Home Theater View

Blu-ray reviews

I've started contributing movie reviews to Sound & Vision, one of the last home theater magazines still available in print form (Home Theater Magazine merged with them back in 2013). You can also find some of my reviews on their site online; Everest is up. I'm focusing on titles with Dolby Atmos soundtracks and/or 3D for now.

CEDIA 2015: Focused on Core Custom Install Audience

This year's CEDIA has come and gone, and unless the journalists in attendance badly missed something, I didn't see many announcements with broad applicability outside the core custom install base. (I attended CES and IFA this year, but was not able to attend CEDIA live.)

Sony showed off new projectors, including a native 4K model priced at "just" $10,000, but these had been announced at IFA in Berlin.

JVC introduced a trio of projectors from $4,000 - $10,000 that create pseudo-4K from 4K source material.

Kaleidescape is now offering a 4K digital storage/playback solution in the $5000 - If You Have To Ask, You Can't Afford It range.

 

There were no new budget projectors announced; those seemingly will wait for CES. There were few new AV receivers, relatively little new home automation gear, and virtually nothing on the Atmos or HDR TV fronts. The exception: Sony's STR-ZA5000ES, a 9-channel, $2700 receiver with Atmos and DTS:X.

Onkyo Swallows Pioneer's A/V Line

I was on the road covering Apple when this happened, so I missed it at the time, but it appears that Pioneer is divesting its A/V reciever and headphone business and selling it to Onkyo by March 2015. While Sony, Yamaha, and Harman all still make A/V receivers, Onkyo (and its Integra custom install brand) dominates the premium segment in a steadily shrinking market. If I read the disclosures correctly, Onkyo intends to keep the Pioneer brand, but will consolidate all back office functions and manufacturing. I like Onkyo's recievers, and Pioneer has been losing money, but this still feels sad. Goodbye, Pioneer.

Home Theater for the Fairer Sex

Here's another link to that unrelated site with the similar name. HomeTheaterReview has a thoughtful piece on an old chestnut: how do you get women to buy home theater gear? (I wrote something similar a bit over a decade ago.) Two things that stand out:

1. While her advice is not new, Adrienne Maxwell has about as strong a pedigree to say it as anyone. She's written and edited home theater magazines at the highest levels. And while she can geek out with the best of them -- I've met her at trade events and can confirm this firsthand -- she, well, she's a girl. I'm not suggesting that men can't write about women's issues, but that women do bring inherent credibility to the discussion.
2. Read the comments. I love the practical advice on hiring women as salespeople so that the firm can pitch men and women with gender-appropriate messaging/messengers.

OK, now go back and read my column - it stands up pretty well despite its age and my gender.

What's Wrong with the Specialty Audio Business

...what ails the specialty AV market isn't even about technology or a lack thereof, it's about elitism and how you're not a real enthusiast unless you do (insert absurd claim here).

Home Theater Review (no relation to this site) nails it.

CD Players Are Not Dead (Yet)

Apple’s iTunes now sells more music than any other retail outlet and CD sales are famously in decline, so you’d be forgiven if you thought nobody makes CD players any more – or at least nobody would be foolish to launch new ones. That's why I was somewhat delighted to read this press release: Parasound has just introduced a new CD player, the Zcd. This isn’t a CD player aimed at the mass market, but it isn’t targeting money-is-no-object audiophile snobs, either. It costs $400; mass market CD players start at $17.99 at Target, and audiophile brands can top $4,000. Instead, the Zcd is aimed at the custom installation market (the giveaway is that it is described as being “half rack width”).

Parasound apparently thinks there is a market for a high quality CD player where the home owner wants to insert a single disc and listen to it, as opposed to a hard drive-based music server. In other words, the Zcd is intended to be used for dedicated listening sessions, not strictly background music. In that sense, the Zcd is a throwback to the other physical music format with a focused use case – vinyl (though vinyl is explicitly "old school," and all the limitations of the format are typically celebrated as features). The Zcd has top of the line DACs and does fancy things with the volume control and analog converter power source to give installers something to talk about when justifying its cost. While the Zcd can also play back music from USB or a line in jack, it doesn't support dead music formats like SACD or DVD-Audio that few people today seem to even remember. It's a CD player. It plays CDs. It isn't something you're going to find in Best Buy, but it's nice to see someone thinks there's still a market niche left that calls for a dedicated optical disc player.

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.

New Onkyo Receivers Come with HDMI 1.4 and Buyer's Remorse

The problem with 3DTV - aside from the glasses and the nausea and the total lack of content - is that you need to buy an entirely new equipment chain. It is not enough to replace your TV with a 3D capable set, you will also need a 3D-capable Blu-ray player, and - much to the delight of Monster Cable - you may actually need to upgrade your HDMI cables to handle the increased signal bandwidth. The typical HDMI connection in most devices today is 1.3b, but you'll need to upgrade to HDMI 1.4a for 3D. 

This has implications for audio as well. If you want to get the best audio out of your 3D content, you'll need an A/V receiver (or processor and separate amplifier) to process the compressed digital signal, amplify it, and pass it along to your speakers. If your receiver - like nearly all on the market today - does not have HDMI 1.4a inputs, you will need to run a second digital audio cable from your Blu-ray player to the receiver - assuming that your Blu-ray player can simultaneously output video over HDMI and audio over coaxial or Toslink outputs. It probably can. Probably. 

There are also an increasing number of 2D devices that connect to your television via HDMI, and most TVs and receivers have a paucity of HDMI inputs of any kind. I have 15 devices with HDMI outputs, including game consoles, digital set top boxes, digital camcorders and several smartphones. 

With that background it is entirely unsurprising that electronics manufacturers are rushing to update their lines with new A/V receivers that have multiple HDMI 1.4a inputs. For example, Onkyo just announced three new receivers with 7 HDMI 1.4a inputs a piece, including the 9.2 channel TX-NR1008. Of course, this comes literally three days after I bought Onkyo's current generation receiver with 7 HDMI 1.3 inputs, the TX-NR3007 (pictured). Now, I knew that updated versions were bound to be introduced shortly, and, having sent back all my review units, I needed a new receiver now, not in June ...but I still feel a twinge of regret. 

Note: the TX-NR1008 is technically a replacement for the TX-NR1007, not the NR3007 which I purchased. I'm sure the TX-NR3008 will be along shortly, along with a new TX-NR5008 flagship, which is bound to have 8 HDMI 1.4a inputs.  

The New HT Sales Environment

HomeTheaterReview - not HomeTheaterVIEW, which is what you're reading right now - has an interesting take on how the home theater sales environment has changed since the recession, and how to cope. It's partly a pitch for online advertising, partly a manifesto. Oddly enough, I agree with the advertising part, but he's missing a few pieces in the manifesto:

• Are boutique bricks-and-mortar A/V stores relevant in an amazon.com age? (Short answer: only if they're truly boutiques.)
• Is seated home audio relevant in an iPod/dock age? (While there are exceptions -- witness the rebirth of vinyl -- generally speaking the answer here is, "not for anyone younger than 35.") 
• Are editorial-driven magazines (in print or online) relevant in an age of semi-pro blogs and forums? (If my friends writing for these publications are any indication, probably not.)

