The biggest problem facing the AV industry and its customers today? A potential customer walks into a high street AV retailer and takes a demo of some equipment they are interest in purchasing. The customer takes their time and maybe a cup of coffee and makes the decision to buy. Then they whip out a piece of paper with details of the same equipment for sale cheaper at www. whatever .com and tries to get the dealer to match the price. Or worse they just walk out of the shop and buy online. Having spoken to lots of people in the AV industry, I have come to the conclusion that the big problem (perhaps the biggest) for the UK AV industry is the effect of internet sales. Why? Because internet sales have risen dramatically and will continue to do so (see note 1 below). the cost of selling on the net is considerably lower than from a high street shop and therefore online prices are lower (see note 2 below) high street retailers are losing business to online stores manufacturers pricing structures have not reflected the costs of making a sale. I.e. the cost of the kit to retailers is the same whether it is to be sold mail order or in a shop Some retailers are fighting back by refusing to stock certain manufacturers products unless the pricing structure is altered to create a more even playing field (see note 3 below) This chain of events has caused a bit of a ruckus in the industry. As consumers, we should try to appreciate what happens behind the scenes because it affects us. If all the high street retailers were to go bust because they lost all business to online retailers, we would have nowhere to audition our AV kit (see note 4 below). And the very best advice is to audition equipment before you buy it (see note 5 below). High street retailers can offer us a valuable service we simply cant get from online stores (see note 6 below). Many manufacturers are reacting to the situation by either preventing their products from being sold mail order using various methods to discourage the retailers (see note 7 below) restructuring their costs to retailers. Products are either more expensive if they are destined to be sold online, or they are cheaper if they are destined to be sold in a shop. Or a bit of both (see note 8 below) In short, then, the perception that most of the UK AV manufacturers, distributors and retailers have is that the internet is bad for their business. The solution? UK AV manufacturers, distributors and retailers need to understand what the internet actually is. They need to appreciate that it is used by people their customers to find information in the same way as people buy AV magazines to find information. They should use the internet to send their message to their customers. A message something like buy from our high street retailers/our shop because we can offer you a different/better service than you can possibly get mail order. Imagine a magazine advert which you only had to touch with your finger to get more information about the company/products. Thats what you get with internet advertising. But the internet is relatively new and the concept of advertising on it is completely alien to some companies. I guess part of the problem is that the marketing people dont know where they can advertise. In the UK there are only two significant online resources for home cinema the Home Cinema Choice group of sites and the AV Forums. Many AV manufacturers, distributors and retailers adverts are conspicuous by their absence on the AV Forums. Where are the adverts for Sony, Pioneer, Panasonic, Philips, Toshiba, Sharp, B&W, CEDIA, Sevenoaks, Audio Excellece, Audio-T, Practical Hi-Fi? Are these companies not interested in reaching the same target audience they get with What HiFi, Home Cinema Choice etc.? What Hi-Fis ABC (number of issues sold) is 70-80 thousand per month; we have an ABC of over 150,000 every week! Its somewhat surprising that the AV Forums the busiest home cinema community in Europe - is not getting support from these important companies. In summary My message to people buying AV kit is not to forget the added value you are getting from a high street retailer which justifies their prices. And dont go for an audition in a shop just to then buy online. It is morally corrupt and ultimately bad for you as a consumer. My message to AV manufacturers, distributors and retailers is to embrace the internet ideally the AV Forums and use it to get your message to your potential customers. Note 1 Roughly half the UK population shopped online this Christmas, spending more than £3bn. Research shows that UK customers are among the most enthusiastic online shoppers. The European Interactive Advertising Association found that 30% of British consumers bought more than 16 items online in 2004, compared with 19% of shoppers across Europe. Note 2 High street retailers have to pay for rent (expensive in prime locations), staff (highly trained staff are not cheap and 'highly trained' is what we consumers demand), demo rooms and demo stock. It is significantly more expensive to run a high street shop than a mail order business Note 3 Paul Lee-Kemp of Sevenoaks has written an open letter to manufacturers highlighting the problem. He has declared war saying that unless the pricing structure is made fairer, Sevenoaks will not stock their products. Note 4 Is the boom in online sales and stiff competition on price good for us as consumers? On the face of it, maybe, yes. The price of equipment in rip-off Britain is heading in the right direction, right?. But I ask you to think longer term. If we do not buy from high street retailers then surely they will go out of business. Or at the very least the quality of their demo rooms / trained staff / variety of equipment will drop. Then our choice as consumers is diminished. Note 5 What is the best way to buy kit? Personally I think we should read reviews by the magazines (online and print), compile a shortlist of the products which most suit our needs and budget, ask for advice from readers of the AV Forums and finally audition the kit yourself. The auditioning part is the most important because only you are going to know whether you like it or not! Note 6 Besides offering us demonstrations, high street retailers can also install kit for us, calibrate it (no display is correctly calibrated out of the box), and offer an after-sales support service which cant be matched by online retailers. Note 7 Actually Linn have had a policy in place for over 10 years which states that a Linn dealer must be prepared to provide on-site support for its products. You dont find Linn products being sold online. Other manufacturers like Denon, Yamaha and Velodyne are insisting that their top-tier products are not sold mail order and some must be installed by the dealer. Note 8 How the manufacturers are going to keep tabs on which stock has been sold face-to-face and which has been posted mail order is an interesting problem. Maybe it will be a cross-checking of serial numbers at warranty registration time?