rAVe: Kayye's Krystal Ball – 2011 Edition
January 6, 2011 by guest author, rAVe Publications
A terrific partner post from rAVe’s Gary Kayye, looking back and ahead – with the focus on the AV side …
I simply cannot believe that I’ve been writing this for 12 straight years! I spent more than five weeks on this particular version of my annual Kayye’s Krystal Ball feature article due to the fact that the continued economic issues that have plagued our market, the growth of emerging markets (each discussed below) and the advancements of new networking technologies that have finally made it possible to have completely network-based AV systems.
So, welcome to the 12th Annual Kayye’s Krystal Ball, including my personal predictions for the upcoming year for commercial AV, and even some HomeAV technology, trends and products. If you’re a regular reader of this column, then you know that each year I actually start by reviewing my own predictions from last year’s column (Kayye’s Krystal Ball for 2010 ran in the December 28, 2009 issue of rAVe ProAV Edition).
Why do I do it this way? Well, when I was a kid I loved TV and always loved watching those TV psychics sell their predictions to viewers who were willing to pay for such services – all the while I was the ultimate skeptic. Every year, they would reappear on TV selling the next year’s predictions. But I could never remember what they predicted the previous year so that I could truly evaluate their accuracy. I always wanted them to remind us of their predictions from the previous year so I could see if it was worth the price – in case I ever needed to know what my future held.
However, in this case, I’m free. You didn’t pay to read this, so keep this in perspective. But, if I may say so myself, over the past eleven years, I’ve actually done a pretty good job – or at least I’ve been really, really lucky.
So, on to the review of the 2010 predictions and then I will jump into my predictions for 2011.
My first prediction for 2010 was that money would be flowing again – but only in limited applications. Specifically, I predicted three areas that would spark the AV economy in 2010: the government spending, GreenAV and videoconferencing. Well, well, well, what do you know, I pegged this nearly 100 percent. Although the government spending was on target, they didn’t upgrade existing AV systems — but, they did do a lot of new ones. GreenAV finally took off and was a central theme around both the InfoComm and CEDIA shows this year – with over 30 manufacturers showing or pushing GreenAV product solutions. And FINALLY!!! Videoconferencing is HOT! The top two VTC manufacturers both reported record sales of HD and even telepresence-based VTC systems. The only problem is that we, the ProAV market, are still not their drivers into the market – IT is. We’re going to fight that, however — read on and you’ll see why.
The IT Factor: I predicted that we’d see networked-enabled AV systems hit 20 percent of the market in 2010. Well, call me two for two so far. In 2010, the ProAV market finally started to see the value of network-centric AV systems for remote management, monitoring and maintenance. In addition, our share of the digital signage systems market grew (and that’s a market that’s nearly 100 percent network-based). So, we’re at about 25 percent – but that’s well below the IT market’s share leading 80+ percent of the network-based AV installs.
2nd Generation LED-based Projectors: I predicted that although LED-lit projectors were underwhelming in 2009 with the first generation of dimly lit portable projectors that the second generation would have a bigger impact on our market. No question! Not only have we surpassed the 1000 ANSI lumens market with nearly every LED-lit DLP projector on the market, we’re pushing 2000 lumens. We won’t see the entire lamp market switch to LED in LCD and DLP projectors in 2011, but you will see at least 40 percent of the installs in 2011 switch to LED-based projectors – so if you’re making a mint selling replacement lamps, work to find a new market niche by 2013 – hurry!
Speaking of LED-based LCD: Back in 2009 when I wrote my 2010 predictions, two MAJOR manufacturers told me that they were merging consumer and pro LCD monitor production in 2010 but to not push that one too hard. Why? Well, if your clients knew that the 50” LCD commercial monitor they purchased was actually the exact same TV (other than cabinet design) as its consumer sibling over in Best Buy, they wouldn’t pay for it. So, although this one wasn’t much of a prediction — it was more of a gimme — a freebie, compliments of the #2 and #4 LCD manufacturers at the time. Well, 2011 is the switch over year — all but two manufacturers’ consumer LCDs and pro LCDs will be IDENTICAL. I see this as a good thing as it will simplify distribution but, more importantly, will force AV integrators to focus on the services they sell rather than the gear.
