Opinion: Panasonic TV Australian Market Exit
I love the Audio-Visual industry. There can be few occupations where you are working with the heart and emotion as much as you are working with the head and logic. At the same time, there are things about this industry that frustrate me.
Recently, Panasonic announced that they are exiting the TV market in Australia. Apparently, they cannot remain competitive under the trying conditions that so many companies in Australia are currently experiencing.
My frustration is, why do Panasonic, like Pioneer and Oppo before them, feel that they need to be price competitive in the first place? Pioneer and Oppo, and now Panasonic, withdrew from the market claiming that they could not remain profitable while competing with cheaper alternative offerings. Yet each brand was universally renowned for being easily best in class. It's no secret that we believe the Panasonic OLED screens to be the best on the market and the finest domestic screens ever released in Australia – finally outgunning the legendary Kuro screens produced by Pioneer a decade ago.
These are premium products - surely, they could tolerate a premium price tag. Yes, Panasonic may lose some support from the major outlets, but there are still many people who will seek out, and pay for, a demonstrably better product. To me, Panasonic's rationale is the same as Mercedes Benz exiting the market because they cannot be price completive with Toyota. This is a problem that goes way beyond the brands mentioned above.
Some argue that this industry is in danger of pricing itself out of existence – yet nothing could be further from the truth. In the late ’70s, the period many consider to be the industries golden age, a 30watt/channel Marantz 1060 (lauded by many to be one of the finest integrated amplifiers of its time) would cost you $349.00. That is the equivalent of $2,500 in today’s money. Its present-day successor, the 45watt PM6006 sells for $1,060. Examples of the industries devaluation through the ages are everywhere to see.
Compare this to a Rolex Daytona watch. When released in the 1960s, this watch sold for US$210 + tax. Today the basic version sells for A$28,000. Yet demand now exceeds supply, if you want to buy a Rolex Daytona watch you need to lodge an ‘Expression of Interest’; and then wait your turn.
The market for quality products in Australia is alive and well. The motor vehicle industry has just come out of a horrid 12 months with sales reportedly down 8%. The notable exception was the luxury end of the market with Ferrari, Lamborghini, Porsche and Rolls Royce all experiencing solid growth. According to research company Statista, luxury sales of goods in Australia are tipped to rise by 2.8% this year, a very different scenario to the forecast for retail in general.
There is still a sizable demand in Australia for quality products, and people will pay a premium for these products if the price being asked can be justified, and the product in question offers better performance than the lesser-priced alternatives. Panasonic TV’s is (was) one of those products.
So why are manufacturers so adamant that consumers will not pay a premium for Audio Visual components that are demonstrably better than the alternative? The same consumers are willing to outlay $28k+ for a watch that does not keep better time (its basic function) than one costing $500. I believe one reason is pride – or lack thereof. One of the primary reasons for purchasing any luxury item is pride of ownership. Most are objects of exquisite craftsmanship and beauty, products that you take pride in owning and displaying. There was a time when a quality audio system engendered the same pride of ownership. It was a desirable product and something to proudly display. Today most people are preoccupied with trying to hide their A/V systems away, at considerable expense to its performance.
Unfortunately, the problem lies with the industry itself. As an industry, we are hell-bent on convincing the world that all you need to reach audio nirvana is a Bluetooth speaker or a soundbar – and the cheaper, the better. Nothing could be further from the truth. Such products have their rightful place in the world, but that place is not delivering a level of performance that will allow you to form an emotional involvement with the music.
Unfortunately, as an industry, our marketing has been so successful that the majority of the public are not even aware that equipment delivering this level of involvement exists. You don’t need to be a car enthusiast to know of Ferrari, or a chef to recognise the brand Gaggenau, traveller – Luis Vuitton, fashion – Ermenegildo Zegna, watches – Rolex, the list goes on. These are brands that consistently appear in the popular press – newspapers, lifestyle magazines etc. – comfortably appearing alongside the more economically priced brands within the same industry. These industries proudly present these brands as aspirational products, including to people who do not have the desire or the funds to own them.
Our industry, on the other hand, is all about price. It appears that to be successful in this industry, the secret is to be cheaper, not better, than the opposition. As we drive down prices, it is at the expense of performance, and we are an industry that rarely speakers of performance in the public arena. I don’t care how good a $299 streaming speaker is, it is not HiFi – not even close. It will do nothing more than provide music as the background of your life. It will not involve you on an emotional level.
Even though almost every home in Australia has at least one TV, and the vast majority have a music system of some type, aspirational brands do not exist in the greater arena. Go outside the enthusiast market and ask the greater public if they are aware of brands such as Krell, Chord Electronics, Musical Fidelity etc. - our versions of Ferrari, Gaggenau, Luis Vuitton, and you will be greeted with blank stares.
The great shame is that there's a vast body of consumers who are not exposed to the magic of a great piece of music being played on a great system. These are consumers who would relish what we in-the-know take for granted, if only they knew it existed. Instead, we choose to market price as the end-all and be-all, at the expense of performance, and any pride of ownership.
I suspect we have, yet again, taken a step backwards, and it is our loss.
Len’s experience within the Hi-Fi and Audio Visual industry in Australia extends more than 40 years, and Len is the proprietor of one of Australia’s leading and most successful specialist outlets, Len Wallis Audio, established in 1978. Len has been recognised with numerous awards for excellence in business both nationally and internationally.