Lessons From Panasonic's Plasma Day

On Tuesday, I, along with a handful of tech journalists, was invited to attend a briefing by Panasonic in New York to show off their latest line of plasma televisions. The emphasis was on the technical capabilities of Panasonic's plasma technology relative to the latest LCD with LED backlighting.  Some things I learned:

1. Never have a Japanese engineer who doesn't speak fluent English give a marketing presentation to journalists. Yes, there was a lot of technical detail included, but the fundamental reason Panasonic was doing the briefing was to spin the technical detail, otherwise they would have just provided a white paper. While the presentation itself was pretty good, it was agonizingly slow going in parts, and key points just weren't made well.
2. Plasma's burn-in issues are a thing of the past. Non-issue with current sets. Now, the legal guys haven't gotten the message, so you still see a warning in the manual not to allow static images to linger on the screen, but some of the sets are deliberately marketed as better for gaming (which they are). The manuals need to be updated and this issue needs to be taken off the table.
3. Plasma is actually brighter than LCD over smaller areas. This is irrelevant overall - the sample images on the LCD during most of the presentation jumped out at you in a way that plasma does not. Ergo, consumers prefer LCD at retail. (It's more balanced on calibrated sets in a home environment, but on bright images, LCD is superior, and on dark images, plasma rules.)
4. Plasma has markedly better color than LCD, especially off-angle. Sadly, this is basically impossible to see in retail environments with uncalibrated televisions.
5. Maximum energy usage on a plasma is still high if you display white fields all day long, but Plasma and LCD are pretty close in terms of energy consumption on real-world program material. LCD is still better (and has a much better number on the energy use sticker), but it's not a reason to disqualify plasma any more.
6. Plasma is much, much better for resolving high definition when there is motion in the image. This is a key fact that Panasonic should be marketing hard, especially since the LCD competition charges more for sets that try to compensate by speeding up refresh cycles, and they are still noticeably worse on test patterns and real world content.
7. How a TV is set up at retail is critical: the LCD set they had on hand for comparison showed more stars in a starfield, and none of us cared that the gamma of that set may have been off - there were far more stars visible on that TV than on the plasmas. And we actually know what gamma is - the average consumer never touches picture controls when they get their TV home.

All in all, I came away with a better understanding of why I still prefer plasma over LCD for most uses, and why most consumers are buying LCD anyway - and are unlikely to change any time soon.

CEDIA-Bound

I'll be out at CEDIA this year, but only for the press day and some show floor meetings. (I will also be available for press looking to cover major announcements from Apple and Motorola this week. Busy week!).

Look for a wrap-up post with CEDIA impressions by the end of the week.

More Inputs, Please!

I was talking with Microsoft about the XBOX 360 earlier this week, and one of the things they said will drive consumers to their console vs. the competition is the integration of multiple features into Live, such as Netflix streaming, gaming, and other content. At Current Analysis our Digital Home service covers game consoles from the perspective of connected services; we treat a PS3, XBOX, or Wii like the fancy set top boxes (that not coincidentally also play games) that they have become. However, I thought we were a bit ahead of the curve - most consumers haven't fully embraced this vision yet. But when FedEx dropped off yet another box here this afternoon, I started thinking: how on Earth am I going to connect this? Is Microsoft right - will consumers buy a game console to access digital services simply because they're out of HDMI inputs on their TV?

Now I know that my situation is not something everyone faces, but how many devices can a consumer reasonably connect to a TV or even a sophisticated A/V receiver? I'm not sure there are enough inputs any more - even on flagship receivers - to connect all the possible devices an early adopter/TV nut might want to. (Some of these offer redundant functionality, but even then there are typically unique functions that could justify their purchase.) Here's a sample list:

1. TiVo HD (DVR and cable/OTA tuner, Netflix)
2. Cable box (tuner and VOD, may have integrated DVR)
3. Satellite Box (tuner, VOD, unique sports programming, may have integrated DVR)
4. SlingBox (to stream content to PCs and mobile devices)
5. SlingCatcher (to integrate PC content)
6. XBOX 360 (some unique game titles, Netflix, DVD playback, streaming PC media)
7. PlayStation 3 (some unique game titles, Blu-ray playback, DVD playback, streaming PC media)
8. Wii (many unique game titles)
9. DVD/Blu-ray player (if you don't have PS3)
10. AppleTV (iTunes integration)
11. Roku (for Netflix, but even if you have a TiVo HD or XBOX 360 with Live Gold which also offer Netflix, you still might want a Roku for Major League Baseball access)

I'm trying to integrate about eight or nine of those, and I'm not sure that there is a receiver on the planet that can handle more than about half that list.

CEDIA

I will be attending CEDIA this year, but I won't be hanging around for very long, so if you're a vendor who wants to meet me, please contact me ASAP. I'll be covering any Digital Home - Devices news for Current Analysis, and I should have posts here as well.

And Now We Have a Post About Silly Names

  I promise something more substantive in a different post ( <-- that's just a writing flourish. No actual promise is intended or implied), but I wanted to pass this along. I get press releases every day about companies introducing new products, changing management, or using technology. Many of them are incomprehensible - it's as if PR people speak a different language. Here's the headline from one that crossed my inbox this morning:

Leading Architectural Audio and Video Supplier Builds on FST GUI Technology 
for New Streaming Media Product Line

 

Who? What? After reading the press release a couple of times I think I understand what's going on: SpeakerCraft is branching out from crafting speakers and is building a streaming media system (just the sort of thing I focus on in my Digital Home research service), presumably to get audio to their in-wall speakers. OK. But to do so, they needed a way to quickly create a user interface for their gadget, and they turned to FST.

Here's where things get silly. It seems that the folks at FST are either: 12 year old boys, refugees from movie production companies, or high. FST stands for Fluffy Spider Technologies. FST's flagship product is the FancyPants platform and its Ruthlessly Efficient runtime environment. What the hell?

That is all.

NHT Leaves, Returns; Miss Them Much?

NHT (aka Now Hear This) has been a respected mid-tier speaker manufacturer based in the U.S. since 1986, but as the recession hit earlier this year, they chose to shut down product development and manufacturing, take some time off, and approach the market fresh. They weren't bankrupt - at least not yet - they just saw their distribution channel erode as independent dealers and custom installers went out of business, and their price points crept up to the point where they were out of line with economic realities. Some of this was driven by rising commodity prices, some by a disconnect with changing consumer priorities.

Somehow I missed this story. Anyway, after just a few months off, they're back.

They've shrunk their product line nearly in half, and are selling and distributing online-only. If this sounds similar to the Outlaw model, it is, only NHT isn't just selling direct, you can buy from amazon, Audio Advisor, OneCall, and a few others. This eliminates dealer reps, salespeople, and lots of shipping, so prices are down 20% as well. They're killing all print ads because the goal of print ads was to drive prospects to the dealers, though they will do online advertising because they need to drive sales somehow.

E3 Wrap-Up

I'm in charge of Consumer Devices at Current Analysis, which is actually composed of two separate groups: Mobile Devices and Digital Home. I've been in charge of the devices portion of our Digital Home service since the beginning of this year, and while I intend to continue posting here about home theater, I thought I'd plug noteworthy Digital Home reports on this blog as well. This year's E3 (the electronic gaming show) crossed over both of my coverage areas. I stayed home this year - I'm on the road a lot as it is - but Bruce McGregor, our Senior Analyst, Digital Home was there live. This isn't a new console year, but there were multiple announcements around new services, and Bruce wrote up announcements from Microsoft and Sony, while I covered the PSPgo.

(The report links require paid access to Current Analysis' syndicated research service; journalists who need free access should contact me and we'll get an account set up for you.)

	E3 2009: Sony PSPgo Doesn't go Far Enough
	E3 2009: Sony Offers More Movie and TV Show Downloads for Its PS3 and PSP Devices
	E3 2009: Microsoft Shows Off Several Xbox 360 Upgrades to Embolden Its Place in the Living Room

Regional CE Stores Picking Up Where Circuit City Left Off

Yesterday's WSJ had an article (subscription required) on how regional consumer electronics stores are thriving despite the economy. The keys to success seem to be a) taking advantage of the demise of Circuit City, and b) the use of a trained, commissioned sales force. I can't help but point out that one big reason that Circuit City died was the move away from its own trained, commissioned sales force to lower paid, non-commissioned shift workers. Of course, Wal~Mart's spokesperson is quick to point out the flip side: many consumers are doing their research online and hate pushy commissioned retail salespeople.

