January 2007 Issue


“My Music,” Anywhere in the Home

NuVo Technologies President/COO David Rodarte discusses the promising future of whole-home audio, and his company’s growing role in that development. NuVo has a rich and long-standing tradition in music. How has it channeled that legacy into the development of its distributed audio systems? That’s one of my favorite topics. There are five partners in the business. I operate the business as COO, Rick Kukulies is chief technology officer, and the other partners all have the last name of Hanser. Jack Hanser and his brothers own a portfolio of brands in the music industry under the name of Hanser Music Group. It is the

A Custom Retailer’s Double Life as a Manufacturer

The saying goes that if you look at the shoes on the feet of a cobbler’s family, you’ll usually find holes in the soles. And while maxims become maxims because they are so often true, Snap AV, a company that can vouch for its products’ quality because it actually uses what it makes and sells, is the classic exception to the rule. The Charlotte, N.C.-based company is a subsidiary of Wirepath Home Systems, which also owns the two-store chain Zobo.tv, a retailer of turnkey custom home theater systems. It is the brainchild of President Jay Faison, a former 26-store Blockbuster Video franchisee-turned-custom installer

Automation City

In a best-case scenario, an integrator works with a homeowner before the home is even built; this allows them to plan for a future-proof, fully connected home, designed from the ground up. Most integrators consider it an even better scenario to work with a builder as it plans a tract of new homes; in such cases, economies of scale take over, allowing the kinds of margins that would make any C-business salivate. So imagine how cool it must be for Link Your House, a “digital home” integrator now on the ground floor of Carter Grove Plantation, a new 3,500-home city being built in Cartersville,

CR_0107 calendar

Two-Month Planner CEDIA 2007 Management Conference February 7–10 Ponte Vedra Inn & Club Jacksonville, Fla. www.cedia.net/management_conf NAHB International Builders’ Show 2007 February 7-10 Orange County Convention Center Orlando, Fla. www.buildersshow.com CEA Winter Retreat February 26-28 Vail Cascade Resort & Spa Vail, Colo. www.ce.org/events CEA 2007 Winter Technology and Standards Forum February 26-March 2 The Hyatt Regency San Antonio San Antonio, Texas www.ce.org/events Digital Music Forum East February 27-28 Museum of Jewish Heritage New York www.digitalmusicforum.com EHX Spring 2007 March 6-10 Orange County Convention Center Orlando, Fla. www.ehxweb.com 2007 PARA Conference March 7-9 The Peabody Hotel Orlando, Fla. www.ce.org/membership/divisions/98.asp

CR_0107 gear guide

Control4’s Power-Over-Ethernet LCD Keypad ($299 list) draws power directly from a 802.3af Ethernet connection, removing the need for a dedicated power source. The company says this option provides CEDIA-certified integrators who aren’t licensed electricians a compelling alternative when designing systems. The keypad provides 10 buttons, a jog-dial, and a large backlit LCD display. www.control4.com Vidikron’s PlasmaView VP-6500VHD ($19,995 MSRP) is a 65-inch plasma that is the first in the series to deliver 1,920 x 1,080p resolution. The company said that the Imaging Science Foundation-certified VP-6500VHD is also the first plasma display to achieve THX certification. The new model complements Vidikron’s current lineup of 42-,

DisplaySearch’s Paul Gagnon and John F. Jacobs

Everyone knows that prices—and, more relevantly, margins—for flat panels went circling down the toilet in 2006, but what was the damage specifically? CR got two studied views from the research experts at DisplaySearch, part of the NPD Group. John F. Jacobs, director, notebook PC market research, keeps a close eye on the manufacturing of flat panels; he gives us the “supply side” view of the flat panel equation. Paul Gagnon, director of North America TV market research, keeps tabs on retail and reseller pricing trends; he summarizes the trends you experienced facing consumers last year. Let’s review just what happened in 2006. Where were

Let’s Talk: Happy New Year!

