Sony Tightens ES Distribution Strategy

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Los Angeles - Sony will limit distribution of its high-end ES series of A/V receivers and Blu-ray players to custom installers and A/V specialty retailers while prohibiting telesales and sales over the Internet.

Sales through will also come to an end.

Sony executives drew a sharp contrast between their new distribution strategy and the policies of competitors who are broadening distribution and expanding Internet sales.

The changes were announced here in conjunction with the introduction of a new 2010 ES lineup and the July 1 replacement of a unilateral pricing policy with a more flexible MAP policy. The MAP policy makes it possible for installers to pass through dealer-cost reductions announced after a customer contract is signed but before a months-long install is complete.

All three new ES multizone A/V receivers (AVRs), priced from a suggested $1,099 to $1,999, are the first ES AVRs with embedded Ethernet hubs to connect TVs and Blu-ray players to the Internet, 3D-ready HDMI 1.4a inputs and outputs with Audio Return Channel, Dolby Pro Logic IIz post processing to add front-height channels, and an iPhone/iPod Touch app. The app controls AVR functions, including multizone functions and connected sources, from anywhere in the house if the AVRs are connected to the home network. An Android-smartphone version of the app is in the works.

 Other features, such as IP-Ethernet control and embedded DLNA-certified network client, have expanded throughout the line, and other features, such as two HDMI outputs, expand to more models from only one.

The new $399-suggested ES Blu-ray player will be the first in the series with built-in Wi-Fi, iPhone/iPod app and Quick Start startup time. It is 3D-capable out of the box and is the first ES single-play Blu-ray player with IR input.

All new ES products are due in August, except for the top-end AVR, which is due in September. They'll join a carryover $499 two-channel receiver and $1,899 400-disc Blu-ray megachanger, which lacks 3D capability but features IR input.

During a press briefing, the company also:

--previewed its first 3D front projector, a non-ES model due sometime this year. The prototype used in a demonstration delivered 3D in 720p, but the finished product will deliver 1080p 3D.

--introduced a mainstream-series $799 AVR that is the company's first mainstream AVR with Ethernet hub. It sits at the top of the mainstream-series AVR line.

The ES distribution change "will help reinvigorate" the specialty and custom channels, reward those installers and specialists "who have been loyal to Sony for many years," and provide an opportunity for ES to expand its custom/specialty dealer base, said Brian Siegel, VP of Sony's home A/V group.

"ES has been for the past few years essentially widely distributed" and available through "many national accounts" and Internet sellers, Siegel said. A/V specialists and installers, he continued, have said ES offers great products and programs but that the previous distribution strategy "made it easier to do business with other manufacturers."

Sony ES "should be the No. 1 AVR brand in the specialty channel, and this [distribution strategy] is a way to do that," Siegel asserted.

A focus on the installer and specialty channels will also help boost customer satisfaction after an ES product is purchased, he continued. Consumers who buy ES products off the Internet or off the shelf often don't understand all the features they could be using and therefore often use them less than consumers who buy through other channels, he explained.

With AVRs offering such complex features as multiroom-audio capabilities and integration with home-control systems and 3D displays, consumers need dealers who can provide education, installation, and demonstration, Siegel stressed.

When asked, Siegel acknowledged that Magnolia Home Theater (MHT) stores within Best Buy stores would qualify as a specialty A/V outlet under the new strategy, although ES is not currently in MHT.

Although the company is tightening ES distribution, it will continue to use distributors to fulfill shipments to ES-approved dealers and installers, Siegel noted. Sony will continue to manage the dealer/installer accounts centrally.

Regarding MAP policies in general, Siegel said dealers view them as a positive, especially when MAPS are similar to suggested retails. ES's shift to MAP is part of a corporate-wide move to MAP, he added.

The new policy prohibiting Internet sales will begin with the new 2010 models, allowing time for inventories of previous ES models to be sold out through Internet channels. Under that policy, ES dealers aren't allowed to sell online but can continue to use the Internet to promote ES and educate consumers about ES advantages, Siegel noted.

In launching the new ES AVRs, Sony is maintaining a three-SKU AVR assortment. The new models, all with seven-channel amps, are the $1,099-suggested STR-DA3600ES, $1,499 STR-DA4600ES, and $1,999 STR-DA5600ES, all believed by Sony to be the industry's first AVRs with embedded Ethernet hub, in this case with four ports.

With the new models, Sony is expanding embedded DLNA-certified network clients to all three models from one to stream music, video and photos from a networked PC. The top model also serves as a DLNA server, a feature that last appeared in the 2008 ES lineup.

Like all AVRs in the previous ES series, all of the new AVRs access Shoutcast-aggregated Internet radio stations and the Rhapsody Internet music service.

As with the previous line, all three new AVRs include an embedded database of IR codes to control connected sources regardless of brand. The trio also carries over proprietary HD Digital Cinema Sound, which replicates the acoustics of the Sony Pictures dubbing studio used by many filmmakers, but the new models extend the capability to home theaters with front-height channels.

Other features common to all three models include SACD decoding, Digital Media Port to connect MP3 players and Bluetooth modules, and integration capabilities with Control4, AMX, Crestron, Savant, Universal Remote and RTI home-control systems. All three also feature A/V passthrough from a connected video source via HDMI to a TV even when the AVRs are off and in standby mode.

Automatic phase matching among front, center and surround speakers has been extended to all models from one model as part of the company's Digital Cinema Auto Calibration (DCAC) speaker-setup technology.

The opening-price AVR, rated at 7x100 watts into 8-ohm loads, features on-screen GUI that overlays first- and second-zone video programs, second-zone video via component output, third-zone audio, Faroudja 1080p main-zone up-scaling, four HDMI inputs and one HDMI output.

The 7x120-watt $1,499 model adds second-zone CAT5e output for long A/V runs, second-zone 1080i up-scaling and two HDMI outputs, which can be set for switching or simultaneous use.

The flagship $1,999 model adds DLNA-certified server, 7x130-watt amp, five rear-panel HDMI inputs, two back-panel HDMI outputs, one front-panel HDMI input, and proprietary clock synchronization for HDMI and SACD sources. DCAC speaker calibration is upgraded to compensate not just for speaker distance but also speaker angle.

The new ES Blu-ray player is the $399 BDP-S1700ES, which is the first ES player with embedded Wi-Fi (802.11n), embedded DLNA-certified client, IR input and control via an iPhone/Touch app. It's 3D-capable out of the box.

Like its predecessor, the player offers SACD playback and access to Sony's Bravia Internet audio and video services. Other features include access to Gracenote's on-line entertainment database, 1GB of embedded memory, and playback of music, video and photos via USB.

The new non-ES AVR is the $799 STR-DN2010, the mainstream series' first AVR with embedded Ethernet hub (with four ports), first with embedded DLNA-certified network client, and first with Internet radio (SHOUTCast and Rhapsody). It also features HDMI 1.4a inputs and HDMI's Audio Return Channel function.


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