The Journal doesn't talk about the smaller, specialty A/V retailer, but based solely on the number of local stores that have gone out of business over the past year (Rabson's, I'll miss you), that segment of the business isn't going to pick up any Circuit City leftovers. So how will the remaining stores survive? One way is to hold special events to drive traffic to the store. Frankly, I'm surprised this is the first time I'm seeing this: one of the local high end A/V stores is having three manufacturer reps come to do a dog-and-pony show (this link is to a similar past event) and is advertising it by buying email lists from one of the home theater magazines. Will this be enough? I hope so.

Post CES Thoughts and Unintended Poetry

As usual, I attended CES 2009 and spent a lot more time talking with mobile devices vendors (my day job) than home theater. This was a good strategy for anyone this year because the Palm pre stole the show, but there were still plenty of thin LCD TVs, 3D TV, mobile TV, and a few speakers and receivers sprinkled throughout the sprawling show floor. I didn't make it to the Hilton, where most of the high end audio was housed, at all. Still, it's hard to avoid home theater when you have to attend press conferences from Sony, Samsung, LG, Toshiba, etc. and walk the show floor.

After talking to the Dolby Mobile folks, I was pressed into sitting through a terrific demo of Dolby IIz, which adds a (derived, not native) height channel. I've been using Yamaha receivers for years that perform the same trick, so I could certainly appreciate the notion - Dolby seems to be going more for sound placement (i.e., making it sound like the helicopter is hovering above you), while Yamaha is intended for room augmentation (i.e., making it sound like your room is bigger). The 9 minute demo certainly sounded great, but if I listened to my own home theater at those volume levels I'd be deaf before the end of the movie.

I also saw the latest generation of DLP in both super-large format (Optoma's HD8200 projector) and small (TI-powered pico projectors for use with cellphones were everywhere). I stopped by the Optoma booth to see the pico projector, and stayed for a short demo of the HD8200 on a 2:35 screen in a completely dark room. They were playing a clip from I Am Legend, a movie I have only seen in projector demos, so I know the clip well. Contrast ratio and black levels were insanely good, but there was weird artifacting that appeared just before fast motion content that drove me crazy. It could be an issue with the setup, the source, or a bug in a preproduction demo unit, but if I had bought that system, I'd be returning it.

Finally, at the Sony press conference the swag was an eco-friendly bamboo fiber bag, which feels like silk and is apparently intended to be used (and reused) for grocery shopping. Or something. When I unpacked it after the show, I noticed that the care tag is unintentionally poetic and hilarious, a sort of bad translation haiku:

CAUTION
Do not close to fire
Only for shipping bag
Hand wash
Washing will shirink slightly
Only non-chlorine blench
Wet dark cloth will fadeing
The color will fading under sunlight or fluorescence for long time

Profound.

-avi

Home Theater Basics: 720p vs. 1080p, Analog/Digital Switchover

Here's one from the mailbag:

Avi, We want to buy a 37" LCD TV. Is there a significant difference between 720P and 1080P?

 

Yes, there is a significant difference between 720p and 1080p – though it depends on what you’re watching on it, and even then you may not be able to see the difference. The bottom line  is that you can almost always get away with buying a 720p set and saving the money, but nobody seems to believe this answer, so here’s a slightly more involved one:

 

First, two quick definitions:

1.      the “p” in 1080P or 720P = progressive, where the signal has information in every horizontal line, just like a computer monitor.

2.      the “i”  in 1080i = interlaced, where the signal alternates horizontal lines similar to the way an analog TV works – the information alternates fast enough that you usually can’t tell the difference.

 

Now you need to answer two questions:

 

What are you watching? (You want to be able to display all the information that your signal contains, but how much information is actually in that signal?)

 

·        If you’re watching a DVD, it’s 480p. So even a 720p TV is overkill – either the TV or the DVD player will do some magic to “fill in” the extra pixels it has to make up the picture.* A 1080p set has to fill in even more pixels with guesswork.

·        If you’re watching HDTV, it’s either 720p or 1080i. Some channels use one resolution (for example, NBC uses 1080i) and some use the other (for example, Fox uses 720p) – this happens behind the scenes when you change channels; you don’t have to do anything. 720p and 1080i both have about the same amount of picture information (720p tends to look better for fast motion like sports, while 1080i tends to look better for scenes without much motion, like dramas), both count as real HDTV, and both look spectacular when displayed properly on an HDTV.

o   When you watch a 720p channel on a 720p TV, you’re seeing everything that’s there.

o   When you watch a 1080i channel on a 720p TV, first it fills in the interlacing by guessing what the missing line ought to be, and then drops a bit of the resolution.

o   When you watch a 720p channel on a 1080p TV, it does some magic to “fill in” the extra pixels.

o   When you watch a 1080i channel on a 1080p TV, it fills in the interlacing by guessing what the missing line ought to be.

·        If you’re watching a Blu-ray disc, congratulations, you’re watching the only consumer format capable of displaying full 1080p.

o   A 720p set throws out some of that resolution; it usually still looks better than a DVD.

o   A 1080p set displays all the information on there without any changes.

 

Now, let’s assume you are going to watch Blu-ray discs 100% of the time. Question two: can you actually see the difference between 720p and 1080p?

This will depend on several factors:

·        How good is your eyesight? Seriously.

·        How big is the TV, and how far away are you sitting? In smaller screen sizes it usually doesn’t matter if you’re cramming one or two million pixels into the set; unless you’re sitting two feet away you won’t be able to see the difference. Higher resolution allows you to sit closer to the set and does nothing for you if you’re farther back. For example, if you’re sitting ten to twelve feet back from a 50” TV you literally cannot see the difference between 720p and 1080p. Some people want to get the higher resolution anyway. I am not one of those people. My couch is about 12 feet away from my displays, and my 50” plasma is a 720p model. My projector, on the other hand, projects onto an 8’ screen that comes down in front of the plasma; the projector is a 1080p model because when the images are projected that large, the difference between 720p and 1080p is quite obvious.

 

Conclusion: unless you plan to sit awfully close to that 37” set and watch a lot of Blu-ray discs, there’s no reason to spend more on a 1080p version. If you insist on spending money for something you can’t see, I won’t stop you. But you’ll be much happier if you put the extra money into a good surround sound system.

 

Does the upcoming change in broadcasting frequency have any impact on the reception?

 

It depends. If you’re getting your TV shows from cable or satellite, the analog/digital switchover will make no difference whatsoever. None. You do not need to do anything at all.

If you’re getting your TV shows from an antenna, then you’ll need either a new HDTV with a digital tuner built in, or a new tuner/converter box. Your reception will either get much better or much worse, and it will vary by channel, how far away you are from the station, and (in some cases) your physical location (i.e., if you’re at the bottom of a hill or sandwiched between big buildings). Digital channels do not degrade gradually. A rough rule of thumb is that if you get a reasonably clear channel today, you’ll probably get an even better looking version of it on digital. On the other hand, if you have a snowy channel that’s just sort of watchable today, once it goes digital you probably won’t get it at all.

 

Hope this helps,

 

-avi

 

 

*720x480 progressive, or about 350,000 pixels of actual information per frame. This is a gross oversimplification, but it provides a good basis for comparison. 1280 x 720 = around 900,000 pixels. Incidentally, this is why watching analog TV channels or VHS video on an HDTV usually looks much, much worse than it did on your old analog TV; the new TV is trying to take very little information (VHS is roughly 240i, or 480x240 every other frame, or the equivalent of about 60,000 pixels) and displaying it on something expecting more than ten times that information to create the picture. Without much to go on, the TV fudges, which, instead of looking soft and fuzzy like an analog set, looks blocky and horrible.

