Like music formats, traditional home audio components are changing with the times.

The most popular types of components are speakers and AM/FM receivers, which today are equipped with five or more amplifier channels and surround-sound decoders to deliver home theater surround sound. Many models, which are priced from around $199 to $6,000, also serve as the control centers of home theater systems to simplify cable connections and automate home theater use.

To stay relevant in the PC-Internet era, component A/V receivers are:

-Connecting to wired and wireless home networks to reproduce music stored on a PC or dedicated music server located in another room,

-Streaming Internet radio stations through a broadband connection,

-Controlling connected MP3 players, reproducing the player’s music through powerful, high-fidelity amplifiers and connected speakers,

-Incorporating HD Radio tuners to receive analog and digital AM and FM broadcasts, and

-Controlling outboard, palm-size satellite-radio tuners.

In another sign of change, A/V receivers are turning into the central hubs of HDTV-based home theaters and custom-installed multi-room audio systems, which route music to in-wall and in-ceiling speakers installed throughout the house. Many new models incorporate video-enhancing technologies to improve the video quality of standard-definition DVD movies when played on HDTV displays.

A relatively new class of receiver is the multi-zone stereo receiver, which is equipped with up to 12 amplifier channels to send music to in-wall and in-ceiling speakers in as many as six rooms.

A/V receivers have also evolved to include sound-enhancing digital technologies, simplified home theater set-up, and cosmetically appealing designs that integrate with a home’s decor.

Other Types
Other types of traditional audio components are also in demand by consumers, although they account for a minority of component sales. These products include analog-era cassette decks and turntables as well as digital-era CD players and changers, whose sales have declined markedly with the rise of CD-playing DVD players. Other types of components, usually reserved for high-end customers, include separate AM/FM tuners, A/V preamplifier/surround processors and amplifiers.

New types of audio components, meantime, have joined their more traditional counterparts. They include digital media adapters (DMAs), which stream music from a networked PC in the bedroom or home office for playback through a high-quality stereo system in the living room or family room. Many also stream PC-stored video for viewing on the living room TV.

Of course, DVD players also can be considered an audio component, given their ability to play traditional CDs, MP3-encoded CDs and, in many cases, multi-channel DVD-Audio discs and Super Audio CDs. (See section on Multi-channel Music Discs).

Backsliding
Despite the proliferation of intelligent component designs, component sales haven’t moved forward in recent years despite greater merchandising efforts by many electronics specialty stores. Many of the new A/V receiver features have just begun to become widely available, some only in top-end models costing more than $1,000. Suppliers hope sales will grow once again when the value-added features become widespread and more affordable.

Competing consumer technologies and changing lifestyles, meantime, are diverting consumers’ attention – and disposable income – away from component audio.

Marketers, for example, point to new home entertainment options that have grown to include handheld videogames, videogame consoles, PCs, hundreds of cable- and satellite-TV channels, and high-definition TV (HDTV). The evolution of the PC as a key music source in peoples’ lives also took a toll on sales of traditional home audio products as consumers increasingly opted to store music on a PC and use their PC to stream music from thousands of Internet radio stations.

The glamour of new flat-panel TV displays, using LCD and plasma technology, also has diverted disposable income away from component audio.

At the same time, music has begun to play a different role in peoples’ lives at home. Now, most people listen to music as background in the home while engaged in other activities. Serious music listening is more likely to be done in the car or on-the-go while using a headphone stereo.

1990 Peak
As a result, factory-level component-audio sales flattened in 2005 at $1.14 billion, far below the industry’s 1990 peak of $1.93 billion, final CEA statistics show. The forecast for 2006 is for more of the same.

Component audio sales have declined almost every year since 1990 with the exception of slight blips upward in 1993, 1994, 1995 and 2000 and an unusual 16 percent upward spike in 2004. That spike, however, merely overcame a 2003 double-digit percentage drop to return sales to levels only slightly above 2002 levels.

Bright Spots
Despite components’ overall weak performance in 2005, one component segment – speakers – performed admirably in 2005. Although unit sales of component speakers fell one percent at the factory level, dollar volume soared 16 percent to $516.1 million, CEA statistics show. Marketers cite rising demand for pricier speakers with improved aesthetics, smaller footprints and enhanced performance. Better sounding, visually-appealing speakers overcome some consumers’ objections to filling up a living room with multiple speakers to enjoy surround sound.

