On the rocks, Monster trying to put the cable business behind them

Industry watchers will have noticed that Monster quietly dropped the word "Cable" from their name sometime in the last year. Over that time, they've been branching out into other CE goods: furniture, remote controls and iPod accessories, of course.

The reason is fairly obvious: our industry is careening towards a largely wireless world. As more and more of our equipment is networked, that means less cables to buy, or perhaps (one day) none at all. I visited the Monster campus in California three years ago when they were putting the finishing touches on their first line of furniture, and even then it was clear that Monster's future would not be dependent upon selling cables.

Monster is a company that has generated no small amount of ill-will in the industry and among niche consumers, due mostly to their resounding success. For the record, I've never been one of the player haters who criticize Monster. They did, after all, practically invent an entire aftermarket accessory category that many others have also profitted from. I haven't always agreed with their decisions or directions, but that's their perogative. Rather, I have always liked the brand, and felt that a lot of the ill will was simply jealosy and misplaced outrage: lots of CE vendors make expensive products, but not all of them get called out as "over-priced."

Here's some interesting data points to allow you armchair analysts to ponder Monster's future:

Over the last year, the emails I get from our local Monster rep have become increasingly focused on offering dealer discounts. Every month there is a "Clearance Event" and we are offered "One Time Only" deals on selected skus. For a brand that in the past always placed itself on a pedestal and sold itself on its inherent quality and value, this new approach to getting dealers to buy stuff is a bit disconcerting. In the past four months, the tone of the emails has gotten increasingly more frantic; ALL CAPS, lots of superlatives and hyperbole about how great the deals are, and the frequency of the emails has ramped up dramatically. Additionally, the breadth of the skus being offered at a discount has grown to encompass at least half of their catalogue. From the outside, this gives the impression that they are sitting on alarming amounts of inventory, and are feeling the heat.

The second point to consider is that as the number of competitors in the cable buisness has risen, more and more retailers have been seduced away from Monster, resulting in a declining dealer network. Monster officials wouldn't give me numbers even if I asked, but annecdotally it seems to be happening all over. Last week, struggling western retailer A&B Sound dropped Monster in favor of Ultralink. An anonymous source (aren't they always?) confided that Ultralink skus give them the same margin dollars at lower retail price points (what was that about Monster being overpriced?), which are more in line with the price sensitivity of the A&B shoppers who come to buy generic Chinese plasmas.

As the number of competitors has grown, Monster has been working very hard at differentiating their offerings and trying to increase their ability to compete in the marketplace. I have been watching their evolution with some interest. While their future remains in doubt, I hope they find the answers they need.

Sphere: Related Content