Nov./Dec. 2002Volume 1 Issue 2

Recent and Upcoming Events Distinguished Dealers In Today’s Tough Market

By John Giolas

January 9 - 12, 2003Consumer Electronics

ShowLas Vegas, Nevada

Wilson Audio at The Mirage

Dealer Events

October 29, 2002Esoteric AudioScottsdale, AZ

Phoenix Audiophile SocietyJohn Giolas representing

Wilson Audio

November 13-14, 2002Remodeling Celebration

Audio AdviceRaleigh, North Carolina

(13 - Architects, Contractors;14 - General Public)

Peter McGrath representing Wilson Audio

December 4-5, 2002Remodeling Celebration

Sound EnvironmentOmaha, Nebraska

(4 - Architects, Contractors;5 - General Public)

John Giolas representing Wilson Audio

December 6, 2002Open House

Audio/Video EnvironmentsFranklin, Tennessee

Peter McGrath representing

CEDIA 2002 was productive and enjoyable for me this year. The Wilson team had the opportunity to spend time with many of you, listening to both your successes and concerns. We also cultivated new relationships with dealers in markets and areas where Wilson is not currently represented.

I was reminded of the level of professionalism, commitment, and expertise among our dealers. Wilson Audio is privileged to be partnered with the best specialty resellers in our industry.

The CEDIA convention is largely symbolic of how much our industry has changed in the last several years. I remember the first CEDIA conference, which I attended as a dealer. Held in Texas, the first convention was small, poorly attended, and rather amateurish.

While we had some idea of the opportunity that home theater and custom install represented, we could not have envisioned how it has fundamentally transformed the way in which our industry conducts business.

With these changes have come large challenges, both for manufacturers and for dealers. Those businesses that moved into the arena of home theater and custom install without accounting for the profound changes and challenges these new segments present are struggling or have disappeared altogether.

Part of the challenge is financial. Dealers who began as traditional retailers have had to learn to capitalize their business to meet the very different cash and capital demands of installation business.

Often retailers who were “cash rich” as retail organizations found themselves facing cash problems as they attempted to run their custom install organizations using the same business practices they used as retailers. These businesses had to learn quickly how to structure their finances to account for the elongated life-span of the custom install sale.

As the market for home theaters and custom install grew, dealers found themselves competing with a larger number and a wider range of dealers.

Larger “chain” organizations moved further up-market, creating the image that they, too, sold high-end audio and video products.

Custom installers with little more than a pickup truck and some tools (pejoratively referred to as “trunk-slammers”) seemed to spring up from the oddest places; electricians, alarm companies, central vacuum installers, and others made successful attempts to break into the home theater and custom install business.

It became critically important that specialty dealers distinguish themselves from this confusing array of choices presented to the consumer.

(See Challenges page two)

There are other challenges. Technology

in the video industry is rapidly changing. The move away from three-gun CRT to display device products such as D-ILA, LCD, and DLP projectors has made video projectors much easier to install and maintain.

Since these new video products do not require the same level of specialized expertise from the installer as CRT projectors once did, video manufacturers are able to distribute their products to organizations not equipped with a high degree of technical ability unique to specialty organizations.

This dilution of the market in video products will inevitably result in the continued eroding of profit margins for the specialty reseller.

It will also become more and more difficult for high-end audio/video specialists to differentiate themselves from their competitors in the video category.

Those businesses that have remained

loyal to their core high-end values can more easily distinguish themselves from their would-be competitors.

This has been more difficult for specialty organizations as audio manufacturers, once considered exclusive and high-end, have dramatically broadened their distribution and moved further and further down-market.

Dealers found themselves sharing a line they once carried exclusively with as many as five or six other dealers within their markets.

Wilson Audio has grown despite keeping its distribution relatively exclusive.This is because we understand that our products require correct, expert installation in order to realize their formidable performance potential; this expertise is limited to those dealers that are driven by the passion to provide their clients with a unique experience.

It has always been the case that businesses driven by a higher ideal, driven to create something distinctive for their clients, are, by definition, small in number. Wilson is dedicated to this small group of dealers that are infected by the same passion for excellence that drives us.

Wilson Audio has chosen a different approach to cultivating the home theater and custom install market.

Wi l s o n A u d i o i s r a r e a m o n g manufacturers in that, while remaining absolutely true to its high-end audio ideals and culture, we have developed cutting-edge products that address the demands of home theater as well as answer the architectural needs presented by custom install.

We understand that it is the audio performance of a system, (whether it is a theater, listening system, or whole-house audio), as determined by the loudspeaker, that ultimately provides the emotional impact to that system.

We continue to rigorously develop products that redefine what is possible in music reproduction, home theater, and custom install.

The level of research and development engaged by Wilson is remarkable in its high degree of sophistication in anticipation of the product’s actual use.

We remain particularly committed to pushing the envelope of the art of loudspeaker design.

Additionally, Wilson Audio provides unprecedented levels of training to our dealers, teaching them correct methods of speaker set-up and installation.

We are dedicated to the process of providing proper tools enabling our dealers to continue to provide their clients with a compelling experience.

