Retail prices of HiFi

[Ajani]

A couple of threads recently mentioned the old argument about certain products in HiFi being vastly overpriced due to excessive mark-up.

On the other hand, I also see regular reports from HiFi shows, etc where claims are made by manufacturers and HiFi shops that no one is making much money in the industry.Also, we keep seeing HiFi shops closing down.

So if prices are inflated with excessive mark-up then why isn't anyone making lots of money? Are they all just lying about not making money? If they are lying, then why are HiFi stores shutting down?

:idea:

So I starting thinking about what it would likely cost to run a HiFi store. Let's see:

Rent at a location where you can get some decent foot traffic. (much greater if you want space to have more than just a few models from a couple of brands).

At least one member of staff to do sales/cashiering. (Need someone with some actual knowledge of and interest in HiFi else you end up with Best Buy customer service - So likely to cost a bit more than the typical high school student).

Typical overheads - electricity, water, insurance.

OK, so far not too much worse than other retail stores. But then we need to examine your projected sales -

How many items are you likely to sell in a month? I can honestly say that I've never walked into a HiFi store and seen a line like at KFC at the cashier. In fact, I don't think I've ever waited in line to make a purchase, even when there were a few other persons in the store. So I suspect sales volume would be very low. In fact I can easily see a day (maybe even a few days) passing with no sales & only the occasional person doing an audition.

So it means that the limited amount of sales in the month need to cover rent, salary, overheads, your own salary (profit) & of course the cost of your inventory (which we haven't mentioned yet).

Even though you can purchase the items at half retail and mark them up 100%, you still need that cash up front in order to have something in the store to sell. Customers hate to wait for you to special order whatever they need.

All in all, running a HiFi store seems like a pretty sucky business from a financial point of view. It seems you'd need high prices to offset the very timid turnover. Of course high prices will make turnover even slower. And we haven't even discussed competition from online sales and DIY.

Note: I do believe that some manufacturers, especially with their statement pieces, tend to slap on even higher mark-up than usual because that is what is expected for 'luxury items'. Now whether the further reduced sales is heavily offset by the increased price is another question.

So what do you think? Am I way off here? Are there any major costs that I missed out?

[recoveryone]

I would say the demographics of our society is the issue, HIFI/stereo has always been a small part of the consumer mindset. From the old Victrola to todays 10K systems. Its has never been a priority in Americans homes. Single men have been the mainstay, especially during the 60's and 70's and of those it was the American service man that made up the large percentage of that buying public. Once they got married HiFi was no longer a major part of their lives (in buying new or updating their gear) . One thing also to consider is that the pricing is always been high in the states, compared to overseas markets. so what you have is a void of real enthusiast that have disposable cash vs. the on slot of new personal electronics. In the 80's it was the Walkman, I can keep my tunes, without having to spend XYZ dollars to hear them. Service men not able to send back as much audio gear as in the past.

During the late 90's their was a jump in sales due to the HT market flooding the print ads and TV's commercials. An easy way to gain a foot hold in the female market interest along with the kids. But then again, the mindset of "didn't we just buy some speakers and amp 5 years ago, why do we need a new one when this still works fine." As we know the technology changes about every 18 months to 2 years and what you have now is old within 6 months after you brought it. To be able to make it you need to be able to have other items to offer to the public. This is why Curcuit City, and a host of other Electronic/ Computer stroes have gone by the wayside, they could not compete with the foot traffic that Wal Mart, Sam Club, Costco, even Sears was getting. And the HIFI companys did not help either, by making lower end models that could be sold at this discount stores. We all have friends/family that talk about their Sony, Pioneer, Yamahas to name a few, as if it was the top of the line model. And when we try to explained the difference, they get all butt hurt and call us haters and nay sayers. This is why its hard to operate a brick&mortor HIFI store.

[Woochifer]

Every audio shop owner or manager that I've talked to over the last 10 years has indicated that if they depended only on equipment sales, they would go out of business. It's that simple.

The factors that you point out affect EVERY retail business. You either need high margins or high volume, and the market conditions are now very much against the balanced approach that a lot of retailers used to maintain.

In audio, the middle market is what has eroded over the past couple of decades. If you look at the audio retailing landscape, nearly all of the regional specialty chains that catered to the middle market are now gone. Those chains were once very prominent, as they carried a combination of entry level gear, midmarket stuff, and high end components. But, all of the markets that they catered to got knocked out from underneath them -- the entry level market got subsumed by big box chains, while high end gear got increasingly concentrated into boutique high end stores.

Meanwhile, the middle market for audio components is shrinking. Even if you don't account for inflation, home audio component sales peaked back in 1992, when CD player sales were booming and driving sales for other audio components. Right now, the home audio component market is roughly half of what it was in 1992. It's a shrinking market, and retailers are battling over shares of a shrinking pie, even as big box players like Best Buy/Magnolia, Walmart, and Target increase their share.

What happened? First, prices on entry level audio components have tumbled, and the audio quality and functionality for entry level components is now "good enough" for most consumers. Before, you had a much clearer performance differentiation between the entry level and middle market components. Now, the lines have blurred.

