The COVID-19 pandemic has been a painful reality for all. Ever since the pandemic set in, the way we work, communicate, and even eat has changed drastically. There’s little face-to-face communication, work has become a home office endeavor, rather than a commute, and going out to eat is largely a thing of the past.
The same type of evolution has been taking place in the entertainment industry.
Today, consumers aren’t willing to sit in packed movie theaters to take in the next big hit. Instead, major film producers are releasing hit movies through streaming platforms, rather than in movie theaters across the country.
While times have been gloomy for movie theaters, there is some positive news to share. The shift in entertainment has led to a technological revolution in the entertainment space.
We’ve watched as television definition has become more intense, streaming options have become more robust, and thanks to Summit Wireless Technologies (NASDAQ: WISA) and its Wireless Speaker & Audio Association, or WiSA, consumers can now enjoy theater-like sound quality at home for a fraction of the cost and without the cumbersome setup involved in traditional surround sound systems.
I recently had the opportunity to talk to Tony Ostrom, President of WiSA, surrounding the evolution in the entertainment industry, and as a result of the conversation, believe that WISA stock and the WiSA association have tremendous growth ahead.
My Conversation wWith WiSA President, Tony Ostrom
During our conversation, I had the opportunity to ask Mr. Ostrom three questions surrounding the pandemic, the evolution it’s leading to in the entertainment industry, and what WiSA is doing to take advantage of that evolution.
Question #1: The WiSA Association has seen a compelling uptick in both television and audio members. What do you believe is the primary driving factor behind this increase in memberships?
There are two different answers. On the TV side, the source side, I think that some TV brands have seen what LG’s been able to accomplish with WiSA Ready and that’s become even more compelling now that more speaker companies are creating WiSA Certified products.
Also, there’s some TV interest in the potential solutions around SoundSend. We’re looking into making the App work on TV operating systems so that it can get integrated right onto the TV and that would make SoundSend even more user friendly. So, there are a couple of different ways that TV manufacturers are looking to get involved.
On the speaker side, I think that the SoundSend has created an opportunity for speaker manufacturers to connect speakers to any smart TV lot more televisions. whereas WiSA Ready platform offers the consumer a higher level on integration with the TV’s operating system at a lower cost. As more brands ship millions of WiSA Ready TVs the market will grow. is growing, it’s still about 50 million TVs over 2019 and ‘20. In the meantime, SoundSend , connecting to HDMI ARC/ and eARC works on all existing smart TVs, which is approximately represents somewhere closer to a billion TVs worldwide.
I also think a lot of the speaker companies have gone through the due diligence within their own organizations, some taking longer than others, and are finally at a point now where they’re ready to prioritize their solutions.
Question #2: SoundSend is an exciting product offering, especially considering its position as WiSA’s first branded product. Personally, I think the product represents far more than a revenue stream, offering up an opportunity to increase consumer awareness of the WiSA brand, and ultimately sales across the WiSA ecosystem, from LG televisions to Klipsch speakers. What is your opinion in terms of the brand awareness opportunity brought to the table by the launch of the SoundSend Dongle?
From a brand awareness perspective, I think it’s the glue that’s been needed for a while to connect a huge installed base of TVs to a growing number of WiSA Certified speakers, and I think a lot of retailers, buying groups, and brands knew of WiSA but weren’t exactly sure how it could affect them and how they could leverage its capabilities.
Now they know!
And so, I think the brand will get more recognition through those retailers and through the cohort relationships with our member brands to the end users. So, individuals will start to know who WiSA is because they see us in more locations, filling more needs, and hitting more opportunities.
We’ve had a number of speaker brands and distributors reach out to us since SoundSend has become known and since the first article and press release. They’ve reached out saying, “Hey, we’d love to learn more about this, we’d love to get a sample, we’d love to maybe promote it with our speaker systems.” We’ve even had the conversation with distributors who’ve said, “This is a great solution. We carry some WiSA Certified speakers but now that this can connect them to so many more TVs, we’d like to get a couple samples and potentially even distribute it.
So, we’re seeing a lot of new awareness, and a lot of the people who were maybe sort of aware but weren’t sure how they were going to be able to leverage what we do, now they see how they can do that.
Question #3: Even with a COVID-19 vaccine on the horizon, consumer fears surrounding close contact with others have kept them out of movie theaters and other entertainment venues. How do you think the pandemic has changed the landscape of the entertainment industry as a whole, and what is WiSA doing to capitalize on the opportunity provided by the change in landscape?
There were already a lot of ways to access content in the home that were available. I don’t know that everyone was taking full advantage of those, and I think they’ve learned now how to do that in many ways. So, they didn’t realize everything their smart TV could do, and all the content they’ve had access to.
“For ten bucks a month I can have all these movies… Oh my gosh!”
So now I think they’re finding ways to leverage content distribution access and aggregation that was already there. Just like, how many people today are experts in Zoom that never thought they would video conference? The same is true with getting access and control over entertainment in the home.
The second thing is, production houses and the big movie brands, Disney, Sony, Universal, I think they’re going to start finding ways, they already have in some ways, to make movies and new content available directly. You started to see some movies, instead of launching exclusively in theaters, get launched directly to or simultaneously directly to consumers and I think that those movies have been met with some success. So, I think you’ll start to see that being used more as an option and all of that, whether it’s content I already had access to and am just now realizing or it’s new forms of content that are being delivered to me, I think I’m going to want that content to be enjoyed at a higher level.
We see TV sales continuing to increase, I think you’ll see that followed up by people investing in home theaters, and they’ll cross the gamut from a $799, 5.1 home theater in a box to a multi thousand dollar system from Bang Olufsen or Klipsch, or one of the other stallworthsstalwarts of our industry.
I think you’ll see people understanding, and saying, “I’m going to be using this more, it’s an investment in my nest.” Which you’re seeing in everything from home office furniture to outdoor heaters to trampolines, you’re seeing people willing to buy these products because they know they’re going to be home more, and they want that experience to be better.
Final Thoughts
The entertainment industry is changing. While some of these changes, like movie theaters being closed will be short term. Other changes, like consumer willingness to spend on improving their home entertainment experience with smart surround sound, are likely here to stay. Moreover, film producers and other content producers in the space are likely to continue catering to the at-home audience.
My conversation with WiSA President, Tony Ostrom, only served to solidify this view. The bottom line is that while the COVID-19 pandemic has been a painful occurrence, there are some positives that have come of it, with improved home entertainment options being one of them. WiSA is clearly at the forefront of this evolution in home entertainment. As such, an investment in WISA stock is likely to yield incredible returns ahead.
Tony, I know you’re reading this, thanks again for the opportunity to chat!
Disclosure. CNA Finance, parent company to Alpha Stock News has a monetary relationship with Summit Wireless Technologies that resulted in the publication of this article.
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