Runco, Dealers Bask In Glow Of '98 Sales

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The arrival of terrestrial digital television was decidedly not the rallying call for dealers and reps who recently convened in Ixtapa, Mexico for Runco's 1999 line review of high-end front projectors, video processors and aspect ratio controllers.

Rather, Sam Runco, the company's founder and chairman, told his troops to continue to leverage their traditional strengths - selling and installing high-performance video projectors and video processors - until more broadcasters begin transmitting substantial high-definition digital programming to match the capabilities of Runco's projector line.

"We aren't in a hurry to sell HDTV," Runco stated during an open roundtable discussion with dealers, reps and the press. "We made our reputation selling processed video pictures, and our business is still booming. One day soon, I hope, terrestrial digital broadcasts will deliver better-quality pictures than we've seen before. But clearly there are still some problems to be overcome.

"In the meantime, you can't find much better than a DVD running through one of our video processors and one of our projectors."

In fact, none of the dealers attending the event said they have sold significant numbers of DTV set-top decoders for their high-end custom-installed home theater systems. Runco had planned to source a DTV decoder for a third-party manufacturer, but those plans remain on hold.

Of the handful who reported installing some DTV receiving equipment, most said they worked exclusively with combination ATSC/DTV satellite decoders from start-up HDTV satellite programmer Unity Motion.

Runco said that HDTV would soon present a new opportunity for his company to further ramp up volume of high-end HDTV-ready projectors. He reminded the audience that Runco sold HDTV-ready equipment long before terrestrial broadcasting began HDTV broadcasts, and he added that Runco was first to market with a line-doubled video processor.

"Our customer wants to buy a product that's future-proof," he said.

Similar video-processing technology is now part of most manufacturers' early HDTV products.

"What digital television broadcasting has done," said Runco, "is get consumers interested in learning more about home theater and finding out what real home theater is. It's up to you, the dealer, to show it to them. It's important to remember that we are not in the business of selling technology. We are in the business of selling better pictures."

Despite the opportunities digital broadcasting might offer his company in expanding its dealer base, Runco vowed to keep the custom-installer at the forefront of the distribution plans and not to change its strategy by catering to "the super, multi-store accounts."

"Although we have grown significantly, we don't have one single dealer who does 20% of our business," he testified.

Many of Runco's dealers reported that their businesses are better than 60% custom-installed systems, and most make a conscious effort not to let product retailing dominate their time and resources. Most refuse to sell products with weak margins, and they will even refer such customers to the nearest consumer electronics superstore, which often sells products at prices nearing wholesale costs for custom dealers.

Within the custom-installer network some degree of specialization may be starting to emerge.

Richard Barra, owner of Audio Design in Salt Lake City, Utah, told fellow Runco dealers that a growing portion of his business comes from what he termed "electronic architecture" - which he defines as offering system-designing services only to new home builders, do-it-yourselfers and other contractors.

"We provide designs for the whole house," Barra explained. "We put everything together, including the budgets. People moving into multimillion-dollar homes are delighted to pay for it."


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