Blogging for Dollars

Blogging is strange. I can't tell you how many times I get asked to provide links or link exchanges or even the occasional "please review our stuff and we'll pay you for placement."  Now, if this were about my day job (Research Director for Mobile Devices), it would be somewhat understandable - I am quoted by the press, and it's my job to influence industry decision makers. But Home Theater View? Who reads this? Coverage here basically just influences my brother - my mother doesn't even read this! Perhaps all they're trying to do is up their Google rankings.

So, here is a link to an article I was asked to highlight on home theater seating. I didn't write it, I don't know the people who did, and I couldn't even tell you if they've sat in all the chairs they write about. But the pictures are definitely fun to look at. No money changed hands for my inclusion of this link in this post. Enjoy your link, boys.

Next up, an electronics review site, TestFreaks. They offered to pay me for reviewing the site. I never agreed to anything, but since it makes for an interesting post about home theater blogging, here goes. I don't like the site at all. It aggregates reviews from all over the Internet - sort of a Rotten Tomatoes for A/V gear and gadgets. That part might be useful if you couldn't just Google the product name and get the same information. Where it could still be interesting is if there was some editorial judgement applied to the rankings so you'd see a decent list of speakers or receivers to start a comparison shopping exercise. Nope, it's all automated, and the results appear to be completely random.

Logitech Buying Ultimate Ears

Logitech announced today that it is buying high end earbud vendor Ultimate Ears. UE is best known for $1000+ custom headphones for professional musicians, but it also has a line of consumer headphones in the $40 - $400 range. Its business model is incredibly similar to Shure - both come from professional audio (initially microphones in Shure's case) and branched out into the consumer space. In contrast, etymotic's background was in hearing aids, and V-MODA seems to have come from the fashion world.

Without the custom business, Ultimate Ears is just another headset vendor, and its brand differentiation will be difficult for Logitech to maintain. But if Logitech leaves the core custom business alone, it can definitely build up the consumer side -  Ultimate Ears could definitely use better distribution and broader consumer awareness; Logitech excels in these areas - just look at what they did with Harmony (speaking of which, I just got in a Harmony One remote control; a review will follow shortly).

In terms of how Ultimate Ears actually sound, I have no idea. I have tested most of the competition - Shure, etymotic, Sennheiser, Sony, v-moda, and Bose, to name a few. I should be getting in some Ultimate Ears product soon for comparison.

New Wireless HDTV Standard(s)

A bunch of big companies are getting together to standardize wireless home HDTV transmission. Again. The AP reports the details here. Most of the commentary I've seen has been fairly positive, though everyone points out that several of the big players backing WHDI are separately supporting WirelessHD as well. Could we have a standards war here?

Jeremy Toeman is taking a contrarian stance, saying it doesn't matter. He makes some good points:

• WHDI products aren't expected to hit the market for at least a year or two
• Testing this stuff will take forever
• Even if it just adds $100 to the cost of products, the rise of brands like Vizio proves that many consumers are primarily driven by price

In the short term, he's right. Nobody is going to put off buying a new TV today because in 2 - 5 years a wireless version will be available. Those who need a wireless solution today -- in the home theater industry, installers will always run into problem rooms -- will be willing to pay for expensive proprietary add-on gadgets that solve the particular problem. Longer term, though, it does make sense for there to be wireless options that work across vendors. At one time, wireless PC standards (ex: WiFi) were supposed to take over in the A/V world, but the bandwidth to pass HDTV unaltered on those doesn't exist outside the lab. I wonder whether any of these consortiums will get something to market that actually works in a reasonable timeframe - I've seen demos of this stuff at trade shows for years now. Because even once TVs and set top boxes have such a standard built in, you'll need to buy a new TV AND a new set top box to see the benefit. So for the forseeable future, nothing changes, which explains why Sony and Samsung are backing multiple standards, and why Jeremy can't bring himself to care.

In NYC next week? Come "Downtown"

If you're in the Wall Street area next Thursday, I'll be moderating a panel at Digital Downtown on Flat Panel TV Trends:

Plasma and LCD TVs are the center of any digital home. The category's success is driven by the produts' fashion appeal and picture quality as well as the DTV transition. Listen to our panel of industry experts discuss the current trends affecting the flat panel TV market and where it's heading.

The session is free to financial analysts, press, and "invited guests." You can register here.

CES 2008: GizmodoGate

[Warning: rant coming]

GizmodoGate really bothered me. I was at that Motorola press conference. This was Moto's first time talking to press/analysts in the post-Zander era, and they kept starting and stopping and starting and stopping. It was annoying for me to watch, and very hard for them to tell a smooth story.

If Gizmodo had characterized this as a prank gone badly wrong and apologized, it might have been forgivable (after all, some of us do have a sense of humor). Instead, Gizmodo's unrepentent response left a really bad taste in my mouth. I've been a marketing professional in the past and now I'm on the analyst side of the table; I consider both worthy of respect. Not nearly as much respect as teachers or firefighters or Alzheimer's researchers, but marketing, analysis, and journalism are jobs that need to be done and are worth doing well. If Gizmodo doesn't respect these professions (or my time) and insists on acting like 14 year old boys, that's fine, but they should get the same access as 14 year old boys get to CES and press conferences: none. Let the pros at engadget get the coverage and ad revenues.

-avi

CES 2008: High Def Disc Format War Over, Thin TVs, and Steve Jobs

Well, I'm back from Las Vegas, but my body is still on the wrong time zone. There were three main stories at this year's CES:

1. The death of HD-DVD. With Warner’s announcement that it will no longer sell HD-DVD movies, the high definition disc format war is effectively over with Blu-ray as the victor. Toshiba (one of HD-DVD’s primary backers) offered a weak reaction, saying that it is stunned and upset, but that HD-DVD has been declared dead before. That's true, but formats are only as valuable as the content that they are tied to. With Warner gone, only Paramount and New Line are left in the HD-DVD camp, and even they will probably switch to Blu-ray before the end of the year, once the rumored exclusivity period of their arrangement with HD-DVD is up.
2. Super-thin flat panel displays. Several vendor showed incredibly thin flat panel televisions – as thin as 9mm (a prototype) to 1.7” (likely to become a production model shortly). You might wonder whether there is a market for slightly thinner displays – after all, how much thinner is 1.7” than a 4” plasma or LCD today? The answer is, a lot thinner. The difference is that a 4” display is still a box you’re putting on the wall, while anything under 2” approaches being part of the wall itself. The prototypes on display looked incredibly good, and will be extremely exciting to interior designers. I expect that super thin displays will make up a significant premium segment of the market in just 1 – 2 years time. The phenomenon of super-large flat panel displays, on the other hand, has limited appeal beyond the super-wealthy, even as prices inevitably drop from the “if you have to ask” range, simply because an 11 foot long flat panel literally cannot fit around a typical home’s layout to the installation site.
3. Waiting for MacWorld. Last year, CES was completely upstaged by the iPhone at MacWorld the same week. This year, MacWorld is back to the week after CES, but the shadow of Cupertino was palpably draped over Las Vegas this year as well. I have no inside information on what Apple will announce next week, but Apple’s head of PR promised me that Apple’s announcements at MacWorld will be better than anything I’d see at CES. I believe him, and I suspect the rest of the industry does, too.

Other CES trends:

• Several systems for moving HD content wirelessly were shown, either as part of the television purchase or as a separate accessory. While wired connections will continue to be the bulk of the market for some time, the availability of wireless options is extremely welcome as a solution to specific installation challenges.
• Home storage was another big theme, with solutions that ranged from simple connected hard drives up to enterprise-class servers with friendly user interfaces.
• The industry continues to introduce boxes that let you watch PC content on TV. Yawn.
• GPS was everywhere at the show, particularly from vendors who either are new to the U.S. market or new to the market generally. Prices are already dropping due to the competition (and ready availability of the components needed to become a PND competitor), and it will be extremely difficult for all these vendors to make money, even if they can avoid being cannibalized by GPS on cellphones. These issues and more were discussed during my CES Education session on GPS Monday afternoon. The panel was well attended and the discussion could have easily continued for an additional hour or two beyond the time allotted.

