Customer Confusion on Dealers’ Minds as Ultra HD Rolls Out

The Los Angeles market is showing support for Ultra HD, said Joseph Akhtarzad, president of Just One Touch Video & Audio Center, Santa Monica, Calif., who said he has sold multiple Sony and LG 4K TVs, despite the $25,000 and $17,000 price tags. Akhtarzad had an exclusive on the LG sets for the first 60-90 days after the October launch and sets sold “extremely well, exceeding all numbers,” he said. LG had to send more sets by air freight from Korea to satisfy demand, Akhtarzad said. He wouldn’t disclose sales numbers for “competitive reasons” but other dealers said Akhtarzad’s stores have sold more than 100 of the 84-inch LG sets.

Just One Touch already has a waiting list for the next round of Sony 65-inch ($6,999) and 55-inch ($4,999) models due out next month, and he said a Sharp 70-inch Ultra HD model is due in August in the $8,000 price range. He attributed the interest to entertainment industry clients -- producers and directors -- “who want to see how their movies look in 4K.” He expects to have “half a dozen” 4Ks on the floor by later this year. Akhtarzad’s three stores have used Sony servers for demo material along with the Sony upscaling Blu-ray player. Seventy percent of 4K TVs sold by the retailer have sold with the upscaling Blu-ray player, he said.

Sharp didn’t respond to our questions about an upcoming 70-inch model, and the company’s presence at HTSA was skewed to the audio side of the business. While Sharp and Pioneer’s Elite brand would be a logical launching point for Ultra HD, Elite dealers we spoke to were in the dark about plans for an Ultra HD model in the line.

David Young, president of The Sound Room in Chesterfield, Mo., told us he believes Elite “is going away.” There’s been no discussion of new products and Elite contacts “are being tight-lipped,” he said. Young lamented the lack of fresh product in the Elite line, citing “a lot of loyalty” to the brand from consumers dating back to the Pioneer Elite days. Elite TVs “looked better than any other set,” he said, and were the “closest thing to plasma,” which is currently the Sound Room’s benchmark for video picture performance.

Young said The Sound Room will look at Ultra HD “when prices drop.” The retailer’s current premium TV is Sharp’s $9,000 90-inch LCD model, a price point where Ultra HD needs to be before The Sound Room will take it on. If a customer wants to buy a 4K TV, “we'll get it,” Young said, but until there’s enough content to support the technology “it’s not going to be a big deal for us,” he said.

The staff of Gramophone in Timonium, Md., left CES in January “without a clear picture of what the future of Elite was,” President Brian Hudkins told us. And time is ticking for the pre-eminent brand, he said. “Elite either has to have Ultra HD ASAP or there’s going to be no position for it,” he said. Sony’s 55-inch and 65-inch Ultra HD TV model, due out in the next few weeks, are in the same price range as the 60- and 70-inch Elite LED-lit LCD models, he noted.

Several dealers told us they think Sony’s pricing of the smaller sized Ultra HD TVs is too aggressively for a performance product. At $7,000 for the 65-inch model, “It’s a little low,” Hudkins said. “We could sell it for more.” Gramophone has gotten “a lot of interest” in the smaller 4K screen sizes, he said.

Some dealers were concerned customer confusion over new TV technologies could cause them to pull back from the market altogether until a clear winner emerges. David Berman, general manager of Stereo East, Dallas, said consumers are confused and wary over the differences in OLED, 4K and 3D as TV makers “try to reinvigorate the TV market.” A $25,000 84-inch 4K TV today will follow the same trajectory as plasma TV, only faster, he maintained. “Three years from now, they'll deliver three-point margins and nobody will care,” he said.

Craig Abplanalp, vice president of Definitive Audio, Bellevue, Wash., took the long view on Ultra HD, citing lack of content to take advantage of the high-res displays. “It will be a long time before NBC, ABC and CBS are broadcasting in 4K,” he said. And consumers are wary, he said. There will always be a limited number of affluent early adopters who want the first new technology to roll off the line, but a growing number of consumers are wary about “buying the first one,” he said. “They're concerned about being burned by something that’s going to go out of favor,” he said.

At The Little Guys, outside of Chicago, Ultra HD is on display as a kind of “museum piece,” said co-owner Evie Wexler. At current price points and without content, Ultra HD “isn’t reality yet,” she said, but it’s a “cool future product” that generates excitement among customers. The selling price of an 84-inch 4K TV needs to reach $10,000-$12,000 for The Little Guys to do significant business with it, said co-owner David Wexler. The store’s current top TV model is the 90-inch Sharp TV at $10,000, “and that doesn’t look as good,” he said.

While The Little Guys has promoted 4K as a way to get consumers into the store, “it’s a fine line” to walk, David Wexler told us. “We don’t want people not to buy a TV now” as they wait for prices to come down on 4K, he said, but displaying the product “opens the door for upscale sales.” In addition, talk of OLED adds confusion to the picture, Evie noted. That battle could be good for business as customers come in to compare pictures, David said. “But it could also prevent them from buying” until they see which one wins out, Evie told us.

One dealer who asked to remain anonymous told us he’s not sure the value of 4K will be readily apparent to consumers in the smaller, more affordable screen sizes. The advantages of 4K from a projector throwing to a 120-inch screen are “dynamite,” he said, “but as you get down to smaller sizes the selling points have to be more than about pixel density because at those sizes you can’t see the difference,” he said.

Hi-Fi House, Broomall, Pa., is using Ultra HD to bring customers into the store, CEO Jon Robbins told us. The store has held two events drawing more than 100 customers each. “Ultra HD is a true opportunity for us,” Robbins said. Robbins sees Ultra HD’s rollout through specialty dealers as a chance for HTSA-type dealers to have the exclusivity they didn’t enjoy when 3D launched. With Ultra HD, “Vendors understand they need this channel,” he said.