LEN WALLIS

The Sound Mar­ket Is Chang­ing, And Len Wallis Is Ready

SmartHouse - - CONTENTS - Writ­ten by Fer­gus Hal­l­i­day

There’s been a shift by both music com­pa­nies - and the con­sumers they cater to - to­wards high res­o­lu­tion au­dio.

It’s a tran­si­tion that’s play­ing out both among the older tra­di­tional home au­dio cus­tomers and the younger mil­len­nial gen­er­a­tion that’s grow­ing to be­come a driv­ing fac­tor in the in­dus­try.

We spoke to Len Wallis, founder of the home au­dio re­tailer, about the shifts fac­ing the in­dus­try.

He says that reach­ing out to that grow­ing mil­len­nial au­di­ence is im­per­a­tive for re­tail­ers and has “got to be done through so­cial me­dia type ar­eas.”

“The prod­uct we’ve got is in­cred­i­bly rel­e­vant to that youth mar­ket, we’ve just got to get to them.”

“They’re not in the Syd­ney Morn­ing Her­ald,”he says.

Len says JB Hi-Fi have done an in­cred­i­ble job at pro­mot­ing them­selves as the de facto re­tailer for mil­len­nial au­di­ences look­ing to build a sound sys­tem.

“We’re not win­ning that war,” he says

In re­sponse, Len says his com­pany has “moved away from ar­eas that have been ex­tremely well han­dled by JB Hi-Fi and moved things up an­other level” in terms of the qual­ity of prod­uct they stock.

“That’s worked re­ally well for us,”he says. Len ex­presses his reser­va­tions about the ef­fec­tive­ness of on­line ad­ver­tis­ing and says the com­pany is fo­cused on in­for­ma­tion-based ef­forts on­line.

“The most suc­cess­ful thing we’ve done is our news­let­ter. We’ve looked at killing it twice and both times we’ve de­cided not to.”

He says the com­pany is look­ing to re­work its web­site in the near fu­ture.

The com­pany re­cently made a re­turn to print ad­ver­tis­ing through the Syd­ney Morn­ing Her­ald but found that chan­nel tends to reach the older au­di­ence - one that has lived through all the same big shifts in the in­dus­try that Len him­self has.

“When I started it was all turntable based,” Len says.

He cites the in­tro­duc­tion of CDs, the “mar­riage” of the sound mar­ket with home theatre sys­tems and the ar­rival of net­work­ing and the in­ter­net as the ma­jor fac­tors that have shaped the in­dus­try go­ing for­ward.

As the sound mar­ket evolves, the tech­nol­ogy that Len be­lieves will gen­er­ate the most growth is on­line stream­ing.

“It’s all go­ing to re­volve around that,” he says.

“Even­tu­ally, peo­ple are go­ing to be forced to go into stream­ing and down­load modes,” he says.

Len has been in business for 38 years and says that the com­bi­na­tion of mil­len­ni­als’ will­ing­ness to re­search and their lack of brand loy­alty makes them unique to deal with.

“It’s a big chal­lenge for our guys be­cause we’re across so many dif­fer­ent prod­ucts and brands and parts of the mar­ket.”

“I don’t be­lieve the mil­len­nial mar­ket will ever shop the way peo­ple of my gen­er­a­tion shop,” he says.

While home in­stal­la­tions re­main a big part of the high-end home au­dio re­seller’s business - it’s pop­u­lar­ity among mil­len­ni­als is over­shad­owed by its pop­u­lar­ity of the gen­er­a­tion im­me­di­ately pre­ced­ing them.

It’s “the gen­er­a­tion just hav­ing chil­dren and start­ing their own homes,” Len says.

For both these new­com­ers and long-time Len Wallis cus­tomers, wire­less au­dio is in huge de­mand.

Len says he ex­pects it to do very well over the Christ­mas pe­riod.

“I think Christ­mas is go­ing to be very much a Blue­tooth stream­ing Christ­mas - and vinyl, strangely enough.”

When asked if the resur­gence of vinyl fits into the in­creased de­mand for hi-res au­dio, Len ad­mits “it is part of that.”

“The whole vinyl thing is very strange. It shouldn’t be - I love vinyl and I love the way it sounds but it’s an en­tirely new gen­er­a­tion that’s dis­cov­ered vinyl.”

“I thought it would have gone by now,” he ad­mits be­fore jok­ingly say­ing “the in­ter­est­ing one for me is whether reel-to-reel takes off again.”