Happy New Year! Many of us have already celebrated the rites of passage that usher in every new year. As an industry, we’ve come and gone from CES and look forward to the spike in A/V sales that traditionally surrounds the Super Bowl. As publishers of content, we ramp up our annual game plan. It is my honor to share with you the exciting plans we have in store for CustomRetailer in 2007. Our main goal is to step up the energy in this vibrant publication and welcome you to our recently relaunched web site—www.customretailer.net—which is chock-full of unique content that takes you beyond the

Let’s Talk: Nomenclature

We have a real nomenclature problem in this industry. So many intriguing installers, integrators and retailers are out there doing amazing things, loaded with the knowledge and expertise that can enable connected digital lifestyles for people of all economic and demographic stripes. But very few consumers know what to call you. If they read or hear about lighting control or home automation or whole-house audio and they want to look someone up in the phone book who can help them make it happen, what are they looking under? And if they don’t know what to call you, they won’t call you. Or e-mail you. Let’s

Middle or Mediocre?

In the world of electronics retailing, being in the middle is being mediocre to many consumers. The prevailing, reassuring view for years has been that of the consumer market as a pyramid, with fewer buyers and dealers at the top and more of each at the bottom. In my long-held view, however, the market is becoming hourglass-shaped, with the middle getting sucked out. At the bottom, Best Buy and Circuit City, each generating tens of billions of dollars in sales, dominate the consumer electronics business. At the top, higher-end retailers with less than 10 storefronts are doing quite well. In the middle, however, are retailers like

Strike Up the Brand

“Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” Those are the words of Peter Drucker, arguably the most influential business teacher and writer of the 20th century. Drucker’s wisdom on marketing and innovation has been used consistently as a driving force in modern business. When Jack Welch became CEO of GE, he invited Drucker to a meeting. During their time together, Drucker asked two questions: “If you weren’t already in business, would you

The Aftermath of Red Friday

What just happened? Have we lost our mojo? I don’t remember signing up for this ride. Most of us with A/V specialty stores are waking up with a margin hangover. Black Friday is now Red Friday for us, and selling a flat panel and installation is becoming more and more like ordering a burger at a drive-thru joint. OK, maybe I’m exaggerating a bit, but my head is still spinning from all of this nonsense. The big boys reported less-than-desirable earnings for the quarter on flat panel sales, but they were quick to shout that they’d gladly do it again. Meanwhile, we were inventory-rich and

Tip Sheet: 120Hz LCD

As the price and screen size wars heat up between LCD and plasma, differences between the two will become more crucial. LCD makers claim higher brightness and pixel density in a wider range of sizes; plasma manufacturers counter with more accurate colors, better black levels and sharper motion rendering. That last point was clearly shown in the Advanced Plasma Development Corp. (APDC) test suite at this year’s Consumer Electronics Show as a side-by-side demonstration with 46- and 52-inch LCDs and 42-, 50- and 60-inch plasma displays. Motion blur is a real sore spot for LCD technology, particularly now with the availability of 52-inch and

You’re Selling a Relationship, Not Products

My friend Bruce Jacobs, the publisher of CustomRetailer, passed away in November. Bruce and I talked often of the industry—and particularly about “what is right” in our business. What is right, in particular, is the success many companies have had in building grass-roots marketing programs through relationship selling. Sure, it sounds like another vapid consulting phrase: “relationship selling.” But it was the underpinning of Bruce’s success as a magazine publisher, and it is used successfully throughout all businesses. Bruce made a personal connection first. If you’re interested in seeing the effects of relationship selling, read the tributes posted in Bruce’s name at www.customretailer.net. You’ll

Your Exit Strategy

With seven private equity investment funds having raised more than $10 billion, the firms behind them are looking for solid investments. An article in the December issue of STORES magazine suggests that retail is a very attractive segment for these funds. In 2001, Best Buy purchased Seattle-based Magnolia Hi-Fi to beef up its specialty business. In 2005, Indianapolis-based CE retailer hhgregg sold an 80 percent interest in its company to Freeman Spogli & Co., a New York- and Los Angeles-based firm. Warren Buffett has added retailers like Nebraska Furniture Mart and R.C. Willey to his Berkshire Hathaway portfolio. Tweeter based its growth strategy