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Best Buy minus 3D = Dropping, Dropping, Dropped!

Posted on December 19, 2010 at 4:05 PM

With an entire weekend between us and my last post, I’m hoping that you’ll remember that I was reading through one of the latest issues of TWICE recently that recapped the Black Friday after action report. One of the things that the Weekly – that’s what us cool, industry kids call it; kind of like saying “Yeah, I read the Journal like it’s a commandment, bro-ham!” or “I’ve got to tell you what I read about [something-something sports related] in SI!” or, “the Max has a hard hitting expose on pube bleaching! Powerful stuff; really made me think, you know?” – went on to talk about along with the less than Black (I’d say “blacker than black” but I think when it comes to retail numbers, “blacker than black” would probably be a good thing) sales number, was how the high ticket items weren’t really selling.

 

The quote in particular was this, “In contrast, 3D TV and iPad, both early Black Friday favorites, proved to be a mixed bag.” A Sears representative said that “3D drew little attention” while a Best Buy corporate talking head commented that “Interest in 3D was light.”

 

Hmmm, what a shocker. I mean, I just can’t believe that 3D TV hasn’t been embraced by everyone. I mean why wouldn’t everyone be rushing out to buy a new 3D set? Like one for every room of their home and the kitchen. It can’t be because there is hardly any programming to watch. Seriously, needing any more than 4 different movies to watch is really just being greedy. I know that Lauryn is content to watch Toy Story 3, Ratatouille and Horton Hears a Who over and over again, so with those movies, we’re pretty much set. What? Those aren’t available in 3D, you say? But surely there are some awesome things available, right? I mean, studios would be throwing Suge Knight level support and persuasionness behind promoting 3Ds, right? Let me just check some of the 3D titles available at Amazon.com. Saw3D...Legend of the Guardians – Owls of Ga’hoole...Step Up 3D...Piranha 3D...Cats & Dogs: The Revenge of Kittle Galore...and, oh man, really? Kenny Chesney: Summer in 3D? Really?! Like, is the movie industry actively trying to sabotage TV sales by cherry-picking their catalog to find the most ass-tastic, pooh-smelling titles for their 3D processing? OK, forget about the movie selection. I’m sure that when CDs first came out, it wasn’t like you could just run out and buy good music to listen to. You probably had to wade through some Peaches & Herb and Famous Irish Drinking Jigs. Let’s talk about the other equipment, like the glasses. And sure they’re expensive, but you can’t put a price on entertainment. Wait? What? You can’t put a price on entertainment but electronics’ manufacturers CAN put set a price? And that price if $150+ per pair of glasses? But we can just take turns using them. And Lauryn has already refused to wear them, so that’s one less pair I need. And if I wait until after Dana goes to bed, I can probably just use the set that comes with the TV. See? With a little creative problem solving, you don’t even need to worry about buying more glasses! And, yeah, it may be true that viewing can result in nausea, possible epileptic fits and the urge to throw yourself down flights of stairs. But seriously, so could drinking too many beers. And like I’m gonna let a couple of potential adverse health warnings get between me and my bottles of delicious-hint-of-blueberry Leinenkugel's Sunset Wheat and my heavy machinery operation.

 

No, none of these are reasons not to buy a new 3D TV. In fact, TV manufacturers have already decided that 3D TV is going to be the next big thing, and that, oh yes, so help me God, you WILL own one. So stop being such a difficult tightwad and go buy your new set!

 

Still not convinced? Yeah, neither am I. And it’s not just because my 9G Pioneer Elite Plasma is SO awesome; I think that I’d probably be perfect happy with a new 65-inch VT Panasonic. Now, granted, I might never use the 3D ability, but it makes a kick-ass 2D picture. But this set is flagship, priced, maybe that is keeping people from buying these new 3D sets.

But what about Todd Splanger’s article in Multichannel News back in May, titled “3DTV Sales Forecast to Triple in 2011.” O’le T-Splang says, “Manufacturers are on track to sell 4.2 million 3DTV sets worldwide in 2010, with the market projected to triple to 12.9 million units next year, according to research firm iSuppli. By 2012, 27.4 million 3DTVs will ship worldwide and by 2015 shipments will reach 78.1 million units, representing a compound annual growth rate of 80.2% between 2010 and 2015, iSuppli projected.”

 

I have to say, those numbers all sound pretty gosh-darn impressive. I mean, sales numbers tripling, 80.2% annual growth rates, and 78.1 millions of sets sold and whatnot. Sounds like investing in 3D is the place to put my moneys! I mean, not investing IN a 3D TV, but investing in companies that would profit from this tsunami onslaught of 3D TV sales. Maybe a company like, I don’t know, Best Buy. They sell 3D TVs, right? Let’s just take a look at their recent stock price, shall we?

