Multiroom Audio and Home Theater Systems Installation Business is Booming

Residential Sales through Home Systems Integrators/Installers Grew 18% in 2005

Sales of Multiroom Audio and Home Theater Systems surpassed dealer expectations during 2005, according to the 1st Quarter 2006 Installing Dealer Survey released today by Parks Associates.

Consumer demand for multiroom audio, home theater, and associated control systems was largely responsible for the strong growth in business for the Installing Dealers channel. Audio systems were the single largest product category is 2005, generating more than $2.1 billion in residential sales, with Russound and Denon as the top brands for audio components and SpeakerCraft as the most popular brand of speakers.

Installing dealers had total sales of $7.3 billion to residential customers in 2005, an 18% increase over 2004’s $6.2 billion, according to Parks Associates’ 1Q06 Installing Dealer Survey.

“Multiroom audio exceeded our estimates by nearly 9%, and home theater sales beat expectations by about 8%,” said Bill Ablondi, director of home systems research at Parks Associates. “There are several factors driving this demand. More affordable systems are broadening the market to include more midrange homes, more builders are aggressively marketing entertainment amenities, and, most importantly, more home buyers want to incorporate entertainment systems into the infrastructure of their home.”

Installing dealers are also optimistic about the potential for growth in 2006, according to 1Q06 Installing Dealer Survey. Nearly 40% of dealers expect to see their businesses grow by more than 20% in 2006, and 30% project growth of 11-20%. Only 4% expect to see a decline in business in 2006.

“The installing dealer channel is expanding, both in numbers of integrators/installers and in the sales each firm generates annually,” Ablondi said. “We’re seeing the evolution from a custom-only channel to one which is beginning to embrace pre-packaged systems in an effort to expand its reach in the market.”

The 1Q06 Installing Dealer Survey is part of Parks Associates’ Installing Dealer ePanel Program, which collects regular feedback from electronic systems integrators, designers, and installing dealers across the U.S. Surveys are conducted online, and each client assists in developing the questionnaire. The ePanel program is an affordable, efficient, and accurate way to increase understanding of the installing dealer channel.