in December 2008
Kayye's Krystal Ball, V.09
By Gary Kayye, CTS
The author reviews how he did last time, and makes projections for the future.
Welcome to my tenth annual Krystal Ball feature, predicting the upcoming year for commercial AV (and even some home AV) technology, trends and products. If you’re a regular reader, you know that, each year, I actually start by reviewing my own predictions from last year (see December 2007); I also review my predictions mid-year (see “Sight Lines,” June 2008).
Why do I do it this way? Well, when I was a kid, I loved TV and always watched those TV psychics sell their predictions to viewers who called in with their credit card numbers. Every year, they would reappear on TV selling the next year’s predictions, but I could never remember what they predicted to see if they were right. I always wanted them to remind me of their previous predictions so I could see if it was worth the price. (I knew my dad’s credit card number.)
In this case, my predictions are free. You’re probably not paying to read this, so keep this in perspective. But, if I may say so myself, over the past nine years, I’ve actually done a pretty good job...or been real lucky.
So, onto the review of my predictions for 2008, and then I will jump into predictions for 2009.
Last Year’s Predictions
• IP-IP-IP: I started my predictions for 2008 by saying we’d see a proliferation of IP-enabled AV devices. I specifically named the digital signage market as being the driver of this.
Well, the home AV market has jumped in on this ahead of commercial AV—a trend I’ve noted in recent years (home AV integrators and users adopting new technology long before commercial AV integrators and users). Most home AV integrators are installing streaming video (or video-on-demand) servers in almost every home they do now. AppleTV, Roku and Kaleidescape are a few of the leading boxes being installed. The commercial AV market is behind in this trend, but I see a big upswing in this segment since Summer 2008, especially in the digital signage niche.
In fact, control, management and content are nearly 100% delivered via IP-enabled AV networks. This has allowed some fairly new players to become market leaders quickly, such as Visix, Roku and Ronin, to name a few.
I would highly recommend that you get into the digital signage market. Why? Well, although the market’s far from mature and still using cutting-edge technology to send and receive content, it’s the identical way you will be integrating standard commercial AV systems (via the network) in the not-too-distant future; this will give you a good understanding of how networked-based AV systems should and will work.
• Control is KEY: I predicted that the control market was close to an evolutionary revolution. There are just too many things lining up in favor of it.
Here was my point: The control system is the user interface to the entire AV-enabled room. You walk in a room full of thousands of dollars of AV gear and, to turn it on, the first thing you have to do is use the control system. Whether it is a keypad, a touchscreen or a handheld remote, you must use something that simplifies the use of the AV room.
But, as technology has allowed for sleek software features, nice aesthetic designs and the use of Windows-enabled drivers, many clients are wondering, “Why can’t I use a $1500 tablet PC to control all this stuff in the room and save myself $5000 on the price of a traditional touchpanel?”
The answer is simple: The key to a successful control system isn’t in the hardware; it’s in the software. Actually, you can use a tablet PC and, by doing that, you will save $4000 to $5000, but who’s going to manage all the control protocols for each of the devices when they’re installed...much less a year later when the customer wants to add a new source to the system?
Ah, but what about this revolution? Well, for 2008, I predicted that more and more products would become IP-enabled (meaning they can be controlled via an Ethernet network port and without custom protocols or stupid RS232 ports); there is standardization of control functions in devices. As that occurs, you will see more control options that are completely network-based.
But, this transition is not going to be complete in one year. Over the next three years, you will see every AV system built go from being primarily RS232, I/O and IR-based control to exclusively IP-based control.
Well, I was only partially right. The control market has clearly gone toward simplification: Look at what Extron has done in the past 12 months, for example. But, that revolutionary change hasn’t occurred...yet. It may be because the cloud AV-based control system companies haven’t finished engineering their software, yet, or it may be that Crestron, Extron and AMX haven’t decided to go totally-network based. But, I stand behind this prediction and believe it will fully transform in 2009. (For information about the cloud AV future and my opinion about where I think this is all going, read about it in my 2009 technology forecast.)
• Gaming projectors drive prices (and profits) down even further: There has been a plethora of sub-$1000 projectors that have driven sales in places like Best Buy, Office Depot and the internet. At first glance, they seem comparable to higher-end, specification-based projectors, but they are far from ruggedized: Many have weak lamps and just don’t hang with what is needed in a classroom or meeting room.
But, some do. This trend of sub-$1000 projectors has destroyed margin opportunities on the entire entry-level and mid-level systems market (at least where projectors are concerned), and will hit the higher end of the market with sub-$2000 projectors in 2009 that are in the 4K light output level!
• Digital Signage Boom: 2008 will be remembered as the year that the digital signage market finally exploded.
