News:
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Introduction
Welcome to another issue of rAVe!
In this issue’s editorial, I discuss the great big surprise that’s coming down the day analog television transmissions are halted. Preparing your customers now will help them get over the shock later, and will likely land you that overhaul business.
ActiveLight President Brad Gleeson gives us a great review of the Digital Signage Pavilion at NSCA – the activities, what was hot, and we have an interview with Adtech President David Gormley describing the ProAV company’s experience of expanding into the HomeAV market.
Enjoy!
— Gary Kayye, CTS 
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Editorial
The Final Sayye by Gary Kayye
The Digital Transition: A Sports Bar's Worst Nightmare
By Gary Kayye, CTS Everybody’s heard and read something about HDTV and the world’s transition from our current analog standard TV system to the new digital standard, right? Today most countries in the world use either a system known as NTSC or PAL for broadcast television transmission and display. Both systems are very similar in that they are analog-based and display either 525 or 625 lines of resolution on the screen. Regardless of screen size (from 3” to 300”) you’re still seeing either 525 lines of video or 625 lines of video.
But, over the next three to five years, the entire world will be switching to a digital-based transmission system that will accommodate up to 1080 lines of resolution for TV viewing. That will yield much higher resolution images and broadcasts for everything from sitcoms to educational shows to sporting events.
In fact, in many areas of the world, you can already receive these new digital signals with a conventional rooftop antenna and pick up a couple of local channels broadcasting in the new HDTV (high definition television) format. Soccer’s upcoming World Cup, football’s SuperBowl and baseball’s World Series are all available in HDTV!
In fact, much of what’s out there on HDTV now can actually be displayed in either digital or analog HD formats. Sure, the digital HD format with its DVI (digital visual interface) or HDMI (high-definition multimedia interface) connector and signal formats look a lot sharper than the analog component video counterpart. But, they still blow away NTSC and PAL sporting events that are blurry and at a loss for resolution.
Sports bars love this. The added resolution makes large-screen projection and flat-screen formats look awesome. So good, in fact, that you can actually see facial expressions on the faces of the fans sitting on the sidelines, the puck flying across the ice in hockey (assuming hockey still exists), the color of shoe laces in soccer and you can even read the obnoxious signs held up by fans at virtually any sporting event (my personal favorite was ‘Duke Sucketh’) – in HDTV resolution.
But, are these Sports Bars really ready for the transition? Did they plan for this? When they were working with their AV integrator, did they have a transition plan from analog HD to digital HD?
Probably not.
Today, it’s estimated that more than 6,000 sports bars exist across North America touting their new HDTV display technology – drawing sports fans from as far as 200 miles away just to see the big game in HDTV format. Europe, another 1,200 sports pubs, as they call them. But, did you know that more than 90 percent of these are routed and displayed in the current analog HD format and not in the future digital format?
Why should they care?
 Well, according to the FCC, by July 1, 2007, the USA will be ready for digital-HD formatting and will order that the analog ports be shut off from showing high resolution HD content. Yes, shut off. So, when this happens, the HD component output will no longer carry anything higher than 480p resolution video. In other words, the native 720p and 1080i HD formats won’t work at all – unless, of course, you use the digital DVI or HDMI ports. You see, these digital ports can’t be copied so Hollywood supports this transition as it virtually eliminates content pirating/theft.
Simple enough — just switch the output ports, right?
Well, not so easy. Sure, if your TV’s HD satellite or cable box is directly connected to the TV with a single cable, all is OK. But, if you’re connected like most sports bars are where signal routing is done via component HDTV distribution amplifiers and switchers and lots of high resolution coax cable, no way.
In fact, their system design will have to be overhauled completely. Every DA, every switcher, every cable and every connector will have to be re-installed and changed to DVI or HDMI for anything other than 480p – enhanced definition television (EDTV) – to be displayed. And, who wants to look at EDTV when you can get HDTV?
So, what’s the message here?
Well, if you’re an AV systems integrator designing systems using digital cable, satellite TV or any sort of HD format, you need to be future-thinking and have a plan for how you’re going to go back later and change out what you’ve put in there and make it true, digital HDTV. Or, at the very least, fully disclose to your clients what’s happening in just a couple of years. Or they’ll come back to you complaining that you didn’t.
If you’re a customer: beware. Not every AV integration firm realizes that we are in the midst of this transition to digital TV. Sure, everyone knows it’s happening, but the extent to which this affects TV viewing may not be apparent. HDTV will eventually ONLY be digital.
Finally, if you’re a consumer – don’t go out and buy an old-technology analog format TV. Buy the new generation HDTV format displays and take the time to look on the back and make sure there’s either an HDMI or a DVI connection for truly digital HDTV display.
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Feature Article
NSCA/ActiveLight Digital Signage Pavilion Highlights
By Brad Gleeson
President
ActiveLight, Inc. NSCA’s 2005 Expo featured a lot of new technology and even a little drama. A bizarre indoor rainstorm over the Christie booth on Thursday (as well as the wonder of seeing the booth with its screens back the next day seemingly unaffected by the downpour), was followed on Friday by an equally bizarre false alarm to evacuate the building. The alarm certainly contributed to a quiet afternoon, since the dozens of folks who bolted for the parking lot could no longer hear that it was indeed a false alarm.
The unprecedented drama aside, I will always remember NSCA 2005 for the success of the NSCA/ActiveLight Digital Signage Pavilion.
