Analog Sunset Inspires Profitable
Digital Upgrade Opportunities
Over the last year, our company has seen
a significant swell of new and recurring
opportunities in what we call “technology
refresh installations.” This business has
been driven by the obsolescence of analog
technologies (aka the analog sunset) and
the increased mass adoption of digital
technologies in the home.
All of our customers now listen
and view content from cloud-based
services. They also store their audio and
entertainment on hard drives throughout
the home and want to view it anywhere
there is a TV or iPad/iPhone in the home.
Our customers want to control their
content from network-connected devices
(wired or wireless) distributed throughout
the home, and they want access to their
digital content when they travel.
The analog-based infrastructure installed in our client’s high-end
homes in the late 1990s and early 2000s will not meet their current needs,
and they are looking for companies like ours to “digitally remodel” their
homes. Driven by consumer demand for products like the Apple TV/iPad,
Netflix, Sonos, TiVo, Slingbox, HDMI-based TVs, and Blu-ray players,
we find that our company has become a trusted professional for digitally
enhanced and integrated homes. These installations are typically
not large, six-figure “new construction” deals. They don’t
involve a lot of pre-wire and in-wall products, but
what they do require is an intelligent leveraging
of the home’s existing wiring infrastructure
to implement today’s whole-house digital
Retrofitting Multi-Room Audio
Ideally we look for a Cat-5 structured wiring
plant throughout the home on which to build
our digital framework. We will often find that
Cat-5 wiring was installed in a client’s home
but never fully terminated. So our first course
of action is to terminate and label all of this
wire, then install a business-class 10/100/1000
switch. This becomes the digital wired foundation
from which we can enable all of our entertainment and
control solutions. Where Cat-5 wire is not available, we can
look at leveraging powerline and wireless solutions to enhance and extend
the networked coverage of the home.
Whole-house audio is the first system that we upgrade to a digital solution.
Most of our clients are now listening to streamed music from the internet, in
addition to their own digital music collection. Many of these homes already
have a wired whole-house audio system, but a “dumb” central amplifier
that will only allow the homeowner to play one source at a time throughout
the home. And the only audio control in a given room is volume attenuation
with a volume control knob on the wall. We can leverage the whole-house
in-wall speaker system and infrastructure speaker wire by installing multiple
“network-intelligent” Sonos amplifiers at the speaker wire head end,
replacing the single whole-house amplifier. This Sonos solution allows our
clients to listen to any music (online or their own local music collection)
in any of the rooms where speakers are currently installed. And with an
Android, iPod, iPad, PC, or Mac desktop interface, they can control not
only the music volume in a given room, but the source content and the
various transport control options (skip, pause, rewind, etc.)
At its core, the analog home has become the digital home.
The Control System Upgrade
Handling Video Distribution
The next upgrade we look at is the home’s video wiring plant. These
homes typically have component-based video infrastructures, complete
with complex component video matrix switchers and control systems.
Current HD video display products require digital HDMI cabling and
ports to pass copy-protected content between AV products in the home.
To digitally upgrade these component-based video infrastructures, we will
often use component/HDMI baluns. Or, if structured wiring is available,
there are a number of products that will allow us to use Cat-5-based
HDMI switches instead of the existing component switch to digitally move
these video signals throughout the home.
All of these new digital AV products require updated controllers, and we
provide programmed universal remote solutions in the traditional “candy
bar” format, as well as mobile or in-wall touchscreen displays.
These new digital refresh solutions represent a significant business
change from the larger new construction AV solutions that we provided
many of our clients in the last decade. Though they do not have the
hardware or pre-wire margin that we used to enjoy, they still
require a large number of labor hours to properly design,
procure, install, program, and train our clients on
their upgraded digital infrastructures. These are
professional services that do generate healthy
project margins, and our jobs are often started
and completed within months, not years.
Payments also are made more frequently,
cash flow is improved, and we extend our
professional services to more clients, further
extending our company’s image and brand.
All of us are looking for the holy grail of
recurring revenues to bolster our bottom lines,
and the steady stream of technology refresh
installations for our existing and new clients
has become our recurring revenue opportunity.
Shouldn’t it become yours?