Well, this one was dead-on. In fact, there are four digital signage shows now! And, now we’re seeing specialized digital signage integration firms. This is great for the commercial AV market because this, as I mentioned before, is the same network we will use eventually to send content and control integrated systems.
As mentioned earlier, I recommend that you enter the digital signage market sooner rather than later because this is more than a trend: It’s an emerging market!
• LED WOW: I predicted you’d see the first flat-panel LEDs aimed squarely at the flat-panel LCD display market in 2008. Incredible advancements in technology—down to 4mm full-color LEDs—have made indoor small-form-factor LED flat-panel displays the answer to bright ambient light environments. Companies such as Lighthouse and Barco have jumped on that opportunity and, in fact, have worked not only to displace LCDs, but also rear-screen projectors that used to have to be hung in giant cabinets from the ceiling. These LEDs are still price prohibitive (and in most cases way too bright) for your average meeting room application, but you’ll see more advancement in 2009 and, by 2010, expect real competition in the small form factors where super-bright, long-lasting images are a must—and LED power consumption gives it a big advantage to those going “green.”
• Plasma Comeback or Death?: I predicted that 2008 would start the decline of plasma sales that eventually would spell its death by 2011.
The first half of 2008 saw the rapid increase of LCD and a decline of plasma sales.
But, as the recession took hold in the latter half of 2008, most sales tracking firms cite plasma sales increasing because people want bigger for less...and plasma costs as much as 50% less than LCD in same-size configurations. But, this is truly driven by the recession and eventually will come to an end. However, because 2009 will see a full year of a recession, we likely will see plasma sales increasing all year long.
• 3D: I predicted that 2008 would be the year we saw 3D again. Well, the very first InfoComm booth I toured, Da-Lite Screen’s, was all about 3D. Then, I saw 3D displays at Sony, Philips, Samsung, Electrograph, NEC, JVC, Texas Instrument’s DLP division and a dozen other manufacturers featured 3D-based sections there. Some of this is being driven by Hollywood, with more than 30 movies scheduled for 2009 using 3D glasses and technology.
This will spill over into the home for sure and, believe it or not, into the commercial AV space, too. In fact, Da-Lite’s demonstration at InfoComm of the 3D Virtual Black screen material had a number of corporate and educational demos using 3D applications.
• Verticalization: I predicted that 2008 would see a movement of the commercial AV integrator back to an organization based on verticalization. What the heck is verticalization? Well, companies that target specific vertical markets with specific vertical market experts have done quite well. In other words, instead of having salespeople who sell by territory or region, have them sell by vertical market expertise (i.e., education, worship, hospital, government, etc.). In 2008, you saw more and more verticalization than ever before.
The days of selling stuff based on a technical expertise are here. Now, we must become application experts and sell stuff (systems) based on understanding the workflow of the client and how you can add AV technology to improve that workflow outcome. This is a tried and true successful model and makes a lot more sense than breaking out a sales region by ZIP code.
• Distribution: I noted how big and strong Electrograph had grown in 2007 and predicted that it, and the other distributors, would get more of the commercial AV business in 2008. This, in fact, has happened. More dealers are relying on distributors to help them manage inventory needs and cash flow—not directly, but indirectly. Using distributors means that a dealer doesn’t have to make large commitments to manufacturers and can get discount pricing on just about anything.
I see 2009 being a good year for distributors. More and more manufacturers are making their products available via distributors and, as manufacturers crack down on the sell-to-anyone-that-breathes mentality, you will see more dealers turning to distributors. Also, it works both ways: As manufacturers have old inventory to dump to make way for new products, using distributors to blow through inventories is a great idea.
• The Killer InfoComm: I predicted that, with the NSCA Expo gone, you would see the ultimate AV trade show in InfoComm 2008. And, it was! Almost 35,000 people—the most ever to attend any audiovisual trade show in history—attended the show in Las Vegas in June. It was a great event that probably requires another day, though. Three days are not enough to navigate a show this size! I hope the InfoComm Executive Committee will look seriously at making it a four-day show, adding a dealer-only day. We need a true industry-insider show, and making one day only for those of us inside the commercial AV market would be a great start!
• Finally, the Economy: I predicted that the economy in 2008 didn’t look good and that, although we would have growth, it would be less than 10%.
This one was dead-on, too. The economy sucks as I write this in mid-November, and still will by the time this is published in December.
2009 will see a recovery, but not until the second half of the year. But, don’t give up! Watch expenses carefully, but don’t disappear. Cutting marketing is not the way to wade through a recession: Spend money better and smarter, and cut out the fat and the (I hate to say this as blunt as this, but it has to be said) people who should have been cut a long time ago. Work smarter and manage your past relationships better.