With more than 20 different exhibitors collectively representing all the elements of digital signage, visitors to the sports themed Pavilion benefited with a single location for the latest trends in digital signage. Exhibitors included Electrosonic, Mercury Online Solutions, Scala, Enseo, Webpavement, Promo Only and many more.
Some of the innovative products and technologies on display inside the pavilion included:
- Avocent’s “Longer-view Wireless,” the company’s newest wireless KVM solution, which allows wireless distributed video with a range of 1000-3000 feet, depending on obstructions.
- Gyricon’s new “E-paper” bi-stable flexible material that can display simple static messages using a battery-operated, pager-based updating system.
- Electrosonic’s HDFrEnd hi-def storage and playback display controller.
- Akira’s new modular plasma that could allow video-wall type matrix applications using plasma displays with very small bezels (unfortunately their sample didn’t quite make it to the show).
- Philips’ new Adtraxion digital signage solution including the networkable display controlled software and Philips plasma or LCD monitors.
The Pavilion was also the site of the "Demystifying Digital Signage" presentation, which featured an overview of digital signage and “How’d They Do That” examples of successful installations by D2 Sales, Playnetwork and Microspace. This presentation was preceded by the first-ever DIGI Awards for innovation in digital signage installations and applications. The ten awards presented covered especially creative and compelling installations in the areas of corporate, retail and transportation, and were sponsored by Systems Contractor News and Pioneer. Award winners were from as far away as Hong Kong and New Zealand, as well as North America.
ActiveLight’s contribution to the drama of this year’s event, besides presenting the DIGI Awards, was the delivery of the first issue of our new trade magazine – The Digital Signage Quarterly. The marketplace and industry has been asking and waiting for this kind of specialty publication and we’re proud to be a part of it. Special thanks to David Keene and CMP for their support of this effort. I would be truly remiss (and in a lot of trouble) if I didn’t take this opportunity to acknowledge the support of the following advertising sponsors, including Chief Manufacturing, Chyron Corporation, FOCUS Enhancements, InFocus, NEC/Mitsubishi, NEC Solutions, Philips, Reflect Systems, Samsung and Sony.
NSCA 2005 offered more opportunities than ever for professionals and end-users to explore different approaches and get answers to their key questions about digital signage. We’re excited to be apart of this exciting time in our industry.
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News: Have a news tip? Send them to rAVe Editor-in-Chief Denise Harrison — dharrison@kayye.com Industry News Clarity Gains Signage Software With CoolSign Acquisition Clarity Visual Systems announced the acquisition of Burlingame, Calif.-based CoolSign, maker of enterprise digital signage software, with an eye toward being a one-stop shop for signage integrators.
Clarity CEO Paul Gulick tells rAVe that the acquisition works for Clarity because they inherit a number of large, high-profile accounts, and it works for CoolSign because they had just begun to invest in a channel program, which Clarity now provides them.
“The majority, if not all of Clarity’s customers in digital signage need to have this sort of enterprise-wide software,” says Gurick. “Clarity was setting out to build that capability, content and management, and CoolSign has that up and running, including a network operations center managing thousands of signs on various networks for their clients.”
When asked how the Clarity dealers reacted to the news, Kris Gorriaran, Clarity’s VP marketing and sales, told rAVe: “The comments during the conversations the last few days, many dealers said this was a smart business decision for Clarity. One AV integrator who does banks said ‘It’s now going to be one-stop shopping for me.’”
Gorriaran added that Clarity has had partners clamoring for content creation for just such one-stop shop for product and services.
Here are some other facts rAVe learned about the acquisition:
— Clarity purchased CoolSign from Adspace Networks, Inc. Terms of the acquisition were not disclosed.
— They will keep the CoolSign brand attached to the product.
— Training is already in place, often at the offices of integrators. Some of the future training will be hosted by CoolSign, some from Clarity.
— CoolSign brings large, big-name accounts in retail, malls, casinos, hospitality and theaters. Names include Macy’s West, Federated, Nike, Gap, Smithsonian Museum, Loews Theaters, Mandalay Bay and others.
— CoolSign brings a strong alliance with Cisco and IBM, companies with which Clarity has worked as well.
— Employees: CoolSign has 25, Clarity has almost 100.
— The purchase immediately adds over 3,000 digital signs to Clarity’s installed customer base.
— CoolSign operations remain in Burlingame, Calif.
“Day one after this acquisition, all our channel partners now have a place to go to get everything necessary to deploy digital signage for their customers,” says Gulick. “Fast forward a year or two, and imagine all the additional benefits we can offer the channel as we integrate software features into the hardware so that deployment becomes straightforward, seamless.”
For more on the acquisition, go to http://www.clarityvisual.com/news/pressroom/0503/0316_CoolSign.asp
For more on CoolSign, go to http://www.coolsign.com/home.shtml
AV Veteran Andersen Joins Adtech’s Home Entertainment Expo  30-year AV veteran Helene Andersen joined Adtech’s Home Entertainment Expo as director of business development. The Home Entertainment Expo (see story below) is an exhibit of residential technologies, showing specifiers and end-users how different entertainment and control technologies can be used in different settings.
Andersen was previously CEO of Boston-area AV systems integrator Crimson Tech. At Home Entertainment Expo, Andersen will manage, cultivate and expand the HomeAV client base, including end-users, architects, builders and other design/build professionals.
