The magic of home cinema

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The home cinema market has undergone something of a revival over the past year or so. That’s not to say that we are seeing a return to the heady days of home cinema when systems were flying off the shop shelves, but the recent downward trend in sales has shown signs of being reversed.

GfK reports that sales of home cinema systems reached 582,000 units for the year ending December 2007, compared with 512,000 pieces for 2006. Market value for the same period was £142.8 million, compared with £124.3 million for the previous twelve month period. Even average price managed to rise, albeit from £243 in 2006 to £245 in 2007.
So what’s caused this (albeit, small) change in fortune? The answer is: a combination of factors that include the rapid growth of large, flat display televisions, which is fuelling a demand for bigger and better pictures on the TV screen, greater affordability, and manufacturers launching a new range of products that make home cinema even easier to set-up – and which don’t dominate the living room to the same extent as older systems once did. The space-saving developments include sound bars, like Samsung’s HT-X810R, and new types of stands like Sony’s RHT-G1500 system, which integrates a 5.1-channel surround-sound system into a television stand – there’s no need for extra speakers. Simon Storey, Samsung’s product manager for DVD/HTS, says: “Home cinema sound bars are great for consumers looking to save space in their living room. Fully wall-mountable, and with a gloss black finish, the X810R looks the part, which is becoming increasingly important to today’s consumers.”  Panasonic says the number of consumers asking for TV home theatre systems is increasing due to the amount of space that this saves. As a result, Panasonic has launched two home cinema TV stands, the SC-HTR210 and the SC-HTR310, both of which feature 3.1-channel sound.
The impact of HD
Sales of HD ready flat display sets, plus an increase in the availability of high definition content has also helped drive home cinema system sales – and given retailers an opportunity to persuade consumers to trade up. Many home cinema systems, such as JVC’s TH-G30, NX-F7E and NX-F3E are DVD-based systems with an HDMI output that offers 1080p up-conversion. So are Samsung’s HT-X710, HT-X715 and HT-TX715 systems. “This feature is popular with home cinema enthusiasts and it adds a new dimension to your DVD collection,” says Steve Carter, JVC’s product specialist manager.  Now the high definition format war between Blu-ray Disc and HD-DVD has been settled, Blu-ray-based home cinema systems are emerging onto the market. These include JVC’s NX-BD3, Panasonic’s SC-BT100 and Samsung’s HT-BD2R. “High definition is becoming increasingly important for consumers. The advances in the television market, with all the messaging around high definition means that customers want devices that allow them to maximise their television’s visual capability,” says Samsung’s Storey, who adds that upscaling helps fill the content gap while the Blu-ray library of titles increases.
Simple solutions
Ease of use has also helped home cinema system sales to grow. The concept of home cinema used to have an image problem and a system was seen as something that was difficult to set-up and involved festooning the living room with speakers and cables. If many older home cinema systems were ‘in your face’, today’s are more about being ‘in their place’, and blending in well with the home decor. The rise of 2.1-channel systems, like Sony’s DAV-F200, has helped changed the picture. These systems can’t offer the same impact as a full-blown 5.1- or 7.1-channel system but they are nevertheless very impressive and offer a neater, simpler and less obtrusive means of getting home cinema in the living room.
Samsung’s Storey says other factors have helped too: “The introduction of HDMI cabling makes life far easier for customers when it comes to setting up their home cinema system as the picture and audio are sent via the one high performance cable. HDMI – CEC technology also allows customers to benefit from Samsung’s Anynet+, which enables customers to control multiple Samsung devices with one remote through the HDMI cable.” Storey adds that advances in wireless technology mean that customers no longer need to run cables around their living room.
Samsung’s HT-X715 is a 5.1-channel home cinema system with wireless-ready rear speakers. By using a simple wireless accessory (the Samsung SWA 4000) users can have high quality audio wireless streamed to the rear speakers. Incidentally, the wireless receiver works on a dedicated wireless frequency, so won’t interfere with other wireless devices around the home. Panasonic has introduced auto set up functionality on all its top-end systems and there is a Viera link function, which enables consumers to operate the various home cinema components via a single remote handset. All this has helped make the home cinema experience even more enjoyable and easier to sell to consumers.
