|On Home Theater
With Wes Marshall
February 1, 2010
CES Analysis: Retrenchment and Herd Mentality
Plus: A Few Things to Look Forward To and Hopes for the Future
Chapter 1: High-End Problems and Retrenchment
"Are you kidding? If I do that, Ill be right out
of business, just like [blank] and [blank]."
I withhold the companies names because both are still
in business, if barely. But the story is instructive. I was talking with one of the
heads of a major maker of high-end, two-channel audio components that was exhibiting at
the 2010 Consumer Electronics Show, and casually told him that I wished his company would
make a home-theater processor.
"Id have to put three engineers on the
payroll," he explained, "and even if they were working full-time on nothing
else, I still couldnt keep up with the changes. Plus, Id have to charge
$25,000 for the piece, and how many would I sell?"
I didnt know. Three?
The new owner of another major high-end brand was kvetching
about what its taking to move his renowned surround processor into the current
environment: "We promised an upgrade path forever. But when I bought this company, I
didnt know that a freelance engineer owned the design. Hes asking for a
fortune to give us the design of our own product! And trying to make sure that the
original owners can get an upgrade path is nearly impossible. So the market is passing by,
my original owners are clamoring for a new product, and Im stuck."
Others were sticking their heads in the sand. I overheard
this masterpiece of denial and rationalization: "Our customers are really more
interested in sound, so we concentrated on the best sound. If video switching becomes more
important, they can always buy an external video processor -- but at least theyll
know they have great sound."
How about new sonic offerings from THX, Audyssey, Dolby,
The solution most makers of high-end electronics came to
was to retrench into niche markets of the home-stereo marketplace. Like trying to get a
piece of the alluring growth market in vinyl -- turntables were everywhere! Or trying to
find novel ways to morph digital signals into analog sound. Amplifier manufacturers had
all sorts of new technology. Other companies offered power regulators that cost more than
the wiring for my whole house. Products for Wall Street bankers keen on blowing their
entire bonuses on home-theater systems were everywhere, prompting at least one person (me)
to wonder aloud how so many companies can chase so few ultrarich customers.
This always happens during periods of financial
retrenchment: CEOs decide to flee upscale. Wouldnt you rather make $10,000 on one
unit than $1 on each of 10,000 units? The problem is that all the other CEOs have the same
idea. Which brings us to . . .
Chapter 2: The Herd Mentality and the Avatar Effect
Flash back to The Graduate and the career advice Ben
Braddock received: "Plastics." Well, someone is whispering in the ears of the
R&D folks of companies large and small. Besides the hurried rush to the high end of
the pricing pyramid, a few other signs of the herd mentality were on view.
The Venetian Las Vegas hotel is where, at each CES, the
companies that focus on perfectionist electronics and speakers show their wares. Walking
the halls, you could enter almost any room and see speakers costing six or seven figures
per pair. Many were showing turntables at similar prices. Wires, cartridges, phono
preamps, digital converters, and electricity cleaners were abundant. The problem with all
this is that such manufacturers assume a core market of enthusiasts, then try to figure
out ways to convince those enthusiasts that they need more, better, different, and more
expensive components for their systems. Dont get me wrong -- Im an enthusiast
myself. I love all the little quirky tweaks that improve my overall enjoyment of music and
video. But the times they are a-changing.
In my other writing life, I cover wine. For centuries, the
most popular wines -- generically called Sherry -- were made in southern Spain (in a
region called Xeres, now Jerez, hence Sherry). Sherry makers enjoyed their dominant
market share, but missed the fact that young people were beginning to think Sherry was for
geezers. Sherry is now a niche product with a small but dedicated group of fans.
Wine lovers all over the world collect Bordeaux, a wine
that, famously, must sit untouched for years before its harsh tannins evolve into
something drinkable. These winemakers were blindsided by a public who decided they
didnt want to have a cellar full of slowly aging wine, but instead wanted to be able
to buy a bottle of the stuff, open it, and drink it. Winemakers who insisted on long
periods of aging rushed to the top of the market, while the cheaper alternatives tried to
figure out how to make something that was dependably drinkable at release.
Sound familiar? Were in a paradigm shift, and most of
the companies are getting more conservative.
