in December 2007
Kayye's Krystal Ball, V.08
Gary Kayye, CTS
The author reviews how he did last time, and makes projections for the future.
Welcome to the 2008 edition of my 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 of Sound & Communications, you know that, each year, I actually start by reviewing my own previous predictions (see Sound & Communications, December 2006, and my “Sight Lines” update in the June issue).
Why do I do it this way? Well, when I was a kid, I always loved watching 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 us of their predictions from the previous year so I could see if it was worth the price (I knew my dad’s credit card number).
In this case, what I’m offering is free; you probably didn’t pay to read this, so keep that in perspective. But, if I do say so myself, over the past nine years, I’ve actually done a pretty good job...or been real lucky. But, this could be my LAST one, because my editor told me I am way past my deadline and I think he’s pretty upset. So, this better be a good one, huh? You be the judge of that!
So, on to the review of the 2007 predictions; then I will jump into my predictions for 2008.
|Videoconferencing finally is living up to its own hype. This is Polycom’s RPX, essentially a room in a room with all parameters included.
What Were My 2007 Predictions?
• HD, HD, HD: I predicted that 2007 would be the year that all you commercial AV dealers and designers would start thinking about 16x9 projection and display. Sure, that was an easy one, with the proliferation of HD displays out there (as well as all that new HD content), but I went on to say that that meant putting in 16x9 aspect ratio screens in most installs instead of 4x3.
Well, many of you are listening, but some of you aren’t. You’re still doing way too much 4x3. Two leading screen manufacturers tell me that, although 16x9 projection screen sales have grown 300 to 500% in the last year, they’re still selling too many 4x3 compared to where the market is going.
• Simpler Control Systems: I predicted that 2007 would bring us more simpler-to-use control systems. This happened in a small way (i.e., Logitech’s Harmony 1000, Extron’s expansion of MediaLink and Crestron’s MediaManager), but nowhere near the level I thought. But, it’s not for a lack of trying. In fact, 2007 brought my company, Kayye Consulting, a record number of inquiries from little-known or unknown companies trying to get into the control system market (all with a plan to, as they put it, knock Crestron and AMX off their leadership positions).
But, in reality, many of the control system solutions out there could be made simpler but are still over-complicated by you, the integrator. Trying to fit every function of a handheld remote onto a touchscreen certainly isn’t simplifying things, huh? Believe it or not, many dealers still do this. You pick up a touchscreen on a boardroom table and, as soon as you touch it to wake it up, you see 12 buttons all surrounding the border of the screen! Why not two or three? Why not start with, “What do you want to do?” and have, maybe, three or four major functions on there?
OK, OK, I’ll stop blaming the integrator because you are right, it’s not all you. In fact, you have little to work with.
It’s time for a revolution in the control system market and, based on what I’ve seen from a few of these as-yet-unknown companies, we may see it in 2008—especially if Crestron or AMX take a look at some of it.
• iPod Pro: I predicted we’d see a sort of an iPod-ish device for the AV market—not necessarily from Apple, but something server-like. Well, it’s here. Not only did Apple introduce the AppleTV for the home (a device that allows you to download, manage and play, in HD, movies, TV shows and music), but a few other AV-ish companies such as Niveus, Polycom and Grass Valley introduced media-server products aimed at the commercial AV market that store, manage and play SD and HD video, PowerPoint, PDF, Flash and WMV files. You’ll certainly see more of this in 2008!
• Blu-ray Wins: Well, well, well. Although I didn’t predict that Blu-ray would win out in 2007, I clearly stated that Blu-ray would win the high definition standards war. And, I stand by that statement. With the exception of two months in 2007, Blu-ray players outsold HD-DVD players, even though they were two to three times the price. And, more telling is that Blu-ray disc sales in the US are outpacing HD-DVD better than 4:1.
There is one factor, however, that I didn’t consider that may, unfortunately, prolong the eventual death of HD-DVD, and that’s the completely stupid, uneducated consumer’s desire to buy things entirely based on price rather than quality. When Wal-Mart pushed a discontinued Toshiba HD-DVD model through its stores in early November for less than $100, a bunch of dumb consumers ran to the store and bought it up.
So, HD-DVD consumers’ stupidity will create a blip along the freeway of Blu-ray domination. And, as Apple and Sony will show the world in 2008 with their Blu-ray integration of Macs and PCs, Blu-ray is the dominant PC platform, too, and then you’ll all agree!
• HD Conferencing Boom: This was the year of HD-VTC. Finally, videoconferencing is living up to its own hype! HD conferencing, and not just telepresence, is incredible. Even the desktop HD-VTC stuff is incredible. We are looking at a technology that does exactly what the marketing people are saying it does, albeit 10 years later!
• Built-in Projectors: In 2006, I saw a number of prototypes for built-in projectors in devices like laptops, videogame players and cell phones. Yet, none of them has gone past the prototype phase. Maybe 2008?
• AV Security Boom: Cameras are everywhere. Security camera manufacturers, CCTV manufacturers, integrators and 24-hour monitoring service providers are making a killing now. It’s like the early 1980s all over again. The renewed interest in security has resuscitated an entire industry. Find a way to play in that market because, apparently, it’s only 13% saturated and growth in 2008 is projected to be in the range of 40%!
