The Brancatelli File By Joe Brancatelli
Looking for the Big Picture With Henry Kloss
December 1, 1982 -- In a tiny office cubicle on the ground floor of an old, dilapidated, railroad-terminal warehouse building in Cambridge, Massachusetts, the Wrong Stuff has found a home.

Anything and everything technical that wasn't fashionable enough for the Tom Wolfe book has come to rest here: disemboweled television picture tubes, stacks of yellowing technical manuals, ancient radio receivers, creaky office furniture, electronic gadgets and gizmos that defy description. And sheaf upon sheaf of paper is strewn about: on and under the desk, on the chairs, on the walls, all over the floor.

Delivering an impassioned discourse on the state of home entertainment in this tumbledown shrine to the history of electronics is Henry Kloss, a thickset, balding, 53-year-old entrepreneur who just happens to have invented more of the Right Stuff in home entertainment than anyone since Thomas Alva Edison.

"A whole generation of Americans has grown up believing that the conventional 19-inch television set is the best way to watch television at home," he says. "Well, a whole generation of Americans has been woefully misinformed. The proper way to watch a television picture is on the big screen, like we watch motion pictures in a movie theater. Big-screen viewing isn't unnatural, it isn't incongruous. It is the 19-inch TV that is the oddball."

Kloss has preached the gospel of the wide-screen television picture for a decade and a half--ever since he first conceived of "projection television" in 1967, invented the first receiver with a 7-foot screen in 1969, and marketed the first commercial big-screen set in 1974. With hundreds of American communities plugging into cable-TV and pay-TV systems, and millions of American consumers buying video games and video-cassette recorders, large screen television sets should be a natural accessory item.

But 15 years after Kloss first conceived of projection television for the home, he is still looking for the big picture. Thirteen years after he proved that wide-screen home TV was a technical reality, Kloss is still struggling to find a receptive audience among America's TV-crazed consumers. Eight years after bringing the first projection set to market, his company still numbers its production in the thousands. Along the way, he has been laughed at, sued, dismissed as a fool by competitors and forced out of two companies he founded.

Yet Kloss, whose earlier products have changed the way two generations of Americans listen to music, remains committed to the belief that large-screen television is the wave of the future.

"One really doesn't know why projection television has not been regarded as a natural and desirable product," says Kloss, who unabashedly refers to himself in the third person. "One is a bit surprised and annoyed at the slow level of acceptance. More people ought to have this product than have it now, but one's come to accept that. But it is inevitable that the market will improve. Projection television is the right product."

These days, Henry Kloss looks for the big picture as president and 53 percent owner of Kloss Video, a six-year-old company that went public last year. All of Kloss Video's operations are stuffed into 100,000 square feet in three old buildings in Cambridge not far from the Massachusetts Institute of Technology. The warehouses, which once served the steel and firearms industries as well as the railroads, are now filled with about 250 employees and some of Henry Kloss's most ingenious creations: one-of-a-kind glass-grinding and lens-making equipment, unique picture-tube assembly lines, and even a special area where craftspeople hand-tool curved, freestanding protection-television screens.

Kloss Video now makes six projection TVs. Biggest seller is Novabeam Model One, a two-piece floor model that sells for $3,300. Onto the 4x5.5-foot screen a picture measuring 6.5 feet diagonally is projected by an electronic "projector-receiver" console. Looking much like a cube-shaped coffee table, the Novabeam console measures 27.5-by-18.5-by-22 inches and weighs 118 pounds. The newest Novabeam, Model Two, is a highly touted, $2,200, one-piece portable. The projector-receiver console weighs only 65 pounds and its dimensions (21.5x24.5x12 inches) are comparable to those of a standard 19-inch television set. The Model Two needs no freestanding screen and projects a 5.4-foot-diagonal picture on any blank white wall.

Unlike earlier versions of wide-screen television, many of which were plagued by dim, grainy, and washed-out pictures, Novabeams present pleasingly bright colors and a generally impeccable television image. Video magazines and even most of Kloss's large-screen competitors point to Kloss Video's products as the best in the field.

As a financial enterprise, Kloss Video is reasonably sound. The company's first public offering of shares last year raised $3.7 million. Sales reached $13.4 million, almost double the 1980 figure. After-tax profits were $1.6 million, almost triple the 1980 profit of $604,000. Unit sales of Novabeams have been impressive, too. After selling 342 Model One sets in 1979, Kloss sold almost 4,000 sets in 1980 and 5,800 last year. Half-year results for 1982 were also good. Profits declined--mostly due to increased advertising and R&D costs—--but net sales and units sold were both substantially higher than comparable 1981 levels. Furthermore, Kloss Video is probably the only manufacturer actually turning a profit on projection-TV sales.

"There's no business here," insists an executive of a TV firm that has been making wide-screens for five years. "Henry keeps saying people will soon embrace projection TV, but the figures don't show it. Nobody bought wide-screen television five years ago, nobody's buying it now. The reality is that projection TV is a wonderful theoretical concept that is dying in the marketplace."

Kloss not only refuses to accept this view, he also rues being the voice in the wilderness.

