As 1991 unfolded, the U.S economy was sliding into recession and the drum beats of war in the Persian Gulf were getting louder. Retail stocks were getting hammered and sales in major categories like major appliances, VCRs, portable audio and car electronics were down significantly. It was a difficult time to be optimistic about the consumer electronics industry.
But one company saw promise and acted upon it. Cahners Publishing, one of the country’s largest publishers of business publications, parented by Reed Elsevier, one of the largest publishing conglomerates in the world, bought TWICE, TWICE TODAY (the CES show daily) and sister publication CARS from founder Richard Ekstract. CARS was folded into TWICE and its editor, Joseph Palenchar joined the staff of TWICE.
In an editorial, TWICE looked ahead at what it tagged “the digital decade,” and assured loyal readers that the mission of the publication remained the same and that the best was yet to come for the industry. In that same issue, CEMA forecast industry sales for the industry would reach $34.5 billion in 1991, representing a modest 3 percent growth over the previous year, but growth nonetheless. It appeared that Cahners had made a savvy and timely purchase.
At TWICE’s annual Retail Roundtable, executives were guarded but optimistic that a slow economic recovery was coming. But they expressed the most trepidation when discussing the coming conflict in the Middle East. A few weeks later, when Iraq invaded Kuwait, a watershed moment in the history of television took place. The 1991 war was one of the first televised events of the global village, as the entire world watched a military spectacle unfold live on their TV screens via TV satellite networks.
Well, the Gulf War came and went in a few short months and gas prices, which had been steadily rising in the run-up to the war, dropped as a result providing a boost for the general economy. Things were looking up.
In addition, copyright issues surrounding digital recording by consumers were finally settled. The EIA cleared the way for makers of digital recorders to make royalty payments to software owners, and a host of new digital products saw the light of day, including Sony’s first Digital Walkman which recorded to DAT.
At the time, my Walkman, the old analog kind with the foam headphones, was my most used possession. Having secured a job at a New York-based trade magazine and an apartment across the river in New Jersey, me, my Walkman and an assortment of cassette tapes commuted together underground each workday. My entry-level journalism job did not provide enough discretionary income to afford a CD player, but my friend Mike had one in his apartment so I logged a lot of hours sitting on his floor taping CDs to blank cassettes.
Out of necessity, I did save enough money to buy my first TV, a 19-inch Emerson, and the return on investment was excellent, as it still works today.
While I was shopping at the low end, the industry remained ten steps ahead of me and my wallet. Hitachi brought to market a precursor to the home theater in a box: a home theater package that included a 46-inch Ultravision rear-projection TV, 100-Watt Dolby surround sound amp, a hi-fi VCR, a laserdisc/CD combo player, four speakers and a black oak cabinet for $6,000. No custom installation was required.
Also on the high end, three companies joined forces to market a 100-disc CD carousel player, the first of its kind in the U.S.; Sharp introduced a wall-mounted 8.6-inch flat screen LCD TV in Japan for $4,000; and Alpine previewed the industry’s first in-dash car CD changer, a three-disc model, for $800.
The CE retail scene in 1991 was still being dominated by RadioShack, which topped TWICE’s annual retail registry with $2.9 billion in sales the previous year. But parent Tandy was not content to rest on its laurels and surprised the industry by announcing that it would diverge from company tradition and offer some name brand merchandise in its 7,000 stores.
Blockbuster Video was also becoming a force to be reckoned with, leaping from No. 15 to No. 6 in the TWICE Registry of Leading Retailers, with just over $1 billion in sales. In six years the retailer grew from a single superstore in Dallas to the country’s largest video chain, with 1,596 stores, mostly through the acquisition of rival regional chains.
Another star segment of the retail scene was the home office superstore. Driven by steadily rising PC and fax sales, office superstores BizMart, Office Club, Office Depot, OfficeMax, Office World and Staples all expanded their retail presence.
The biggest business story of the year followed investment firm NYCOR as it staged a proxy battle to take over Zenith. Jerry Pearlman, Zenith’s chairman, vowed to fight the bid and the company’s outside directors remained loyal to management. Goldstar appeared to be playing the White Knight by investing $15 million in newly issued stock and NYCOR asked the New York Stock Exchange to investigate whether the deal was legal. Eventually Zenith beat down the challenge and went on that year to introduce the first closed caption TVs, as well as the first VCR Plus VCRs. But the company also posted its eleventh consecutive quarterly loss and made the difficult decision to close its Missouri assembly plant, shipping the production to two facilities in Mexico.
As 1991 came to a close the arrival of the 16-bit gaming revolution provided a huge boost to holiday sales with new systems from Nintendo and NEC hitting the market. The life-like action and fast moving graphics caught on with the gaming crowd immediately and the category quickly exploded.