• 802.Whatever: I predicted the explosion of 802.xx technology would be all over the place in 2007. Sure, we have wireless internet in our homes, our coffee shops, our offices and, of course, our hotels. But, we’re now seeing wireless towns, cities and states! And, AV manufacturers are in the process of leveraging it more and faster than ever.
Also, companies such as Avocent are taking advantage of this with devices that drive everything from XGA to HDMI wirelessly! If you and your clients are not doing wireless projection now, you will be in 2008 because the opportunities for entry into the digital signage market are huge...as long as you can get the network to the displays!
• Cisco, Dell and Steelcase: Cisco and Steelcase are here! Cisco has entered the professional AV market with a product in the telepresence space (life-sized HD conferencing and Cisco even nabbed the name TelePresence for its branding), and Steelcase owns PolyVision!
Dell didn’t really make a very successful push into AV in 2007, but watch for the company in 2008. PCs are completely unprofitable, so either they’ll get into AV or they will die a rapid death.
|Digital signage will be huge in 2008.
Now, What About 2008?
IP-IP-IP: In 2008, we’ll see a proliferation of IP-enabled devices. What does this mean? Well, today, to route and distribute video and audio (and control) signals, we (the commercial AV market) do things the Old Fashioned Way: We use lots of custom wire, such as coax and stranded copper and color-coded cable. We send that signal, mostly in analog form, through switchers, distribution amplifiers and even signal boosters around a room up to a projector or flat-panel monitor that then converts that analog stuff to a digital signal.
Did you know that the current consumer wireless standard, 802.11n, is capable of routing almost all this stuff via Cat5e network (Ethernet) standards? That’s right! But, until now, we haven’t had too many products that could manage signals that way.
But, in 2008, as network infrastructure is upgraded, we’ll have the ability to route any signal across a network using something called Ethernet AV. The Ethernet AV standard is a protocol for routing every commercial AV and consumer AV signal via a network (wired or wireless), supposedly, even up to 1080p! We’ll see. But, one thing’s for sure; I know for a fact that a number of AV companies out there are working on Ethernet AV-enabled products.
What does this really mean? Well, right now, if you want to do video and audio via a network, you can...as long as you have the bandwidth. But, at both the head-end and the display, you require some sort of media transporter or receiver. And, the quality, to use a highly technical term, stinks.
With this new standard, theoretically, you can not only build an Ethernet AV receiver or player into a display or switcher, for example, but the quality is exactly what the original source was: lossless.
OK, I agree that it seems too good to be true, but 2008 will see the introduction of IP-enabled displays and this format easily could win the digital signage market over quickly, not to mention the potential in higher education.
• Control is KEY: I think the control market is close to an evolutionary revolution. There are just too many things lining up in favor of it.
One thing’s for sure; there will be some new players! Everyone’s gunning for control, and rightfully so. Control has become a huge slice of the proverbial AV pie. Not only that, it’s hugely profitable. Clearly, Crestron’s been a market leader.
And, I fully expect to see the company play a big part in this control revolution, but I also see potential for a host of other players out there. In fact, I know that a super-small company called Cloud Systems recently won a huge Cisco meeting room project using a software-based control system leveraging the Cisco IP-phone as the user interface.
Look, here’s my point. The control system is the user interface to the entire AV-enabled room. You walk into 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 have to 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? You see, you can’t do this without Crestron or AMX.
Ah, but what about this revolution? Well, in 2008, as more and more products 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 entirely 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. This will open the door for a revolution in both hardware and software that, yes, Crestron is poised to leverage. I know this as I have worked with the company as a client and know its vision, driven largely by vice president marketing Randy Klein, is clear.
I am sure AMX is on this path already; if not, I hope company executives read this because they need to be. However, you will also see “others” enter the market with IP-based solutions and completely software-based offerings where your laptop, your tablet PC (by the way, Apple’s going to introduce a tablet computer in 2008, so we could insert tablet Mac), or even your phone could be the user interface to an AV room!
• Gaming Projectors drive prices (and profits) down even further: Although this discussion primarily addresses commercial AV trends, it should be mentioned that many consumer AV trends directly affect the professional market. One of them is gaming projectors.
Because of this new projector market, you will see the prices of projectors drop even more. Selling 800x600 projectors isn’t worth the cost because many are cheaper to buy online than through a dealer. But, it’s getting ready to hit the HD market because many manufacturers will introduce HD-gaming projectors at the CES show next month. This will drive the price of native-HD projectors down, thus dragging the XGA and SXGA market along with it. So, beware!
• Digital Signage Boom: 2008 will be remembered as the year that the digital signage market finally exploded. Are you ready?
Look, everyone’s been hyping digital signage for years. But, all it has been up to now for the commercial AV market is digital advertising: We go, we hang an LCD, we connect it, we turn it on (maybe we add some limited control), we leave, we’re done. Let’s be truthful here, it’s been a glorified LCD TV sale!