In com­par­i­son, Len ex­pects CD to “be around for a long time. Peo­ple have big col­lec­tions they want to re­tain” but notes that it’s fall­ing out of favour with the in­dus­try.

Ac­cord­ing to Len, there is a very large con­sumer in­ter­est in both vinyl and stream­ing ser­vices.

“How­ever at some stage vinyl will plateau, but higher res­o­lu­tion on-line stream­ing from sites such as Tidal is still in its in­fancy.”

Re­gard­ing the high-res au­dio stream­ing ser­vice, Len ad­vises“The con­cept is a sus­tain­able con­cept un­til such a time as Ap­ple or some­one steps into the [hi-res] game”

“The liveli­hood of ex­ist­ing stream­ing ser­vices [will] come un­der ex­treme pres­sure once pow­er­houses such as Ap­ple en­ter the arena - and I have no doubt that they will.”

He says the qual­ity en­abled by vinyl helps open the eyes of mil­len­ni­als to the ex­pe­ri­ence of hi-res au­dio and to the world of Hi-Fi in gen­eral..

“When you buy an al­bum in most cases great at­ten­tion was paid to track se­quenc­ing and the over­all theme of the record in its en­tirety. iTunes changed this with con­sumers ran­domly pick­ing tracks, los­ing the in­tended struc­ture.”

Un­like JB, Len Wallis is well equipped to help in­tro­duce younger cus­tomers to the ben­e­fits of high-res­o­lu­tion home au­dio.

He tells the story of “a young guy who came in look­ing for a sound sys­tem for his MP3s” who was in­tro­duced to hi-res au­dio by a staff mem­ber and found sob­bing over the dif­fer­ence in qual­ity from tra­di­tional sound.

He says “In many in­stances now we will de­sign a client’s net­work be­fore we de­sign their sys­tem. If we de­sign a good au­dio sys­tem and sit it on a lousy net­work the sys­tem is go­ing to fall over, and the blame will al­ways go to the sys­tem.”

When asked about how the trends sur­round­ing the size of liv­ing spa­ces have im­pacted home au­dio in­dus­try, Len says “Not yet.”

“The trend is only just start­ing [but] it will have an im­pact. One of the things we are find­ing now is that “there’s a ten­dency for peo­ple to say ‘I will have my good qual­ity sys­tem in one room and then I will have my stream­ing around the house’”

He at­tributes this to what he calls‘The Sonos Gen­er­a­tion.’

He says the re­tailer’s abil­ity to phys­i­cally demon­strate the dif­fer­ence be­tween 24-bit au­dio and CD-qual­ity au­dio gave them an ad­van­tage.

He says that this abil­ity to en­gage and ed­u­cate cus­tomers is some­thing “JB and those guys can’t do. I think that they will re­alise there’s po­ten­tial here as the mar­ket grows”

Ac­cord­ing to Len, “Peo­ple have gone into Sonos and sim­i­lar stream­ing prod­ucts, put it around the house and found there’s nowhere in house where it sounds re­ally good.

He says that re­al­i­sa­tion is a big driver for home au­dio busi­nesses like his, and that the push for wire­less born out of that ex­pe­ri­ence with Sonos has very much shaped the kinds of prod­uct that is sell­ing well at the mo­ment.

It’s all very “net­work-re­lated”, he says.

“Net­work­ing is a big part of it. Con­trol is a big part of it.”

He notes in­vis­i­bil­ity and the ris­ing pop­u­lar­ity and chal­lenges for stealth set­ups where speak­ers can’t be seen.

“You have to be able to get peo­ple in to try it,” he says.

He says the home in­stal­la­tion part of the business had their bud­get grow 50% this year and are al­ready ex­ceed­ing it.

This growth has brought with it some mas­sive changes to the business.

He also notes the in­flu­ence of gender dy­nam­ics on the way that shop­pers ap­proach home au­dio, say­ing that men tend to focus more on how it sounds while women care more about how it looks.

“At the same time I be­lieve women have bet­ter ears than men,” he adds.

In ad­di­tion, it ap­pears the di­vide be­tween Ap­ple and An­droid op­er­at­ing sys­tems doesn’t play as big of a role in the space as one might ex­pect.

He says iOS dom­i­nates the space, say­ing that when it comes to cus­tom in­stal­la­tions “at least 98% is Ap­ple.”

Len says he has ‘no doubt’ the com­pany have a game­plan for go­ing high-res and says that, when they fi­nally do, “the mar­ket will fol­low.”

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