Home receiver performance, on the other hand, took a dive. Factory-level sales fell 18 percent in dollars to $435 million and 19 percent in units to 1.65 million, CEA’s statistics show. Other types of electronics components, including preamp processors, did better in the aggregate, rising 18 percent in dollars to $185.8 million and 27 percent in units to 1.02 million.

Charting Changes
With component sales in a slump that has lasted more than a decade, many component-audio suppliers are laboring mightily to give consumers more compelling reasons to upgrade from lower price home-theater-in-a-box (HTiB) systems.

The changes include:

·  Receivers that serve as the hub of a home entertainment system. These receivers simplify the integration of TV sets with multiple video sources, including over-air and cable HDTV tuners, DVRs, satellite-TV tuners and DVD players. Most of these receivers simplify home theater set-up by reducing the number of video-cable connections in home theaters that consist of multiple video sources and an A/V receiver. Many of these receivers accept multiple types of video cables (from a VCR’s composite-video output, for example, or from the S-video outputs of DVD players and satellite-TV set-top boxes), then “upconvert” or “transcode” the composite and S-video signals to analog component video or to digital HDMI (High Definition Multimedia Interface) video. All video signals then are routed to a single HD-capable component-video output or HDMI output. From the back of the receiver, consumers connect one cable to the HDTV set instead of multiple cables.

·   Receivers that upgrade the video performance of a home theater system. At least four suppliers plan in 2006 to offer receivers with sophisticated video processors that turn a standard-definition digital-video source into a high-definition spectacle. The video source can be a DVD player or standard-definition digital cable or satellite signal. Expect more receivers of this kind in the future.

·   Receivers that serve as the control center for a custom-installed distributed-audio system. Such receivers reduce the cost and complexity of installing distributed-audio systems, which distribute music to in-wall and in-ceiling speakers throughout the house. Such models start at around $900 but run as high as $6,999 for more sophisticated versions.

·   Receivers that control docked headphone MP3 players and docked satellite-radio tuners. The MP3 players and tuners can be controlled from the receiver’s front-panel controls, handheld remote controls, and user interface appearing on the receiver’s front-panel display or on a larger connected TV screen. The receiver’s display or TV also display MP3 song and album titles and song genre. They’ll also display the names of satellite-radio channels and information on the songs playing.

The first MP3-controlling receivers appeared in 2005, and in 2006, more than a dozen new receivers from at least six brands will control MP3 players at prices starting as low as $449. Some receivers require an add-on docking station costing anywhere from $69 to $100.

At least eight brands in 2006 planned receivers with satellite-radio controls. Prices were expected to start at about $299.

Other features also are attracting consumer attention. For example:

·      Select receivers and speakers automatically adjust frequency-response to suit a room’s acoustics. These products incorporate advanced digital signal processing (DSP) to compensate automatically for the frequency-response peaks and dips caused by a room’s acoustic characteristics and by speaker placement within the room. A room’s size, shape, furniture and window treatments distort sound by exaggerating some frequencies and muffling others. Receivers with room-acoustics compensation will start at around $300 in 2006.

·                Select receivers network with PCs and broadband modems. These receivers use a wired Ethernet connection or a wireless adapter to stream music from a PC’s hard drive or from Internet radio stations into a home hi-fi system. They’ll be available from at least three brands in 2006.

Appearances Count
Cosmetic appeal has grown increasingly critical to the success of component audio because of the rising economic influence of women, according to a CEA report entitled Five Consumers To Watch. “Women have a major influence in the purchase decision for consumer technologies within the household – 46 percent of women believe they have the most influence in their households, while another 42 percent believe they have equal influence with others,” the report said.

To tap into such demand, component suppliers are offering a selection of stylish, diminutive audio electronics and slender speakers that don’t overwhelm a consumer’s living space. Many are designed to look at home with wall-hanging or pedestal-mount flat-panel video displays.

