Embrace New Tech, HES Tells Members

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DALLAS — Home Entertainment Source (HES) is urging dealers to add home control to their repertoires to help offset margin declines in their core A/V businesses.

Executive VP Jim Ristow outlined a new model to members attending the group’s 2010 Spring Summit here last week in which dealers become “integrators that do A/V specialty,” rather than A/V specialists that provide limited integration services.

Citing CEA forecasts, Ristow said home technology, including structured wiring and wholehouse sound, will outpace traditional CE categories this year with 6 percent growth, while disciplines such as automation, lighting and energy management could increase by as much as 20 percent, he projected.

“That’s where we can go to make money,” he said. “Gaming, IP, IT, A/V — only we can pull it all together.”

Driving the integration of technologies will be smartphones and the coming wave of tablet computers led by iPad. The latter, he said, “will do for control what iPod did for music.”

Ristow advised members to avoid both overly esoteric applications and mass-market solutions, and to aim instead for the mainstream “semi-custom” control market.

Home control is one of several areas that the group’s 475 members should pursue in this time of “hope and opportunity,” he said, including 3D and rear- and front-projection TV, whose large picture and fast refresh rate provide a better 3D experience.

Thanks to the availability of 3D content, compared to the dearth of source material in the early days of HD, consumer awareness is ahead of the industry for the first time in driving a new technology, Ristow noted.

HES will help members promote 3D with prepackaged special events, press releases and other turnkey solutions because “you’ve got to show it to sell it,” he said.

Other strategic opportunities include video on demand, which he deemed a saleable feature in TV, as well as plasma displays and audio. Plasma, which still offers the best-quality picture, is being abandoned by big-box chains beyond the opening price point, while audio “is actually alive and well, [and] we need to bring back the passion” for the category.

None of these options alone will provide a home run, Ristow said, although together they can provide “lots of singles” and important margin opportunities.

He added that those who adapt to the new marketplace realities by changing their business models will be rewarded for their resiliency and perseverance, while those that don’t might not survive.

“A whole new market is about to explode,” he said. “The good old days are gone. You need to renew and reinvent.”

In other HES news, Ristow reported that the group’s Expert Warehouse instant- rebate portal became operational in January, and that about two-thirds of members are utilizing it. The online tool, which consolidates claims, reduces administrative costs and reduces average payment time from two to three months to 15 days, could recoup as much as $10 million in unclaimed funds if all 550 members participated, he said.

Ristow also reported on last month’s annual Video Summit in New Jersey, where HES and Alliance partner PRO Group held informal discussions with key vendors. The upshot, he said, is that manufacturers are working to develop and enforce stricter channel policies, particularly for online retailers, which will help stabilize the market.

“It’s not perfect,” he said, “but it’s better than it was.”

The Alliance partners will meet with manufacturers again this month during a planned trip to Asia.

HES Adds Seven Vendors, Honors Best

DALLAS — HES said it expanded its vendor roster with the additions of

Epson, Integrated Systems, NuVision, Paradigm, Peachtree Audio, Somfy and Sonos

, and announced its Vendor of the Year award winners. The group included


for accessories;

Definitive Technologies

, for audio;


, for video; and


as most supportive vendor.

Lynn’s Audio Video

was named HES Member of the Year, and Randy Blanchard of

Expert Custom Warehouse

received an Excellence Award.

Other highlights included a series of joint HES and PARA education sessions, and an address by recently elected HES president Vance Pflanz of Pflanz Electronics, who introduced new board members Bob Dodge of

Talk of the Town

and Alan Guyes of


, and returning directors Bill Janka of

Mission Audio Video

, Marty Hayse of

Dennis Sage Home Entertainment

, David Pidgeon of

Starpower Home Entertainment Systems

, and Andy Kersey of

Hamlin & Kersey


Attendance at the Summit, held here at the Hilton Anatole in tandem with AVB/BrandSource, HES’s parent group, was up 10 percent over last year, Ristow said. The event will move to the World Marriott Center in Orlando, Fla., next February.


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