Plasma Will Continue Its Imminent Death: In 2008, I predicted that plasma production would all but cease by the end of 2011 and in my predictions for 2010, I stood by that. Well, 3D technology has actually helped plasmas hang around longer than I originally thought (especially in the consumer market), but since I think 3D is a fad that won’t last (at least in the consumer market), this has just delayed the inevitable a little longer. Sure, you’ll see giant 100” and above plasma have a market niche beyond 2011, but, by the end of 2011, plasma will be impossible to find in sizes 60” or below.
Speaking of Shifting to a Service-based Sales Model: Last year I pleaded with readers to take a look at a new service from NEC called VUKUNET. It let ProAV integration companies take advantage of the other 80 percent of the digital signage network business we’ve never captured: advertising. Well, NEC used 2010 to sign up ad agencies and commercial AV integrators to the VUKUNET and ADVUKU platform and they told me, just last month, that they will roll it all out in 2011. So, if you’re interested in learning how to take a chunk of the profitable services segment of the digital signage market, check it out. And, best part about it, you can keep buying displays from Sony, Sharp, LG, Samsung, Mitsubishi, etc. — VUKUNET doesn’t require you to be an NEC dealer, and also doesn’t require an NEC-branded display or media player.
Cat 5/UTP Domination: I predicted that both Crestron and Extron would roll out Cat5-based network-centered AV systems – not just routing video via Cat5 — networked AV. Well, both did — Extron in the form of its acquisition of Electrosonic and Crestron with its launch of their DigitalMedia system at InfoComm. Although IP-based videoconferencing was the first network-based AV stuff, both the Crestron and Extron systems marked the AV industry’s foray into marrying legacy systems (analog stuff) with new technology content (network-based audio, video and presentation content). No question 2011 will be a big year for AV over the net — as you will see below in my 2011 predictions.
Acquisition Fever: Last year, I predicted that because so many companies were under-valued and in financial trouble, there would be dozens of “mergers” in the dealer channel in 2010 and even some manufacturer consolidation in 2010. Well, I got this half right. Logitech bought LifeSize, Cisco bought Tandberg and Panasonic bought Sanyo. But, the dealer consolidation was minimal – in fact, many of those struggling integrators went out of business rather than consolidating. Missed that one.
Social Media Marketing Goes Mainstream: I predicted that we’d all be using social media (Facebook, Twitter, LinkedIn, YouTube) by year’s end. Well, if you’re still not playing in the Social Media Marketing space, you NEED to be. Manufacturers like NEC and Crestron and integrators like AVI-SPL, CCS and Ford AV have DEMONSTRATED success in social media world with all of them even claiming to win over customers and projects via social media marketing. Don’t believe me? Go read their Tweets. Don’t know what that is? Well, that explains why you aren’t successful in social media.
So, my results for 2010: 7.5 out of 9 – not bad, I’ll take that!
Now on to the 2011 Predictions:
3D in Our AV: Everyone knows about 3D in movies and in the home, right? Well, guess what? They’re MISSING THE BOAT! 3D WILL NOT make it in the HomeAV market (remember I said that). It will be a passing fad and will not catch on in America’s living rooms. Sure, you’ll see people with dedicated entertainment spaces (e.g., home theaters) buy 3D capable projectors, but most of us (yes, even us in the ProAV market) won’t actually want or buy 3D unless we’re a big time gamer or a movie buff. Losing the remote control is one thing, but losing the 3D glasses, or worse yet, sitting on them makes for a bummer-laden 3D experience, with one person watching a 3D movie in blurry 2D while the rest of the family sits there with their amazingly uncomfortable $200 3D glasses. By the way, most studies say at least 12 percent of the population cannot even see 3D at all — with some studies saying that number could be as high as 20 percent. That said, there’s a huge opportunity for the ProAV market in 3D and that will become clearer (pardon the pun) in 2011. Everything from 3D science for high-schoolers to 3D graphics design for art majors will require 3D players, 3D displays and 3D systems to be integrated. If you focus on the higher education market, you NEED to become a 3D expert so you can sell this gear as 2011 will be the launching pad for commercial 3D applications.
Networked Systems: IP-enabled AV will move beyond videoconferencing systems and digital signage installs and into meeting rooms, class rooms and lecture halls. In fact, the biggest reason you should get in to the digital signage is, interestingly, not the reason you think (market growth). Yes, the digital signage market has, in fact, been the fastest-growing segment of AV for at least three years running, but the reason you NEED to get into the DS market is so you’ll understand how AV systems content routing will work in the future. As I mentioned above, Extron and Crestron already have networked video and audio solutions, but you’ll see even more from them and a handful of other companies in 2011 who will help you move content via the network while still allowing legacy AV to be routed and distributed around as well.
