First Cracks Showing In The Canadian CE?

By: Lee Distad

We all know that a rising tide raises all boats. When the sun is shining on the housing market, you see erst while contractors getting into the business, whether as trades, custom CE installers, or even as homebuilders. But as the saying goes, adversity is a greater teacher than success. As the economy turns, and the housing situation cools off, that’s when we find out who really has their act together, and who was just in it for the short term.

One of the best things about my job is being plugged into dealers and vendors all over Canada and the US, and being able to get a big-picture view of our industry that sometimes challenges what network news tells us. It’s clear when talking to US dealers that the outlook is mixed: while there are plenty of depressed regions, there is still an equal or greater number of areas reporting that they are still doing well. So far, the outlook in Canada has been insulated from much of the gloom in the US, but that could yet change.

Consider this story 1 part schadenfreude, and 2 parts valuable lesson. Word just came to me about a CE integrator in a large Canadian city whose business just went into free fall (don’t bother to email me and ask who and where; I’m not telling). They find themselves in a bind because their sales funnel of new deals has been dried up for six months, and their cash flow is running on the progress payments from existing jobs. If you’re a long time business owner, maybe you’ve been there, and you’re cringing as you read this. I know that I winced more than once as the story was related to me.

That’s not to say that all of us in Canada are doomed. Don’t forget, the plural of anecdote is not data. However, now might be a good time to take a good look at your own company: what does your sales funnel look like? How hard are your sales people prospecting? Are your installers running a tight ship, or is there a lot of slack on the jobsites that needs to be reeled in? Do you even know these answers without having to check?

By the time you see a problem on your QuickBooks, it might be too late. The right time to tidy up your operations is always now.

Media Servers Past and Present

By: Lee Distad

If you’re paying attention to trends in CE, you don’t have to be Nostradamus, nor know Moore’s Law to see that Media Servers are rapidly careening towards mass-market consumer price points.

Take the sheer number of competitors who have sprung up. At CEDIA Expo last month there were twice as many companies at the trade show listed under “media server” as in 2007. That alone tells you which way the wind is blowing, as well as the kind of money at stake in taking media servers mainstream.

At the same time, I have to wonder how long the players at the luxury end of the market will be able to hold onto their cache as high-end toys. Don’t get me wrong, I’m very familiar with the features and reliability that differentiates products like Kaleidescape from it’s competitors, but software capabilities and processing power in mainstream PC’s are catching up. To be honest, I'm kind of glad I'm no longer on the custom install front line pitching media servers that cost $50K or more to the rich and famous.

While the tangible difference between an economy car and a luxury automobile are as obvious now as they were in Henry Ford’s time, computer hardware and software is quickly usurped by products that are newer, faster, better, and cheaper.

Let’s not forget the DYI element: home made servers. Just surfing around at various online computer vendors, I figure I could build my own movie server with retail PC parts, starting with a 600 DVD capacity, and upgradeable for under $2000. In reality, by the time I quit procrastinating and got around to it, it would be less. What do you think a Terabyte is going to cost next year? Easy answer: less than it does now. However bear in mind, that homemade solutions require hours and hours of futzing and troubleshooting, and are anything but plug-and-play.

At the moment, the battle between the MPAA and Real Networks over the Real DVD archiving software is just beginning to heat up. In the meantime, while the movie studios try and turn back the clock, you can imagine that win or lose, Real Networks isn’t going to be the last software company to try to put powerful tools in the consumer’s hands. At the moment, US legal precedent leaves custom channel integrators in the clear; let’s hope that continues.

I don’t mean to come across as being negative about media servers going mainstream, far from it. I think that they represent a huge opportunity for the CE industry as they grow in popularity. I’m just suggesting that there are risks and pitfalls that you need to consider if you’re going to get on board.

TrackItBack Takes It Back

By: Lee Distad

For those that don’t know, TrackItBack is a lost-and-found service for small electronics. Customers purchase small foil stickers with a serial number, and register their iPods, phones, and other small devices with TrackItBack. If lost, the sticker encourages the finder to contact TrackItBack, who pays the finder a reward, and reunites the lost device with its owner, at no further charge beyond the original cost of the sticker. I vaguely remember registering a Palm Zire three or four years ago that I’m pretty sure is now sitting in a drawer in my filing cabinet, but that’s neither here nor there.

Because I’m on their mailing list, last week I received an email from TrackItBack founder Jason Wagner. It was an impassioned mea culpa: Apparently, earlier this year TrackItBack changed their service from lifetime coverage to annual coverage, and instituted a renewal fee. It appears that the company received Krakatoa-like blowback from their customers. The email was a heartfelt apology and an announcement that effective immediately, all of their current customers and new customers will once again receive lifetime coverage on all of their registered TrackItBack items.

The lesson here is that as soon as you forget what your business is, you’re screwed. Change is both good and often necessary, but you can’t undertake it lightly, and you certainly can’t make sweeping changes in how your business works without considering the most important part: how it will affect your customers. If you do decide to alienate your existing loyal customers and search for bigger better ones, I sure hope your new plan really does bring in the new ones you’re hoping for. If things don’t go quite the way you planned, you can always apologize to your customers, and if you’re really, really lucky, they’ll forgive you. Requests to TrackItBack for further comment went unanswered, but I hope their realignment with their core values pays off for them.

Trade Journalism vs. Public Relations: Where is the Line Drawn?

By: Lee Distad

So I was hard at work today when I received an email from a dealer I know with a fairly direct request. They wanted to know if I would write an expose on a now-ex vendor that gave them a bum steer; his experience was in direct contrast with the positive press his nemesis receives, and he wanted his voice to be heard.

As it happens, it’s not the first time I’ve been asked this; sometimes an angry CE dealer copies me into an email thread with their vendor and uses it as leverage against them. Not that I condone extortion, but sometimes the threat of bad press gets the dealer what they want.

