Sony's Sterns, Shackelford and Sy on 4K, Hi-Res Audio and More
Frank Sterns, a multi-decade industry veteran who spent many years with Niles Audio, began a new role last year with Sony, as head of the CE giant's custom install channel. At this week's HTSA spring summit, we sat down with Sterns and two of his colleagues, Gordon Shackelford and market planning specialist Joshua Sy, about Sony's plans for the year, as well as Sterns' transition to his new role.
Q: I first wanted to get a general sense of what Sony is trying to accomplish here at the conference this week.
Frank Sterns: Sony's strategic mission for 2014 is to develop a premium speciality performance portfolio, specialty 4K video and high-resolution audio, are strategic goals for us. So it's logical that a strong technology premium-oriented group like HTSA is a prime channel to sell these products in. And we're committed to the group and supporting the group in developing premium business. So that's why we're here.
Gordon Shackelford: These guys are high-end guys. And Sony is a big Japanese company. So the idea that Frank's group is now being formed to service these guys specifically. And Sony's got premium branding, and these guys get premium service, so it's a real win-win for both of these groups.
Q: The major product categories we're talking about here are 4K video and hi-res audio, and what else?
FS: The ES brand, that's ES AV receivers, hi-res audio, ES front projectors, 4K projectors, and the XVR 4K televisions. That's our premium home offering, and that's the focus of what we sell through this group. They have access to the rest of the Sony product line, but those are the real high-end Sony products that these guys like to get behind.
Q: You guys have been spending a lot of time and effort on 4K in the last couple of years. What are some of the challenges associated with selling 4K?
FS: The first challenge is exposing consumers to the benefits. When you look at studies of 4K, there's only a very select group of customers that understand 4K or UHD or what we're talking about. When customers go into the store and see a demonstration, at an HTSA member, they're immediately convinced of the value and it's pretty easy to sell. We're talked to a number of dealers at the conference and they say their sales are rapidly switching to 4K and they're doing quite well with it.
But for those people who haven't been exposed and haven't seen it, they don't really understand it yet. So we have a pretty steep ramp-up curve, to get people exposed to the technology, get a good demo and then things will accelerate.
GS: In the last year, it's been more about getting the dealers educated about 4K, because it's been a mystery to them. It's less so now, but it's still a mystery to a lot of guys about integration, and what is it really, and how does Blu-ray look, and where's the 4K content? All these things have to be addressed one by one, and these guys' comfort level with their customers has to be maintained, that they're selling something that's not like 3D, but is an ongoing evolution of video resolution technology.
Q: In your discussions with dealers here, and elsewhere, are you getting the sense that 4K is moving beyond early adopters?
FS: The sense is that 2014 will be the tipping point. I think most people would say that yes, it's absolutely going to happen. This will be mainstream within the next 18 to 36 months, maybe faster, and that 2014 is the year is the year that this becomes mainstream.
GS: The thing that's going on is these guys really have a firm sense, especially with firm projection product, that if they sell their customer a 2K projector that's really expensive, they're selling their customer an obsolete technology, and that's considered a dangerous thing to do.
Q: Now, in terms of in-store presentations, what is Sony doing to help HTSA dealers out with those?
FS: We have a pretty aggressive demo program with HTSA dealers where we subsidize the cost of putting up the demo, and encourage them to do so, to display the technology. We do that for projectors, we do that for 4K panels, we do that with hi-res audio products, and we do that with ES AV receivers. So we have a pretty strong program with those guys to get it on display, and to support marketing efforts, and to drive consumers in to see it. Plus, we do a number of events at their locations, where we'll come in, and we'll advertise in the local magazine, and we'll bring in some wine and cheese, and bring a technical expert in to give a presentation about the technology.
Q: Is social media part of those efforts at all?
FS: Sony is big on social media. We don't actually manage that part for Sony. Sony does quite well with that.
Q: How has your experience from your years with Niles prepared you for your role with Sony?
FS:[Laughs] I have very long-standing relationships with all of the target customers, that Sony wants and needs, and they need Sony to do 4K, and hi-res and very cool technologies. It hasn't prepared me quite as well for working in a very very large organization, it's all been a learning curve for me. But I'm pretty stubborn, and I just go fight. And I win most of the fights. Or a lot of the fights, at least the important ones.
Q: Anything you've seen at the conference so far that's surprised you?
FS: I think I've been to all of the HTSA conferences, except for the couple of years when I was off-plane, and this is by far the biggest one. So what surprises me is how big this has gotten, and how this group has weathered the whole downturn and come back stronger than ever.
GS: I think the thing that's impressed me so far, at least in the one-on-one meetings, is just the general uptick in business and optimism that these guys have. Everyone's been really bullish.
FS: Sony's business this spring has doubled over the previous year. We've been constrained in some key products, and we've still doubled this year. And I don't think general business has doubled, but our business has doubled.
Q: Anything else you'd like to add?
FS: Personally, it's really exciting for me to be in the forefront of two cutting-edge technologies, hi-res audio and 4K video. And I'm enjoying very much being back in the swing of things, my old buddies developing new technologies and markets for those technologies. So it's a lot of fun, and I like coming to these conferences, and working with these guys to develop plans to create the next cool premium thing. My whole career has been in premium and it's nice to be able to do premium video, because Niles or Infinity, we never had the money to do anything like that technologically sophisticated.
GS: I'd just like to say, to add to what Frank said, the idea that Sony is an innovative technology company, and that we're the only ones with a real consumer 4K product, it really underscores Sony's long history in the development of video technology. So I think the guys in the group recognize that, and going forward, that's going to be more prevalent, that Sony's going to be a real leader, if not THE leader, in developing video technology.
Josh Sy: I'd say we're doing a lot, behind the scenes as well, working with the production side of the house, just building the 4K pipeline. You saw yesterday that Comcast was using a Sony F-55 to collect 4K content, that's really big push. We're been doing it for several years now. Also, 4K projection in the cinema, we're the masters of that, largest market share of those in the country. So really, we're really pushing the edge of 4K, not just the displays, but the full ecosystem of products, to make sure that's stuff to watch on those displays.