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|RCA Press Release for June 6, 1983 No. 1|
CHICAGO, June 6 -- Industry sales of video products are running well ahead of the growth in the national economy and will surpass a record $13 billion in retail sales this year, an RCA executive forecast here over the weekend.
Jack K. Sauter, RCA Group Vice President, said at the opening of the industry's Consumer Electronics Show that "the consumer is clearly leading the video industry into an era of sales and profit growth that is surprising even the optimists among us."
He noted that a little more than a year ago it was generally expected that the basic video industry -- television receivers, video cassette recorders, video disc players, tapes and discs -- would grow to $11 billion in retail sales in 1983. "Instead, we are approaching 1985's anticipated sales level this year."
A buying public that is more video-conscious, and the faster replacement of older video products were the two primary reasons cited by the RCA executive for the industry's strong sales pace in 1983. "This favorable acceleration in growth carries with it the promise of improved profitability as the consumer accepts more quickly the industry's advanced video products which offer higher levels of performance and more deluxe features," Mr. Sauter said.
Mr. Sauter emphasized that color television "remains the core of an expanding video products business, with industry sales to dealers now running 15 percent ahead of last year's record level. Current indicators point to a near-13 million unit sales year in 1983, which would be the highest total in the industry's 29-year history.
"The common belief that the color TV industry was not affected by the deep recession in 1982 needs to be re-examined in view of this year's strong sales pace," he said. "It is now more likely that color TV was indeed adversely affected by the economy, and the sales rate being experienced this year is more reflective of pent-up consumer demand which promises to have a favorable impact on the higher-end segments of the color TV business."
He said the relatively quick acceptance by the public of monitor receivers and more advanced remote control models has resulted in:
-- Larger screen table models, now more likely to be monitor receivers, have increased in unit sales by 68 per cent this year compared with 1982. RCA, which helped pioneer the video monitor segment of the market, is registering a 226 per cent sales gain in this category of product so far this year.
-- Remote control receiver sales are growing rapidly and presently account for 50 per cent of all console models sold, and close to 40 per cent of all color receivers, including portables and table models.
-- A recent study of retail pricing indicates that the $700 and above color TV price category now accounts for 16 per cent of all industry color sales, or more than double the mix of recent years.
"The fear held by many dealers and distributors that higher priced table models with advanced technical features would be difficult to sell, let alone explain to consumers, is being dispelled every day on the retail sales floor," Mr. Sauter said.
RCA has expanded its video monitor line to eight models this year in response to far broader consumer interest in high performance TV receivers that are designed for use with the expanded array of video accessory products now being offered by the industry. Mr. Sauter noted that more than one-third of the industry's retail sales, measured in dollars, will be generated this year by high-end color receivers.
"High performance television is undoubtedly the industry's most favorable development in recent years. Combined with the prospect of a 47-million unit replacement market, we can expect continuing growth for many years, particularly for those brands that have an established presence in technically-advanced receivers," Mr. Sauter added.