Future developments
Looking ahead, Samsung’s Storey says that in 2008 Blu-ray will become an increasingly popular technology as consumers want to maximise the potential of their high definition televisions with superior audio and visual quality. “I expect to see an increase Blu-ray home cinema systems on the market as we move into 2009,” he adds. Another key trend driving the home cinema market is style and design. “This has been becoming increasingly important in the television market and consumers now want their home cinema system to complement their living room aesthetically,” notes Storey. 
The audio market
There have also been major developments in the audio systems market. “Sales of micro, midi and mini overall have been stable,” notes Paul Robinson, Philips’ marketing manager for audio and connected audio, “but what you have seen is a shift in product category and sales of products not keeping up with the trends have suffered.” By recent trends, Robinson means the convergence of the PC and the home audio system, “People are now more likely to listen to music with a PC-type source,” he adds. These devices include the ubiquitous iPod, MP3 players, PC music libraries and online music sources like iTunes. That’s why many audio systems now include iPod docking as standard. “Having an iPod docking channel has become an essential,” says Panasonic, while JVC was one of the first to offer such a facility on its audio systems. “Consumers want the option of playing their iPods both in and out of the home,” says JVC’s Carter. You can see the attraction: why settle for changing a CD every so often, when you can play thousands of tracks stored on your iPod? JVC’s NX-PN7E system is a smart-looking double dock unit that can play and charge two iPods simultaneously. Philips is launching the DC910 iPod docking system later this year, which will include a removable stand for wall mounting and also rotate an iPod in both portrait and landscape positions, as many iPods play both audio and video. “It’s very easy to overlook the value iPod docking offers; it’s a big pull towards the product as iPod docking is essential for many consumers,” says Philips Robinson.
Some systems also offer USB connectivity, with consumers able to plug a USB stick or USB device into their audio system and play music, although Philips’ Robinson is not convinced that many consumers actually use this facility. However, flash memory and hard disk technology are finding their way into a growing number of audio systems. JVC’s UX-DM9DB has an internal memory store that holds up to 500 tracks while Sony’s NAS-SC55PKE system has an 80GB hard drive that can store up to 40,000 tracks. “Hard disk technology is fascinating and how it sells depends on how people are consuming music,” says Philips’ Robinson, “if they have a PC music library then they are more likely to opt for an audio system with hard disk storage.” Wireless technology is also available on some audio systems, like Philips’ Streamium-branded product, the WACS7500. It has an 80GB hard drive that stores around 1500 CDs and uses a super-fast CD ripping system. “The beauty of systems like this is that you have a single music library – there’s no need to move CDs between rooms,” says Philips’ Robinson, “you have one source and other devices around the home to access it. Nobody likes having wires all around the home.”
The impact of DAB
DAB is finding its way into more and more audio systems, which Philips Robinson describes as a “big positive” for audio system sales. Conventional audio formats like the CD, LP and tape still have their place in many audio systems, with many consumers still owning large libraries of these older formats, and also viewing tape decks and CD decks as value-added features. “CD and tape are still very much around,” says Philips’ Robinson. Likewise, there has been a vinyl resurgence and sales of midi systems reached 150,000 units in 2007, a year-on-year rise of almost 33%. There are even USB turntables that enable users to transfer LPs to their PC hard drive.
One of the results of the move towards the newer music formats is a change in the way audio systems look: “It’s a really exciting time for the audio system,” says Philips’ Robinson, “once music is all-digital you can move away from what might be described as older industrial designs and focus on new features and new designs.” New music formats, new features, new ways of playing music and new designs all add up to the fact that the audio market is moving forward and is still a significant player in the consumer electronics market.

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