Located in Sudbury, Massachusetts, HEE’s facility is a showroom that provides a place to see, hear and touch audio, video and home automation equipment, in a realistic home environment, including ten unique home settings.
For more information, go to http://www.homeentertainmentexpo.com/
ICIA Design Education, Certification Expands in Europe
Audiovisual Design Gains Recognition Worldwide The International Communications Industries Association, Inc. (ICIA) is expanding its audiovisual (AV) design education and certification programs in Europe with a series of Design Schools in 2005 and the first certification testing ever outside the U.S.
Design School Level 3: Systems Design, which focuses on how to analyze, select and plan seamless equipment interoperation to deliver a desired outcome, was offered March 10, 2005, immediately followed by CTS-Design (Certified Technology Specialist – Design) certification testing – the first time the exam has been offered outside the United States. Hosted by RGB Communications at its training facilities in Berkshire, UK, the event was also sponsored by AMX.
ICIA's certification program is renowned among AV professionals as the best in the industry. ICIA has sponsored certification for the AV industry for more than 30 years at both general and specialized levels; there are currently 2600 holders of ICIA certifications worldwide, a 45% increase over 2003-2004.
Europe, Middle East, Africa Projector Market Exceeds Million Mark For the first time ever, sales of projectors in Europe, the Middle East and Africa exceeded the million mark, according to a new study by InterConnection. This is a trend that is likely to continue into the next years as well.
The reasons cited by the study were large sporting events, which affected both home cinema and the hospitality industries, and pricing drops. In fact, the study found a significant correlation between the increase in sales and projector sales under 1,400 Euro.
The IC-MARKET TRACKING MULTIMEDIA PROJECTORS IN EMEA study is a detailed market and branch analysis of the projectors market, says the research company. It contains market figures in value and quantity for the years 2002-2004, development predictions up to 2008, as well as sales figures and market shares of the top manufacturers in Europe. The study is now available from the InterConnection Consulting Group.
For more information, go to http://www.interconnectionconsulting.com
Sonic Foundry to Award Rich Media Projects Sonic Foundry announced an awards program to honor professional AV designers and consultants involved in the development of innovative rich media rooms and facilities using the company’s Mediasite products. “The designs must reflect the three tenets of rich media innovation and functionality achieved through high-quality visualization, collaboration and publishing,” according to the announcement.
The projects must be done between Jan. 1, 2004 and May 1, 2005. The deadline is May 15, 2005.
Designs to be considered likely maximize the convergence of AV/IT visualization, collaboration and publishing technologies, such as high-end projectors, high-definition screens, video conferencing systems, and rich media recorders and servers, to provide an optimal communications experience for in-person and remote audiences.
To nominate a project, go to http://www.mediasite.com/designaward
Long-Time Iowa AV Pro Passes  Elma Kasparek Pratt, 101, of Cedar Rapids, Iowa, passed away March 9. Elma and her husband, Frank, founded Pratt Sound Films in 1939. Frank passed away in 1943. Elma, together with her daughters Louise and Loretta, built what is known today as Pratt Audio Visual and Video Corporation which is headquartered in Cedar Rapids, with branch offices in Des Moines and Bettendorf, Iowa, Omaha and Lincoln, Neb. and East Peoria, Illinois.
Pratt Audio Visual was chosen by Presentation Business News as one of the Top 25 Dealers in the Audio-Visual Presentation Industry and was a recipient of the Cedar Rapids Chamber of Commerce BRAVO Award in 2000. She remained active in the company through her early eighties.
Memorial donations may be made to Four Oaks of Iowa, 5400 Kirkwood Blvd. SW, Cedar Rapids, IA 52404.
For more on Pratt Audio Visual, go to http://www.prattav.com/
ActiveLight Announces 2005 DIGI Awards The DIGI Awards, the first formal recognition of innovation and excellence in the digital signage industry, were presented to nine companies at the NSCA Systems Integration Expo in Orlando, Florida.
D2 Sales received an award for its outdoor installation that successfully promotes Yahoo! Local, a new Yahoo! search product. The unique unit, complete with printer and Yahoo! yodel doorbell has been featured in news broadcasts nationwide. Webpavement, another recipient, created a large-scale LED display network introducing the impact of eye-level digital signage to the streets of New York for the New York Subway.
This year's DIGI award recipients in corporate, retail and transportation categories of digital signage installations in each division are:
Corporate Installations
Under five screens: Sirius International (Hong Kong) Limited for Cotco Holdings Limited Digital Signage LED Selector — interactive touch-screen application to demonstrate a “Dynamic Range of Color Spectrum” in various types of LEDs manufactured by Cotco Holdings Limited
Six to 25 screens: MITRE Corporate Communications for MITRE Corporation Digital Signage System — corporate communication to employees, visitors and tenants
More than 25 screens: Alpha Video for Ceridian Corporation Digital Signage System — real-time call center statistic displays and employee communication system
Retail Installations
Under five screens: Advanced Method for Seattle Design Center Digital Signage System — interactive building directories and way finding information
Six to 25 screens (tie):
Microspace Communications Corporation and Helius, Inc. for Flagstar Bank Digital Signage System — real-time marketing, training and corporate communication content to retail and banking locations via satellite
OpenEye Displays for Regency Duty Free Shops Digital Signage System (New Zealand) — displays driving sales and increasing consumer awareness of promotions in airport duty-free shops
More than 25 screens: Mercury Online Solutions, for SunTrust Corporation Digital Signage System — five-channel program to engage and reach every customer at every bank visit
Transportation InstallationsUnder five screens: D2 Sales for Yahoo! Product Launch – installation to promote the launch of Yahoo! Local search product
More than 25 screens: Webpavement for New York Subway Digital Signage System — 80 LED displays interconnected in urban street level outdoor environment
No award was given in the six to 25 screens category.