Technically, the bandwidth we have now on networks is more than enough to do what we traditionally put into meetings rooms totally via the network (with the exception of power). We have enough bandwidth – even with our wireless networks – to route the video, audio, control and presentations content via the network already. But, the real limiting factor is DRM — digital rights management — who owns the content and how can it be stored, played and copied. This slowed down the adoption of HD in the home (e.g., HDMI’s HDCP encryption issues) and is now doing the same in the pro world. But, with more and more laptops, tablets and even phones giving you the ability to send content out their digital-signal based DisplayPorts as well as a file via the network, all we need is media players to play it – and that will come. There are already a dozen of so media players manufacturers for digital signage networks that can play PowerPoint presentations, HD video, MPEG4, H.264 content and hundreds of other file formats. It’s just a matter of time before we see media players for the meeting room.
Oh, by the way, you might want to keep reading as I’ll explain how Apple’s getting into the networked-AV market in a bit.
iPad Control: I was blown away with the sheer number of iPad-based home control options on the show floor at CEDIA this past September. This is coming to the ProAV market in 2011. In fact, I predict that we’ll see more iPad-based touch screen control systems integrated by November of 2011 than ones done with traditional Crestron or AMX touch-screens. Sure, they might not replace Extron’s MediaLink or Crestron’s MediaManager touch screens, but they’ll quickly swallow the $2500 touch screen market. Don’t kid yourself.
Amazingly Bright LED-lit Projectors: 2011 will wow us with LED-lit projectors that will blow by the 2K lumens barrier and into the 3K lumens range; and we may even see a few 4K’ers by year’s end. Lesson: Get out of the projector lamp replacement business as fast as possible. Or, join the association that all those CRT replacement suppliers (and VCR tape providers, pager retailers and fanny pack resellers) belong to so you’ll have an annual trade show to attend, assuming there is still one out there.
LED is not only getting brighter, but it’s got the entire green (i.e., sustainable energy resources) market behind it. Those same people who are forcing auto companies to build high-mileage cars and hybrid vehicles (and who got the incandescent light bulb all but banned in California) have embraced LED lighting as the wave of our green-tinted future. Thus, it’s not just a few specialized projector lamp manufacturers that are out there perfecting LED illumination – it’s the entire light-bulb industry! Still, don’t think LED-lit projectors are the wave of our LCD and DLP future? Well, consider this: over 80 percent of flat panel monitor manufacturing will be LED backlit by the end of 2012. You think they’re gonna skip us? Wrong.
Speaking of Projectors: We’ll see two major developments on the projector front in 2011: bright pico-projectors and projectors integrated into smart phones. Right now, they top out at 200 lumens, but watch for 500 lumen handheld projectors to make their way into Best Buy in 2011. Don’t care? Well, you should care — the low end of the market’s already dead for ProAV integrators and they’re gunning for the mid-range too. And, top that off with projectors being integrated into smart phones in 2011, you may have an industry-killing formula. OK, it’s exaggerating to say it’ll happen in 2011, but you will, too, be wowed by these tiny wonders. It’s prompted a major software manufacturer to buy some 5000 pico-projectors just last month for its traveling sales force. But, don’t laugh it off totally — could you have imaging using the camera in your iPhone or Droid as much as you do now? Well, college kids can — and the entire Augmented Reality Market will — more on that in my 2012 predictions article.
AirPlay: Apple barely mentioned a tiny but powerful add-on to iTunes during its iOS4 launch this past Fall. But, the mention didn’t fall on deaf ears here. I did some research. Basically, simply put, AirPlay is Apple’s protocol for streaming audio, video and control via the network. And, AirPlay is being integrated into everything Apple makes. But, that’s not the interesting thing. What’s interesting is that the company is licensing AirPlay for others to integrate. So, now we have a potentially industry-standard protocol for pushing content via the network. So, if you’re a computer manufacturer (like Apple) you can integrate AirPlay into your network to allow for content (presentations, movies, songs, etc.) to be played to an AirPlay compatible display (e.g., any TV or projector with a $99 AppleTV connected). Don’t think Sony, LG, Samsung or even Dell would integrate Airplay? Think again. Apple invented FireWire — nearly every digital camera and computer had a FireWire port for fast date connectivity for more than a dozen years (until USB 3.0 got faster). Imagine if all the projector manufacturers integrated AirPlay into their displays. Every HDTV manufacturer. Or, every speaker manufacturer integrated AirPlay receivers for content (heck, Jeremy Burkhardt, the president of SpeakerCraft, told me at CEDIA he was). And, what about computer manufacturers? Blu-ray player companies?
