Home Theater View

Gibson Buys a Big Chunk of Onkyo

Gibson is looking to diversify away from musical instruments, and is buying Onkyo USA. Onkyo has been doing reasonably well in the shrinking A/V receiver market - I own an Onkyo NR3007 myself - but I just can't figure out why Gibson decided to invest in the incredibly challenged A/V industry rather than, say, ANYTHING ELSE. Here's the press release:

 Gibson Buys Stake in Onkyo Japan and Majority Interest in Onkyo USA

Forms Strategic Alliance to Take Consumer Audio Experience to a New Level

Nashville, TN. January 04, 2012: As part of its continued diversification into the music and audio lifestyle arena, Gibson Guitar Corp., the world’s premier musical instrument manufacturer, today announced a strategic partnership with Onkyo Corporation, a worldwide leader in consumer audio. With a reputation of excellence for high quality audio equipment and home theater systems, Onkyo offers Gibson’s newly-formed Pro Audio Division substantial technology resources. Gibson will provide Onkyo with its marketing resources and expertise. The result will be an ability to deliver a far superior audio experience to the consumer who has become more and more used to hearing only inferior compressed music through inexpensive ear bud headsets.

Through this venture, Gibson will acquire a majority of Onkyo USA (Onkyo’s exclusive distributor for North America and a distributor for Central and South America) and become the second largest shareholder in Onkyo Corporation. Gibson will make a strategic investment in the company, and Gibson Chairman and CEO Henry Juszkiewicz will be given a position on the Onkyo board of directors. Likewise, Onkyo will invest in Gibson, and CEO and President Munenori Otsuki will take a position on the company’s Board of Directors. Together, the two entities will form a Hong Kong-based joint venture focusing on design and development of unparalleled consumer audio products. Through this alliance, Onkyo USA becomes the latest addition to the Gibson Pro Audio division, which already includes KRK, Cerwin-Vega! and Stanton.

“Onkyo makes some of the world’s best audio equipment, and this partnership will give Gibson the ability to bring a deeper and more enhanced audio experience to music lovers around the world,” says Juszkiewicz. “While people may be listening to more music, they are listening to it primarily in a severely compressed format. The aural disparity between a real system and compressed sound is vast, and as a result, they are simply not hearing tremendously rich sounds. With Onkyo, our goal is to bring the same exceptional experience artists demand in the studio to a larger consumer base.”

“This partnership has significant positive implications for Onkyo as we are always seeking ways of creating new value,” says Otsuki. “Gibson is a leading global company with a massive fan base, best-in-class products and superior marketing skills. Coming together in this way opens the door for amazing opportunities for both companies and, more importantly, fans of Onkyo and Gibson.”

All agreements are subject to Japanese regulatory clearance, negotiation of definitive agreements and financing approvals of lenders.

ABOUT GIBSON GUITAR CORP.
Gibson Guitar Corp. is known worldwide for producing classic models in every major style of fretted instrument, including acoustic and electric guitars, mandolins, and banjos. The Gibson Les Paul Guitar is the bestselling guitar of all time and is a tribute to the late, famed musician of the same name. Collectively, the Gibson Robot Guitar, Gibson Dark Fire, Gibson Dusk Tiger and the Gibson Firebird X represent the biggest advances in electric guitar design in more than 75 years. Through the Gibson Foundation, Gibson Guitar Corp. has become equally known for its philanthropic efforts on behalf of music, education, health and human services. Founded in 1894 in Kalamazoo, MI, and headquartered in Nashville, TN, since 1984, Gibson Guitar Corp.’s family of brands includes Epiphone, Cerwin-Vega!, Dobro, Kramer, Onkyo, KRK Systems, Steinberger, Tobias, Echoplex, Electar, Flatiron, Slingerland, Stanton, Valley Arts, Maestro, Oberheim, Baldwin, Sunshine Piano, Take Anywhere Technology, J&C Fischer, Chickering, Hamilton, Wurlitzer and Gibson Pro Audio. Visit Gibson’s website at www.gibson.com. Follow Gibson Guitar at www.facebook.com/gibsonguitar and www.twitter.com/gibsonguitar.