Due to a hyper travel schedule I will not be in SFO for MacWorld next week, however I will be covering announcements made at the show from afar. Should be interesting!

-avi

RIP: First CRTs, now RPTVs

The AP is reporting that Sony is now exiting its "money losing" RPTV business  to focus exclusively on flat panel displays; Sony's technologies of choice are LCD and OLED. (As an aside, I thought Sony's TV business had finally pulled into the black after years of losses - the Playstation business was supporting everything else until the PS3, and then the situation reversed. I guess the flat panels were profitable but the big sets weren't.)

This is the second major television technology/form factor to get the boot - outside of mass merchandisers its pretty hard to find a CRT any more, and none of the high performance brands (which is a bit of a shame, because picture quality on high end CRTs is really exceptional). While there are bound to be holdouts for another year or two it's also clear that Sony is acting rationally. Flat panel prices don't need to match RPTVs, just get within the ballpark for consumers to move to the thinner, brighter displays. We already saw a similar transition in computer monitors which transitioned to LCD from CRT well before price parity in popular sizes was reached.

I'm actually seeing a bit of this first hand as I try to sell my JVC LCoS RPTV in favor of a Panasonic plasma I bought to save space in my own home theater (and make room for a significantly larger screen that will hang in front of it for use with a new projector). When I talked to a friend who is in the market for a new big screen TV he was interested in buying the JVC only until he realized that it's a projection unit rather than a flat panel even though he has no real need for a flat panel - it would go into the same cabinet regardless.

Shopping for a New TV

I hit up six different stores recently trying to pick a 50” plasma to replace my 52” JVC LCoS rear projection 720p HDTV which is now three years old. The goal is to regain a foot of space in the room and then move to a larger front projection system (the screen hangs in front of the TV); the TV is used for broadcast material with the lights on, while the projector is used for movie watching with the lights off. I could have asked vendors to send over review units and then buy whichever one performed the best, but I’m time constrained – my contractor wants to start hanging everything already. (I’m using a general contractor for installation, a practice I do NOT recommend to others – good custom installers are almost always worth paying for.)

At the 50” size, plasmas are still less expensive than LCD, and the primary benefit of LCD – blinding brightness – is not important in my light-controlled room (we have directional halogen track lighting, so even with the lights on, no direct light falls on the set). Our seating position is 12 – 13’ back from the set; at that distance, there is no visible difference between 720p and 1080p sets, so a more economical 720p model makes sense. Then it came down to selecting a brand and model. When there is a difference between lower priced brands (Vizio, Sanyo, Zenith) and midpriced brands (Samsung, LG, Panasonic) it often shows up in how the sets process non-HDTV sources (there are other differences, too, but some of the budget sets are actually quite good). The difference between the mid-priced brands and the Pioneer Kuro is primarily in the black level and shadow details. Since we still watch a lot of non-HD programming, I felt it was worth the extra money to buy a set with slightly better processing, and I gave mid-priced brands primary consideration once I saw (when looking at the various sets at retail) that there did appear to be a difference. If the television was our only display, it would have been worth spending even more to get the best available (in my opinion, the Pioneer Kuro), but since the projector will be handling most of the movie duties, I wasn’t willing to spend too much of my budget on the plasma.

That left a showdown between Samsung’s 54 series and Panasonic’s 75U (there are slightly more expensive versions of each that add anti-glare shields, but that isn’t necessary in my room). Both sell for $1500 - $1700 except on Black Friday, when you can get another $100 - $200 off. After considerable evaluation in less than ideal circumstances (see below), I concluded that both are excellent options, and it really comes down to personal preference. The Samsung had much better contrast and more saturated colors. Everything “pops” on the Samsung. The Panasonic did slightly better with really noisy content, and had noticeably better black levels, which lent subtlety throughout the color range. Both can be adjusted to look better than they did in the store, and either would make a fine choice. I preferred the Panasonic.

However, the stores don’t make it easy to come to this conclusions, and I really have no idea how people not specifically looking for differences in black level vs. contrast ratio can make a rational buying decision. Only one of the stores (6th Avenue, a regional A/V chain) had a truly knowledgeable salesperson. None of the stores had tweaked the picture on any of the sets in any way (they were all set to whatever the manufacturer hoped would stand out on the showroom floor – the brightest and most oversaturated settings), which I expected from the big box retailers, but not the specialty stores. At least the aspect ratio was correct in most cases, so that’s an improvement, and nearly every unit was displaying widescreen material. However, while it was widescreen and may have been high definition once, it certainly couldn’t be called high definition by the time it got to the display, because not a single store had a clean signal feeding the sets. None. Not one. Not even at the regional specialty store with the knowledgeable sales guy. In every store, the signal was split and distributed to multiple sets, and by the time it got there, it was missing a lot of the original information.

A Dramatization: What the set should have looked like (left, click to enlarge) vs. what it actually looked like (right, click to enlarge):

I seriously question how retailers can expect consumers to pony up thousands of dollars for televisions whose picture quality looks that bad (in the store). If an HDTV looked like that in my home, I’d return it.

At least it made evaluating each set’s processing a bit easier – every set was tuned in to a low resolution torture test. Different sets dealt with the lack of information differently: some made everything soft – so soft it looked like widescreen VHS – and some riddled the screen with digital artifacts so that everything appeared filtered through a 1980’s music video or was digitized to obscure nudity. There were a few sets with direct satellite feeds (or direct connections to an HD disc player); it seems cynical, but those tended to be more expensive 1080p models, and, possibly, higher margin sales for the stores. Conspiracy theory, or just plain retail incompetence?

When did my day job kill my hobby?

I've been trying to catch up with my reading - nearly a year's worth of home theater magazines have piled up. One thing I've noticed is an increased emphasis on flat panel TVs -  no surprise there, as that category  accounts for an enormous amount of sales activity. What I found odd was the sheer amount of coverage mobile devices now get in these publications. Sure, I expect convergence in Sound & Vision, which has steadily moved in that direction for years. But Home Theater Magazine? Aside from the odd TV with an SD card slot, what do digital cameras have to do with home theater? Someone has to explain to me why the iPhone gets flagged on the cover of The Perfect Vision, which used to be a magazine targeting videophiles.

I know the writers of  many of the articles - I see them at all the same trade shows and press conferences, and their content isn't bad, it just seems badly out of place. Perhaps I'm a strange person to raise the question; after all, I left a thriving home theater research service at JupiterResearch several years ago to start up a Mobile Devices practice at Current Analysis.  I know that the iPod  has been a major challenge for traditional A/V vendors (you could probably make a strong case that   Apple and iPod dock vendors have stolen sales that once went to receivers, minisystems, and boom boxes) but when did the iPhone kill interest in speaker systems?

State of HD Disc War

Engadget just posted a nice wrap-up of their CEDIA coverage. (I was not able to attend CEDIA; after Nokia's big London event last week, I went to RIM and Motorola events this week and even had to follow the Apple announcements from afar due to scheduling). The big news both at CEDIA and in the press last month is around the HD-DVD Blu-ray war; HD-DVD gained a studio just when it appeared Blu-ray was pulling away with software sales, and both Samsung and LG have new dual-format players coming to market demonstrated at the show.

Back in January at CES, I attended the launch of LG's first dual-format player, and it looked like it might assuage early adopters fears about getting into the market. Certainly, the new players, which support even more features of both formats, are welcome. However, with the software schism, prospects for success for either format have gotten much worse. The only way a HD disc format could succeed is if it brought new experiences to consumers along with overwhelming industry support.