Look, I am not saying AirPlay is the industry’s answer to streaming content wirelessly (Oh, did I forget to mention it’s wireless? Well, it is.) across a network, but it’s the industry’s first standardized system from a major manufacturer that’s being offered to anyone and everyone to integrate into sources and displays.
HD Videoconferencing Market Explosion: 2011 is the year you want to be selling HD conferencing. Whether it’s desktop-based or telepresence-driven, HD conferencing is going to EXPLODE in 2011. It will easily see 100 percent to 120 percent growth next year. If you’re not already selling HD conferencing gear, you’d better take the time to set yourself up as a dealer for Polycom, Cisco/Tandberg, Logitech/Lifesize or someone out there who’ll sell it to you as businesses will find a way to pay for this.
Oh, and as with everything I’ve mentioned for the past three or four years, STOP focusing so much on the gear. I know there’s a bunch of you out there who just read that last section and thought to yourself, “hey, why should I do this if they’re bringing HD conferencing systems to the home,” or maybe a few of you out there thought, “I’m not sure I want to get into HD conferencing as it’s so hard to manage.” Duh! That’s the point. Those clients who have this in their home will WANT it in their office and a home-based system isn’t the same as a professional VTC system. Does your IT department use a home network router at the office? (If so, let me know so I can come hack your network and steal your ID.) And, to those of you who think that HD conferencing is too hard to integrate as it’s too network-centric and complex: GET OUT OF OUR MARKET – we love making complex systems simple to interface with!
GreenAV: I’ve already mentioned GreenAV above with my ode to LED-based lighting. But, it’s worth mentioning that the green movement in AV is just barely getting started. We have green lighting control, some green displays and a few green audio amps, but you should take the time to imagine an industry where everything we have with a power connector will have some sort of green version — and many of them will debut in 2011. This isn’t “green-washing,” by the way. We’re moving towards real power savings, cost cutting energy standards and sustainability initiatives that will stimulate our market’s growth in 2011. The government has all but backed itself into a corner and, if you bid green vs. non-green solutions, you can likely guilt them into taking the high-priced GreenAV solution — if it’s not already a law like it is in California and a handful over other states by years end!
And, if you want to make someone feel politically incorrect, start spec’ing all systems with a green-version and a non-green version and see how many corporations, schools and houses of worship can walk away feeling good about buying the discounted non-green solution? Trust me, it’ll work and 2011 is the year to start this.
Integration of Social Media in DSNs: This is a predictions article so I don’t have time or space to delve into the how digital signage networks work — I promise that I will write a couple of columns on how to get into the DSN market as features this year. In the meantime, understand that there are three specific opportunities for the ProAV market in digital signage networks: the gear, the ad revenue opportunity and the creative content production.
Most of you are simply selling the gear and that’s definitely profitable, but the emerging market opportunity for DSNs is the ad revenue — or recurring revenue piece. In 2011, there will be at least two and maybe three ad networks allowing commercial AV integrators to partner with to get a piece of the ad revenue. I’ve already told you about one, VUKUNET, but you’ll see a couple others emerge in 2011. But, the coolest opportunity for ProAV integrators is integrating the content – the creative content. But, to do this, that means you need to actually hire creative people that can create creative content – not just PowerPoint presentation. What I am talking about is the stuff you actually see on digital signage networks — so, hire someone who actually knows Adobe Creative Suite 5 (CS5). And, by the way, make sure you offer the integration of social media in your DSN installs.
InfoComm Will Dominate a ProAV Comeback: InfoComm couldn’t be in a better position than they are right now. It’s clear that we’re starting to finally climb back towards the end of this four-year recession (yes, it’s been four years) and by the time their show rolls around in mid-June, just about every integrator in ProAV will be seeing positive sales. And, for those who’ve gone into the digital signage NETWORK or HD conferencing markets, I’ll guarantee you that you’ll be on a path towards double-digit growth by the time you board your flight to Orlando to attend the ultimate AV tradeshow known as InfoComm. Again, I GUARANTEE you this!
This post first appeared in Sound & Communications.
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