Successful CMOs achieve growth by leveraging technology. Join us for GrowthBeat Summit on June 1-2 in Boston
, where we'll discuss how to merge creativity with technology to drive growth. Space is limited. Request your personal invitation here
3D TVs are a really hard sell. They look nice, but I don’t really want to pay $2,100 to $5,000 for a TV with stereoscopic 3D images for my living room. I already have a flat-panel TV.
But the TV makers are pushing it big time, and Sony is the latest to launch its line of 3D TVs. Samsung and Panasonic started their campaign to sell 3D TVs in March, but Sony took longer because, the company says, it wanted to get the entire message and product right.
In the meantime, Sony has conducted more than two million demos of 3D TVs at its Sony Style stores and at special events in the last few months. The effort supports its ad theme “Seeing is Believing,” and it reflects the company’s view that high-quality 3D is something that has to be experienced and that only Sony does it the right way.
“It has taken more than 100 years for people to figure out how to do 3D TV right,” Stan Glasgow, president of the U.S. division of Sony Electronics, said (pictured).
Glasgow is the chief cheerleader for 3D TV. While Sony isn’t the first, the company has gotten valuable feedback by waiting longer and has lined up the best quality, Glasgow said. Sony claims that 60 percent of consumers who have seen demos say they plan to buy a 3D TV.
At an event today, Glasgow’s team showed off two 60-inch Bravia TVs that could be viewed with Sony’s active shutter 3D glasses. Those glasses are sealed on the side, cutting your peripheral vision but also keeping out reflections that mess up the images you see.
The TVs showed live broadcasts of the World Cup match between Germany and Spain. It was fun to see, and the quality was pretty good. The high-definition images stayed synchronized for me as I watched the event for more than 10 minutes. I didn’t get tired or develop a headache, as some people have apparently experienced with poor-quality 3D. There was no “ghosting” effect, where there are secondary images of soccer players. The only flaw I noticed was that the soccer ball turned into a blur whenever someone kicked it hard. That’s not such a big problem.
The problem I have with the 3D TV experience is the cost. The glasses are as much as $200, and Sony’s TVs start at $2,100 for a 40-inch Bravia KDL-40HX800 TV with LED backlight. The top-of-the-line TV is a $5,000 for a 60-inch LCD Bravia XBR-60LX900 TV with an LED backlight. According to iSuppli, about 70 percent of TVs sell for under $1,000.
When I asked Glasgow about the 3D TV pricing, he said that you should watch 3D on a big screen for the sake of having a higher quality experience. That naturally means you’d pay a higher price. But I find it curious that, as much as the TV makers are touting 3D, they are not adding it to their cheapest TV sets yet. The cost addition is as much as $500, but could be less than that. So why isn’t Sony adding it to some of its 40-inch TVs that cost $1,000?
The obvious reason is that every TV maker wants to upsell consumers to the more expensive TVs with all of the other features, such as LED backlights and web connectivity. So the 3D TV strategy makes sense from a business view. And Sony’s position — focused on providing the highest quality — is more defensible than some of the other TV makers.
But it’s not a great time to be selling high-priced TVs. The recession may be ending, but there are lingering effects such as a jittery stock market, troubles in Europe, and weak consumer confidence. Glasgow said he is cautiously optimistic that Sony Electronics will grow its business in the U.S. this year by a significant amount compared to last year. (Sony doesn’t disclose exact numbers for its regional sales).
All told, Sony has 27 3D products. It is pushing not only consumer 3D TVs, but internet TVs based on Google’s technology as well as 3D projectors, 3D video cameras, 3D Blu-ray players, and 3D panoramic still cameras. Digital cinema is taking off in the U.S. as theaters convert to 3D. Thirty 3D movies are in production this year, compared to 19 last year, Glasgow said. Sony Pictures is running workshops to train movie makers how to create 3D movies.
Sony is commissioning content such as 3D games that can work with its PlayStation 3 game console, and it has put in place a lot of content partnerships such as the World Cup 3D partnership. ESPN is broadcasting thousands of shows in the coming year in 3D. All of this is aimed at overcoming the inertia of consumers who may have already bought their flat-screen TVs just a few years ago.
In short, this is one of the biggest electronics sales jobs in history. Sony is running TV commercials featuring Justin Timberlake. For the summer, Sony has added 300 3D specialists to its Sony Style stores, where an estimated 200,000 demos will take place in the next few months. Sony will stage more than 5,000 marketing events for 3D.
“We are investing in educating the consumer,” Mike Fasulo, executive vice president and chief marketing officer at Sony Electronics in the U.S., said (pictured right). “The last thing we want to do is confuse the consumer and stall a sale.”
Chris Fawcett, head of TV sales at Sony in the U.S., said that early pre-orders for 3D TVs are good and that early promos show that consumers prefer the biggest screens available when considering a 3D TV purchase. Fasulo said the market education campaigns are aimed at taking away the anxiety of consumers when it comes to 3D.
On the other hand, a little anxiety also helps. Now many consumers are starting to feel that they should buy a 3D TV for the sake of future-proofing their home entertainment system from becoming obsolete.
Glasgow said he would love for the TVs to display stereoscopic 3D without the glasses, but for now it’s not possible or affordable.
Overall, Glasgow pledges that Sony will have the No. 1 market share in 3D TVs. Hopefully, the market won’t be the size of a puddle. Market researcher DisplaySearch estimates 3D TV revenues could hit $22 billion by 2018. DisplaySearch forecasts the market for 3D-ready TVs will grow from 0.2 million units in 2009 to 64 million units in 2018.
As one wag said recently, the experience of 3D TV will be as glorious as James Cameron’s Avatar movie, or as bad as the forgettable Ishtar.
VentureBeat’s VB Insight team is studying marketing analytics...
Chime in here, and we’ll share the results