Point of View: Electronics economics

Richard Stevenson takes umbrage at some sweeping generalisations aimed at the AV market

I was propping up a bar after a conference earlier this month and found myself speaking to a man who referred to himself as ‘a banker’. We live a public space that makes bankers about as popular as Die Hard’s John McClane wearing that sandwich-board sign on the streets of Harlem, so fair play to his admission. However, on enquiring about my line of work he noted that I must be worried because ‘that niche end of the electronics market is a dinosaur dying on its arse’.

Damn, he went down hard. I was overcome with a sudden, violent sneeze that to the casual observer may have been mistaken for a well-aimed Glasgow kiss. As he lay there on the floor clutching his nose, I noted that home cinema was set to be a key factor in global economic recovery, that it would single-handedly save the music industry and was a driving force in the roll-out of local renewable energy generation.

Economically, Blu-ray sales were one of only two established consumer electronics-related sectors that achieved double digit growth in 2011, the other being tablets, of course. According to the Digital Entertainment Group, BD discs were up 11 per cent, grossing some $2bn throughout last year. Another $1.9bn was spent on video on demand content – mostly movies. As there are only seven billion people in the world, that is equivalent to every man, woman and child on the planet spending 50 cents a year watching home cinema content. As digital distribution continues to grow and projects like UltraViolet (maybe...) get off the ground, home cinema-related expenditure will be an ever greater percentage of the world’s GDP.

Hi-def hijacking

The music industry has been in a state of flux for some time and is desperately seeking ways to monetise content that consumers can otherwise share with each other for free. By hijacking Blu-ray, media publishers can pack in 5.1- or 7.1-channel surround sound, music videos, hi-def concert footage, interviews and special features. Not only does music on Blu-ray command a premium over a CD or MP3 download, it is a whole lot harder to copy for the average user and the huge files size make it far less convenient to share.

And there are plenty of people prepared to pay extra for better quality, too. Just look at the rise-and-rise of premium car brands like Audi, Mercedes and even Aston Martin. For music that I really want to listen too, given the choice of an uncompressed 192kHz/24bit stereo recording on Blu-ray for £20 or a torrent downloaded MP3 for free, it would be the paid-for Blu-ray every time. I consider services like Spotify, lastFM, Pandora and even basic file sharing as the new ‘radio’ – introduction services guiding my purchasing of premium content. With DRM a joke and small MP3 files easier to share than a pack of Wrigley’s, I find it amazing that services like iTunes don’t yet offer a premium high-resolution music download service. If rhetoric from this year’s D:Dive into Media technology conference is to be believed, artists like Neil Young are working with Apple to develop just such services and new generations of ultra-iPods to play them on.

Then there is home cinema fuelling local renewable power generation. Okay, I might have been getting to the tenuous end of my argument at this point but I have personally installed some solar PV panels to assist my gratuitous electricity consumption. All I need now is eight inches of snow to melt and uncover them.

By which point a crowd of people had gathered around the prone figure, mostly giving me stern looks and fingering the ‘9’ key on their mobile phones. ‘He’s a banker,’ I blurted. There was a small ripple of applause and they dispersed.

Are you spending less on your home cinema hobby than before?

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The column first appeared in the May 2012 issue of Home Cinema Choice