For more information, and, in October, applications for the 2006 DIGI Awards, go to http://www.activelight.com
Projection
Christie to Introduce 2K Digital Cinema Projector, 10-bit Processor  Christie announced a new digital cinema projector and image processor at NSCA. The CP2000X 2K Digital Cinema projector is specified up to 22,000 ANSI lumens and more than 2000:1 contrast ratio. It includes a 15-bit image processor, and a two-piece design with a separate projection head and lamp ballast for easier installation. It comes with ChristieNET network connectivity (at this point, all Christie projectors do). It also comes with a color touch panel controller for setup and control via Ethernet.
Christie is targeting cinema/exhibition, post-production, digital mastering, multimedia theatrical productions and digital intermediate work.
The Cine-IPM 2K Image Processor can convert virtually any standard of content, regardless of source, says the company. It formats non-cinema or alternative content sources such as broadcast television, satellite, business presentations, DVD and HDTV for display in theatrical venues. The Christie Cine-IPM 2K is optimized for use with Christie 2K Digital Cinema projectors as an integrated in-theatre solution.
For more information, go to http://www.christiedigital.com/corporate/news/pressRelease/2005/march/shoWest2005/shoWest2005.asp
Lumens Integration Introduces 90/180/270 Degree Document Camera  We got our hands on the new PS600 document camera from Lumens Integration at NSCA. The entire line of document cameras from the company is nicely designed and quite affordably priced, too. This one puts the burden of rotation onto mechanical movement of the camera head, instead of on the software, so you get a fast reaction during 90, 180 or 270 degree rotation.
It also has an automatic step-zoom function that lets you just push a button on the front of the camera, a lot easier and faster than a typical gradual zoom in and out. This camera can also store 32 images internally and comes with a compact flash slot. The PS600 has a split-screen capability, RS-232 support and RGB and CMY color adjustments. MSRP on the PS600, on the high end of their product offerings, is $2,995. For more information, go to http://www.mylumens.com/pdf/Lumens%20PS600%20PR.pdf
InFocus Introduces SXGA+ Projector  InFocus has a new installation projector specified at SXGA+ (1400 x 1050) resolution, 3500 lumens and 750:1 contrast ratio. The LP860 is wireless-ready, too, with the company’s InFocus LiteShow wireless offering. (LiteShow allows users to securely project from PCs anywhere in the room on a shared projector for individual or group presentations).
Other features of the InFocus LP860 include motorized zoom, focus and lens shift.
The LP860 will be available in April with an MSRP of $6,999.
For more information, go to http://www.infocus.com/company/pressroom.asp?site_lang=1&site_region=1&id=1160
Canon Unveils Pair of Affordable LCD Projectors Canon has two new LCD projectors, the LV-7230 and LV-S4. The LV-7230 is specified at 2000 ANSI lumens, 380:1 contrast ratio, XGA resolution and weighs 6.4 pounds. It also comes with a 1.6 zoom lens that can display a 100-inch image from 8.2 feet away. The LV-S4 is specified at 1500 ANSI lumens, 300:1 contrast ratio, SVGA resolution and weighs 5.1 pounds.
Both projectors have digital keystone adjustment of +/-20 degrees (vertical), progressive-scan circuitry that converts a 480i (NTSC) or 575i (PAL) signal to progressive display using 2:3 pulldown, and a customizable logo display that lets users display an image, such as a corporate or school logo, on the startup screen. They also come with Greenboard mode, which adjusts the color balance when teachers want to project onto a green chalkboard.
Canon also offers a LV-RCO2 Presentation Kit, with a remote control with USB Remote Receiver that can be used as a wireless mouse, and can control common projector functions.
The Canon LV-7230 projector, available in April, has an MSRP of $2,299. The LV-S4, available in May, has an MSRP of $1,399. The LV-RC02 Presentation Kit, also available in May, has an MSRP of $120.
For more on Canon projectors, go to http://consumer.usa.canon.com/ir/controller?act=ProductCatIndexAct&fcategoryid=109
 New DLP Projector From Toshiba
Toshiba’s new TDP-T98U, a 6.2-pound DLP projector, is specified at 2500 ANSI lumens, 1600:1 contrast ratio and XGA resolution. It includes composite, component and S-video inputs, and audio in/out capabilities.
This projector has pretty much the usual you can expect, such as monitor out, color enhancement (Toshiba’s Natural Color Enhancer, to be precise), automatic keystone correction, etc. It lists for $2,299.
For more information, go to http://www.toshibadirect.com/td/b2c/pdet.to?poid=292739&seg=SMB&sel=1&rcid=-26366&ccid=1291021 Displays
Samsung Shows Whopper 82-Inch HD LCD  Following their infamous tradition of showing giant-sized displays they may or may not ever ship, at NSCA, Samsung announced the company has developed an 82-inch high definition TFT-LCD screen at its new production complex in Tangjeong, Korea. At its 7th-generation Line 7-1, Samsung can produce two 82-inch panels from a single substrate.
