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Audio Execs Talk State Of Market At CEA Forum

A group of concerned audio manufacturers and retailers discussed the depressed state of home audio sales during a panel at the CEA Industry Forum, here.

The experts assembled were Steve Baker, the newly named president of Denon Electronics, Steve Caldero, sales VP of Yamaha Electronics; Brian Hudkins, president of Gramophone Ltd.; George Liu, founder and president of Audio Visions South; and Gary Warzin, president of Audiofile Systems Ltd. and the new chairman of CEA’s Audio Division.

CEA industry analysis director Sean Wargo moderated the panel and outlined the all-too-familiar sad audio statistics from the past couple of years. Yet he made an interesting point, which is that due to the popularity of DVD players, which many consumers are using as a DVD/CD player in home theaters, if DVD sales were added to the audio numbers, things wouldn’t seem so bleak, statistically speaking.

Caldero picked up on that view, saying, “Maybe we should abandon our usual reference, that products which are not normally considered audio products are selling well. For instance, Apple has sold $500 million in iPods … and there is an expansion of audio on PCs.

“Hudkins noted that the industry has gone away from selling the benefits of great audio. “We don’t sell performance anymore, the experience. Bose sells the audio experience, but the industry [as a whole] doesn’t.”

Warzin discussed the industry statistics by saying that “mass market products overwhelm the industry sales figures and doesn’t show the progress in the high end.” He noted that while much of the ultra high-end business “is tied to the stock market surging” especially during the late 1990s “bubble market,” the industry figures don’t provide an accurate picture.”

Baker said that Denon considers “DVD as an audio product.” He added that the delivery of “digital music online provides more [consumers] with the audio experience. That should create a major role for traditional audio companies.”

Liu of Audio Visions South noted that traditional audio suppliers are not only in competition with PCs, but with the popularity of new video displays. “More money is being spent by consumers for video displays and more experienced salespeople are selling video because that’s where the sales are. The result is that audio suffers. Consumers are fine with ‘good enough’ audio.”

Caldero stressed that retail demonstrations are a way to change consumers’ minds. “Someone must give consumers an experience to buy. Most young people today experience audio via earphones, boomboxes or car audio Maybe we have to look to changing the way we market our products. ‘Good enough’ audio is not a negative term. If we don’t give them an experience consumers will have other priorities, and audio isn’t one of them.”

Liu said manufacturers have to be more involved too. “We need manufacturers to say, ‘It’s cool to have equipment that sounds great!’ We need manufacturers to assist us in the stores with promotions. We need sales training to give our salespeople the ability to communicate the passion of great audio.”

And Hudkins added that the industry has to acknowledge the existence of “PCs, video game systems that play CDs and the like, versus trying to sell ourselves, the typical consumer of 30 years ago.”