It’s worth noting that my correspondent pointed to the perception that all we do in the trade media is say nice things about manufacturers. I know that in corresponding with mainstream journalists, many think that we don’t dig up stories, that all we do is write gushing reviews and paraphrase press releases. Yet that’s just not true at all. For example: I was the first to break the story earlier this year about Best Buy recruiting finance professionals to rejuvenate their Venture Capital arm. The story ran in the American CE trade media, and when it broke in a major daily newspaper a week later, the journalists who wrote their own story gave me zero credit for having the scoop. If I still sound a little bitter about that, I guess I am.

I have to argue that doing CE trade journalism is totally different from being a publicist. It’s the job of the PR professionals to promote their manufacturer’s products. It’s the job of trade media to report news. A new Blu-ray player is news for us to report; it’s the publicist’s job to talk up the product.

Certainly, the two professions dialogue and work together, but it’s the media’s job to report on the facts, and that means if a product or a company is in trouble, we report on that too. A struggling company that shall remain nameless has recently been displeased with reports of its difficulties and recently started make angry, litigious noises about the press it receives. My response was that if they’re struggling, that’s news; if they’re doing well, that’s news too. If they want to read something positive, try turning a profit first.

Do personal opinions enter into trade journalism? Certainly. But if I think a product or service sucks, I’ll back it up with facts and experience, and tell readers why. If that opens up a dialogue with people in the industry who disagree, well that’s even better for everyone. The better informed our readers are, the better off we all are as an industry.

Is Your Business Ready for Retirees?

The “baby boomer” population is growing, but are businesses taking this into account when planning for the future? According to a recent study conducted by The Human Resources Professionals Association (HRPA), most don’t, despite that fact that 20% or more will face employee retirement within the next five years.

Of the remaining companies in the study, 15 per cent say up to 30 per cent of their workforce will retire in five years; and 8 per cent expect up to 40 per cent will hit retirement age. Despite this knowledge, 23 per cent of companies admit to being “poorly prepared”, while 60 per cent feel they’re “somewhat prepared”. Those that are somewhat prepared may have bought themselves more time as Canadian’s stomach an economic meltdown that has seen Canadian stocks drop 30.6% since January 1st. Those that thought they were retiring may be working for another few years in hope of their investment portfolios recover.

Statistics Canada reports that 15 per cent of Canadians are now 55 and older; and, for the first time, half are over the age of 40. In less than 10 years, one in five people in the workforce will be between 55 and 64.

What’s more, the study refers to a pending “talent shortage” that will leave companies looking for worthwhile staff.

How are you prepared to handle retiree-fever and talent shortages?

In all, 627 HR professionals were surveyed for the study.

Lots Still To Be Thankful For

By: Lee Distad

If you’re a newshound, and especially if you have an interest in financial and business news as I do, things look pretty grim. Turn on the TV, pick up a paper, or go to the web and you’ll see headlines warning of impending doom across a broad swath of sectors: Banks are failing, the price of oil is dropping, container ship charter rates have dropped to nearly zero, and so on. And retail, oh lord; the prognosis that on-air pundits are giving for retail and the upcoming Christmas selling season is beyond terrible.

Still, let’s take time today to focus on what’s important, and better yet what we still have to be thankful for. How about some perspective to start with: this isn’t the first time that we’ve seen a weak US dollar, fluctuating energy prices, and spiralling inflation. It’s not the end of the world yet, this too shall pass. Let’s be thankful that the exposure of Canadian chartered banks to sub-prime asset-backed securities has been minor. On the same vein, let’s be thankful that lending standards in Canada have been more rigorous in the last five years than our neighbours to the south, so that we’re less likely to see a tidal wave of mortgage defaults here. On a more industry-centric note, let’s also be thankful that Canadian consumers still have an appetite for cool shiny toys like flat-panel TV’s, smart phones, and in-car navigation. This Christmas may not be the best one ever, but it’s unlikely to be bleak for Canadian retailers.

Lastly, let’s all remember that the reason why Canadian Thanksgiving is a month earlier than American Thanksgiving is because we have more to be thankful for.


Have a safe and happy Thanksgiving.

Happy Thanksgiving!

By Gordon Brockhouse

The news headlines over the past couple of weeks have been anything but cheery: stock-market meltdowns all over the world, failures of once-mighty financial institutions, a tumbling loonie, bitterly divisive elections in Canada and the U.S. So it’s understandable if Canadians head into this holiday weekend with a high degree of anxiety.

I think we’ll all be happier on Tuesday morning if we can stop worrying for a bit. The fact is we have a lot to be thankful for on Canadian thanksgiving.

Even if our portfolios have taken a shellacking, we still have a functioning economy: one that added 107,000 new jobs in September, when the meltdown began. Our own industry is making a contribution, as you can see by the story on our main page about Future Shop hiring 6,000 seasonal associates for the holidays. Regardless of where the markets go next week, the vast majority of us will still be working and providing for our families.

Of course, many individuals and families have been hurt by the economic turmoil. Thankfully, our blessed country has the institutions and generosity to assist those who aren’t so fortunate.

Even if we’re witnessing two unusually nasty elections, the mere fact that we have elections is another reason to give thanks (and to get out and vote on Tuesday!). Even if we don’t always think well with our leaders, we get to choose them and hold them to account. We have constitutions that let us change governments peacefully, rather than at the barrel of a gun.

There are many other reasons to give thanks: family and friends to name two of the most important.

So instead of worrying, let’s all do what we’re supposed to do on Thanksgiving holiday weekend, which is 1) relax and have some fun, 2) give thanks, and 3) eat a really big turkey.

Happy Thanksgiving to all our readers from the Marketnews team!