NEW YORK –
Soundbar sales are rising rapidly. HTiB sales are declining rapidly. But the two trends aren’t related because the two products are purchased largely for different reasons, multiple suppliers contended.
Consumers are buying soundbars mainly to enhance flat-panel TV sound, even if the products include virtual-surround technology, suppliers said. Consumers also buy soundbars purely for aesthetic reasons or for placement in secondary and tertiary rooms.
HTiBs, on the other hand, remain the preferred option for consumers who want a full surround-sound experience, have living rooms or media rooms configured for the placement of five or more speakers, aren’t intimidated by system setup, and want a simple purchasing decision that makes it unnecessary to mix and match audio components.
Though full-fledged surround-sound systems are still the system of choice for many people, HTiBs aren’t the only solution. Retailers are increasingly creating their own HTiBs from different brands of audio components in inventory, contributing to the decline of single-brand HTiBs marketed by audio and A/V suppliers.
“I think there is probably more cannibalization of HTiB from the retailer-made bundles than from sound bars, which seem to be much more related to the necessity of improving the flat-panel TV sound,” said Tom Sumner, senior VP of Yamaha Corp. of America.
“If you look at it, you’ll see that online retailers like
and Newegg and brick-and-mortar retailers like Best Buy and hhgregg are offering their own packages with an A/V receiver and speakers,” Sumner explained. “The packages still offer consumers a complete solution that is approved by the retailer and offers the retailers more flexibility in changing their offering on a regular basis.”
The trend to dealer-packaged HTiBs, he noted, is “one factor driving HTiB sales lower and component sales up.”
Marketers also note another potential reason for declining HTiB fortunes: market maturity. Household penetration of surround sound systems of any type grew to 39 percent of all U.S. households by January 2012, Consumer Electronics Association (CEA) statistics show.
The decline in HTiB sales accelerated in 2011, when factory- level unit sales fell 17.7 percent to 2.3 million and dollar sales fell 27.3 percent to $556 million, CEA statistics show. The 2011 decline followed 2010’s 9.8 percent unit decline and 14 percent dollar decline. For 2012, CEA forecasts a decline of 14.7 percent in units and 15.9 percent in dollars.
Soundbars, on the other hand, are surging. In 2010, factory- level unit sales skyrocketed 325 percent to 672,000 on a 278 percent dollar gain to $146 million. Both percentage gains were based on admittedly small bases, but unit and dollar sales surged again in 2011 at high double-digit rates, and dollar volume in 2012 is forecast by CEA to grow 117 percent to $485 million.
For its part, The NPD Group said retail-level HTiB sales fell in 2011 by 9 percent in units and 12 percent in dollars while soundbar sell-through rose 64 percent in units and 67 percent in dollars. Soundbar average selling prices rose by 2 percent in 2011.
Interestingly, NPD found that 2011 sales of HTiBs lacking a video source (including supplier-made receiver/speaker packages) grew 8 percent in units and 10 percent in dollars. “I would think these devices would be more in direct competition with soundbars, [yet] we are seeing both categories grow at the same time,” said Ben Arnold, industry analysis director for consumer technology at NPD.
For his part, Samsung’s Joe Stinziano said bars are growing in part because they’re often used in secondary and tertiary rooms that don’t accommodate multi-speaker HTiBs. “The majority buy it for aesthetics or to enhance the TV-listening experience,” the senior home entertainment VP added. The company doesn’t recommend soundbars as replacements for HTiBs, even if the bars feature virtualsurround technologies.
Bar buyers come in three types, Stinziano continued. One is concerned about aesthetics, another is concerned about ease of use, and a third is the value consumer.
Dealer positioning is also playing a role in preventing soundbars from cannibalizing HTiBs, said Troy Livingston, Panasonic audio product manager. “Dealers are advertising a simple solution with no cables or rear speakers.”
Panasonic senior product manager Alex Fried agreed that dealers are positioning soundbars not as HTiB replacements but as “more of an enhancement of audio for TV. Virtual surround is secondary.”
For many consumers, Fried noted, HTiBs used to serve as a way to augment TV sound, but with TV prices having eroded faster than HTiB prices, those consumers are more reluctant to add a $400 to $500 HTiB onto a TV that now costs $1,200, or about half the price of only a few years ago. These consumers are now opting for soundbars, which are generally lower priced than $400-$500 HTiBs, he said.
For his part, Samsung’s Joe Stinziano also sees a dichotomy between soundbar and HTiB buyers. Bar buyers come in three types, said the senior VP for home entertainment. One is concerned about aesthetics, and another is concerned about ease of use. Some bar customers are also value consumers. “The majority buy it for aesthetics or to enhance the TV-listening experience,” he said. The company doesn’t recommend soundbars as replacements for HTiBs, even if the bars feature virtual-surround technologies.
Soundbars are also growing for another reason, he said. They often fit in secondary and tertiary rooms where a multispeaker setup wouldn’t make the cut.
Yamaha’s Sumner also sees bars and HTiBs appealing to different customers. “The first driving force [behind soundbar growth] is that the flat-panel TV continues to get thinner, which seems to be preferred by consumers, but it also makes it very difficult for the TV to produce good sound,” he said. “The thinner sound of the TV in some cases makes it a necessity for consumers to have some form of external audio.”
A second driving force “is what we lovingly call WAF, or ‘Wife Acceptance Factor,’ ” he said. “Historically the hometheater system was sort of the man’s domain, but now with flat-panel TV being stylish and part of the décor, the woman of the house wants to have more of a say in the appearance of the entertainment system.”
A third factor driving soundbar sales is convenience, Sumner added. “It really does take some work to install a complete home-theater system — either HTiB or components — in a home. Soundbars are just easier to install and don’t usually require any cutting into drywall or running wires,” he said. “We do find that people who are seriously into video games, sporting events, movies or music tend to invest the time and money to get the real immersive experience, at least in their main man cave. Those same customers may opt for a sound bar in secondary rooms like bedrooms or dens.”
As a result of these market forces, sound bar sales are up significantly in all price bands, including $500-plus, Sumner said, but the sweet spot is the $200 to $299 price range, which accounts for about half the market.
Many retailers, however, are taking steps to entice consumers in stepping beyond $299. Sumner pointed out that at International CES, several retailers were impressed with a display that Yamaha set up to showcase several sound bars. “At least one retailer implemented almost the exact display to demonstrate to customers what they get by trading up from $250 to $800 to $2,000,” Sumner said.