In fact, just about every digital signage network (I use that term intentionally because that’s the difference in a glorified LCD TV sale: the networking of the delivery and control of the content; not just the display) has been installed by a content producer. While we all sat back and hyped the heck out of one of the most hyped markets in the history of AV-hype, digital signage, we’ve simply been in the business of selling and installing the mechanical parts of it. We’ve not been taking part where the real money is: content.
And, while we’ve done that, we’ve forced the majority of the content production and creative companies (mostly located in Canada) to go around us and use IT-integration companies because of the complexity of the network.
Here’s the deal: There will be explosive growth of the digital signage market in 2008. Everything from security, corporate signage, way-finding, facility-wide messaging, advertising and interactivity will see the market opportunity for digital signage. We have to partner with related companies to pull this off. Do it!
• LED Wow: The quality and form-factor of LED is incredible. Of course, everyone’s familiar with large-screen LED displays such as those found in football stadiums, New York’s Times Square and the huge signs in Vegas. But, are you familiar with what else is going on with LED? We already have LED lighting for backlighting of flat-panel displays coming, bringing us white that looks white instead of blue-ish white.
But, did you also know that you’ll start to see smaller form-factor LED displays that are meant to compete with flat-panel LCD and plasma? Well, you’ll start to see these in 2008, and they’ll, theoretically, last forever (or at least until the resolution changes).
• Plasma Comeback or Death?: Recently, there’s been resurgence in plasma sales. Although many point to plasma’s quality as the reason, I see it as a last ditch effort of a dying technology to sell stuff by always claiming to have better quality (that most people can’t see) and a better price point (everyone identifies with that). In reality, the former is the truth: Plasma colorimetry is better than both LCD and DLP technologies. But, with the investment made by Sharp, LG, Samsung, Sony and the other giant LCD companies, as well as their divestment of plasma R&D, is the writing on the proverbial wall? Is plasma going to die, soon?
• 3D: Although theater releases rarely have a direct impact on the commercial AV market, the renewed interest in 3D is mentioned here for two reasons:
First, I’m writing this and I am a huge Star Wars fan. And, in 2008, George Lucas has said he plans to begin re-releasing the Star Wars films (one per year) in 3D. I saw a clip from the original Episode IV 1977 film and one from 2005’s Episode III in 3D at CEDIA this past September, and was blown away. I just thought I’d mention that.
OK, the other reason I mention this is that it was shown on a rear-screen DLP projector, and looked incredible! The re-introduction of 3D into theaters could create such a demand for it in the AV world, eventually.
From one AV geek to another, I highly recommend you all go out and see those movies—in 3D.
• Verticalization: For those of you who have been in the commercial AV space as long as I have, we’ve seen tiny companies grow huge, sell, merge, fall apart and re-form again. Interestingly enough, only two huge AV companies still exist: AVI and The Whitlock Group. Both, for the most part, grew organically (not much buying out or merging). What happens to both of them remains to be seen, because AVI is in the process of “merging” with SPL (pssst: I’ll tell you a secret; it’s not a merger: AVI is clearly buying SPL).
Is that a good thing, or not? I hope Marty Schaffel knows what he’s doing (which, so far, he has!).
Anyway, back to verticalization. As we’ve evolved as an industry, I see an emerging trend toward a path to success: verticalization. What the heck is this? Well, companies that target specific vertical markets with specific vertical market experts have done very 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’ll see more and more verticalization than ever before. The days of selling stuff based on a technical expertise are gone. 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: Has anyone noticed how big Electrograph’s gotten lately? Well, prepare for it to get bigger. My sources tell me that Electrograph’s either after an infusion of cash to grow even more rapidly or looking into a merger with an even larger distributor. This will happen in 2008 and, in my opinion, this could be a good thing for commercial AV.
We’re in dire need of a distribution model for AV gear. Sure, I know that distributors, in many cases, tend to drive prices down, but Electrograph’s actually adding a lot of value to its service with incredible training and education, partnerships with the leading industry associations and also helping to drive product development. More power to them!
• The Killer InfoComm: With the NSCA Expo now gone, you all need to come to InfoComm. No waffling allowed. There are no excuses left. Look, InfoComm is the show for commercial AV integrators, manufacturers and consultants. If you’re not at InfoComm, you’re a loser. InfoComm will be huge in 2008!
• Finally, the Economy: Unfortunately, the economy in 2008 doesn’t look good. We already have inflation (if you can’t see that, you’re living under a rock). And, we now have a housing crisis that will trickle down and up, to all segments of the economy.
We in commercial AV, however, will weather it well. Sure, we won’t have the double-digit growth we could have had in a super-strong economy, but we will be close to 10% growth anyway.
That’s impressive no matter how you slice it. So, don’t worry, be happy!
Oh, One Last Thing: North Carolina will win the NCAA Basketball Championship in 2008! Mark that on your calendar...
Gary Kayye, a member of Sound & Communications’ Technical Council, and author of the monthly “Sight Lines,” is principal of Kayye Consulting. He was InfoComm International’s 2003 Educator of the Year, and NSCA named him 2007 Instructor of the Year. Send comments to him at email@example.com.