By 2010, approximately 30 million U.S. households are expected to have connected entertainment networks, according to a recent study by Parks Associates, cited by Linux Devices, a trademark of Ziff Davis Enterprise Holdings Inc., New York. A connected entertainment network is defined as “a network composed of either a PC connected to at least one … or multiple interconnected consumer electronic devices such as a whole-house
DVR system.” The study predicts that connected entertainment will be the core of entertainment and business prospects in the digital home, creating a long-term opportunity for both traditional and low-voltage electrical contractors.
In a related study, ABI Research, Oyster Bay, N.Y., estimates the market for home networking and connected entertainment devices will grow from the $14 billion experienced in 2005 to more than $85 billion in 2011. According to the market research firm, this growth rate will be driven by a desire for “pervasive connectivity” in applications such as multiroom personal video recorders (PVRs); place-shifting, a technology that allows broadband video streams from a home television set or PVR to be forwarded for viewing at any location with a computer display and a high-speed Internet connection; and networked gaming.
Why is the home entertainment market growing so much and so rapidly regardless of the fall-off of new residential construction during 2007? The answer lies in the proliferation of digital components and accessories, such as MP3 players, satellite radio, and larger audio/video (A/V) servers and their integration into a single network with a centralized control system.
“As a result, consumers have become more technologically savvy. And as home entertainment becomes a bigger part of their lives, consumers want a way to integrate separate systems to more easily monitor, manage and control the entire household,” said Taly Walsh, director of marketing for Crestron Electronics Inc., Rockleigh, N.J. The growth in the home entertainment product and system market lies also in the advances in product technology, as well as in their diversity.
“Advances have made the technology more affordable, and any new construction is now including structured wiring for home entertainment and control systems to ensure new homes do not become immediately obsolete,” said Jeff Grove, integrated systems manager for West Side Electric Co. Inc., Portland, Ore. And because the demand for home entertainment systems is a relatively new phenomenon, the market has a long way to go before it reaches saturation.
“Growth is also driven by people who enter the market at the low end of the spectrum and upgrade and expand their systems over the years,” said Bob Gartland, president of Avad LLC, Van Nuys, Calif.
Defining home entertainment
According to the Custom Electronic Design and Installation Association (CEDIA), Indianapolis, approximately 22 percent of U.S. residents have a home theater system, and 34 percent of homebuilders now offer structured wiring packages as standard or optional amenities. Of course, the definition of a home theater or home entertainment system is broad. An entertainment system could incorporate audio at the lowest end; surround sound and high-definition (HD) video in the mid-range; or, at the high end, 7.1 surround sound, media servers and entertainment systems, such as Playstation 3, HD video with high-definition multimedia interface (HDMI) capabilities, and a control solution that provides seamlessly integrated dynamic control.
“A home entertainment system can be as simple as a stand-alone music device or as sophisticated as a distributed whole-house music system with home theater and other media setups that is integrated with lighting and HVAC control as well as other systems around the home,” Grove said.
The devices used to control the system also range from the very simple to the complex, including remote controls, touchscreens, the Internet or handheld devices.
For success, electrical contractors already in or planning to enter this market need to know what products are used in a home entertainment system and what customers demand. The obvious products include HD televisions, video sources (including cable and satellite), stereos and speakers, media players (DVDs, DVRs), and lights and lighting controls. The less obvious, and up-and-coming, are music and movie server systems that enable homeowners to download and store music and videos.
“These products and systems have come down in cost over the past decade, making the technology affordable for middle-class consumers. In addition, the capabilities and reliability of the systems have improved, providing consumers with a wider range of choices,” said Ken Kerr, president and CEO of Home Controls Inc., San Diego.
Currently, consumers mostly are demanding a home theater system consisting of HDTVs, upgraded surround sound audio systems, and a cable or satellite box with a HD DVR and a high-end DVD player.
“Typically, consumers also want a sophisticated remote control that provides easy use of the entire setup,” Kerr said.
According to Gartland, ease of use is key, and right now, easy-to-use systems are custom engineered, which requires professional planning and installation.
“In most cases, sophisticated systems with easy-to-use whole-house controls still haven’t migrated to mass--produced retail solutions,” Gartland said.
The demand for easy-to-use home entertainment solutions is a direct outgrowth of people’s desire for homes that are generally easier to operate. People’s lives are complicated, but they still want the technology. They want systems that will help them simplify.
“For example,” Grove said, “they want a programmable lighting control system that allows them to quickly and easily manage all the lights in the house from a single control component or to access movies and music that have been downloaded off the Internet from any room in the house.”
“Electrical contractors have great opportunities in this market, particularly in the installation of remote lighting control,” Kerr said. For example, universal powerline bus (UPB) technology is a reliable digital communication protocol that resides in powerline transmitter switches and enables consumers to easily control all the home’s systems. Also prevalent is Z-Wave technology, which provides homeowners with the same control capabilities as UPB but uses radio frequency (RF) signals instead.
Walsh believes electrical contractors can break into this market by working closely with the A/V integrator and lighting designer to help determine where fixtures and boxes will be placed in order to optimize the home entertainment environment and expand the business potential of any particular residential project.
It is the electrical contractor’s unique relationship with both custom and production builders that provides the opportunities in the home entertainment market and allows them to promote the technologies and products.
“However, to be successful, the contractor needs to be educated about the market and its technologies as well as understand the A/V side of the business to maximize profits and opportunities,” Gartland said.
It is exactly the contractors’ expertise in wiring homes for power and lighting that allows them to branch out into the area of low-voltage premise wiring for the home entertainment systems that many have considered, until now, to be the domain of specialty contractors, Grove said.
“Contractors can use their expertise to demonstrate to builders that they have the necessary capabilities to supply complete wiring for all of a home’s systems, thereby reducing the number of subcontractors required for a residential project,” Grove said.
According to Cesar Martinez, vice president of home entertainment solutions at Philips, electrical contractors interested in the home entertainment market first should attend industry shows hosted by the Consumer Electronics Association and CEDIA, where they will learn about different solutions at different price points.
“Contractors need to research manufacturers’ technical training and support offerings as well as attend conferences and seminars to learn what is available in product solutions and how to receive training in the proper design, product choice and installation methods of home entertainment systems,” Martinez said.
What the future holds
A major question for electrical contractors considering entering the home entertainment market is whether its growth is sustainable.
“Absolutely,” Walsh said. “Innovation at the consumer level isn’t going to stop, and there will always be a need to integrate new technology and provide control on a single platform.”
Green building is another factor in the market’s continued expansion into the foreseeable future. Environmental and energy concerns mean control features will play a vital role in the green home of the future. It will not be just for entertainment purposes. The green home of the future will control lighting, measure and provide real-time feedback on the amount of energy generated by solar panels, and monitor a home’s water usage.
The linking of iPod-like devices into the home entertainment system is another leading product trend electrical contractors need to be aware of, so they can match their offerings to customer demands. The decline in the prices of HDTVs and the digital explosion in audio over the Internet will allow more devices to be easily connected and provide homeowners with more universal plug-and-play opportunities, Gartland said. In addition, the trend toward using Internet communication protocols means homeowners will be able to control their integrated homes through computers, rather than by using remote controls or touchscreens. The committed, educated electrical contractor that is schooled in home entertainment products and integrated systems is in an excellent position to migrate into the market and match its expertise to evolving customer needs.
BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 or firstname.lastname@example.org.