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Luxury Video is Not Dead

Luxury video seems to be the red-headed stepchild when compared to high-performance audio. Why?


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There is no denying that integrators love to sell high-performance audio, but why doesn’t the same level of passion exist for high-end video?

The way I see it, there are two primary reasons for the difference. First, many dealers are former musicians who played in bands, mixed music and partook in other audiophile-like pursuits. So, logically, their love of music is paramount and thus audio selling takes priority.

Second, there are still tremendous margins to be had when reselling audio components and speakers. It’s not uncommon to hear about dealers upselling clients into a pair of $30,000 or even $100,000 floorstanding speakers that offer a mood-altering experience to 2-channel listening and home theater viewing. It makes sense for integrators to gravitate to these audio product lines that still offer the opportunity to earn huge markup dollars.

But just like in the audio category, there are heavyweight projectors on the market from $50,000 to $200,000 that bring clients an incredible viewing experience. Those same high-end units offer strong markup potential that make them just as profitable as audio equipment with high markup. Yet, you rarely hear the same upselling success stories on the video side of the business. Luxury video seems to be the redheaded stepchild when compared to high-performance audio. Why?

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Is it because most dealers aren’t frustrated Hollywood directors who fell into the custom installation business like their musician-based brethren? That’s probably a true statement, but I doubt it’s the reason dealers don’t upsell video effectively.

Video has been particularly hurt by the public perception that flat-panel TVs should cost less each year. In preparation for a recent webinar, I pored over some data from several past CE Pro Annual Readership Studies on the average price of an installation in the custom market. In 2007, the average job was $29,910. Today, it sits at $13,500, a 55 percent drop over four years.

Photos: 20 Great Demos

To some in the industry, flat-panel TVs are the root of that downward trend. Seven or eight years ago, integrators were selling fl at panels for $5,000 to $7,000. Today, they are a fraction of that cost.

Projectors have also felt the pinch. According to recent data from Quixel Research, 58 percent of all projectors sold in the U.S. in 2011 cost less than $1,000. However, there is good news from the same survey when you look at the revenues vs. the unit sales. High-end projectors, of which 7,000 were sold (or 5 percent of all units), actually account for 36 percent of all revenue or $103 million - double the amount of revenue from the tiny inexpensive projectors.

The point is that upselling projectors benefits substantially to your bottom line. Some of the sales trends taking place in audio right now could be a precursor of very good news for the video category. Sales of high-end turntables and headphones are exploding. Consumers are not willing to settle for “crummy audio.”

At the same time, video advancements are continuing, which adds opportunity for upgrading existing clients. Over the past five years, 2.35:1, 1080p, 3D, HDMI and anamorphic lenses have taken hold while new technologies like 4K, Laser, OLED, streaming video and IP control wait in the wings. So it may be in the cards that future consumers won’t want to settle for “crummy video.”

Bottom line is that it’s a good time to address your video upselling, from the demos to the product lines. Don’t write off this high-end category.




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About the Author

Jason Knott, Editor, CE Pro
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.

1 Comments (displayed in order by date/time)

Posted by JW Home Theater Solutions  on  03/06  at  10:39 AM

I think one big reason is because the $30,000+ speakers you reference are always going to sound great and not become obsolete.  Even 20+ years from now they will be great.  Doubtful anyone is going to hang on to a projector or tv that long because it is ever changing.  At CEDIA I saw a $12k projector that blew away an $80k projector.  People would rather spend a less on the video and afford to continue to upgrade. Speakers are a long term “investment”.

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