In a world of diminishing margins, Wilson products remain profitable. And since our products are consistent and reliable, Wilson Audio provides a source of pleasure to its clients without the attended ongoing maintenance required by other product categories.

Wilson Audio thanks you for your continued efforts in providing your clients an experience not obtainable elsewhere. We believe that Wilson Audio products provide our dealers a unique opportunity to distinguish themselves from their

Challenges (Cont. from page one)

Wilson Audio’s only wall-mounted speaker to date, the WATCH (Wilson Audio Theater Comes Home) Sur-round appeared in 1999. As the Surround was designed, the reflections from its wall-mount position were taken into account. The Surround’s interaction with wall boundaries were calculated in its achievement of tonal balance and accurate reproduction of sound. With the WATCH system (WATCH Center, WATCH Surround, and WATCH Dog Subwoofer), Wilson Audio Addressed the growing trend toward home theater by creating an integrated multi-channel system that performs with the level of quality Wilson customers have come to expect from our loudspeakers. Although conceptualized as part of a home theater system, the Surrounds perform excellently as stand alone speakers in rooms, such as apartments or offices, where floor space is limited.

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Wilson Products in the News“2002 Recommended Components: The 700 Best Audio Compo-

nents”Stereophile, October 2002

“Wilson Audio Specialties Sophia: $11,700/pair. JA had great expectations for the Sophia right from the start, and in no way was he disappointed. The three-way, floorstand-ing, reflex-loaded loudspeaker, had a way of ‘reproducing the wide dynamic sweep of a

symphony orchestra in full measure’ that left JA captivated.”

“The Stereophile Show: Home Entertainment,” by Arnis Balgalvis The Audiophile Voice, Vol. 8, Issue 4

“The show stopper comes during the Wilson demo sessions. . . .the WATT/Puppy 7 introduction was spectacular. I heard dynamics, resolution, space, and speed. But above all, I heard music. It doesn’t get much better than this.”

“The Hot 100: John Atkinson Ranks the 100 Audio Products He Feels to Have Been the Most Important Since 1962”

Stereophile, November 2002

Just a few weeks before Christmas 1995, I heard rumors about a speaker company here in Utah that produced the X-1/Grand SLAMM retailing for nearly $70,000 a pair. Never before had I heard of Wilson Audio, but as the manager of a large electronics store, I was dying to know more. Perhaps after the holidays when things slowed down. During the Christmas rush, I was waiting on a customer buying some headphones and a few other small items. He needed my help to get them to his BMW undetected. Part of the required checkout procedure was to ask for a phone number. Imagine my shock when the name that appeared on the cash register screen was David A. Wilson! After chatting awhile with the designer of the X-1, I knew I wanted to be part of a passionate company like Wilson Audio. In December 2000, a career goal was fulfilled when I was offered a position as a service manager at Wilson Audio. My first day on the job was CES 2001 – the introduction of the Watch Dog Subwoofer. I came back from Las Vegas earlier than the rest of the Wilson Audio team and felt somewhat overwhelmed trying to handle questions phoned into the office on my own. Now, personally assisting dealers when they call is second nature. In fact, I’m wondering if all of our dealers are aware of some of the unique services Wilson offers.

Read the following list to see if there’s another way we can help you better serve your clients. Brochures/Posters: A full-line of brochures and product posters is available. High Resolution Digital Images: Call for specific options. Custom Paint Samples: We have paint samples to assist interior designers and customers having a difficult time deciding on color. Parts: All parts, drivers, grills, owner’s manuals, and accessories are available through the our service department. Order status: I can provide information regarding the status of ship dates, new orders and ETA, or current stock availability. Troubleshooting: I take calls regarding service and what parts are needed to complete a repair. Shipping Information: You may ask for tracking information, shipment details, contact numbers, etc…. Speaker Maintenance: You can receive information on how to dust, wax, and care for your speakers and perform routine maintenance. Placement: If you need any specific tips regarding speaker placement, positioning, toe-in, etc., please call. History: With serial numbers, we can provide information regarding age of product, what upgrades have been performed, etc….

When Jerron Marchant isn’t at Wilson Audio answering your questions, you might find him at home playing with his four children who range in age from eight months to seven years old. During the fall 2002, Jerron helped coach his five-year-old son’s soccer team. Another favorite way for Jerron to spend his lesiure time is watching movies with his wonderful wife. Among their favorties are The Rookie; Raiders of the Lost Ark; Forrest Gump; O Brother, Where Art Thou? and The Sixth Sense. Jerron grew up in the small town of Stanwood, WA. How small? Small enough that Jerron and his brother have bragging rights to having purchased the first CD player in town, the Sony D-5 (portable), in 1985.

This is Jerron. How may I help you?By Jerron Marchant and Sherri Burge

Open House Feedback We wanted to thank you so much for your tremendous contribution to making our October 24th event a success. Your help during the day in setting up equipment and getting everything ready was invaluable. It is always nice to know that your vendors are behind you. We had many complimentary comments about you, your presentation, and the prod-uct. Thank you again for being here. Best Regards, Don Krasen Krystal Clear Audio-Video Dallas, TX If you are having an event we could help

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Some of the Many Posters Available through Wilson Audio

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