Binoculars, Bird Watchers, and the Economics of Innovation

Binoculars, Bird Watchers, and the Economics of Innovation

BY JOHN E. RIUTTA | Contributing Editor

IT SEEMS THAT EVERY YEAR for the past few now, with the optics companies' annual new product announcements, the same question is asked by birding product retailers throughout the industry, "Where are the new binoculars for us?" It's a fair question, for in looking across the different optical firms' product lines, where new camouflage models and large objective designs seem to be plentiful and increasing, there hasn't been a new binocular recently introduced that really seems to have been created specifically for bird watchers. However when you begin to consider the matter in greater depth, adding in a few important but often overlooked realities of the optics business generally known only to those who've spent time inside it, the complexity of the issue dramatically increases and a new more pressing question begins to arise - that of a widespread lack of significant innovation across the entire binocular industry.

To begin with the original question, however, a primary perceptual difficulty is that the overall binocular market doesn't divide neatly into two discrete user segments. In addition to bird watching and hunting there are a wide variety of uses to which people put their binoculars daily, and many are neither birder nor hunter. From sporting events to sightseeing, concert-going to commercial navigation - and let's not forget military and law enforcement - binoculars are a near, if not an absolute necessity in a remarkably varied assortment of activities. The problem is that once the easily definable market areas of bird watching, hunting, and to a lesser extent "tactical" (the optical industry term containing all specialized optics specifically designed for either military or police use) are acknowledged, defining a measurable user profile and requirements for any of the other previously noted activities is next to impossible; hence the fixation by the sports optics manufacturers on these three areas.

This problem of multiple indefinable user markets creates a false dichotomy between bird watching and hunting.  If the requirements for only two user groups can be defined, then most all products must be created around one or the other. (We can set aside tactical, as the products developed for it, at least in regard to binoculars, are too specialized to be of much use in any of the other markets, definable or otherwise; thus little cross-selling occurs). Is a potential new binocular to be a bird watching or a hunting binocular? But what is a bird watching binocular and what differentiates it from one designed for hunting? Truth be told, most of the differences that exist - or seem to exist to the end user - between the two are matters of branding and marketing.

Spend a little time perusing the binocular display at a large sporting goods retailer - Cabela's for example, and you will begin to notice two important things. First, just about every binocular presently in production that you're likely find around the neck of a bird watcher seems to be represented. Second, many of the models spread across the majority of the different brands look very much alike - as if they were all made by the same manufacturer and simply given different names.

These are the two often overlooked realities of the modern binocular industry. To take the first point first, if you can sell a binocular to a bird watcher, you can sell it to a hunter; however the reverse is not the case. Where bird watchers have definable preferences in the binoculars they favor, almost all of these preferences are "internal," relating to the binocular's optical design.

A sharp image that presents its user with crisp fine details and color that is as true to life as it can remain after passing through half a dozen or more pieces of glass; - internal.

A wide field of view at a magnification level not above 10x and more commonly around 8x; -internal.

A close focus distance shorter than most users will ever have a need to validate in the field; - internal.
Hunters, on the other hand, make certain demands in regard to their chosen binoculars that are primarily external.

A heavy armor coated chassis in a camouflage pattern; - external.

Flared eyecups; - external.

Threaded lenses for attachment of filters to enhance or block specific portions of the visible spectrum; - external.

Just about the only thing hunters require that is internal, which is not already an existing specification for a bird watching binocular, is higher levels of magnification and correspondingly larger objective lenses; however a simple modification to the binocular's optical prescription can address this in short order.

Truth be told, there is nothing in a good bird watching binocular that would not be seen as either an advantage to a hunter or simply an irrelevant feature. Yet most, if not all, of the features that put a binocular specifically into the hunting category make it a difficult sell at best to birders. In fact, most of the elements that make a binocular a good bird watching binocular are suited for just about any of the non-definable user markets as well. For this reason, binocular manufacturers tend to create their core designs around a bird watching user profile and modify models accordingly for other markets as needed.

This brings us back to that second point; how so many binoculars today bear a striking resemblance to one another. Take out the products of the "big three" - Leica, Swarovski, and Zeiss (possibly the "big five" if the top level products of Nikon and Kowa are included) who all expend considerable time, money, and effort in creating their own unique products - and it often becomes difficult to distinguish one brand of binocular from another. Two or three brands may seem similar to one another while two others may seem reflections of themselves - differentiable only by the name printed across their respective bridges. When "house branded" models (bearing the retailer's name rather than that of an optical firm) are added to the mix, the situation becomes more confusing.
It all comes down to the dramatic rise of Asian OEM (original equipment manufacturer) suppliers - optical manufacturing firms, or divisions of larger, multi-faceted manufacturing companies, who produce binoculars and optical instruments for other companies but who don't (generally) sell products under their own names. A few of these, the older and more established ones capable of producing high quality products, are located in Japan; however the vast majority are in China where the cost of labor is far lower.
And that's really what it all comes down to - being able to acquire each binocular unit as inexpensively as possible. That's why there are so many different (or apparently different) binoculars from which to choose at the low few hundred dollar price point range. They're not unique creations, they're simply OEM-sourced base model products often available to anyone able to meet the minimum order requirements and pay the costs for any desired feature changes. Add a lens coating and OEM Product X becomes Brand A; change contours of the armor and it becomes Brand B. Under this business model, more firms than ever before - sometimes not previously thought of as optics providers - are offering larger numbers of binocular models to the marketplace, blurring the lines between one another's products, keeping retail prices and margins as low as possible, and rendering user group differentiation all but meaningless.

Innovation doesn't come from such a state of business - it comes from having, as the MBAs like to say, some "skin in the game." A Swarovski EL looks and performs the way it does because it was painstakingly developed by Swarovski's own engineers and designers to represent all for which that company stands - not just to be another item added to its existing product line. Zeiss' Photoscope is unique in the marketplace because of Zeiss' commitment to innovation at the intersection of optics and electronic technology - not just because it was a neat gizmo they thought would sell a few thousand units. The old saw is true - "you get what you pay for;" and when it comes to the past few decades in the binocular market, most users have not been willing, or asked, to pay at a level that supports the type of company at which true, noticeable, head-turning innovation occurs. Consequently, outside of the highest price bracket, a large swath of the binocular market has become somewhat stale.

Thus, especially in deference to the earlier-made point, it is entirely reasonable to think that the bird watching market is of significant importance to the various optics companies - for nearly all of the parameters it defines as important in a binocular will be found at the center of the larger circles of binocular products marketed to a wider range of user groups. And while it seems that, due to external modifications and the myriad variety of colors, shapes, and finishes applied to appeal to the hunting, as well as other, user markets, the bird watchers are given lesser regard, it is important to remember that beneath all these cosmetic variations beat bird watching hearts.

The larger challenge, in which such solace is not so easily found, is innovation. So long as the OEM centered business model remains dominant in the binocular industry, only a few firms will undertake the significant investment needed to produce products that stand above the of "me too" models. Only if these firms can achieve sufficient return for their investment will they continue to innovate.