ABOUT ONKYO
Since 1946 Onkyo has been passionately committed to developing audio products that deliver uncommon performance, quality and value. Bundling proprietary technologies and innovations with other sound-enhancing exclusives, Onkyo continues to created award winning products that are lauded by many of the industry leading audio publications. The company's philosophy is to deliver products that are superbly designed and built to a consistently outstanding standard of excellence. The results can be seen in the obviously high quality of any Onkyo-manufactured product, even before it is turned on. Visit Onkyo’s website at www.onkyousa.com. Follow Onkyo USA at www.facebook.com/OnkyoUSA.

Onkyo Announces First MHL A/V Receiver

There is no indication of price or availability, so this "announcement" is almost comically vague, but it is interesting nonetheless. For the uninitiated, MHL is a standard that aims to simplify getting content from mobile devices (smartphones and tablets) while keeping the devices charged. The MHL folks were smart enough not to come up with their own unique connector/cable; instead it uses the HDMI or microHDMI connectors, and includes HDMI backwards compatibility. It looks like Onkyo's reciever will pop up windows showing you what content is available on the device, allowing you to easily push that content on to the TV. That doesn't seem like an earth-shattering innovation, but given the dearth of MHL-compliant televisions on the market - let alone installed in homes - it could be useful.

Of course, you'll need an MHL-capable phone as well. Here the news is good; there are only a handful of phones with MHL, but one of them is extremely popular, Samsung's Galaxy SII, and most of HTC's latest phones support it as well, including the EVO 3D at Sprint, Vivid at AT&T, Rezound at Verizon Wireless, and the Sensation at T-Mobile.

Roku Goes Retail

It certainly took them long enough, but Roku is finally graduating from online-only sales to retail. It wasn't doing too badly in the old business model - Roku's status as the least expensive and easiest streaming media box allowed it to rack up over a million units sold. Still, Roku always seemed something like a secret that only technically savvy people knew about - and that is not the target demographic for a product designed for simplicity. No, the ideal retail channel ought to be something like Target. Or Best Buy:

Roku XD player is available for purchase at Best Buy stores nationwide and at BestBuy.com. With up to 1080p HD streaming support, integrated 802.11n WiFi and Instant Replay the Roku XD offers unlimited entertainment choices and incredible value to customers. The Roku XD has a list price of $79.99 and is available at Best Buy stores and at BestBuy.com for purchase today. Roku players can also be found at other leading retail stores including BJ’s Wholesale Club, Fry’s Electronics and RadioShack.

Best Buy, Fry's, and the Shack. Well, the good news is that those stores are where a shopper goes if they want an inexpensive box to stream Netflix (or MLB or NBA or any of Roku's other content options). The bad news is that it won't reach consumers who don't know that they want an inexpensive box to stream Netflix (or MLB or NBA or any of Roku's other content options). Hopefully a successful run at Best Buy will get buyers at Target and Walmart interested, because their customers are who Roku should be chasing.

Headphones To Lure the Next Generation

Great article in Dealerscope on how custom audio shops can prepare for the future by focusing more on headphone sales. Money quote:

"There are no new audiophiles entering our community any more," Abplanalp said. "For young people experiencing music, the art of building a stereo has lost its cachet. So selling headphones is a very important part of introducing music lovers to different performance levels..."

The article also notes that Monster's Dr. Dre Beats line is a key sales driver for this demographic, but oddly undersells the ability to properly demo in-ear headphones in-store.

Why there haven't been any posts here at HTV

I've been on the road pretty much since the beginning of the year - first at CES and then meetings, product launches, and more trade shows. Until I have a second to breathe, here's HomeTheaterREview's (no relation) nice write-up debunking CES myths.

Last Minute Holiday Gift Guide

My Last Minute, Non-Obvious Holiday Gift Guide 2010 has been posted over at Slashgear.com and includes a Home Entertainment section.

Kaleidescape Ships Blu-ray Server (Sort of)

First a bit of background: Kaleidescape is a high end media server vendor. They make boxes you have a custom installer put in one spot, which connect over a wired network to smaller boxes your installer connects to each TV and projector in your home. You - or your installer - copies all your DVDs onto the big box, and then you can watch all your movies anywhere in your home. Basically, it's Sonos for movies for rich people. How rich? Kaleidescape was actually the reason I instituted a policy not to review anything I could not reasonably afford. Years ago Kaleidescape offered me a full setup to review; I refused because I didn't want to take out an insurance policy on a loaner, and I didn't want to take out a second mortgage on the chance that I couldn't bear to return it. A full Kaleidescape system in those days easily topped $50,000. Prices have come way down, but most systems will still end up in the $20,000 range with installation.

