Digital Home Divide: Is The Home Market Still A Channel Play?


CRN assembled channel executives at D&H Distributing's Mid-Atlantic Show in Hershey, Pa., last month to talk about the future of digital. The executives agreed the market hasn't lived up to expectations but said there's no single reason why convergence hasn't been more successful.

"I think the forecasts were wrong for [convergence]. The industry saw a tidal wave of expectations, but it's really more of a rising tide," said Ted Houser, general manager of Glick Audio and Video, Lancaster, Pa. "The tidal wave of anticipation you're looking at is why you see vendors backing out. The product is a commodity. The real solution is our skill. That's what has hindered growth. There's not a whole lot of skill and ability out there to sell these solutions."

But all the executives were bullish on the digital future long term, including David Kaplan, executive director of Digital Delivery Group, a Seattle-based consortium of regional digital distributors. "My experience is that things happen quickly in their own sweet time," he said. "Maybe we're moving glacially, but we're moving from the attachment to the TV world to the network world. I have come to the conclusion that it is an absolute, an inevitability."

Mike Halasz, president of Northshore Technological, Erie, Pa., said the true success of digital convergence lies not in the hands of vendors or analysts, but in the integrators and dealers selling the solutions. "It's us. We're the only ones that are going to make it stick. It takes a unique skill set to pull disparate products into something that works together for a customer's needs," Halasz said.

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He then cited statements made last month by one vendor CEO that convergence is not going to happen. "He said convergence is a violation of the laws of nature. Things want to move apart. [Vendors] are all going to act in their own best interests. There's not enough altruism."

But at least one panelist, Jon Layish, president of Red Barn Computers, Binghamton, N.Y., said he has found his services niche with a big help from a vendor in his local market. He's developed a relationship with Time Warner Cable to install home theater PCs and Internet service in the homes of consumers. "We've really been excited. They're giving us free advertising to push the concept," he said.

Several of the panelists said the one vendor likely to jump-start the convergence revolution is Apple, and more specifically with its upcoming Apple TV box. "I give Apple credit. They are capturing the imagination of the market and elevating the whole concept. Apple TV has been done by TiVo, done by Media Center, but if Apple can do a better marketing job they will capture tremendous market share," said Mark Friedman, vice president of Custom Audio Video Distribution, South Plainfield, N.J., and president of Digital Delivery Group.

"Apple holds the future in its hands," agreed Lee Rambler, director of custom home at WeeBee Audio, Lancaster, Pa. "Apple TV will be the biggest thing to do what Vista was supposed to do."

It appears that marketing and education of the solutions to end users also lies in the hands of solution providers, said Darryl Nicolas, owner of ColorBAT Computer Services, Millersville, Pa. "People don't have the knowledge to know it's important yet. We sell to 2 [percent] to 3 percent of the population that understands it. The other 90-plus percent don't know how to tie strings, let alone run a convergence center in their home," Nicolas said.