heading into the
year of 3D TV, Samsung Electronics
America president Tim Baxter is preparing
for another successful year.

Samsung kicked off the launch of a
global 3D LED TV marketing and advertising
campaign in New York with a flamboyant
Times Square concert and upstaged
its rivals by scooping up “Avatar”
director James Cameron to give a shout
out to Samsung’s 3D TVs and shoot 3D
footage of a Black Eyed Peas performance
for a promotional video during the campaign
launch celebrations.

TWICE caught up with Baxter at the
Samsung Experience showroom in New
York just after the launch formalities for a
closer look at the company’s 2010 strategy:

What are your goals for 3D TV
this year?

Baxter: The first goal is to create the
market. We, as an industry leader, have
that responsibility to create the market
[for a new platform]. We did it last year
with LED. We want to be able to take
that same approach and formula into
this because if we don’t take new technology
and create new markets, we are
on a very slippery slope towards rapid
commoditization, and that’s not healthy
for anybody, including the consumer,
because you are not bringing the newest
and best entertainment solutions
alive. So, the first job is to create the
market. In doing that, we expect to get
more than our fair share of the marketplace,
and we expect to be a clear leader
in the 3D market. We have between 30
and 35 percent market share in TV, Bluray,
and we are getting there in hometheater
systems. We expect to have the
No. 1 position in 3D as well.
This year we will have 15 TVs coupled
with a Blu-ray player and a Blu-ray hometheater
system, all with 3D and IPTV
capability built in. The strategy is to use
3D and IPTV as critical legs of that new
entertainment experience. We are seeding
the market with 3D TVs that give
you IP TV benefits immediately, as well
as bringing forth 3D partnerships with
partners like DreamWorks.

TWICE: The A/V specialty channel historically
has been a critical component in the
launch of any new format, yet the industry has
lost a number of significant players there in the
last year, and many of the rest feel the manufacturers
are leaving them out to dry in favor of the
mass merchants, warehouse clubs, online dealers
and big-box chains. How is Samsung going
to address this with its 3D plans this year?

Baxter: We are very committed to our
partnerships with the A/V channel. A lot
of what we have done over the past two
years and the successes we have had have
come from the A/V specialty channel. It
is critical that we do that, because that is
where you bring new technology to the
marketplace. We offer derivatives for the
channel. We offer special programs and
promotions for the channel, and we will
continue to invest in them. It is in Samsung’s
best interest that the A/V specialty
channel continues to flourish.
This is not a fundamental changed in
our distribution strategy. We continue to
offer programs and solutions tailored to
each of the distribution channels.

TWICE: What is required to qualify for one
of the 5,000 3D merchandising kiosks you announced
you will be providing to dealers across
the country this year?

Baxter: This is about dedicating the
space and recognizing that one size does
not fit all, so there are many different
form factors and solutions for our various
partners. This is not about building 5,000
merchandising displays and putting them
in a warehouse to see who wants them.
This is collaborating with each of the retailers,
understanding their merchandising
needs, understanding their merchandising
restrictions and guidelines, and
designing solutions that will bring forth
the message that we want to convey to
the marketplace. Again, this is very similar
to what we did last year with LED.
We wanted to communicate three main
points, and we think that delivering solutions
that communicate them at the retail
level is the best way to do that.

TWICE: This year Sony and Panasonic
are also offering 3D kiosks to many dealers
to communicate their systems and messages.
Will it be more difficult to get the real estate
you will require?

Baxter: It will depend on the retailer.
We are confident in our ability to get the
retail execution of this.

TWICE: You are investing heavily in advertising
and promotion this year. How does
your advertising and promotions budget compare to last year?

Baxter: Looking at it from the context of
the TV and consumer electronics areas —
I can’t speak to the handheld phones — we
will be spending more money in 2010 than
we did in 2009, and we spent a lot of money
in 2009. We invested a lot in promoting
our Dual View digital cameras, and we expect
to do more of that in 2010. So what
we are really doing is rather than taking the
rather traditional vertical approach to marketing
communications, we are really doing
it much more horizontally. National television
advertising will be a significant portion
of that budget. The focus will be on broadcast
TV, online and print as the three key
components of that and probably in that
order. We think the value of online in that
space is growing and growing in terms of
communicating and marketing online to
reach consumers. When we launched the
teaser (3D TV spot) campaign on Sunday,
the amount of hits and the Twittering that
was going on was remarkable. The numbers
were something in the neighborhood
of 20x the numbers that were coming to the
site to learn about 3D, and we had been doing
a lot of talking about 3D coming out of
CES. So we think the timing of that was
very relevant.

TWICE: And how will you leverage co-op
advertising this year to bring the customer into
local stores?

Baxter: What we’ve been doing is getting
more and more creative with how we collaborate
with our retail partners to bring that
alive. You saw that in TV commercials last
year, and you saw that with many of our retailers,
where we take our creative theme and
messaging and tie that in with our retail partners
so that is becoming more prominent.
The key to it is making sure that both parties
understand the consumer insights and
what we are bringing to the table, and how
do we extend that beyond the buy/sell relationship
but more integrated into the marketing
communication and insight groups
within our retail partners. That allows for a
richer experience that we bring alive.

TWICE: How will you tie 3D into your
NFL sponsorship plans?

Baxter: I think that is still evolving. As
broadcast content evolves, there might be
opportunities to do that, but there is a lot
of work going on right now on the broadcast
side of the 3D content experience in
general, and we expect that will continue to
evolve, and that’s all I can say right now.

TWICE: How much more of a challenge is
it to introduce a new format like 3D on the tail
end of this recession?

Baxter: I look back to the day, almost
one year ago, when we announced our
plans for LED TV, which had a $600,
$700, $800 premium, and many people
asked me that very same question. And
at that time we were in some of the darkest
days of the economic downturn. Yet we
think it was imperative for us to do that.
And, frankly, so many retailers and consumer
were appreciative of us taking that
bold step, because had we not, we would
have again been on that slippery slope toward
commoditization. So, while we are
seeing improvement — and we don’t think
that we are out of the woods yet."