There will be a trend toward bigger government in 2009, with the new president, and why not leverage this? We all know and remember what happened in the last recession: Government increased AV spending for itself and education. And, if you will recall, houses of worship spent more, too: They had more as more people went to church to pray about the nervous economy.
Don’t believe me? Here’s proof: During a recent Sunday service, my church’s minister actually announced that financial pledges for 2009 are up more than 10% over 2008, and that is without some 20% of the congregation left to make their pledges.
Our increased taxes will increase spending. Our increased spending will drive more AV sales. Sure, we may not see as much military spending in an Obama presidency, but a lot of money previously spent on wars may just go into spending on education, infrastructure and meeting rooms!
My last prediction for 2008 was that the University of North Carolina would win the 2008 Men’s Basketball Championship: Wrong: Kansas won!
Now, What About 2009?
• Projectors will become smaller: The so-called pico-projector is coming in 2009. We’ve been seeing prototypes of pocket-sized projectors for years, and now it’s close to reality with 2009 looming...and battery-operated, too!
Although this is not going to be a boom for the commercial AV segment, it has a lot of application options to offer with portable projectors that are palm-sized. Promised to be two- to four-hour battery life capable, the size of an Apple iPhone and resolutions around that old standard VGA port, these pico-projectors will bring the AV market a lot of press.
• Laser projectors will debut in 2009: Finally, we will see the debut of the laser-based projector. Promised for years, laser projectors are supposed to bring us an option of UHP (ultra high performance) lamps, and are said to bring us much better colorimetry. Currently, UHP lamps only deliver about 40% of the color gamut that we (as humans) can see. Everyone from the laser industry claims that using laser as a light source will bring us up to 90% of the color gamut.
If this happens, we will see even better color from rear- and front-screen projectors. Whereas now, using metal-halide lamps, we have images that are on the blue side of the color gamut, we will have a white-point that is closer to white than red (like halogen), green or blue colorimetry.
The first of these likely will come from a Japanese manufacturer (and probably in the form of a consumer rear-screen TV), with everyone watching to see if they are successful. If it works, expect to see laser become a big deal and probably the most talked about new projection technology since TI’s 1990s debut of DLP.
• Flatter flat screens: 2009 will bring us super-flat flat-screen TVs. Mirroring more like what you see with a laptop’s LCD screen, you will see flat-screen LCDs that will be in the one-inch-thin range. This will be big for commercial AV.
One of the inhibiting factors to LCDs actually competing with front-screen projectors is the weight. Take away the thickness and you will take away a lot of plastic and electronics that will eliminate a lot of the weight. One pioneer here is Sharp. Sharp has actually shown a 52-inch LCD screen that’s only 0.6-inch thick, Sony has announced a consumer-version LCD monitor that is 0.5-inch thick, and Samsung introduced a 40-inch 1080p LCD that’s 0.39-inch thick. We will see super-thin LCDs by the end of 2009, and they will completely overtake the flat-screen market by 2010. This is one reason that plasma will die by 2011 (a prediction I made back in 2007).
• Green: Going green will be the trend of 2009, from consumer AV to commercial AV. Although many of you are tired of this hackneyed cry of the environmentalists, the time finally has come to make this a mantra of your company. Mark my words, you will see every commercial AV manufacturer make a commitment to some power-saving standard (certainly ENERGY STAR is the leading one) that will make it a marketing tool for sales departments everywhere. And, rightfully so, to be honest. Have you ever taken the temperature of an AV rack with gear full of cooling fans? It’s staggering. Then, throw in a few cable TV DVRs and you don’t need a coffee maker or microwave during installation.
Going green will be a big theme of the next few years, especially under a Sierra Club-endorsed President Obama. (I’ll bet it would have been that way for McCain, too.)
No matter who you are, the gas pricing scam of 2008 forced us all to wake up to the energy issue. Saving energy will be something that everyone will harness. You will see LCDs go green, projectors redesigned to deliver standby modes that sap up less than 1 watt of power and federal entities buying AV that is green when given the option.
• Cloud AV: If you’ve heard of cloud computing, you’ll understand this. According to Wikipedia, cloud computing is internet-based (“cloud”) development and use of computer technology (“computing”). If not, this may be a leap. But, 2009 will bring us the debut of the cloud-based AV systems. What are they? Well, right now, we pack meeting rooms and lecture halls with AV gear that runs itself. Imagine if the projector had a network device (like a browser) that could navigate any network (like a typical browser navigates websites), to find any file or video and play it right there in the room or in any room on campus. Or, maybe all rooms on campus, simultaneously.
This will require some sort of netbook-like projection system or display: a display with a tiny embedded computer that is nothing unless connected to the network. Then, when connected, it becomes a web browsing media player capable of playing whatever content is sent to it, and capable of fetching content on its own.
