On a different note not mentioned in the article and one major dissadvantage I can see for cable comapnies and HT retail is a decline in overall cable sales. Perhaps Kurt can chime in on this. Does the adoption of HDMI not ultimately mean a decrease in overall cable sales? I mean less cables are now needed to hook a system up. Perhaps BJC sees growth because of its value, but generally speaking able ompanies and retail outlets who have positioned themselfs as selling "high end" cables with major difference will find themselfs in an awkward position with time.
Well, for us it hasn't represented any decline in cable sales overall, but I do get the impression that it has for others. I have seen a few competitors disappear and I have suspected that the cause was that they had tried to go "high-end" with their HDMI offerings in a market that is increasingly aware that if the interface seems to be working well, it's probably working perfectly, so that spending more money on cable won't get you anything better in resulting performance.
That is the big change, I think: the "high end" is harder to justify in the digital domain because where analog always allowed one the ability to posit how a higher-quality cable would make for a higher-quality picture (which, in fact, it frequently will, although (1) in short runs cable quality frequently makes little to no difference, and (2) "quality" and "price" are not good proxies for one another), digital doesn't really allow that. With HDMI, receiver circuits don't generally fail gracefully, so cable failure turns up as sparkles, line dropouts, and sync dropouts or as the rather unambiguous "no picture at all" result. People know this (thanks to the Internet, more than anything else), and consequently when a vendor tries to say that his HDMI provides better color definition, deeper blacks, et cetera, the online discussion is extremely hostile because people know that those claims are not just false as applied to the specific product; they are, in principle, impossible.
For this reason we are seeing people try to shift around and market HDMI cable as though specific cables are required to support specific features and protocols. In particular, look at Monster Cable and its various little insignia it puts on cable packages, promising deep color, xvYCC color support, special audio formats, and so on. These claims--that one cable stock is suitable for these features while another is not--do not make sense. Some of those features are bitrate-neutral, and the others do affect bitrate but there is no way a cable can tell whether, for example, the bitrate it carries represents 480p at 16-bit color or 1080p at 8-bit color. Bitrate is all there is when it comes to support for different resolutions, features, etc., and bitrate is unsexy, boring stuff, hard to promote with flowery language. Ultimately, I think all of this complication is going to become harder and harder to get the customer to sign on to.
We certainly are witnessing the "death of analog" in consumer AV right now. My wife and I started our business by building assemblies from stock Belden and Canare materials in our living room just six years ago, and today I do not think one could really start such a business with any success, because the need for HDMI cable is simply too great. If you buy HDMI cable in small quantity lots, it's expensive, and if you buy it in large lots, well, you need to be able to sell it in quantity or you'll be buried in paid-for, unsold cable. We are constantly shipping HDMI cable to China for termination, and are constantly shipping HDMI cable from China in finished form, and it places an enormous strain upon planning and inventory management.
If we had not shifted our focus heavily to HDMI cable, I think our business would be in sharp decline. Certainly things like component video cable do not sell as well as they once did. We decided, as is well-known, to take a two-pronged approach to the HDMI market. First, we decided to offer unique product with special characteristics--specifically, Belden-made bonded-pair cable stock--so that we had something we could genuinely represent to our customers as our own, unique product. Second, we have stayed competitive in the low-price market for Chinese-made HDMI, which is a moving target. If you're not the best or the cheapest, it's hard to sell cable unless you have some other advantage (e.g., retail placement in big-box stores). Without these things--which most of our old competitors did not mirror--we would be losing our grip fast, but as it is, business is still healthy and growing.
Kurt
Blue Jeans Cable