"We're making money and they're not," he says with noticeable pride, "and one does get satisfaction in having come in against the big guns and become a successful competitor. But one realizes that we can't exploit the market single-handedly. The other guys haven't the faith in the market that they ought to have. "We've proven there are buyers. But development and expansion of the market can only be done by the Sonys and the RCAs and the GEs who have considerable sums of money to invest in expectation of major returns. One is sure that the moment big manufacturers decide projection television is a product they want to sell, they will take their case to the consumer and convince him or her to buy projection television."

Without the massive marketing push that normally accompanies major product introductions, projection television has been fighting an uphill battle against its high price and the negative impression created by the cheap barroom installations that were for many people their first exposure to the product. And then there are generations of TV addicts who are accustomed to an intimate little rectangle of flickering light and find an image that approaches lifesize just plain unnatural.

"The oddball tag is still there in some people's minds," Kloss admits. "It's taken an enormous amount of one's time and effort to fight that negative impression."

During his darker moments, Kloss will allow that he resents some of the personal side effects of his 15-year involvement with projection television. Mostly, he's astonished that the press, while covering the fortunes of the industry, has long been fixated on his mildly unorthodox lifestyle. Whenever reporters try to describe Henry Kloss the human being, they seem unable to resist hoary clichés.

"One would like to read that Henry Kloss leads a fairly normal life outside of his work," he complains. "One would like to read that he has a wife [her name is Jackie] and three children [two boys and a girl] and lives in a wonderful old house in Cambridge. Instead, one is reduced to other things."

The "other things" seems to crop up whenever Kloss or projection TV is mentioned. The Wall Street Journal never writes about Kloss without calling him "shaggy-haired" and rarely neglects to mention that he and his family vacation in a tent because his 17-acre tract on Martha's Vineyard is houseless. An Esquire story in 1976 pulled off an almost enviable literary hat trick. It used three of the most familiar Kloss clichés--tinkerer, absent-minded professor, Gyro Gearloose--before it even mentioned the term "projection television." Forbes is partial to describing Kloss as "disheveled." And no publication--not even this one--can resist describing the unvarying Kloss wardrobe: an endless series of stained and baggy khaki chinos and blue button-down shirts.

Kloss has become so conscious of his idiosyncratic image that he feels compelled to explain even the smallest adjustments. Several months ago, when he offered to drive a departing reporter to Boston's Logan Airport, Kloss apologized for his white Mercedes-Benz. "One understands you were expecting to be driven in the beat-up old Checker station wagon that you must have read about," he said. "But one felt the need for more reliable transportation, so one bought the best new station wagon one could find."

After 15 years of promoting the viability and desirability of projection television, Kloss is finally growing bored with all the huckstering and lecturing and cajoling that's required. Last June, during a press introduction of the Model Two, the usually voluble Kloss remained in the wings, leaving center stage to sales and marketing vice president Tom DeVesto.

While an unexpected thunderstorm kept everyone else on the premises of the presentation, Kloss stepped out with an umbrella and considered the strain of the last 15 years.

"One wonders if one would have gotten into projection television if one could have known it would have taken all this time to establish the viability of the market," he said. "One is glad to have chosen to do it, but ... Maybe inventing the Walkman--inventing a whole new category of product and doing it right from the beginning--would have been more satisfying."

Kloss has never done quite that, but he has made a career of revolutionizing existing products. Thirty years ago, for example, Kloss refined some acoustic principles he found in an old technical manual. The result was the first shelf-size speakers. They became the cornerstone of America's fledgling hi-fi industry and prompted Kloss to found the venerable and extremely profitable Acoustic Research speaker-manufacturing firm.

Acoustic Research did more than establish Kloss as an inventor and a marketing force, however. It marked the first of many times his business acumen was questioned. In 1956, after his relationship with AR's other founding partners soured, Kloss sold his large share of the firm for $50,000. A decade later, AR was sold for $9 million.

As the "K" in KLH, another pioneering audio company, Kloss developed two more blockbuster audio products: the first high-fidelity FM tabletop radio and what is now called "compact" stereo, those all-in-one systems that offer hi-fi sound in a small size and at a small price. Both products, introduced in the early 1960s, became spectacular successes. KLH became one of the most important and lucrative companies in the audio business.

Then came another crucial business decision. Kloss sold KLH to Singer for $1.2 million worth of stock. He continued to run KLH for a while--one year he pushed sales to a then-stratospheric $17 million level--but Singer's stock coincidentally went into a nose dive. When he resigned from KLH in 1967, he sold his Singer shares for $400,000.

Kloss's decision to leave Singer was partly business--"One wasn't building any equity"—but mostly creative. Kloss had conjured up a new idea. He thought America's growing fascination with television might yield a new product: wide-screen television. Singer thought the idea was absurd.

"One would have gladly produced the projection television at KLH for Singer," Kloss insists today. "But they weren't interested."