Cloud AV systems will take their first steps, albeit maybe baby ones, in 2009. What eventually will happen is like what is happening in the digital signage world now: In digital signage, either the display has an integrated media player in it now (like a mini-netbook), or it has one behind it. Take a look; all of them have them! In any case, that “computer” is being controlled, managed and fed content from a head-end across the network. So, that content can be a presentation, weather, stock information, news, video and even live TV, all across the network.
Imagine this being the meeting room hub in the future. That is what we will see and how we will get to this cloud AV systems future. All you will have, one day, is a projector in a room that is networked and pulling content, being managed and controlled via the network from anywhere across the internet.
But, to get there, we need embedded projectors, we need network devices in every product category and we need AV integrators with the vision to build it. If you’re doing digital signage now, you’re in a great position to get there; if not, you have to be.
For example, consider a university. It has projectors in every classroom on campus with various content from visiting lecturers using laptops to network-based content driven to the display from professors. All of a sudden, there’s a campus-wide emergency. That emergency information is sent to every display across campus, instantaneously, all via the network.
• Control systems will be dumbed-down: Many control systems today are just too darn complicated. I am sure AMX and Crestron would disagree, but they are fulfilling their own prophecy. Actually, even they might agree because they, along with Extron, which pioneered simple control with MediaLink, are starting to build simple control systems that don’t take an engineer to program, and can be configured on the fly.
2009 will bring us even simpler control systems. The success of these simpler systems, and their ability to be networked and managed via one head-end, will drive their acceptance. If you aren’t already looking at ways to put in a sophisticated touchpanel-less control system that is simple to program and operate, you will in 2009.
This trend of dumbing down control systems will continue and there will be plenty of inexpensive touchpanels out there so you won’t have to build everything around a $3000 color LCD that’s mostly used for lowering the screen and turning a projector on and off. For example, what about the iPhone?
• iPhone/Android Control: Speaking of the iPhone, Google has launched its own iPhone-ish phone operating system called Android. These two products make touchscreen phones fully functional $300 control interfaces. Couple them with a CPU or a plethora of network-enabled AV gear, and you have a whole new way of controlling AV.
Watch for 2009 to be the year a few totally new control system companies enter the market with their own iPhone- and Android-like interfaces that will allow you to build fully functional rooms and control them seamlessly with iPod Touches, iPhones and other inexpensive multi-touch color screens.
• HD-VTC Year 2009: I predict that 2009 will be a boom for videoconferencing, but not for the reason you may think. Saying that videoconferencing systems finally work—almost perfectly on almost every type of network—is powerful, and the fact that they are cheaper than flying around the world for a meeting makes a strong argument, but there is another reason: fixed costs versus variable costs. It’s not the cost of the flight that will boost VTC technology; it’s the cost of the meeting in general. The flight is one thing, but the golf, the dinner, the lunches and snacks, the hotel rooms, the meeting fees, the setup and breakdown costs...that’s why.
So, if you are in the VTC market, you will have a great 2009. This will be one of the leading AV products to get you into a facility to talk about the rest of the AV systems world. And, again, this leverages the network: an inexpensive way to connect to anyone anywhere, way cheaper than flying around.
Case in point: I was supposed to go to Hong Kong in November. I had to cancel the trip at the last minute, but I connected via my Polycom HDX 9004 system (an HD VTC system) to InfoComm Asia in Hong Kong from my office in Chapel Hill NC. I delivered a two-hour seminar called AV-2001 (it’s one of the keynote speeches I regularly deliver at dealer shows and industry events).
The cost of the connection was about $300. I saved $3500 in airfare, $1500 in hotel bills, $600 in food and four days minimum of my life. InfoComm was happy, the attendees were happy and, heck, we used the technology we’ve all been touting for years as the future of AV.
• Finally, the Microsoft Rumor: There’s a rumor that Microsoft is trying to buy a manufacturer in the commercial AV market. Of course, because Microsoft is a public company, representatives will not confirm anything, but I believe it makes sense for Microsoft and 2009 could be the year the company enters commercial AV.
Microsoft is in a perfect position to come into our market, but I would also think that the home AV market might be its first target. The movies-on-demand segment is growing by leaps and bounds with Netflix, Apple and cable TV providers dominating that segment right now.
So, no totally bold predictions, but watch Microsoft carefully as the company could play its cards for us and become a big commercial AV player by year’s end.
David Lee Jr., PhD, CEO of Lee Communication Inc., Orlando FL, is a licensed minister and has more than 25 years of experience as a systems integrator. He is a member of Sound & Communications’ Technical Council. Send comments to email@example.com.