This post is sponsored by HDMI LA
The hits never stop when it comes to the technology consumers buy to bring the best entertainment experiences into the home–whether that means 4K and 8K movies and TV shows, immersive audio or the latest AAA video game and, of course, the products needed to make those experiences a reality.
For retailers, consumers’ appetite for top-notch entertainment is a double-edged sword. On the plus side, it keeps customers coming in the door—or logging on. On the down side, rapid tech changes and fluid market conditions create several challenges, like what will sell and what won’t, successful system integration to minimize returns and even the general health of the economy.
Recently, Brad Bramy, Vice President of Marketing and Operations at HDMI® Licensing Administrator, Inc. (HDMI LA), and Deena Ghazarian, Founder and CEO of CE manufacturer Austere, sat down to discuss these and other issues facing retailers.
Q: How is this period of economic uncertainty with inflationary pressure and declining GDP affecting CE manufacturers and retailers?
Brad Bramy: Manufacturers are expressing guarded optimism for sales, but there’s more to the economic puzzle than just inflation and general economic growth. Companies also are saying while they are planning for a positive year, it’s difficult to make projections due to other factors like component shortages and shipping interruptions.
Despite the headwinds, there are good options for the newest tech being found at affordable ASPs, and mid-to-higher income consumers still want premium products—great ones with the latest technologies, like HDMI 2.1a tech and the features it supports.
Deena Ghazarian: Consumers are also demanding brands with a high regard for environmental sustainability and products with lasting quality, which means retailers aren’t as interested in commodity products. These factors present retailers with a great opportunity—to cater to consumers’ desire for environmental sustainability and products with high reliability and performance.
Q: Brad, you mentioned the HDMI specification update to HDMI 2.1a and new features that are supported. Can you tell us a little more and address any concerns retailers might have about it?
BB: The HDMI 2.1a release was a minor update, and many consumers might not notice—with the exception of Source-Based Tone Mapping, or SBTM, that ensures HDR-enabled TVs make the most of their High Dynamic Range capabilities.
DG: One important benefit is it upgrades many update-capable products painlessly because it’s a simple firmware update.
BB: Right, that means consumers don’t have to worry about it. Spec updates are also backwards-compatible, which means the performance of existing devices like streaming sticks, set-top boxes and TV will just get better. Unfortunately, some misreporting in the press has created unnecessary confusion, but retailers can assure customers the new spec improves performance and doesn’t require them to do anything special.
DG: One other point, HDMI 2.1a like all of the HDMI spec predecessors comes along with new product certifications to ensure different manufacturers’ products are interoperable, which removes a potential pain point for retailers and their customers.
Q: Do you think the role of wireless connectivity for entertainment devices will affect demand for HDMI connectivity?
DG: From the perspective of a manufacturer, I decided to enter this market only after talking to retailers and other manufacturers and reviewing all of the research. It became obvious that the only way to deliver the very best experiences to consumers is with the ample bandwidth that comes with a wired HDMI connection.
From the consumer point of view, they want that “wow” experience, and it’s only with the ultra-high bandwidth that they can achieve that—whether it’s watching 4K or 8K TV shows and movies, playing the latest games or immersing themselves in audio.
From the retailer’s perspective, ultra-high bandwidth HDMI connectivity ensures their customers have a path forward as even more bandwidth-intensive applications and devices come along.
BB: Deena nailed it. Wireless streaming capabilities, including those for gaming, are always improving, but they cannot keep up with the bandwidth needed to deliver next-gen capabilities and the entertainment experiences consumers expect.
Even today, if a consumer wants to enjoy the best uncompressed 4K120 and 8K60, HDMI connectivity is the only realistic solution, and that doesn’t even take into account the need to also support enhanced features like 10- and 12-bit color, 4:4:4 chroma and high bit-rate and object-oriented audio.
Q: Many gamers seem to be warming up to TVs as an alternative to monitors for game display. Has the HDMI 2.1a spec had any role in that, and if they are adopting TVs in place of computer monitors, how is that affecting retailers?
BB: The latest specification updates have helped to motivate TV manufacturers to support advanced gaming features, which is giving consumers new options.
This change means retailers can now qualify customers and gamers and offer both computer monitors and TVs—ultimately expanding the lineup of products they can offer for sale. It also gives retailers the chance to sell related accessories and gaming products.
DG: Support for HDTV advanced gaming features changes the dynamic. Now entire families can play games one moment and the next watch a streaming movie—all on the same television. Avid gamers, too, can use these advanced TVs as well when playing in competitive tournaments. They’re even being used at eSports venues on college campuses. All of this adds up to expanded sales for the channel.
Q: Earlier Brad, you mentioned the impact of component shortages and shipping issues on manufacturers and the channel. Are there any other related issues for the channel?
BB: Sometimes manufacturers change suppliers and the countries where products are made more frequently to address supply chain issues. An unintended consequence is some unlicensed or counterfeit product might move through the market.
HDMI LA teams, however, work with customs authorities worldwide to protect brand and trademarks. As a result, there are more seizures of unlicensed HDMI products.
Generally, retailers are unaware that some suppliers are unlicensed or are using an unlicensed contractor until the products they’ve ordered are seized and cannot be released, potentially leaving them out-of-stock during key selling seasons.
To defend against such an eventuality, resellers must demand suppliers provide only licensed products, and they need to make it a requirement in their terms and conditions and even ask to see supporting paperwork—not simply those that meet HDMI licensing requirements, but also all of the licensed IP in products. Resellers should also require products meet strict environmental and packaging requirements so they can be sure they get the products they want.
DG: Manufacturers must make sure they don’t leave retailers in this sort of bind. It’s up to them to make sure they are sourcing licensed products and educating the customer on why certification is important. At Austere, we specifically train our retail partners on the importance of recognizing a label on HDMI packaging to authenticate the Ultra High Speed Certification, which can be scanned using the HDMI Cable Certification app. I also want to underscore the environmental imperative. It’s not simply an important selling point for many customers; it’s a regulatory requirement in many places around the world.
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