Making Audio Work
Alberto Fabiano, partner in West Hollywood, Calif.'s DSI Entertainment Systems, says that money left on the table from lower flat-panel tickets is prompting interest not just in audio but also, in things like Media Centers: "This money is just burning a hole in their pockets, and they think, 'What else can I get?' and start looking at other items they did not think about getting originally."
Bob Gartland, president of the AVAD buying group, says flat-panel price drops only "theoretically" lead to audio sales, "Certainly, I think we saw the inverse of that a couple of years ago, when less audio was being attached because a panel was $15,000, and people were very fixated on having that panel. I'd be a little reluctant to suggest that the reduction in panel pricing would create more audio; it actually might, besides creating more audio sales, create more panel sales in the same house. That flat TV is the focus of a lot of consumers' attention. Where they used to have a very expensive 42-inch panel and some audio around it, now, they have a 50-inch or 62-inch panel and two other panels in their house."
Ira Friedman, president of custom speaker company Bay Audio, sees little correlation between higher audio spending and flat-panel price declines. "Absolutely," he says, "lower pricing brings more people into the marketplace, but does the price drop of any one particular product change the nature of the business? Only if you are component-driven. If you are [just selling plasmas], and the price goes down, you'll need to get more clientele, and your volume goes up and your margin goes down - or you suffer. For those dealers who keep thinking of themselves that way, then yes, they'll truly be affected by the pricing of any one particular component. Asking the question is the same thing as asking, does the ease of a customer being able to shop on line change the nature of your business. Well, no. If you're selling 'stuff,' and all your value is wrapped up in carbon molecules, then yes, it has an effect. But if you're selling custom installation, which entails project management,