With some content available only on one format and some on another, consumers are understandably gun-shy. So industry support is certainly far from overwhelming. But a more fundamental problem is why anyone beyond videophiles should care about either HD-DVD or Blu-ray.

(For a videophile, higher resolution is reason enough to embrace a new format. I've bought and re-bought DVDs several times just to get versions enhanced for 16x9 TVs and better transfers. I am decidely NOT normal. The problem is, there aren't enough videophiles out there to make a mass market. Normal people need clear reasons to move to something new, and upsampled DVDs look pretty good.)

The last transition brought a lot more than just better looking video. The move from VHS to DVD brought:

• noticeably better video on even the least expensive displays - VHS is downright fuzzy
• slightly improved sound with even a basic setup, greatly improved sound when combined with an inexpensive 6 speaker Dolby Digital HTIB setup, and excellent sound with better equipment/room setup
• longer lasting physical media
• smaller physical media and packaging
• a complete shift in industry pricing practices from business rental (where VHS movies cost $75 - $150) to consumer purchase (where DVDs started out at $20 - $30 and quickly dropped to $8 - $20)
• no rewinding
• random track access
• extras such as director's commentaries, deleted scenes, and related video material
• multiple language tracks and subtitles

The move from DVD to either HD format is basically the DVD experience, plus:

• improved video; this ranges from obvious improvement over upsampled DVD to none at all depending on the content, the display, and the setup/environment.
• the potential for a further improved audio experience; right now this potential is limited to high end systems and is further limited by available content, hardware selection, and setup
• the potential for interactivity, however, I have yet to see a compelling use of this technology. Keep in mind that DVD offered it's own promising features that never amounted to much - remember "multi-angle?"
• higher priced content

I made these points back when the formats were first announced, but it's worth repeating now. Neither format offers average consumers enough to get excited about. If the PS3, which includes a good Blu-ray player as part of the package, had been a smash hit AND content providers all lined up to support the format, it might have had a shot at replacing DVD by default. But the PS3 has struggled out of the gate and is getting trounced by Nintendo's Wii, which cannot play movies at all. Wal~Mart will be offering inexpensive HD-DVD players this Christmas, but if the content question is still in doubt (and titles are more expensive than DVDs), free players would not make much of a difference.

Consumers are moving to random access media. A strong case could be made for a new format that brought HD video resolution to a media server where it could be queued up at will from a visual menu, seamlessly distributed around the house, moved to portable/phone/car -based systems, and sliced and diced for instant access to greatest hits scenes (like a typical spliced-together YouTube video). This would be a significant improvement for consumers who today must load individual discs from racks of DVDs or download movies from iTunes to watch on a single PC or iPod touch. Of course, content owners won't let this happen -- they can't even get out of their own way with HD DVD/Blu-ray. But if Hollywood doesn't create and monetize a system like this themselves, consumers will eventually piece something like it together on their own with pirated/downloaded content and/or content ripped from DVDs. Sure, the video quality won't be as good, but video quality alone isn't enough to get consumers move to a new format - or keep them from moving to different format, either.

-avi

Count 'em: *TWO* CEDIA Expos

CEDIA (the show) has been growing by leaps and bounds each year, so CEDIA (the organization) announced that they're adding a Spring show in Las Vegas. I do think that there is room for another targeted CE show in the first half of the year; CES has gotten way out of hand. CES is so big and so crowded that it's impossible for a small company's announcement to stand out and nearly impossible to navigate for attendees.

But CEDIA is scaling back expectations for the event, saying that,

“Feedback from CEDIA members indicates that there is strong support for a second show that draws from a more regional electronic systems contractor base,” said Ken Smith, president of CEDIA.

"Regional contractors" are considered an appropriate target because the traditional lifecycle of CE products has the announcement at Fall CEDIA or CES in January, with products hitting the market in late Summer/early Fall in time for the holiday sales season. This doesn't hold true for all products, of course, and is geared more towards the purchasing cycle of large retailers than indpendent A/V contractors - hence the focus on them for this show.

-avi

HES Come, Gone, Missed

The New York Home Entertainment Show has come and gone... and I missed it (I was tied up at a meeting most of the day Friday and had commitments on Sunday).

I am upset that I missed seeing Internet-only retailers Outlaw Audio, who showed off a new line of speakers, and Aperion Audio, also a speaker vendor. I can ask for review units (my home theater isn't set up again just yet, but at least it's not under water any more), but without a dealer channel, open-to-the-public shows like HES are the best venue for normal folks to see and hear their products first hand.

I'm not upset about missing CINEPRO's room, though. They sent over a card and email before the show touting the ridiculous amount of wattage they planned to deploy their room. Unfortunately, their slogan is "Hear What You've Been Missing," and in past years I nearly blew out my hearing for the rest of the show in their room. How can you hear nuances in the music if your ears are bleeding? I suppose it can make sense to have way-over-reference power in a huge theater, but not in a small hotel room.

One other thing I noticed without even attending the show was the dearth of press conferences. Two years ago, nearly an entire day was booked with A-list companies (for example, Sony launched LocationFreeTV there, along with a big SACD push). This year, there was basically nothing.

-avi

50% of HDTV Owners Don't Have HDTV

The Wall Street Journal has a great article (subscription required) quoting a recent survey showing that 50% of consumers who bought an HDTV set don't actually have HDTV service. What's more frightening - and yet entirely believable - is that 25% of HDTV owners think that they do have HDTV when they don't. Well worth a read.

-avi

Apple TV Knocking off Cable?

Alan Graham proposes that Apple's Apple TV is aiming at the heart of the cable TV business model:

Is Apple Out to Kill Tivo? by ZDNet's Alan Graham -- Yeah, I'm calling it. I think Apple (and others) are about to send Cable TV and Tivo a clear message…your time is almost up. The Web 2.0 world is about to kick the door in and escort the old methodology to pasture. And I think it is going to happen pretty quickly. Don't let the [...]

It's well argued, and there's no question that Apple TV is a TiVo competitor, but he's wrong on the cable front, so his numbers just don't add up. Alan's most compelling argument is that cable TV + TiVo is considerably more expensive than simply buying the shows you're interested in off of iTunes. However, this business model requires consumers to give up their cable TV, and that simply isn't happening en masse. For starters, cable TV allows you to discover the shows worth buying in the first place. Cable TV allows you to watch live events, like sports, or the Academy Awards, SNL, moon landings, war/terrorism coverage, and murderers driving very slowly. There are plenty of other options for getting news, but sports events have deliberately limited distribution, and generally must be consumed live (watching a game 24 hours later is like reading yesterday's newspaper. For some it is 'reference material,' for others, it's the video equivalent of what you wrap fish with).

There are other advantages to having access to live (or only slightly time-shifted) content. Speaking as someone who watches a lot of TV via Netflix, the gap between watching something live on cable and watching it a day/month/year later kills the sense of community and continuity - you're completely out of touch at the water cooler. I admit that being out of touch is not as big a deal as it used to be, given the fractured TV landscape (TiVo, TV-on-DVD, TV-online, TV-on-iTunes) and work environment (I work out of a home office where there is no "water cooler," unless you count Instant Messaging). But at least with TiVo -- ReplayTV and XP Media Center in my house -- you have the option of watching live. If you turn off cable, you're at the mercy of whatever content Apple gets and when they get it.

Apple TV will be additive for most people, purchased in addition to cable. Yes, it could replace a TiVo or Netflix subscription (though both have uses that the iTV does not currently address). And perhaps it could replace extended cable packages (in my own household we downgraded to basic cable several years ago and filled in our entertainment gap with TV-on-DVD via Netflix). But to make Alan's numbers work, you need to drop cable entirely... and that's just not going to happen.

-avi

CES and MacWorld

I will be attending both CES and MacWorld next week, but as you can imagine when you cram two shows and two cities into one week, I will be extraordinarily pressed for time. Therefore, I will only be taking meetings with clients at CES, though I will be attending most of the press conferences on Sunday. I will also be at Digital Experience Sunday night and Showstoppers on Monday night.

