A/V Execs See Hope, Challenges In Q4

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– A soft flat-panel TV market, the state of 3D TV and a surprising revival in home audio was the talk of top manufacturers and buying group execs during CEDIA Expo, here.

All admitted that the TV business was slow during the summer and that September, which provided a boost due to the beginning of football season, was historically lower than prior years. There was also concern about lackluster interest in 3D TV, but hope that its fortunes would revive during the fourth quarter.

The fourth quarter will undoubtedly be promotional, with aggressive pricing on Black Friday. The only question will be whether those promotions will result only in a Black Friday or a Black November.

Suggestions have been made that aside from a still suffering economy the introduction of iPad, e-readers and 4G phones took dollars out of the TV market.

Rick Calacci, LG Electronics regional sales VP, did not agree and said the quiet summer was “some of the usual seasonality” and that currently “the return of football season has helped. But has it lifted sales where it should be? No, not yet. But we think it will get there soon.”

Concerning the fourth quarter, Calacci said, “We haven’t changed our production plans, but we have changed our promotional plans. Industry promotions [on TVs] will vary by their length and breath.

Jim Sanduski, senior sales VP for Panasonic, said the dents had been able to introduce 3D and demonstrate it properly, we could have helped establish the market and explain the technology.”

Both men quoted a study commissioned by both groups that said their members demonstrate 3D TVs 59 percent of the time while national chains have done it 22 percent of the time. “If you go to national chains the quality of their 3D demos are non-existent … or ineffective,” Ristow said.

Ristow said the hoopla surrounding of 3D TV has “stepped over IPTV, which is a very viable and useful feature for consumers,” Ristow noted.

And finally, when asked if this would be a typical Black Friday or will heavy retail promotions make it a “Black November” for flat panels, Ristow and Workman maintained there will be “major Black Friday events” but hoped the industry would avoid over-promoting.

The danger, if the promotions get too aggressive, is “it will drive people into the stores that weekend then they disappear for two weeks,” until retailers promote heavily again to get consumers back right before Christmas, Workman said.

Richard Glikes, executive director of Home Technology Specialists of America (HTSA), told TWICE at his group’s CEDIA reception that his group was optimistic about the balance of the year. “In September … bigger houses are being built and our guys have more jobs in the pipeline.”

Glikes said HTSA’s moves to get involved in alternative categories “is going well and progressing. We are doing well with that.” And he added, “I keep on telling members that you can’t just rely on TV sales. If you are just a TV store you will be out of business.”

That being said, Glikes is optimistic about 3D. “It will happen. It will happen if the Hollywood studios want it to happen. I am hopeful.”

One pleasant surprise has been higher home audio sales after a prolonged malaise, with speakers and networked receivers leading the way.

For instance HES and PRO reported that their audio sales have been up by double digits during 2010.

Jim Minarik, president/CEO of DEI Holdings, acknowledged that trend. “This growth has been a surprise this year. These retailers [HES and PRO] have done better with audio than the past couple of years and the industry is performing better too.”

Bob Weissburg, president of sales and marketing, D&M Holdings, explained, “There is pent-up demand for audio with existing products and new speaker configurations such as soundbars, thin speakers to match thin TVs. Only when consumers get home do they realize how some flat-screen TVs really sound and they need speakers.”

Networked receivers, which manage and channel content from iPods or MP3 players, Internet radio and the like, have done well too as the hub of the networked home.

“Many networked receivers are HDMI 1.4 compatible, meaning they are all 3Dready,” Weinberg noted.

He suggested, “I think we will see modest growth in A/V during the fourth quarter due to home audio growth, interest in 3D TV, HD and Internet TV.”

But Weinberg stressed, “Consumers need to see 3D demonstrations at retail, but they have to be done correctly.”


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