Samsung used its Super Patterned-ITO Vertical Alignment (S-PVA) technology to get a 180-degree viewing angle. The company says the new panel is specified at 1200:1 minimum contrast ratio and 600nit brightness. Response times are 8ms or faster.
The 7th-generation line will begin mass production at the end of March.
For more information, go to http://www.samsung.com/Products/TFTLCD/News/category_TFTLCD_20050307_0000101494.htm
BroadSign Upgrades DMLS Signage Network Operation Software  The new Digital Media Logistics Suite 4.0 from BroadSign is a new version of the software just announced by the company. According to the company, the upgrade to its digital signage network operation software now offers a customized interfact to match a client’s workflow, simpler front-end, enhanced reporting capabilities, easier campaign analysis, Linux OS playback, and an industry standard ad sales process function.
BroadSign's software is currently used to operate digital signage networks in shopping malls (USA, Dubai), DVD dispensing machine chain (USA) and other venues. A number of pilot projects powered by DMLS are also under way in grocery stores and retail banks (USA, Canada and Europe), says the company.
For more information, go to http://www.broadsign.com/
Integrator Solutions
AMX Introduces Two Enterprise Ethernet Switches
 AMX has two new enterprise-grade Ethernet switches for connecting devices and maintaining signal quality through the switches. The NXA-ENET24 and NXA-ENET24PoE are pre-configured switches that tie together all products operating on an IP network, so installers can just connect the devices into the switch without needing additional configuration.
The Ethernet switches also are designed for AMX's MAX Integrated Content Servers to help prevent jitter, skipped frames and audio distortions.
The NXA-ENET24 is a managed switch with 24 auto-MDI/MDIX 10/100 Ethernet ports, two combo Gigabit ports and two built-in stacking ports, for stacking up to eight units.
The NXA-ENET24PoE is a managed switch with 24 auto-MDI/MDIX 10Base-T/100Base-TX ports and two combo Gigabit ports. It provides up to 15.4 watts per port for a total of 370 watts of power.
The switches are available now. For more information, go to http://www.amx.com/new-products-public.asp
Control New Annotation System Lets Users Write Over Any Isys i/O or UPX-2 Info Crestron’s new MediaMarker annotation system allows telestration over computer signals, live video or streaming media, Web pages and even whiteboards, in real-time on the company’s Isys i/O TPMC-15 and -17 and the UPX-2 Universal Presentation System. The annotated images can be presented, saved, edited and shared.
The capability is embedded onboard the UPX-2 and Isys i/O 15” and 17” touchpanels, so MediaMarker does not rely on screen-scraping or VNC (virtual network computing) schemes. That means when the presenter draws a line, shape or text on the touchpanel screen, response is instant and accurate, says the company, and regardless of the source, the background image can be displayed full-motion or captured while annotating.
MediaMarker allows screenshots to be captured and saved to a network drive or portable flash card in a range of formats including JPEG, BMP, PNG, TIFF, and HTML. Streaming video can also be captured.
The MediaMarker capabilities do not require a separate computer, special software, or any other outboard processors, either.
For more information, go to http://www.crestron.com/news_room/show_releases.asp?press_release_id=1183
Audio Crown Expands Commercial Audio Series  Crown International announced a new mixer, a new amplifier and a higher-power mixer-amplifier at NSCA. The new products are specifically designed for commercial and industrial applications, such as needed for schools, hospitals, factories, restaurant/retail, houses of worship, fitness facilities, A/V boardrooms, prisons, and small offices, for paging, background music, security and evacuation instructions.
Mixer input routing allows each input to be assigned to any output, possibly reducing the number of additional mixers or amplifiers required for the install. The products also include priority muting, phantom power, four-tone generator, independent volume, bass and treble controls for each channel, and capability for remote volume control. Amplifier models provide 4-ohm and constant-voltage outputs (70V and 100V).
Power ratings and number of inputs and outputs for the new models are as follows:
- 1160MA mixer-amplifier: 4 inputs and one 160W power amplifier
- 180A amplifier: 1 input and one 80W power amplifier
- 280A amplifier: 2 inputs and dual 80W power amplifiers
- 1160A amplifier: 1 input and one 160W power amplifier
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Feature Article: A rAVe Exclusive
ProAV to HomeAV: Adtech Discusses the Challenges of Branching Out
AV systems integration company Adtech, Wayland, Mass., was in business for 16 years when the company decided to branch out into HomeAV as well. What was behind the decision? How well is it working for them?
David Gormley, president of the company, shares Adtech’s experience in this exclusive article for rAVe in order to help other commercial systems integrators considering a move into HomeAV.
rAVe: Describe your company, when it was founded, how it began, and what the main focus of the business was for the past 16 years.
DG: Adtech was founded back in 1988 as Advanced Technology Presentations by my wife, Elizabeth Gormley. Prior to opening the company, she was with a small software developer selling the first black and white LCD panel from nView Corp. It's a fair assumption to say she was a pioneer in selling these panels, and quickly became recognized by the manufacturer as one of their best reps. When I met her, she was frustrated with her employer and ready to move on, so we called nView and convinced them to sign us up as a new dealer in Massachusetts.
Her first day in business she sat at a desk I had set up at my own company, sold an nView panel at list price on her first phone call, in the first hour. I knew we had fallen into something good.
