“This industry loves to eat its young” is an observation often attributed to Dave Workman, president and CEO of the ProSource buying group. With TV makers and retailers yearning for higher margin 8K TVs, could slim margin 4K sets be the next item on Workman’s industry cannibalization menu?
“There really isn’t anything a dealer can do if the customer believes [8K] is the next technology coming and is inclined to put off their purchase or upgrade because of this,” Workman notes. “The sets are very expensive and there isn’t any content available, but the picture does look amazing on the set.”
That 8K will someday subsume 4K, just as 4K usurped 2K and just as 2K consumed analog TV, is a given. Whether or not retailers can do anything about 8K excitement impacting sales of 4K TVs in the short-term may be another matter.
All of which assumes 8K is impacting 4K sales.
“We found showing 8K did not hurt 4K sales – and that shocked us,” reported Tom Campbell, corporate direct or of the five-store SoCal Video & Audio Center (VAC) chain, “and we had been extremely concerned. For people for whom price is not an issue, they want the latest regardless of cost. But the attitude of most customers is that I can get a great buy on 4K, and when the price comes down on 8K, we’ll buy one then.”
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Considering that 8K TVs still carry $5,000-plus price tags, buying interest could take time to catch up with actual buying. According to Futuresource, sales of 8K sets in the U.S. are projected to reach just 300,000 units this year, a mere 1.3 million by 2023.
“8K technology may cannibalise to a small degree 4K sales going forward, but this is in line with a growing trend toward larger screen TVs in most major markets,” notes Matthew Rubin, Futuresource’s senior market analyst, “which, when combined with 8K only being available in TVs above 60 inches, suggests the shift will happen naturally, but will be restricted to these extra-large screens.”
Stephen Paczkowski, buyer and channel manager for the AVB buying group’s Expert Warehouse distribution arm, thinks that 8K can actually boost 4K TV sales. “A smart retailer will use the classic ‘sell off of the high-end’ product strategy, and move to 4K if they encounter an objection. As the saying goes, start with the Ferrari and move to the Ford.”
Even considering the lack of 8K content and the approximate 5x price delta between 4K and 8K sets, some retailers are taking no chances.
“Promoting 8K confuses customers,” insists Bob Cole, founder and CEO of Philadelphia’s World Wide Stereo. “It’s just another thing that reduces their confidence, and there enough articles that say there is no content, making it sound like a scam. We never promote a TV as 8K right now. We promote it as a better TV, which it is. In-store we explain how. They sell, but there is no velocity yet.”
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