The Las Vegas Convention Center is where, at each CES, the
megalithic companies show their future products. Like a few million other souls, I saw Avatar
in 3D and agree that it was an archetype changer. But even that couldnt prepare
me for the LVCCs main hall. This CES might as easily been called the 3D Convention.
Everyone was showing a proprietary system with proprietary glasses, and a totally variable
ability to produce realistic depth in moving images.
Some of those images were flat-out amazing. Sony was
showing a transfixing Kenney Chesney concert that had me staring slack-jawed, until I
faced certain violence from the folks standing in line behind me. And Chesney is one of my
least favorite country artists. JVC was showing a 3D system using two huge
projectors, a 16 screen, and disposable glasses; it broke ground for
As good as some of the 3D setups were, youll have
heard a lot of complaining from folks about a seemingly insurmountable problem with the
proprietary systems. Given the fact that the glasses will cost $50-$75/pair, how often are
you going to want to invite all your pals over to watch the Super Bowl, or the last
episode of Project Runway?
The solution is so simple, Im almost embarrassed to
posit it. If all the manufacturers would agree on one type of 3D technology that required
one type of 3D glasses, folks could bring their own. Of course, we all know how this film
will end. Eight-track vs. cassette, VHS vs. Betamax, CED vs. laserdisc, DivX vs. DVD,
DVD-Audio vs. SACD, HD DVD vs. Blu-ray, etc. Im not holding my breath.
Chapter 3: A Few Things to Look Forward To
Enough of the problems. CES also offered plenty to be
excited about. Tops on my list was a product from JVC. Thirty-six years ago, former rock
writer Jon Landau, producer of Avatar, wrote, "I have seen the future of
rocknroll." He was speaking of Bruce Springsteen. Well, I have seen the
future of home-theater projectors, and its the JVC DLA-RS4000, a projector with all
the wonderful traits of JVCs D-ILA projectors, but at a resolution four times that
of high definition (4096x2400 pixels). The price is a cool $175,000, but the way these
prices drop, Ill bet that in the next few years even I will be able to afford one.
DISH is taking a strong step toward proper media
distribution. The DISH Network HD DuoDVR ViP 922 has a huge (1TB) hard drive, a
much-improved GUI, and a joint venture with sister company Sling, TV Everywhere, that
extends your ability to use whats currently on or recorded on your DVR in any TV in
the network, or on your laptop or smartphone. Theyve been promising this little
number for a while, but it looks as if its finally ready for prime time.
Another company making strides toward universal media
access is Monster. They have several systems that can begin to offer what I was
describing, the most promising being Monster Digital Express. I had a nice conversation
with Anthony DiChiro, Monsters director of new technology. Theyve been working
on this system for several years, and have now combined wired and wireless systems to give
good distribution even in large homes. And they have even more to come.
Youve gotta love a company like Onkyo. No, their
receivers dont have the most transparent amplifiers in the whole world, but
theyve leapt bravely into the home-theater abyss with such receivers as the
TX-NR5007 ($2700), creating new room-slaying technologies and adding things like Audyssey
DSX, Dolby Pro Logic IIz, and ISFccc certification. Theyre networkable, compliant
with Windows 7, and priced for the real world. Would I rather have something from Anthem,
the only high-end company keeping up with the rapid-fire changes in processing? Yes. But
the price difference is compelling.
Finally, CES 2010 was full of interesting new loudspeakers.
The best I heard was the ProAc Carbon Pro 8 ($40,000/pair), a big speaker that images so
well it "disappears," all the while producing prodigious bass, a totally natural
midrange, and highs so delicate it felt as if they were kissing my ears.
As for sound per dollar, Anthony Gallo Acoustics again blew
me away, with both their Reference Strada 5.1 system ($7000) and the as-yet-unreleased
Reference 3.5 ($5900/pair). Gallos speakers filled the room with the most natural,
fatigue-free, dynamic sound.
Chapter 4: Wishes for CES 2011
The way people use their media is changing. Music, video,
games, and communication are all portable, and every buyer has an idea of what level of
quality is desired at every place he or she wants to access those media.
The winning companies will figure out how to integrate the
media and give all of us the power to use it any way, any time, anywhere. It must be
simple, easy to use, and give the buyer the option of choosing any price level desired.
And which company was addressing that sticky
Perhaps next year.
. . . Wes Marshall