Audio Video Revolution Forum  

Go Back   Audio Video Revolution Forum > Welcome to's Forum > Discuss News

Discuss News Post your opinions on the latest news from the pages of

Thread Tools Display Modes
Old 12-06-2007   #1
Join Date: Feb 2007
Posts: 695
Default Slumping U.S. Economy Puts Sting on AV Industry

A friend of mine, Craig Pease, who used to own a high-end speaker company called Evett and Shaw, spoke (with his stand-up comedian style of delivery) about his Orange County, California neighbors and their spending habits during the recent housing boom. “You live on Newport Coast, in a fancy tract house that you bought a year or two ago for $1,300,000, and your neighbor sells a similar house down the street for $1,600,000 – what do you do? Of course you take out an equity loan and buy a Bentley Continental GT because you just made $300,000 right?” OK, so Craig was being sarcastic, but way too many people around the country actually think the equity in their home will never shrink, especially here in California where 25 percent yearly increases to property values become yet another entitlement of living in the Golden State. These are the same kind of people who thought that $525 per share was the right time to buy into Yahoo back in the day.

In recent months real estate values have declined, and now people all over the nation are feeling the sting. It has also had a definite, short-term impact on the home theater business. With large flat panel HDTVs priced well below $2,000, they are no longer just high-end goodies designed exclusively for the “A Paper” or the 800-credit score crowd who didn’t need to borrow money to pop for a $20,000 50-inch plasma a few years back. At today’s prices the much maligned, “sub-prime” audience can enjoy a big, bright HDTV, even if their financial future isn’t quite as bright as their new television set. With many middle class Americans now feeling the sting of shrinking equity in their homes and growing consumer debt on credit cards, many industry experts suggest that sales for AV gear have to suffer along with the rest of the economy. Optimists point to electronics, video games and anything HD to be among the hottest holiday sales items. Final sales number from the fourth quarter will tell the final story.

One area of the economy dealers quietly say is booming is in the international export business. While dealers aren’t really supposed to sell U.S. designated gear to other nations, it's hard to really stop them from taking an order. Factor in today’s weak dollar and those Euros start to spend a lot better when someone from overseas is waltzing down Fifth Avenue as opposed to the Champs-Elysees. It is somewhat easier for foreigners to buy US speakers and cables than it is to purchase US audiophile electronics with sophisticated chipsets that require specific AC voltages and can render a $10,000 amp useless overseas. Another issue is that the importer of American-made audio and home theater gear didn’t sell the products imported into a foreign country, thus the warranty is void. Even with a weak dollar, it costs a pretty penny to fly over a repair guy to replace the tweeter on your new Revel Salon2s that you installed in your London flat.

Experts suggest the sub-prime loan market will take a year or two to sort itself out, but the weak dollar might not get much stronger as Wall Street seems to be looking for The Fed to drop the lending rate even more, thus making the dollar even more weak. This results in import gear being more and more expensive for American buyers, but also makes American-made gear more attractive to foreign markets, which can be larger than the domestic market. High-end audio and video companies will need to keep their eyes on the ball as the market corrects as there are tens of millions of Generation Xers still buying homes and Boomers cashing in their retirement funds looking for luxury items - assuming the value is there.

by: Jerry Del Colliano is offline   Reply With Quote
Old 12-07-2007   #2
New Member
Join Date: Aug 2007
Location: Brentwood Northern California
Posts: 4
Talking Re: Slumping U.S. Economy Puts Sting on AV Industry


Not only AV gear....I have to part with my childhood dream '07 C6 Z51 LT3 Lemans Blue Corvette....seems they are going begging at the moment as well!

Good thing I've got a decent AV system to get me through!


Magoo is offline   Reply With Quote
Old 12-07-2007   #3
Super Member
kennyt's Avatar
Join Date: May 2007
Location: Florida
Posts: 2,422
Default Re: Slumping U.S. Economy Puts Sting on AV Industry

I for one am doing everything in my power to keep our high end economy afloat.
Ken Taraszka, MD
Associate Editor
kennyt is offline   Reply With Quote
Old 12-07-2007   #4
Super Member
JerryDelColliano's Avatar
Join Date: May 2007
Location: Beverly Hills
Posts: 1,423
Default Re: Slumping U.S. Economy Puts Sting on AV Industry


Not only AV gear....I have to part with my childhood dream '07 C6 Z51 LT3 Lemans Blue Corvette....seems they are going begging at the moment as well!


I hear you on the car issue.

While I am not selling under duress - my 1997 Twin Turbo 911 has been up for sale since July 27 and I have yet to sell it. I have come close 5 times now. It feels jinxed honestly.

In the end - having a $70,000 used car that I have put 2,000 miles on in over 2 years just doesn't seem to make sense anymore. I just wish I took the offer for $82,500 that I got 10 months ago. Ooof...
Jerry Del Colliano
JerryDelColliano is offline   Reply With Quote
Old 12-08-2007   #5
Super Member
Join Date: May 2007
Location: White Plains, New York
Posts: 1,706
Thumbs up Re: Slumping U.S. Economy Puts Sting on AV Industry

Hmmmmm Jerry, I feel ya.

kennyt, Dr. Source, yes, thank GOD for you and your ways of spending our weak US dollars. Waiting to hear that full review for the Mythos!!!
deacongreg is offline   Reply With Quote
Sponsored Links

audio, av, economy, holiday, home, impacting, industry, mythos, news, projectors, replace, sales, st, theater, tweeter

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Audio-fool trends in the industry kennyt Off-Topic Posts 9 03-21-2008 06:02 PM
Comcast puts cameras inside boxes to watch TV watchers! rex Satellite Receivers, DVRs & Cable Boxes 2 03-21-2008 04:09 PM
Is the recording industry trying to kill CD's? TheMoose Off-Topic Posts 18 02-24-2008 04:55 PM
Jerry puts the Sony DVP-S770 DVD Player to the test Source Components 0 07-24-2007 12:40 PM
Consolidation And Private Equity Changes The AV Industry JerryDelColliano Discuss News 0 06-01-2007 12:12 PM

SEO by vBSEO 3.6.1