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Consumer vs. Pro: One of These Things is Not Like the Others

Call it Best Buy Blowback or Wal-Mart's Revenge. Dirt-cheap prices on consumer electronics have spurred growth in the commercial AV market. More than ever, organizations are looking to deploy flat-panel displays and other high-end gear?but they want to do it at the rock-bottom prices they see at big-box stores.

When asked by clients why they should buy the higher priced commercial panel instead of the model on sale at the local big-box retailer, Tom Peters points out the differences in warranties: 90 days and no on-site services for the consumer-grade compared to 2 to 5 years and on-site support for the pro one.Photo: Stephen Voss/WPN

Call it Best Buy Blowback or Wal-Mart's Revenge. Dirt-cheap prices on consumer electronics have helped spur growth in the commercial AV market, while at the same time creating new headaches for professional AV integrators. More than ever, organizations are looking to deploy flat-panel displays and other high-end gear in their offices, schools, and churches—but they want to do it at the rock-bottom prices they see at big-box stores.

“There's definitely more pressure on cost these days,” says Tom Peters, president of Applied Visual Communications (AVC), a commercial integrator in Herndon, Va. “A CEO gets an HDTV in his bedroom and pretty soon he wants one in the boardroom. He walks into Circuit City, sees a 46-inch LCD display and asks, ‘Why can't I get that brand?' The consumer channel is really driving this market.”

According to surveys conducted by Pacific Media Associates, a research firm in Menlo Park, Calif., half of all businesses had flat-panel TVs in their meeting rooms in 2007, but only 39 percent of those were professional-grade models. More than four out of 10 companies looking to add flat panels in 2008 plan to buy them at Best Buy, Circuit City, or Wal-Mart.

"A CEO gets an HDTV in his bedroom and pretty soon he wants one in the boardroom. He walks into Circuit City ... and asks, 'Why can't I get this brand?' " -Tom Peters, AVC

"A CEO gets an HDTV in his bedroom and pretty soon he wants one in the boardroom. He walks into Circuit City ... and asks, 'Why can't I get this brand?' " -Tom Peters, AVC

Credit: Stephen Voss/WPN

“Everyone can see what's happened to pricing in the consumer world,” says Chris Connery, vice president of the Austin, Texas–based research firm DisplaySearch. “You see two 46-inch LCDs: one's a commercial product that costs $6,000; the other is a consumer model that costs $2,500. Some professional installers don't see that the cheap one might have more limited functionality, only that it has VGA or DVI connectors. They're not thinking about warranty or durability issues during the up-front installation, either. They say ‘Heck, let's go with the least expensive one from a brand I trust.'”

Further muddying the waters, major manufacturers like Sharp and Sony are selling more consumer-grade products through commercial channels. According to DisplaySearch, nine out of every 10 displays Sharp sold through its commercial channels last December were Aquos LCD TVs initially built for the consumer market; likewise in October 2007, three quarters of the flat-panel products Sony shipped through these same commercial channels were from its Bravia TV line.

Lower prices, in turn, are encouraging more small businesses to adopt digital signage, unaware that the money they're saving by buying low-cost consumer panels today could cost them big later on. The same display that works fine when handling a few hours' duty a week in a boardroom could prove a costly mistake when used in a 24/7 digital signage environment, notes Sam Taylor, president of Electrograph, a leading U.S. distributor of large-format displays.

“Integrators [that] sell consumer panels for digital signage applications aren't doing their customers or themselves any favors,” he says. “They're setting themselves up for potentially huge problems down the road.”

REPORTING FOR DUTY

The biggest problem with consumer displays is that they aren't built to handle the heavy duty cycles commercial applications often demand.

“Consumer TVs are built to run four to eight hours a day,” says Andy Weis, a senior product manager for Samsung's display marketing group. “Commercial products are designed to be used for 15 or 16 hours a day, and some run 24/7.”

The longer a consumer display runs, the hotter it gets, which increases its likelihood of failure. For those reasons, Samsung's line of professional displays have heat dissipation plates, dust inflow filters, cooling fans, and electronics that adjust the monitor's brightness settings depending on the amount of ambient light, further reducing heat output, Weis explains.

“Time is the key element a lot of people forget about in these installations,” says DisplaySearch's Connery. “They see the product work in a pilot program, but don't see the longer-term phenomena that may come up. If your clients aren't educated on all the other solutions that exist, they likely won't even know the pitfalls they have to worry about a couple of years from now.”

And when consumer displays do fail, their owners may be dismayed to find their equipment is no longer protected by a manufacturer's warranty. Many consumer warranties become void when the display is used in a commercial setting, Peters explains.

“The real issues with flat panels tend to be duty cycles and cooling,” he says. “That translates directly into warranty issues. When someone comes in off the street and asks us why they should buy a commercial panel for their application instead of a consumer one, the first thing out of our mouths is the difference in warranties. They'll have to forgo the kinds of protections they're used to having in the commercial environment.”

Even if the panels are covered, many consumer models come with bare-bones 90-day warranties and no on-site service. So businesses have to rip out displays when they fail and bring them in for depot service, or return them to integrators that then either eat the cost or end up with unhappy clients.

Electrograph's Taylor says this scenario is less common than it was a couple of years ago, after many resellers got burned. “The first time you take some [consumer product] you installed four months ago in a bar or a restaurant, send it back to XYZ vendor and they say ‘Sorry, the 90-day warranty expired,' you're not going to take that chance again,” he says.

Consumer goods also have other limitations. Many consumer panels won't operate in both portrait and landscape modes, which is important for digital signage applications, or they may not support all necessary PC screen resolutions. Cheaper LCDs and plasmas may have more issues with image retention and burn-in than their commercial counterparts. Industrial panels tend to have more robust power supplies, ruggedized housing, and shielding against electro-magnetic interference.