For a year, I ran my own business by day while handling all the operations of building Adtech at night. She spent her days on the road and on the phone selling nView panels, followed shortly after by InFocus panels, and then Proxima. I joined her full-time a year later. By then, the company was filling a niche as the AV company with computer expertise, and with product always in stock and ready to ship. In those days, you got a lot of orders because you had it in stock while the other traditional AV companies did not.
We must have been doing something right because soon enough our Proxima rep decided to leave her job and come work for us, followed later by our InFocus rep, who saw the light as well.
The main focus of our business for the first six years was primarily following the LifeCycle of LCD panel to LCD projector, and reaping the rewards of easy sales of allocated products at high margins. Despite the advice of many to diversify at the time, I didn't see any reason to spend precious resources diversifying when we couldn't keep up with the business of selling high margin projectors. Instead we diversified into new ways of selling projectors, opening a national sales division and selling through the computer magazines with weekly ads and an 800 number. Within months, we were selling so many boxes that at 4 p.m. each day, I and whomever else I could find would head for the shipping department to join the frenzy of getting every order out the door by 5:30.
All good things eventually come to an end. Those who survive it have to recognize that fact and figure the right time to change. For me, that was around 1996 with the internet looming and our good customers asking us why we couldn't install their projectors. It was time to transition from box sales to AV integrator, without ruining a hard-built reputation of first-class customer service and support. I brought in a local industry veteran who promised to bring the knowledge, expertise and contacts necessary to make a successful integration business. The only problem was that two years later, I finally figured out that he forgot to bring the customer service along with him. My objective in building this new division was to grow slowly, take only small projects we could handle and build a reputation as the company that delivers what they promise, starts and finishes on time and doesn't leave until the customer feels they got exactly what they paid for. When I recognized this was not happening, I terminated that relationship and developed a new position of COO and made one of the best hires of my career.
From that day on, we committed to building the AV integration business I wanted, one step at a time, while continuing to grow and adapt in our box sale business. We grew quietly, one system at a time, adding good technicians and engineers as we found them and developing a company atmosphere that would attract and keep the best talent in the industry. We weren't on the A B or C list of the big AV consultants and architects, and we didn't make the bid list on the million dollar projects, but we were quietly making our way into many of the big companies and schools – with a solid reputation and good referrals leading the way. If you had a project under $50k and didn't want to wait the eight weeks for someone else, you found Adtech and were done in four.
Those customers kept coming back for more and we made sure of it.
Today, we are capable of completing any integration project, big, small, complicated or simple. Our customers know that when we accept a project, it's because we know we can complete it and they won't find themselves waiting for us because we took on more business than we could handle. We have what I would consider the most efficient, knowledgeable and caring team of technicians, engineers and sales and support staff that I could ever have the privilege to work with. We are able to accomplish the volume of quality work that we do primarily because of the pride each takes in what they do and how they contribute to the overall success of this company. I consider them the New England Patriots of AV integration, and we have all seen what that kind of teamwork does for a great football team.
rAVe: What prompted your decision to expand into HomeAV?
DG: Six years ago I realized that commercial projectors were becoming a commodity. I knew we had to get into the residential business. As a commercial A/V integrator, the standard line of advice has always been, stay away from residential systems. The perception was that it's a different business, a different kind of customer, one that requires and expects perfection, one that you will never make happy, have a hard time getting paid by, and one that requires too much service. Two years into the business and I can confirm that is ALL true and then some.
It was easy to heed those warnings and stay away, until the recession hit a few years ago and the internet became a competitive force. As I looked for a different direction to take the company in a challenging economy, I realized that I was already facing everything I feared about residential customers with our commercial clients. Our objective to being successful in commercial business was to be the perfect contractor who showed up when we said we would, completed each project as specified in the design and in the timeframe planned, and never left any stone unturned when the project was done. By aiming to meet or exceed client expectations, Adtech was able to build customer loyalty.
Unfortunately the recession and the widespread gutting of prices on the internet have changed the way a substantial percentage of our commercial customers think. There is much less loyalty today and always a new company that wants to hang the "Audio Visual Contractor" sign on their door and bid against us.
Thus, I was drawn to the customer loyalty still embedded in the residential world and went in knowing there would be significant challenges to make it profitable.
rAVe: What steps did you take to enter the HomeAV market?
DG: In assessing the Home AV market around me, one perception rings loud and clear – this is a fast growing business with a lot of opportunity for the right kind of company with financial resources to stay the course and get over the bumps. Most of what I found were smaller operations following one project to the next with their checking account requiring replenishment in order to take the next job. Then there are the bigger retailers trying to get in, but unable to build a quality team of sales and installation professionals. There is also a bounty of trunk slammers working from their house – selling the job and installing it.
As a customer, you can't get good service from the big stores and you have to hope the small company you choose doesn't go out of business after they install $100,000 of complicated AV gear in your home. You are also taking a big risk with the one-man show since one day he will surely decide it’s time to get a real job again.
So I decided there was a place for us in this market. Because I already had a vast amount of resources within the company, I decided to make a large investment in something no one else had in this area — a showroom. The perfect building was on the market one mile up the street on the main road in an affluent town. When I first walked in, I immediately saw theaters and vignettes unfolding before my eyes. I bought the building and within weeks found Jim Ares, the best person I could have imagined to run the division.