New products that erect fewer practical or aesthetic objections to a component-based home theater system, or even to more compact home-theater-in-a-box (HTiB) systems, will go a long way in expanding the customer base for home theater audio, according to an NPD Group survey of consumers taken in September 2005. The survey found that 58 percent of consumers claimed physical room limitations as the reason for not owning a home theater system. A total of 26 percent, for example, said their room was too small, and 23 percent objected to running exposed speaker wires to a home theater system’s five or more speakers.

Disappearing Speakers
To overcome practical objections to adding a component-based home theater system, more receivers (and HTiBs) in 2006 include virtual surround technologies that simulate five-speaker surround sound through two front speakers. Likewise, at least three companies in 2006 will offer a single front speaker that delivers five-speaker surround, in some cases via passive designs while others use sophisticated digital signal processing and built-in amplifiers to achieve the desired result. All of these virtual surround solutions eliminate the need to run wires around the room to surround speakers. Another company will offer a three-in-one speaker that delivers all three front channels from a single enclosure.

Consumer interest in simple solutions is evident in CEA’s 2004 Five Consumers To Watch study. “When buying consumer technology, consumers generally want products that are ready to work as soon as possible,” the association said based on a 1,000-person survey. “A full 90 percent like technology to be ‘ready to go’ without a lot of set-up or customizing.” The study also found that 61 percent of consumers place a high priority on décor-friendly CE products that don’t take up a lot of space and don’t overwhelm a room.

Simplicity’s Next Step
The majority of home-audio purchasers, however, take their quest for simplicity to the next level. They opt to buy compact all-in-one stereo systems or HTiB systems instead of shopping for separate audio components.

Music systems, diminutive enough to fit on a desk or shelf, package a pair of small speakers with one or two chassis that incorporate all system electronics and controls. The electronics include AM/FM tuner, amplifier, CD player and, in some cases, a cassette deck. A growing number of compact stereo systems also integrate DVD-Video players and playback of CDs encoded with MP3 files.

HTiB systems, which are usually larger, add additional speakers and surround-sound decoding to deliver home theater surround sound. In most cases, they come with a DVD player, and select models incorporate DVD-Audio, SACD or “universal” DVD-Audio/SACD players.

 HTiB and music-system solutions appeal increasingly to consumers who lack the time to shop for separate components, are intimidated by too many choices, or don’t have the time or patience to connect a tangle of cables among multiple components.

Also for simplicity-shopping consumers, virtual surround technology is appearing in a growing number of HTiBs and compact stereo systems. In HTiB systems, at least two companies  will offer models that deliver surround sound through a single speaker enclosure. Compact stereo systems featuring two-speaker virtual surround technology will be available from at least six suppliers in 2006.

Home Speaker Evolution
Component speakers are changing to stay relevant in a challenging market.

Like the first speaker ever invented, today's home audio speakers vibrate air molecules to reproduce music and movie soundtracks. Today's models, however, differ in many ways from the hi-fi speakers of previous generations. In recent years, speaker suppliers have improved the aesthetics of their products, reduced their footprints and enhanced their performance with new designs and, on occasion, a dash of digital signal processing. Better sounding, visually-appealing speakers overcome consumer objections to filling up a living room with speakers to deliver home theater surround sound.

Plasma-TV Speakers
The push for appealing design has inspired the speaker industry to dramatically increase the selection of high-performance flat speakers that can be hung on a wall or mounted on pedestals next to flat-panel TVs and a growing number of shallow-depth rear-projection TVs. The speakers are as graceful and slim as their companion displays.

The enhanced styling, suppliers contend, will help eliminate aesthetic objections from consumers who are attracted to flat-panel displays as much for their striking cosmetics as for their picture quality.

Where It Began
The need to design decor-friendly speakers was recognized as far back as 1954, when Acoustic Research engineer Edgar Villchur developed the home audio industry’s first acoustic suspension speaker, the AR-1. It was small enough to sit on a bookshelf but could deliver big-speaker bass. It drove the hi-fi industry into the mainstream, freeing consumers of the need to plunk a pair of refrigerator-size speakers in their living rooms to hear life-like music.

In the late 1950s, Paul Weathers developed and marketed the first consumer subwoofer/satellite system, a configuration allowing for a pair of small, unobtrusive stereo speakers and a larger, hideaway subwoofer that delivers low-bass sound. Today, the sub/sat configuration is an industry standard that helps drive sales of multi-speaker home theater systems.

