Beyond the Clouds
4K UHD Eye Candy Stokes a Market
Despite limited content, the advent of Ultra HD/4K television, with OLED waiting in the wings, is allowing dealers to sell the sizzle of high-end video. “Pricing came down to ‘reasonably overly expensive products’ versus ‘unaffordable,’” Stephen Baker, NPD’s vice president of industry analysis, said about 2013. That is helping to drive momentum.
Tom Hickman, Nationwide Buying Group’s senior vice president of electronics, added, “Anytime we have a product that offers a demonstrable picture quality difference, that’s good for our business.”
2014 will bring more Ultra HD/4K options in vendors and size, while dropping prices will generate more consumer adoption and build higher ASPs .
“In 2014, we will see 4K available across all sizes, as small as 46-inch,” said Joseph Akhtarzad, vice president of Video and Audio Center in Santa Monica, Calif., and president of the custom division Just One Touch. “That is exciting.” (Panasonic might be exiting the plasma business but it is bringing its $6,000, 20-inch 4K Toughpad tablet to the U.S.)
The 4K content chokepoint is slowly loosening, with Samsung offering current owners and future buyers two IMAX films on a hard drive, Sony offering an 4K Ultra HD video download service, and Netflix floating 4K content trials.
(Digital photography focused Adorama in New York City is demonstrating 4K televisions with movies and still images from 4K-capable digital cameras as a way to showcase the entire product ecosystem.)
Major retailers’ increased adoption of Ultra HD/4K will promote the technology and increase consumer awareness. “Anytime you can offer product with a higher ASP and some margin, it’s good for everybody,” said Hickman, even though he and other retailers know the prices will drop.
Retail video pricing in 2013 was more stable, as vendors refocused on profitability, enforced unilateral pricing policies, and used instant rebates for selective promotions, not as daily pricing adjustments. ASPs declines were “pretty minimal,” said NPD’s Baker.
While enjoying the market’s relative calm, BrandSource CEO Bob Lawrence said, “You know what’s going happen: sometime in the next few years, people will start getting hungry, and we’ll go right back to the same cycle.”
Nationwide will avoid pricing promotions in 2014 and focus instead on financing promotions. “That seems to definitely drive business,” Lawrence said.