Ironically, the day we started work on the building, my assessments of the residential AV market were becoming reality. A small but well known custom integrator ran out of high end projects and filed for bankruptcy. We hired their top technician. Another company was having troubles; their techs heard about us and showed up one day in a van looking for jobs. A trunk slammer showed up at our door and said he wanted a real job selling systems and not putting them in as well.
I had to question how it was that a company in such a "high margin" business could go out of business. Then a year later another more established integrator in Boston went out of business. On the one hand, it's exciting to get opportunity to hire more talented, experienced people and see less competition. But on the other hand, it also should make anyone realize that this is a tough business to make money in — even with high margins. The reality is, the costs of running a residential operation are very high and margins have to be high if you are going to stay in business. You have to be extremely attentive to daily operations and keep a watchful eye on the people you hire.
rAVe: Describe the Expo — what is there, how large, what was the investment you made in it?
DG: The Home Entertainment Expo is located in a unique homelike building in Sudbury, MA. The front portion is a historic home built in 1699, with wooden beams, a sagging ceiling, warped floors and an old brick fireplace. This area houses the offices. The remainder comprises 8,000 square feet of showroom space in a five-year-old building that has the look and feel of a colonial home. Everyone that comes in this place is immediately taken by a feeling of comfort and relaxation. They are happy to be there and soon overwhelmed in the excitement of the technology. Of most importance is how it caters to what we call "WAF" – wife acceptance factor, great for the husband who wants all this stuff but is often shut down by his wife who doesn't understand it and does not support the purchase.
We have a high-end theater valued at more than $200,000, and we have an entry-level theater valued at $12,000. We have several home theater projectors on display in our lower level, each in its own small theater environment. We have big screen DLP and LCD TVs on display in family room environments and a wall of plasma and LCD flat screens in every size. We display home theater chairs, storage cabinets and TV stands. The showroom is equipped with two different whole house audio systems controlled via keypads and Crestron wall-mounted LCD displays.
Lighting is all controlled Lutron Homeworks via keypads and Crestron controllers.
The idea of the showroom is to get the consumer excited about implementing AV technology within their home. Once they can see it and touch it themselves, it’s much easier for a sales consultant to help them believe they really can have all of this in their own home, and understand why it is a wise investment in their personal enjoyment, and of course, the value of the home.
rAVe: What percentage of your business is now HomeAV?
DG: Currently it comprises only 10 percent of our overall business. We are in the “grow slowly and wisely” phase of the operation. I suspect that percentage could increase each year by up to 5 percent.
The main factor in growing this sector of the business is building a team of technicians, project managers and engineers to deliver on the business opportunity your marketing team brings in. With the power of the showroom – and a comprehensive targeted marketing effort led by Helene Andersen, Director of Business Development, we can bring a steady and increasing flow of the right customers. The bigger challenge is growing an efficient and talented organization capable of responding to those opportunities.
rAVe: What have been some of the best rewards from expanding into HomeAV?
DG: The excitement that goes with any business providing products directly to the consumer. Suddenly everyone is interested in what I do and how my business is going. In commercial AV, the interest level amongst friends and acquaintances in what I do typically stops right after the third sentence. In residential, I get stopped everywhere I go with questions about what's the latest great thing to get and I always get compliments on my store.
rAVe: What have been the greatest challenges?
DG: There are plenty of challenges in this business and mistakes can be very costly. Building a solid team of installation professionals is challenge #1.
You can find a few good experienced people, but the rest you have to build yourself. Your techs deal with people in their homes, so not only do they have to have the skills to do the job, but they have to be able to talk to people and make them feel comfortable with you in their home. I've been told that some of our customers will literally stand there over the techs’ shoulders the entire day watching everything he does, asking questions one after another and somehow still expecting the guy to work and finish the job. That doesn't happen in ProAV. You can imagine what that does to productivity, but how do you teach a tech how to be friendly but also how to let a customer know nicely that they need to go away and let him work?
Another challenge is preventing mistakes and dealing with them when they happen. Ever had a tech drop a plasma screen in a conference room? Maybe you have to repair the plasma for a few hundred bucks, but when you drop it on a homeowner’s brand new hardwood floor creating a dent, you have to absorb the cost of removing all their furniture, sanding down the entire floor, fixing the dent, re-staining and varnishing. Profit – gone and then some.
When the customer complains about our labor rates, I explain to them that we deal with expensive equipment in expensive homes and that requires well-paid, highly-trained, experienced technicians. Whether it is an existing home or new construction, considerable care and detail must go into every installation to avoid costly mistakes that we will no doubt be held responsible for should they occur. Thus our hours and rates are often greater than what you might see in a commercial installation, or that of a competing big chain retailer. If they cannot get comfortable with that and expect us to reduce our rates or time estimates, it’s time to let the customer go elsewhere.
Even better is when your tech moves the 12-year-old TV to get to the cable feed and in doing so, something that's probably been waiting to break for three years finally goes. Guess whose problem that is? The customer blames you and expects you to get it fixed. Welcome to residential AV. It's a great place to be when things are all going well, but there are times when you just say – "Why did I do this?"