I had good reason to fear wanting to keep a system. I have used Kaleidescape at trade shows and have been consistently impressed. It is fully babysitter proof and requires no technical knowledge to use whatsoever. As all the movies are ripped to the system's hard drive(s), movies start instantly. However, its one downfall is that until now it only supported DVDs, not Blu-ray discs. As many installations include equally expensive HD projectors, this is a real problem.

Kaleidescape's first stab at the problem was adding Blu-ray support to the M500 player - one of the small boxes you'd have near your TV. That certainly enables you to play a Blu-ray disc (both at that TV or anywhere else in the house), but it still requires physically handling the disc every time you want to watch a movie and it is not all that much better than a regular Blu-ray player from Sony or Samsung. The whole point of Kaleidescape is access to any movie you own instantly thoughout the house.

Kaleidescape is now selling a partial solution to the problem: you can rip Blu-ray discs to the hard drive in the server, and it will play off the server (which means you can include it compilation video playlists). However, to appease the copyright gods, Kaleidescape still has to physically verify that you own the Blu-ray disc before playing any of its sweet 1080p content. To do so, you'll need a media vault ($1500), the ugly box pictured on the right, which can hold up to 100 Blu-ray discs. You can add as many of these as you like, but each needs to be connected to an M-class player (like the M500). In short, Kaleidescape now allows Blu-rays to be treated just like DVDs, only there is a lot more complexity and kludginess involved. It's better than nothing, but it has to seriously pain Kaleidescape's management and engineering staff who have made simplicity and elegance a core part of the product's value proposition.

Worst DIY Home Theater Installations

The Nintendo cartdrige router should never have made it into the mix (it's awesome), but the rest of CE Pro's slideshow of consumer-submitted photos are hilarious. Custom installers, avert your eyes!

Thiel Goes Amazon - Growth, or Desperation?

 HomeTheaterREview (no relation) is reporting that high end speaker maker Thiel will stop selling exclusively through independent retailers and begin offering some of its entry level products on amazon.com (story here) and indeed, a quick amazon search for Thiel products shows in-walls from $900, and standalone speakers ranging from $1200 - $3,000. Founder Jim Thiel passed away in September, so I'm sure there are some who are saying that Jim must have said, "not over my dead body" and the company waited until that was literally true before making the move. I never interviewed Mr. Thiel, so I don't know what his attitudes or business plans were. However, the company's basic position is pretty simple: the market for high end speakers has always been limited, but audio enthusiasts are aging, the independent dealer channel is shriveling, the recession is tanking custom installers, and competitors are moving design and production to China to lower costs. It would appear that Thiel is suffering from the same maladies as Snell.  

The move to a mainstream, online distribution channel like amazon is definitely risky, especially since Thiel didn't take the obvious step of first segmenting its products into distinct lines for the different channels. Thiel will have to sell enough volume on amazon to offset the fallout from angry independent dealers and custom installers. It's not clear if this is a desperation move -- i.e., Thiel's sales are down enough that anything sold online is a plus -- or if this is an attempt to position the company for growth as traditional channels are expected to continue shrinking over time, and the online channel continues to grow. In any case, simply sticking products from a relatively obscure brand up on amazon will not result in sales; Thiel will need to advertise and promote the products through the new channel. I haven't seen any new Thiel ads or promotions, have you?

RIP Snell, Escient

Not sure where I was when this crossed the wire back in April, but I was saddened - but not surprised - to learn that D&M Holdings shut down both Snell and Escient. 

Snell was a high end speaker brand without enough brand recognition. Selling $30,000 speakers in a recession is extremely hard. Selling $30,000 speakers from a brand that only involved enthusiasts have heard of is basically impossible, no matter how terrific they measure and sound (Snell was famous for rigorously achieving ridiculously flat frequency measurements). 

I suspect that the recession did in Escient, which made well regarded music servers, as well. Sure, some of Escient's functionality made its way into Windows and iTunes over the years, but the general collapse of the custom installation business was the bigger culprit. That and the rise of Sonos, which is dead simple for regular consumers to install, and considerably less expensive than any custom solution.