Fast Forward
Also for today's style-conscious consumers, suppliers have developed floor-standing speakers whose profiles have been narrowed by replacing a single large woofer with multiple small woofers stacked vertically. Also to improve visual appeal, suppliers have turned to materials other than wood – such as extruded aluminum and molded vinyl – to build curvaceous models differentiated from their square competitors.

No matter how cool the speakers might look, some consumers want their speakers out of sight, and for that reason, suppliers have introduced speakers designed specifically for placement in cabinets, often behind acoustically transparent cloth panels. These speakers feature “boundary-compensation” switches, designed in part to flatten out the midbass-frequency response “bump” that occurs when speakers are placed in A/V cabinets. Some of these speakers are three-way models with a tweeter/ midrange baffle that can be rotated to allow for vertical or horizontal placement in a cabinet without degrading
sound quality.

Digital Enhancements
Some manufacturers are taking speaker technology a step farther by offering powered speakers that incorporate digital crossovers, digital equalization, and other DSP techniques to compensate for inherent speaker-design limitations that can’t be overcome by mechanical means.

A small-but-growing number of speaker suppliers also use DSP to compensate for the peaks and dips in frequency response caused by less-than-ideal speaker placement and by a particular room’s acoustic characteristics.

DSP-equipped speakers even allow for more flexible speaker placement. You can “electronically move” speakers to deliver the stereo sweet spot to your favorite listening position without physically moving the speakers into possibly unappealing locations.

In another bow to the digital age, some speaker manufacturers are extending frequency response well out beyond the typical 20-kHz range, citing the demands of the DVD-Audio and SACD formats.

Digital-network Speakers
Speakers’ embrace of the digital age has produced the first wirelessly networked, high-end home speaker systems, which are designed to stream music wirelessly from a networked PC or dedicated media server. They debut in 2006 from at least one company.

The networked stereo speakers, which can be used to stream music to multiple rooms at a time, feature built-in amplification and wireless. Their mission is to eliminate speaker-wire runs around a room or around the house.

A networked home theater speaker package embeds surround-sound processors in each of the five speakers and separate subwoofer. Its mission is to stream surround-sound music stored on a PC or media server. In the main home theater room, consumers can also opt to connect a DVD/CD player directly to one of the speakers to create a high-end home theater.

Subwoofers Sing
To deliver the deepest bass notes, reduce distortion at higher frequencies, and pump up sound-system volume and dynamic range, a stand-alone amplified subwoofer is the way to go. Also called powered or active subwoofers, these speakers reproduce only the lowest bass frequencies. Usually cube-shaped and low-profile, they can be tucked away in an inconspicuous location because their low-bass sounds can't be localized. The sound simply blends in with the midbass, midrange and high frequency sounds produced by “satellite” speakers elsewhere in a room.

  Often, consumers mate stand-alone subwoofers with unobtrusive pint-size mini speakers. Very often, a powered subwoofer is packaged with two or more speakers to simplify the decision-making process for consumers and ensure that, in a home theater system, all of your speakers are matched sonically, often through the use of identical drivers and crossovers. Sonic matching is critical to producing realistic surround sound. With properly matched speakers, the roar of a jet won’t turn into the buzz of bumble bee as it flies from speaker to speaker.

Surround Receivers
To power their home theater speakers, owners of component-based surround-sound systems usually opt for a surround-sound receiver.

Almost every receiver built today incorporates surround-sound decoding and five or more amplifier channels to recreate movie-theater surround sound. The receivers have become increasingly sophisticated yet affordable.

By 2003, 5.1-channel Dolby Digital and DTS 5.1-channel surround sound became a standard feature in almost every receiver available. In 2006, 7.1-channel surround technology will appear in receivers priced below $199.

The 7.1 technologies add two back channels to 5.1-channel home theater system, enabling moviemakers to place sound effects behind you, not just to the sides and front. The technologies allow for true "fly-over" and "fly-around" effects. Jets not only whiz by you, but they can do a full 360-degree spin around your head. The 7.1 technologies enhance the two 6.1-channel surround formats appearing on select DVD movie discs. They’re called Dolby Digital EX and DTS Extended Surround (ES), which are backward-compatible with any existing 5.1-channel home theater.