Consumer units may also lack necessary inputs or RS232 ports that allow the panel to be controlled by an AMX or Crestron system. And because the industrial units are usually controlled remotely, they often ship without accessible menu buttons, making it harder for end-users to screw up their settings.

FLAT-PANEL SALES THROUGH COMMERCIAL CHANNELS

FLAT-PANEL SALES THROUGH COMMERCIAL CHANNELS

Credit: Displaysearch Monthly Large-Format Commercial Displays Sell-Through Report

“The challenge with using consumer-grade equipment is taking something that's designed to operate in the controlled environment of your living room and putting it in an environment that's not controlled, where the temperature fluctuates wildly, and people can press the buttons on the front of the screen,” says Samsung's Weis. “Professional products let you lock those menu buttons out. On a consumer product, anyone can touch them.”THE DISPOSABLE LCD

Yet there are certain applications where inexpensive displays and media players make more sense than costlier industrial-strength models, says David Wilts, senior advisor to Shen Milsom Wilke, a global AV consulting firm headquartered in Chicago.

“There is absolutely a place for consumer-grade equipment,” says Wilts. “But it needs to be in a place where it's not a liability for being consumer grade.”

Some consumer devices are so cheap they're virtually disposable, he says. For universities and other organizations that buy equipment in volume and need to stretch their dollars, or for smaller businesses with less demanding AV needs, consumer goods may make more economic sense.

“We tell clients to think of their business as if it were a restaurant,” Wilts says. “Every restaurant has a significant annual budget to cover costs when a bus boy breaks a glass or a customer drops a plate. We consider consumer equipment to be part of that annual breakage budget. It's usually cheaper to replace a broken DVD player than it is to fix it.”

When you're buying huge volumes of flat panels, it can be more cost effective to buy inexpensive flat panels and replace them as they wear out, he adds. For example, Wilts' firm is working with a 1,400-room luxury hotel in Dubai, and it is recommending consumer-grade flat panels for the rooms, but industrial-strength displays for other areas of the hotel.

“When you've got electronic menus for your restaurant or digital information kiosks that are on 24/7 they have to be reliable,” he says. “Kids shouldn't be able walk up and mess with them. You've got to lock them down.”

On the other hand, Wilts says there's no reason to insist that a DVD or DVD+VHS combo deck come with RS232 connections. As long as the player has discrete on and off infrared commands, it can fit neatly into any high-end professional system, he argues. (Peters adds that RS232 is more important for recording than playback, since the control system needs to verify that the deck went into recording mode.)

And not all integrators are feeling squeezed to swap in cheaper consumer parts for pro units. Randy Vaughn, president of AE Systems in Portsmouth, Va., says the issue never really comes up, largely because his quotes are never itemized and brand names are never mentioned.

“We don't sell equipment, we sell solutions to problems,” says Vaughn, whose firm does both commercial work and high-end residential installations. Even then, Vaughn says he'll occasionally use a consumer-grade piece if it's a good fit for his small-business customers.

“You have to look at the duty cycle of what the piece is expected to do,” he says. “If you're doing a corporate boardroom where you'll occasionally need surround-sound, we'll put in a regular DVD or Blu-ray player. If you're talking about a museum setting where the DVD has to play continuously, we'll go as heavy duty and commercial as we can.”

Audio systems are a little different, Wilts says. Though he says he's seeing more “cross pollination” between consumer and commercial audio systems, “for any kind of rigorous use, such as a sound system in a bar, you're better off with industrial speakers.”

SHIFTING MARKETS

One reason there is more pressure to go with consumer-grade products is that the digital signage market is rapidly expanding.

According to DisplaySearch, the number of 26-inch and larger commercial-grade flat-panel displays shipped worldwide will grow from 1.1 million in 2007 to more than 7 million in 2015 (the figure doesn't include consumer-grade products used in commercial settings). And that, in part, reflects a change in the nature of the people who are buying these things. In many cases, panels and other gear are increasingly purchased by people with little or no AV experience, who handle this as an adjunct to their normal jobs.

“The closer an AV project is to being run by someone for whom this is not a full-time job, the more pressure there is to cut costs,” Peters notes.

That means integrators must take pains to educate customers on all the pros and cons of each option.

“First and foremost, you need to make sure you're recommending a solution that will in fact do what the client expects it to do in terms of sources, duty cycle, and controls,” he says. “Then the next question will be, is it going to last in that environment? What will the warranty be?”

But, Peters adds, if a client is willing to accept the warranty limitations in exchange for a low price, there may not be much you can do to dissuade them.

Vaughn says he'd rather turn down a job than use consumer-grade gear in a scenario where only industrial-strength electronics will suffice.

“My customers aren't price sensitive,” he says. “As soon as someone starts talking about brand names and model numbers they've been researching for the last four years on Net, we walk. They won't be our customer.”

It's easy to say that when business is good, but not so easy if you're a startup hungry for customers or if the recession is fully underway and you've had to lay off staff, warns Wilts. Sometimes going consumer grade is the best choice for that particular client.

“When most professional AV people think of what's in the best interest of their clients, they may be taking too narrow a view of the situation,” Wilts says. “Consumer equipment should be leveraged wherever possible to provide the best value. If you show a client with full transparency how you're adding value in a concrete way, that builds the trust that enables you to have a client for the rest of his or her life.”

Dan Tynan is an award-winning freelance technology journalist and author based in Wilmington, N.C. His work has appeared in InfoWorld, PC World, Wired, and other publications.



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