Working in his basement and with his $400,000 from the Singer sale, Kloss founded The Advent Corporation to develop, refine, and market a wide-screen television device. By 1969, Kloss proved projection television could be manufactured, but he also ran out of funds. To keep Advent and his wide-screen idea afloat, Kloss raised $600,000 in a private offering of stock and decided to re-enter the audio business.

"Television was an expensive business to work in even then," Kloss remembers. "There was an intermission where one had shown projection television was viable, but one didn't have the money for commercial implementation."

The "intermission"--from 1969 to 1973--wasn't a fallow period, however. Kloss was busy redefining audio again. And building a profitable company again. From Advent came the Model One speaker: inexpensive, acoustically advanced and one of the most successful products in stereo history. So was a high-quality cassette tape deck Kloss developed.

With Advent churning out regular profits in audio, Kloss turned back to projection television. In 1974, he introduced the world's first home projection unit: the Advent Videobeam. Nine months later, a revised model debuted. The two-piece Videobeam, consisting of a 7-foot screen and a racy, white, triangular electronics console, carried a $2,500 retail price.

The low price was a fatal business blunder. Unlike other producers of technically advanced equipment, Kloss refused to price Videobeam on the "learning curve," a method that sets a product's introductory retail price high and reduces it when manufacturing efficiencies pare costs. Instead, Kloss chose to introduce Videobeam at a price for which he thought it could eventually be sold profitably. Simply put, Kloss was going to lose money on every Videobeam Advent sold.

Yet Kloss defends the strategy even now.

"If we priced Videobeam at four thousand dollars to five thousand dollars, it might have been technically profitable, but it would never have been considered a consumer product and it would never have generated the excitement it did. One priced Videobeam as high as one could without excluding a significant expression of consumer interest," he says.

Consumers were interested all right, but start-up costs were enormous. "There were unknowns," Kloss admits ruefully. "One had never made a projection television on an assembly line before."

Videobeam production sorely taxed Advent's limited finances. Kloss raised the price several times during the first months of production--it eventually reached the $4,000 level--but it was already too late. Advent's bankers stepped in during the spring of 1975. About $4 million in debt, Kloss was given 72 hours to find new money or pack it in.

Kloss found Peter Sprague, world traveler, boy-wonder entrepreneur and venture capitalist. Sprague, who had turned around a troubled National Semiconductor, was willing to help Advent. Sprague's price, however, was enormous. Kloss was forced to relinquish control of the company and confine himself to product development. Kloss stayed on for about a year--long enough to complete the Advent 750, a less expensive and less sophisticated version of the Videobeam--and then resigned.

"One didn't have the power to do anything," Kloss says about his relationship with Sprague. "One couldn't even buy a screwdriver without Peter's approval. One owned 800,000 thousand shares of Advent but had absolutely no voice in the future direction of the company. So one just left."

Kloss went back to his basement and devised the Novatron, a cheaper, simpler, more efficient picture tube. Kloss offered to license it to Advent, but Advent claimed he developed the Novatron while still working for the company and had infringed on a Sprague-patented tube design. In an out-of-court settlement, Kloss surrendered 125,000 Advent shares in exchange for the freedom to continue to look for the big picture without harassment from Advent.

"It was a straight protection deal," Kloss says now. "One bought one's freedom even though the case clearly had no merit. One wanted to license this new tube technology, but Advent made it clear they would instantly appeal any verdicts in my favor. Under that cloud, one would have never been able to license to other companies, so one bought Advent off."

Kloss started Kloss Video in 1977 in the hopes of licensing his Novatron technology to Advent and the other manufacturers. But when there was only one taker, Kloss reluctantly plunged back into the manufacturing game.

"One never planned to create another company to make things again," he says. "One would have been perfectly content to just license Novatron. One does not necessarily like the process of having to do all these things in order to get projection television on the market. Getting it done, though, is a great satisfaction."

There is also some other satisfaction. While Kloss Video has established itself as the leader in projection TV, Advent has disappeared. Sprague temporarily revived the company but, shorn of Kloss's technological insight, Advent couldn't keep up with the changes in either the audio or video market.

Kloss Video now occupies one of the old Advent buildings in Cambridge. And, says Kloss with a barely concealed grin, "that exceedingly valuable patent to the Sprague picture tube was part of a package of all Advent know-how and trademarks we happened to pick up the other day for $10,000."

Sitting in his Cambridge cubicle, where the only personal touch among the mounds of the Wrong Stuff is four handmade birthday cards from his daughter, Henry Kloss will occasionally ruminate about Henry Kloss.

He does not understand why people call him a bad businessman: "One's companies have always made money, except for one year at Advent." He insists that he should not be called an inventor: "One never actually invented anything until the Novatron picture tube." And he doesn't consider himself a businessperson: "The thought of manipulating numbers and buying and selling companies rather than creating more value is highly repugnant."

Kloss doesn't even particularly cherish the role of inventor.

"Inventing for the sake of inventing is pretty irrelevant. It's not much of a contribution."

This story originally appeared in United Airlines Mainliner magazine.

This column is Copyright © 1982 by Joe Brancatelli. is Copyright © 2017 by Joe Brancatelli. All rights reserved. All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.