Journalists who would like to contact me for quotes and reactions to the announcements can call me on my VoIP line: 703-788-3788 or shoot me an email at: agreengart (at) currentanalysis [dot] com. Either one will be forwarded to whatever gadget I'm carrying each day.

-avi

It's Not the Products, It's the Distribution

Vizio put out a press release a few months ago for two of its 42" LCD HDTVs, touting in the headline, that Vizio is, "ONE OF THE FASTEST GROWING FLAT PANEL BRANDS IN THE U.S."

On the surface of things, that's not such a bold claim - after all, who the heck are these guys, anyway? They came from nowhere, so of course they're growing quickly. When you sell nothing one year, and something the next, your growth rate looks fantastic. So, growth by itself is not necessarily a meaningful statistic. Perhaps all the newcomers, slapping a moniker onto an LCD panel sourced from a Chinese factory somewhere, are all growing and doing well at the expense of the established brands.

However, the AP had an article in same timeframe suggesting the opposite: that consumers are buying flat panel TVs, but only from major brands:

Makers of slim TVs are struggling with higher inventories, but the extent of the problem depends on each company's position in the market: Smaller names are facing a glut of flat-panel screens while most of the top players say they're playing catch-up to avoid shortages.

So Vizio is bucking a trend here. The new LCD TVs explain why. They’re reasonably feature-rich, and very well priced. But so is a lot of the competition. What’s important here is that the channel itself is a key part (perhaps the key part) of Vizio’s business model. Traditional big box retail (Best Buy, Circuit City) places a premium on brand: getting shelf space is extremely difficult, but once on the shelf you have to compete with Sony and Samsung. This is what the AP is talking about, and it helps explain why Sony, once it got its act together with some decent products, is now back on top of the game. Sony's brand stands for high quality televisions at a moderate premium; that's precisely what the Bravia line delivers, and consumers are buying them. (In September, the L.A. Times reported that Sony has regained its position as the U.S.' top TV manufacturer after falling behind in the late 1990s due to its slow recognition of flat-panel TVs. Sony's entrance into the LCD market has helped the company increase its share of the total market to 28%.)

So what's going on with Vizio? The key is distribution: Vizio aimed beyond the big box stores, instead targeting a different, even bigger "big box": warehouse clubs. Costco in particular is a happy home for new discount brands because the warehouse chain mixes in high end brands with relative unknowns; launching your plasma at Costco does not automatically equate your brand with discount merchandise.

Of course, in terms of sheer volume, the biggest game-changer of all may be Wal~Mart, not the warehouse clubs or Best Buy. As prices drop on flat panel TVs -- easily the most desired big ticket CE item -- more of them end up in the land where there are Always Low Prices. Vendors who can make peace with Wal~Mart's margin and distribution requirements (and sometimes hyper-competitive house brands) will be able to grow their sales volumes tremendously. They may even be able to build a brand where they have none - but it won't be a premium brand.

-avi

Is Going Luddite the Answer?

Back in January, 2005, I posted a column asking if the speed of new technology was outstripping consumers' abilities to absorb its implications. Thanks to the magic of Google, that old column is now getting new comments, one of which spurred me to revisit the issue.

The complaints are numerous: nothing works with anything else, it all gets outdated too quickly, and retail salespeople don't understand what they're selling, so there's no place to turn for advice. This reader's solution? Withdraw from technology altogether.

The question of when to buy/when to wait is a common one; nobody wants to buy a product that is immediately obsolete. David Pogue's readers (see the first 20 comments or so) advise finding the right device, and just being happy with it. Aside from being preachy, this presumes that consumers already know exactly what their needs are. It also ignores the fact that computing and consumer electronics tend to plateau - when new devices will just have minor feature updates - but also make major shifts from time to time. If you buy just before a dramatically new device comes out, buyer's remorse is completely understandable. Ergo, the fear of buyer's remorse is completely understandable. Generally speaking, everything gets cheaper the longer you wait, but pricing trends are not always constant, either. Knowing when it makes sense to invest in an expensive TV/cameraphone/PC/etc. could genuinely require an understanding of the market, the technology landscape, channel constraints (the world's greatest cameraphone still needs to go through 3 - 6 months of testing at a carrier before it sees the light of day in this country), and product launch cycles.

You could get some of this information by reading engadget every day, putting together charts of upcoming products, reading reviews... and driving yourself insane. (Actually, some people do this as a hobby/addiction, and for some lucky/insane people, it's part of the job). But there is no way a typical hourly retail employee can be expected to track and master this much information. (Even if you run into a peculiar breed of retail employee called The Geek Enthusiast, invariably he - it's always a "he" - has trouble matching the right gadget/technology to your specific needs. And he'll soon be off to a career in product management anyway, so the next time you return he'll be gone.)

In other industries - construction, healthcare, real estate - we hire professionals to overcome design and choice complexity. Of course, experts demand payment for their expertise, and the dollar amounts and margins on most consumer electronics simply do not lend themselves to a workable business model. I cannot imagine a sustainable business where consumers pay $250 in consulting fees to help them choose a $250 device. Aggregated opinions on the web (such as Amazon.com reviews) are a big help, but are not personalized, cannot ensure everything works well together, can't help you learn how to use your new technology, and there's a lot of chaff to sort through to get to the wheat.

Where the total dollar amounts are higher, a professional services model can work. The custom home theater installation market is probably the only consumer electronics area where many of these issues are addressed - for a price. But the majority of consumers buy by brand name (Bose, Apple, Kodak, and Sony all benefit from long brand associations), buy based on simplicity rather than an extended understanding of potential uses (Apple's iPod fits this category nicely), or hold off buying altogether until a category leader has been established (TiVo, iPod).

But going full-on Luddite is not necessarily practical - or even desirable - for most people. For example, in my day job I focus on mobile devices. The data on mobile phones is clear: the things are way too hard to use. The data is also clear: many people consider their cell phones indispensable. One survey declared them the winner of the technology people most love to hate. So people sort of make their peace with technology and use it for a limited set of functions that they can mentally wrap their heads around. They don't know how to silence the phone, so it rings when it shouldn't. They don't know how to lock/unlock the phone (because no manufacturer will install a simple lock/unlock switch as found on every iPod) so it calls their mother by itself. But they won't leave the house without it.

Similarly, consumers may not have a complete grasp of HDTV and even less understanding of whether to choose plasma, LCD, DLP, an LCOS variant, or wait for laser or SED, but at some point, it's football season...

-avi

CEDIA Highlights, Part II

In last month's CEDIA Highlights post, I noted two projectors that broke through the clutter (and there was a lot of clutter: my in box has dozens and dozens of press releases). There was a third announcement that caught my eye, and, surprisingly, it, too, was projector-related.

THX is now certifying home projectors.

On the surface, this does not seem surprising - THX certifies just about everything. In fact, don't they already have a certification program for displays? It certainly seems like they did. (Actually, they did - but only as part of their commercial theater certification program.) THX is starting out with ludicrously expensive Runco models, but the program should trickle down to more affordable home projectors, rear projection televisions, and flat panel displays.

Not everyone loves THX. First of all, it's a licensing program. It costs money to get the logo, but doesn't offer anything concrete in exchange; theoretically, if your product meets all of THX's specifications, you could be THX-certifiable without actually being THX-certified and pass the savings along to your customers. A bigger issue is that THX's specifications are based on a specific philosophy. On the audio side, the philosophy includes notions of how a speaker should be constructed (small satellites, big subwoofers, and a specific crossover type and crossover frequency), how soundtracks mixed for commercial theaters should be adapted for the home environment, and how rear speakers should be integrated into a system. Reasonable people at, say, a speaker manufacturer, could disagree on an aspect of the technical approach that THX certification demands, but because the THX logo is respected in the market, they may lose business by building things their way instead of THX's methodology.

