Hi-Res Audio: Will Streaming Make the Market? (Part 1)
Retailers, manufacturers, and the music industry weigh in
At a press event during the 2017 CES held by DEG: The Digital Entertainment Group, representatives from multiple industries within the consumer technology community voiced their support for the expansion of the Hi-Res Audio download market into studio-quality Hi-Res Audio streaming.
To gauge the possible impact of this initiative, Dealerscope (Technology Integrator‘s sister publication) polled some leading industry voices who joined the chorus of widespread industry support for Hi-Res Audio streaming during CES.
We wanted to know how leveraging streaming can help broaden awareness of Hi-Res Audio beyond the Baby Boomer consumer demographic that is more familiar with high-quality audio’s benefits.
We also wanted to hear ideas about how the industry can best reach out to the Millennial buyer, and by extension, increase retail sales of Hi-Res Audio-capable products, including digital audio players, headphones, audio components and premium loudspeakers, available from some 100 manufacturers to date.
Today, we’re featuring what retailers had to say. Tomorrow, please watch for Part 2, when we’ll feature comments from executives from the manufacturing and music services communities and from the Consumer Technology Association (CTA) Audio Division Board.
What have been the biggest impediments to date in driving interest among customers in Hi-Res Audio content and hardware?
David K. Pidgeon, CEO, Starpower, Dallas, Texas: Mainly consumer awareness and lack of messaging to the consumer. The name “Hi-Res” oftentimes gets rolled up into the jargon used for televisions, and so there is no clearly understood message as to how it benefits consumers other than being “better.” This also extends to the poorly told story of the audio experience of Hi-Res Audio.
Michael Crane, Senior Merchant Director, Magnolia/Best Buy: A couple of things. First is the fact that not enough customers are aware of the true sound quality of Hi-Res Audio. Instead, many are still listening to music through their streaming services, many of which play audio that’s below CD-level quality.
And second, the cost of Hi-Res Audio can make it more challenging to put in the hands of all types of music fans.
Tom Campbell, Chief Technologist/Corporate Director, Video & Audio Center, Los Angeles, Calif.: Video & Audio Center has been instrumental as a leader in the launching of those products. We carry a full line of Sony. We do support it.
The challenge is the consumer doesn’t totally understand what this is. It’s been an educational process. Once we demo to someone, they’re blown away – and that’s how we sell it. Without demonstration, it doesn’t sell.
We see it as very viable in future. In general, our audio sales are up this year as a category, and as for Hi-Res products, we support every single SKU of Sony’s – and some are very affordable now – another plus. When people hear it demo’ed it’s wow, I love this!
In all our stores, we have headphone setups with Hi-Res Audio sources, and even mirrors, so customers can see the cosmetics of wearing the headphones.
I teach courses that stresses Discovery, Desire and Demand. If people don’t know it exists, or you don’t let them hear it, they won’t know that they want it. They’re not walking into stores now, saying, ‘I want Hi-Res Audio.’ We are promoting it and giving them the experience, but they’re coming in for something else – maybe 4K HD. So then we do the demonstration for Hi-Res.
Phil Murray, Vice President, Marketing & E-commerce, ListenUp, Denver, Colo.: Education. There is a real lack of understanding among most of our customers about how to access content, and the kind of devices that can be used for playback.
Over the past five or six years, we have conducted numerous seminars on music streaming and Hi-Res content, and these are easily the best-attended events we do for customers.
That being said, Hi-Res Audio has been a challenge to promote, because there are so many different formats and types of players – it’s not like CD or vinyl, where there’s a single component to be purchased. Hi-Res Audio has also been a small niche, with only hardcore audiophiles aware of its existence. With the exception of Sony, most of the hardware manufacturers involved do not have a big presence in the mass market.
Will the steps taken by the industry, announced at the DEG event at CES, to make streaming Hi-Res Audio content more widely available make a difference in building consumer interest? How will it drive sales of devices, content and services?
Campbell: Absolutely. Content, content, content. Content is king. Without that, we have nothing to sell. That’s our focus. We’ll continue supporting Hi-Res Audio content. We call it HD for the Ear!
DEG has done an outstanding job. They and CTA are really taking the bull by the horns as far a positioning Hi-Res Audio for a wider audience.
Crane: Showing music fans the difference that Hi-Res Audio brings to your ears is the first step toward adoption. And with multiple music-streaming services announcing they’ll now be offering Hi-Res Audio, the opportunity for this technology to reach more customers only grows.
Pidgeon: I am very excited about the steps taken by the industry, specifically the announced collaboration between artists, content providers and CE companies such as Sony.
While making content more widely available is a good step, there must be a unified message aimed at awareness and benefit. This coordinated effort should elevate Hi-Res to better consumer awareness and go a long way in communicating that there is something better out there. Distinguishing Hi-Res as a better way to enjoy the music, and the key tipping point of consumer interest – that is why the steps taken by DEG at CES are exciting.
Murray: Absolutely. It’s great to see the major labels like Warner, Universal and Sony supporting Hi-Res Audio. For the first time in 30 years, the labels have the opportunity to deliver content in the same quality that the producers and artists heard in the studio. It reverses the trend of downgrading sound quality with the CD and MP3. The DEG group is also focused on streaming – which is how today’s consumers want to enjoy their music – as opposed to a physical format. It will definitely help the adoption of Hi-Res Audio to have a single, consistent message from a group of manufacturers, streaming services and music labels.
Now that there is momentum behind Hi-Res Audio streaming, what are you, as a pro-active, demonstrating retailer preparing to do to leverage this support and convert it into incremental business for you?
Murray: For a number of years now, we have put an emphasis on robust networks, both in our stores and in our installed systems, because we realize this infrastructure is essential in producing the high-resolution streaming experience. As mentioned earlier, we’ve held numerous customer seminars to educate customers – this year, in fact, we’re once again dedicating our annual Music Matters (April 5-6) to streaming Hi-Res Audio. We are also working with [DEG’s] Marc Finer to bring in representatives from the music labels and RIAA to speak.
It’s interesting to see the change in music sources in our stores. We have very few disc players on display any more – we’re either streaming Hi-Res Audio or playing vinyl, which I suppose you could say was the original high-resolution source. All of our audio displays utilize a variety of Hi-Res wireless solutions such as Bluesound and HEOS, or streamers from high-end manufacturers including Aurender, Mark Levinson and MOON.
Crane: Customers can experience Hi-Res Audio for themselves at Sony listening stations in more than 80 Magnolia Design Centers across the country.
In addition, around 250 Magnolia Home Theater locations nationwide have a Sony Hi-Res Walkman, a digital music player giving customers yet another chance to hear what Hi-Res Audio can offer.
Pidgeon: It’s simply not there yet. Everyone is excited about the opportunity for incremental sales and we are working closely with our vendors to include Hi-Res in every interaction. We are looking forward to doing our part to promote the content with providers and create the halo around the category.
Campbell: It’s early, but we now sell subscriptions for Deezer Elite High-Res Audio. We’re very much involved with the content as well.