 

 

What the heck? That “Hold on boys! There’s appears to be a bit of rough patch and a cliff aheaaaaaa...” drop must be a mistake right? Maybe this chart is old, like maybe the week of September 11, 2001? Or like a combined chart showing the market highs in 2007 to the bottom in 2009? Yes that must be it. No? It isn’t? This is a single day? Where it dropped over 15%? And then kept dropping for the rest of the week?! What could have caused such drama? Did Best Buy announce that they want to bring in that Al-Qaeda moneys so they've hired Bin Laden as new comptroller? Did Oprah have a new episode called “Oprah’s Suckiest Things” and devote the entire episode to bashing Geek Squad and saying she caught them trying to secret-spy cam her in the shower? Or even worse; the unthinkable….did Steve Jobs call Best Buy the Great Satan and say that he’d rather own a Flash-running, Vista-driven PC than ever sell Best Buy another product? No? It’s because of...lackluster 3D TV sales?

 

Let’s see what some industry-expert types have to say. Best Buy’s Chief Executive, Brian Dunn, temporarily removed his ceremonial 3D glasses and told analysts that “sales of 3D TVs had fallen behind industry expectations.”

 

According the AP, “A revenue shortfall because pricier 3D TVs and Internet-connected TVs proved less popular than Best Buy expected”

 

But the whole market was probably down right? It was like a 900 point down day or something and the entire Dow was just routed, with Wall Street types fighting each other to be next in line to leap out a window? No? The market was actually up as a whole? According to Reuters, “Strong November retail sales lifted U.S. stocks on Tuesday on optimism about consumer spending, even as weak sales from electronics bellwether Best Buy showed some specialty retailers could be struggling. Shares in Best Buy...lost 15 percent, denting sentiment boosted by the spending data.”

 

Paul Gagnon, an analyst for the research group DisplaySearch, said 3D TVs haven't caught on yet because they are expensive and there hasn't been much programming available and that even many shoppers willing to spend more for the latest technology seem to be taking a "wait and see" position. According to Gagnon (which I hope is pronounced all Frenchey, with a somewhat more cool and silent second g and not, you know, “gag” that the noise you make right before a 3D induced vomit), "There's a bit of a chicken-and-egg dynamic — content makers don't want to make 3-D (shows) if there isn't going to be anybody to watch them.”

 

Those cocksure boys over at Wedbush Morgan Securities were even more heavy-handed in their 3D predictions. Likely buoyed by mega-year-end bonus checks which they are *clearly* not spending on new 3D sets – Oh, that’s right, Webush Morgan! If you’re looking for someone to blame this mess on, I say, look first in the mirror! – the Wedbush boys say, "We do not agree...that 3D TV and [internet-connected TVs] are the next great things. We remain pessimistic that 3D TV will be widely adopted by any but the most hardcore gamers." Maybe that’s because someone bought them a 3D starter pack of that stupid Owl movie and the Kenny Chesney concert. Seriously, Avatar and Tron...you’ve GOT to get in the game here!

 

Ross Rubin, an analyst, market researcher, general gad-about-town at NPD says that consumers are put off by needing to purchase expensive 3D glasses to go along with the new TVs. Rubin, who probably likes tweed and corduroy and plaid flannels, also says, "If the 3D content hasn't been produced well -- if it has been aggressive on certain kinds of effects -- that can result in discomfort for viewers.” Discomfort like, you know, spike-in-brain level headaches, trying to bite their own tongue in half and wanting to throw up and stuff.

 

But what about T-Splang, The Splangulator’s sales forecast...4 million sets sold is a pretty huge amount of sets right? That has to be like, what, 50% of all the TVs? I guessed too low, didn’t I? My gut said to say 75%, but I...what? Too high? Umm, how about 33%, like a third? No? Lower? Are you kidding me? 25%.? Still too high? OK, 15% What? Still no? Ummm, 10%? Come on, you can’t tell me that with all the hype and hoopla over 3D, the promised second-coming, CE world, Messiah-level event, hasn’t even managed to garner 10% sales of TVs! No! I won’t hear your malicious, anti-3D lies! No! OK...All right. I’ll posit one more guess. 5%, Regis, that is my lowest and final answer.

 

Am I right?

 

Well, not according to Chris Nuttall from the Financial Times. His article, “Lack of content leaves 3D TV sales flat” starts with the comments, “Big-screen 3D TVs are not the hottest items this holiday season. Best Buy, the biggest electronics retailer in the US, reported this week that slow sales of 3D TVs had contributed to disappointing quarterly results.” And according to Chris, the guy with tall the Nut, “Only about 4m 3D TVs are expected to have shipped worldwide this year -- about 3 per cent of global HDTV sales.”

 

It just goes to show that it doesn’t matter how much marketing hype you try and generate; how much buzz you try and create; how much you try and force something on people. When people don’t like something, don’t want something or feel they don’t need something, they aren’t gonna buy it. And it seems like the American public has let their wallets do the talking. We didn’t like the Ford Edsel. We didn’t like New Coke. We didn’t like the Zune OR the Zen. And, so far, we don’t like 3D TV either. Now if you’ll excuse me, Lauryn and I have a 2D Blu-ray of Toy Story 3 to watch. Again.

Categories: December 2010, 3D TV, Rants

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