THX Certified Display testing includes the following:

• Front of Screen (FOS) Testing
  • Luminance
  • Contrast
  • Color Gamut
  • Gamma
  • Uniformity
  • Max Resolution
• Video Signal Processing Testing
  • Scaling
  • Deinterlacing
  • Motion/Video Conversion

I am 100% confident that there will be controversy over THX's video specifications. I couldn't tell you what specifically will cause hand wringing - or whether it will be a specification of omission: THX's video certification program was been rightly villified several years back for certifying terrible letterbox transfers; the specs simply didn't go far enough in that case.

Still, I believe that, on balance, THX is an incredibly positive force for home theater audio and video reproduction. If you assemble a THX-approved system, even from different vendors, you know that the individual products will perform to a certain set of specifications, and that they were designed to complement each other. I also appreciate the notion of a certification program in the first place. Sure, Vendor X has a good reputation, and Vendor Y has a powerful brand. But THX drives the entire industry, for better or worse, towards a unified A/V philosophy. Aside from buying every component in your system from a single brand -- as if that were even possible (outside of Sony and Samsung) -- THX assures a level of uniformity of purpose and performance in home theater products. I like that.

-avi

CEDIA Highlights, Part I

To all the PR people trying to set up meetings with me at CEDIA this weekend: I'm not there. I just got back from CTIA before heading out again early next week, and CEDIA just didn't make it onto the schedule this year.

Of course, I'm following the show remotely. So far, only a couple of announcements have really broken through the clutter, and they're two projectors that offer clear value propositions:

• Sony's 1080p VPL-VW50 SXRD front projector, which brings essentially the same technology from the $25,000 Qualia line (that then showed up in the $10,000 VPL-VW100 front projector, and then again in a line of Bravia rear projection TVs) down to $5,000. In the U.S., where big screen TVs have long been available (along with the floor space to put them) mid-priced projectors often sell well. Overseas, where a projector is replacing a big screen TV, not supplementing it, budget projectors tend to do better. Regardless, $3,000 - $5,000 is a sweet spot for pricing, and now performance follows. Sony can claim it uses unique technology for superior image quality, which fits nicely with its brand history (and just might be true. I personally prefer the slightly smoother picture from SXRD/D-ILA technologies compared to DLP or LCD).

• At the opposite end of the price spectrum, if you've got hundreds of thousands of dollars to spend on a Bentley, you may want to consider a Runco Signature Cinema SC-1 instead (starting price: $250K. More if you want the 2.35:1 version). And a 40 foot screen for your home theater. While you might think there is no market for such ridiculously expensive toys, think again: when I last spoke to TI, they admitted that a fair number of professional DLP products aimed at commercial theaters end up in the homes of the super-wealthy film enthusiast. Or at least the super-wealthy conspicuous consumer who needs the absolute best of everything.

-avi

Sonos Tries to Market "The Experience"

Sonos has built a flash version of its music controller for online demos. It's neat, and was probably worth the investment it took to build because the UI (depicted below) is a key part of the Sonos value proposition.

However, one of the more interesting pieces of feedback I received from my Sonos review was from people who wanted to know why Sonos was worth a price premium over simply sticking an iPod and a speaker dock in each room.

There are good answers to that question, but the experience is different, and that doesn't come across in an answer - or a demo of the UI. The controller isn't the experience. Having easily controlled music throughout your home is the experience, and, that may take an actual physical demonstration at someone's home to generate the a-ha! moment Sonos needs.

-avi

What it takes to launch a new media format

JupiterKagan's Michael Gartenberg has a great post about the three elements needed to successfully launch a new consumer media format. He concludes that neither HD-DVD or Blu-Ray measures up.

-avi

Full disclosure: I created the diagram that Michael uses to illustrate his point back when I was an analyst at what was then called JupiterResearch and he was my Research Director; it was for a report on next generation audio formats.

2005 In Review / CES 2006 Review, Pt. 6: Distribution

Part V back in January was supposed to be the final installment of my post-CES chronicles, but we'll add a Part VI to look at how all these products are getting to market. Each of these posts includes a quick look back on 2005 trends and a quick discussion of products introduced at CES 2006. This one is less about CES and more an essay about the rising power of distributors in home theater...

In 2005:

Go back ten or twenty years, and there were two main distribution channels to bring home audio and television products to market: big box retailers, and specialty audio retailers (some of whom were branching into home theater with the advent of large screen televisions, laserdisc players, and surround sound). Today there are two more ways to reach consumers: the Internet, and custom installers, also called the CEDIA channel.

To service custom installers, major distributors are gaining power. Common in the computing industry, a distributor is simply a middleman - a large wholesaler with a warehouse who takes on inventory and then resells it to retailers (or, in this case, to custom installers). Nobody likes a middleman because they add costs, but when you have a lot of small retailers placing small orders, manufacturers often cannot deal with them; enter the distributor. In the world of computing - particularly small business-oriented products, VARs (Value Added Resellers) provide a lot of the IT services used by law firms, florists, etc. When they need a network firewall or piece of software, it is far more efficient for everybody for the VAR to call a major distributor like Ingram Micro, which specializes in putting together small orders, rather than try to open an account with Microsoft or Cisco.

At CES...

CES isn't the primary show for custom installation, that would be the big CEDIA trade show in Indianapolis in September. But it was interesting to see how the CES Show Daily (a thick daily trade show paper produced just for CES) was chock full of distributor ads touting A/V equipment. Distributors are riding the custom installation wave, a market that is becoming seriously crowded.

• For starters, a lot of the independant A/V stores are having a really tough time and are essentially becoming custom installers themselves. Consumers have been putting more money towards big screen TVs, which are low margin in the best of times. To compete with the big box stores, smaller retailers often sell TVs at a loss, and hope to make up the margins on speakers, which are far more profitable. But audio sales are down - the Wall St. Journal reported earlier this month that audio sales dropped 12% last year as consumers bought more plasmas and iPods and fewer speakers and receivers. This is not true across the board; I interviewed an employee at a local high end A/V mini-chain who told me he's having a banner year. His secret: he refuses to sell plasmas without an accompanying set of slim speakers from Definitive Technologies or KEF. But when audio can't pay the bills for cut-rate video pricing, then the other option for independant retailers is to make money on services, specifically custom home installation.

• Electricians are moving from one low voltage specialty - custom lighting installation - to other (ostensibly similar) low voltage jobs: computer networking, whole house automation, and home theater. True, some knowledge of acoustics would certainly be useful (read: ought to be required) before an electrician is qualified to set up a home theater. But there is a definite convergence between home automation, networking, and A/V underway already, and nearly every custom A/V job requires an electrician at some point, so this trend is likely to accelerate.

• Finally, traditional custom home theater installation benefits from the decor-friendly plasma push. Many consumers are not capable of installing a plasma on their own: it's made of glass and must be uncrated properly, it's heavy and brackets must be mounted on studs, and it requires A/V sources to be in the right spot if a wall mount is going to look professional. Most consumers are not capable of installing in-wall speakers, which require cutting into drywall and pulling wire through walls.

The main reason why distribution makes sense for CEDIA members (and their retail and trades-based company) is structural. Custom installers typically need small orders from several different manufacturers drop shipped directly to the work site on an irregular basis. This is something a distributor is designed to handle, and nearly impossible to replicate by setting up one-on-one relationships with manufacturers. Distributors are now advertising that not only do they own inventory, but they hold it at mulitple warehouses around the country to provide just in time delivery on products so that installation schedules don't slip. Distributors higher up in the food chain ("Value Added Distributors," or VADs) also take over some of the mix-and-match/training functions that can help an installer hone in on just the right doodad for the job.

-avi