Last, and probably the most important challenge – getting paid. You need signed contracts, deposits and payments outlined in contract and you don't go to the next stage without payment. Some consumers are great, but there are many out there that will withhold tens of thousands until you label the last keypad and when you do that, they will come up with another reason not to pay you. There are people that enjoy the power of owing you money and you have to have policies that keep you in the driver’s seat. Rest assured, the one time you let your guard down with a sales rep who insists his customer is good for it – you will get burned.
rAVe: Do you think ProAV integrators have any advantages in entering this market over strictly HomeAV integrators?
DG: I think good ProAV integrators have a lot of advantages if they can be properly leveraged. You've already gone through the business of building an installation team. You can take that experience to build the residential team, but don't expect to use your commercial guys in residential. Most want nothing to do with it.
They also require two entirely different approaches. In commercial, it’s get in and out as efficiently and quickly as you can. In residential, there is a lot of thinking time on site, and you have to work carefully and meticulously. Everything has to be made super easy for the customer to operate. They aren't going to read manuals. They want you to show them how to do it and when there is a problem – they expect you to come fix it, not talk through it over the phone.
Most also don't understand the meaning of the phrase "Service Contract" either. They think it means once they buy from you – you are bound to come back to their home free of charge for life.
Infrastructure is also key benefit to a ProAV dealer crossing into residential. You don't need new accountants, new software programs, or new shippers. You can borrow techs from residential and use them in commercial if need be. You can leverage existing vendor relationships to help you with residential vendors and you can use your history to provide good credit refs to potential new vendors.
Beyond those factors – it is an entirely new business. You need someone else to manage it, not the same person who runs ProAV. That person needs an admin. You will need a separate residential design engineer, separate project managers and separate sales people specializing in residential.
rAVe: Who are your target markets and what are the differences in working with them and marketing to them?
DG: Whether working with a builder, architect or designer, you always end up dealing directly with the homeowner. You market your services to those people because they are there with your target customer and thus those relationships are key to a business' success. We utilize our showroom as the primary marketing tool for each. We run seminars, and create social events to bring these people in. When they see what we can do and experience the showroom, they realize that by bringing their customers here – we make them look good. We also have special programs designed for each sector that give them great incentives to encourage their customers to do business with us.
In terms of direct consumer marketing, you can't possibly afford to market to the masses like the big retailers do. 90 percent of the people are not your target audience and will never buy from you even if they do come in your store. You have to decide who you are and who your customer is and that's who you target.
You can't do business with everyone. If you advertise blowout prices on plasmas, you may bring in more customers than were shopping at the big retailer or on the internet, but then the customer looking for a $100,000 theater may think you are a low quality retailer and not come in. But if you only have expensive equipment, the average consumer wont step foot in your store. The truth is, often they can do just as well on a good plasma screen as they would in the big retail store but they are afraid to come through the door. The challenge is figuring out where the line is that will bring in that customer but not scare away the other one. It may not be possible.
rAVe: What advice would you give other commercial/ProAV companies considering entering the HomeAV market?
DG: Don't go into it because you see big fat margins and think you can get a piece of it. The margins on the list prices appear to be profit, but there are many seen and unforeseen expenses that eat into those profits. You need to be realistic about the actual costs of doing business and plan accordingly.
I remember when a good friend of my father’s sent a proposal he got from a custom integrator for a theater and some plasmas in his home. It was all Runco plasmas and projectors at list price. I thought – man is he getting ripped off. I told him I could get him a cheaper plasma and projector and he was overpaying. Thankfully, he didn't listen to me because at the time, I didn’t understand the custom home integration business. Now, I understand that it wasn’t out of line in the least.
The biggest mistake you can make is offering that customer your products cheaper and stepping into that house thinking you just hit pay dirt. You will be the one redoing his hardwood floors and wiping up the dust with the shirt you just lost. If you are going to do it – do it for the right reasons and go all the way. You have to first want to be in this business, then be prepared to lose money while you figure out how to do it right – one customer at a time. If you can get past that and still like it, you will also have figured out how costly it is to be in the business and suddenly those list prices and high margins won't look high – they will look necessary to your survival.
For more information about Adtech, go to http://www.adtech-sys.com/
For more on the Home Entertainment Expo, go to http://www.homeentertainmentexpo.com
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Well, that's it for this edition of rAVe! Thank you for spending time with me as we muse the industry's happenings. To continue getting my newsletter, or to sign up a friend, click the link below. To send me feedback and news tips, don't reply to this newsletter – instead, write to me at gkayye@kayye.com [forward-Click here to forward Gary Kayye's rAVe to a friend] [subscribe-Click here to subscribe] A little about me: Gary Kayye, CTS, founder of Kayye Consulting. Gary Kayye, an audiovisual veteran and columnist, began the widely-read KNews, a premier industry newsletter, in the late 1990s, and created the model for and was co-founder of AV Avenue – which later became InfoComm IQ. Kayye Consulting is a company that is committed to furthering the interests and success of dealers, manufacturers, and other companies within the professional audiovisual industry. Gary Kayye's rAVe was launched in February 2003. The new rAVe Home Edition co-sponsored by CEDIA launched in February, 2004. To read more about my background, our staff, and what we do, go to http://www.kayye.com Back to top
Copyright 2005 – Kayye Consulting – All rights reserved. For reprint policies, contact Kayye Consulting, 400 Meadowmont Village Circle, Suite 425 – Chapel Hill, NC 27517 – 919/969-7501. Email dharrison@kayye.com Gary Kayye's rAVe contains the opinions of the author only and does not necessarily reflect the opinions of other persons or companies or its sponsors.
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