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Dealers Mourn Pioneer's TV Biz Exit

Specialty retailers face gap in premium market

By Steve Smith and Alan Wolf -- TWICE, 2/23/2009

NEW YORK — CE specialty merchants regret the loss of the ultra-premium Pioneer plasma line, which they say fell victim to high production costs and a more value-conscious consumer.

But aside from some short-term channel disruption as Pioneer liquidates its inventory, dealers are confident that other vendors can succeed it with super-thin plasma and LED-back-lit, 240Hz LCD.

"To end a premier brand is unfortunate," said Dave Workman, executive director/COO of the Progressive Retailers Organization (PRO Group). "Pioneer has been an aspiration product [in plasma TV]. For our group the brand has been extremely important. It's tough that niche players can't continue to compete in this business."

Jim Ristow, executive VP of Home Entertainment Source, the specialty A/V division of Brand Source, described Pioneer's departure from the panel business as "a sad day" for the specialty channel.

"They've been a very important part of our business," he told TWICE, "and we will help them manage their transition as long as there are still panels out there."

To fill the vacuum, Ristow has crafted a "solution" for HES members, based on meetings with all major video suppliers earlier this month, that will be presented to dealers during the group's Spring Summit in March.

Richard Glikes, executive director of Home Theater Specialistsof America (HTSA), described the loss of the limited- distribution Pioneer Elite brand and its profit opportunities as "a sad day for specialists," and presumed that Sony XBR, Panasonic's professional line and even Samsung may look to fill that margin-riche niche.

"The winner will be the one that has the most patience," Glikes said. "This is not a short-term commitment."

But Jeannette Howe, executive director of Nationwide Marketing's Specialty Electronics division, believes the alternatives are limited and called Pioneer's departure "a tragedy."

She added, "Fujitsu and Pioneer plasma provided protection for the specialists. "It provided differentiation and value. With Pioneer gone it doesn't leave too many options.

Howe continued, "I'd love to see another manufacturer like Sony or Panasonic come up with a specialty line, but at this point we have to make money on home automation. We haven't really been able to make it with flat panel for a year or two. It is almost like flat panel is an accessory to a home-automation sale."

Howe added that the "race to zero" has cost manufacturers "billions, not millions," has led to the loss of Good Guys, Tweeter and Magnolia, and squandered the great opportunity that is HDTV.

Mike Abt, president of Abt Electronics, similarly mourned the loss of another up-market mainstay. "We sold Pioneer Elite and carried Kuro," he told TWICE. "It's an unbelievable TV, and it's so sad that in this economy the consumer is thinking about value rather than quality. Nowadays, not only do you have to worry about yourself and your competition, you have to worry about your vendors being around."

Pioneer's departure from TV will have little impact on the members of the NATM Buying Corp., but president/executive director Bill Trawick believes, like Abt, that there's more vendor consolidation to come.

"The top three or four manufacturers now control about 80 percent of the [TV] business, and there will be others out there who will have to exit," Trawick said. "It's not healthy when people leave, but there are too many brands out there, just like on the retail side with Circuit City."

Bjorn Dybdahl, president of Bjorn's Audio Video and a Pioneer zealot, said its departure from TV will orphan its audio line, create channel conflict as it enters warehouse clubs and Web sites in its death throes, and will lead to greater confusion and insecurity among consumers.

"What this proves to the consumer is that nobody's safe," he said. "So many TV brand names and weaker players will disappear. This could be a plus for guys like us due to the confusion. That could be a good thing. But there will be customer confusion."

Neverthless, Dybhahl lauded the company for remaining a class act to the bitter end, and beyond. "I am not surprised Pioneer will provide [technical] support for its panels after it gets out of the business," he said.

©2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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