Second and more important, the market shifted to portable and mobile devices. As recently as two years ago, the sales from Apple's iPods alone were more than triple the sales volume for the entire home audio component market. Those sales have now shifted to smartphones and other multi-function portable devices that play audio. And the move to car audio has been ongoing for decades. Now, the sales for car audio are twice as much as home audio. Car audio stores can survive more easily because they make their money on installation services. All these factors are why audio stores cannot survive by just selling components.

So, how do/have they survive(d)? Most of them diversified into home theater, which makes sense because multichannel components carry higher price tags and up until a few years ago, HDTVs carried very high margins. And high priced accessories like cables have mushroomed, and those are far more profitable than components.

But, the key for a lot of stores has been services, services, services. Unlike components, services have no wholesale cost, and the markup on labor is far more than with components. This includes stuff like home installation, networking, video monitor calibration, acoustic consulting, and repair services. Home theater is very amenable to home installation services, which is why most of the stores in my area are also certified contractors. A store in my former neighborhood was a factory authorized repair center for Yamaha, Denon, and other brands. The manager once told me that the warranty service is what keeps the doors open. Of course, with Best Buy now also offering home installation and ISF calibration services, this line of work is also getting squeezed.

The bottomline is that the landscape has shifted, and continues to shift. It's not survival of the fittest, but survival of those who can adapt to these market changes.

[Ajani]

The factors that you point out affect EVERY retail business. You either need high margins or high volume

Obviously. I never claimed the factors were unique to HiFi retail. In fact I said "so far not too much worse than other retail stores".

What I then noted as being the real problem is that sales are slow. What HiFi products could you sell that turn over quickly? As I mentioned, it's not like KFC or other fast food franchises, so by default margins have to be high in HiFi.

The rest of your post is really just a detailed analysis of why the turnover is so slow.


In audio, the middle market is what has eroded over the past couple of decades. If you look at the audio retailing landscape, nearly all of the regional specialty chains that catered to the middle market are now gone. Those chains were once very prominent, as they carried a combination of entry level gear, midmarket stuff, and high end components. But, all of the markets that they catered to got knocked out from underneath them -- the entry level market got subsumed by big box chains, while high end gear got increasingly concentrated into boutique high end stores.

Meanwhile, the middle market for audio components is shrinking. Even if you don't account for inflation, home audio component sales peaked back in 1992, when CD player sales were booming and driving sales for other audio components. Right now, the home audio component market is roughly half of what it was in 1992. It's a shrinking market, and retailers are battling over shares of a shrinking pie, even as big box players like Best Buy/Magnolia, Walmart, and Target increase their share.

What happened? First, prices on entry level audio components have tumbled, and the audio quality and functionality for entry level components is now "good enough" for most consumers. Before, you had a much clearer performance differentiation between the entry level and middle market components. Now, the lines have blurred.

Second and more important, the market shifted to portable and mobile devices. As recently as two years ago, the sales from Apple's iPods alone were more than triple the sales volume for the entire home audio component market. Those sales have now shifted to smartphones and other multi-function portable devices that play audio. And the move to car audio has been ongoing for decades. Now, the sales for car audio are twice as much as home audio. Car audio stores can survive more easily because they make their money on installation services. All these factors are why audio stores cannot survive by just selling components.

So, how do/have they survive(d)? Most of them diversified into home theater, which makes sense because multichannel components carry higher price tags and up until a few years ago, HDTVs carried very high margins. And high priced accessories like cables have mushroomed, and those are far more profitable than components.

But, the key for a lot of stores has been services, services, services. Unlike components, services have no wholesale cost, and the markup on labor is far more than with components. This includes stuff like home installation, networking, video monitor calibration, acoustic consulting, and repair services. Home theater is very amenable to home installation services, which is why most of the stores in my area are also certified contractors. A store in my former neighborhood was a factory authorized repair center for Yamaha, Denon, and other brands. The manager once told me that the warranty service is what keeps the doors open. Of course, with Best Buy now also offering home installation and ISF calibration services, this line of work is also getting squeezed.

The bottomline is that the landscape has shifted, and continues to shift. It's not survival of the fittest, but survival of those who can adapt to these market changes.

[bobsticks]

are there any major costs that i missed out?



ebitda

[Feanor]

The middle of the Hi-Fi market has largely vanished -- which is a large part of what Wooch said.

The high tide of Hi-Fi was the '70s and early '80s when everyone was into it and the middle market was huge . Since then the middle has drifted away from Hi-Fi to home theatre and/or mobile audio which catered to by mass-market products. The residual Hi-Fi middle is served by only a few brands, viz. Cambridge Audio, NAD, and to a lessor extent Marantz, Musical Fidelity, Vincent, and minor Chinese brands. All of this stuff is made in China.

The high-end has survived, on the other hand, by going even more up-market. This works, IMO, because of the changing demographic, i.e. traditional hi-fi is nowadays the purview of middle- and retirement-aged guys (yes, guys), with more discretionary income to spend on expensive toys.

[Ajani]

The middle of the Hi-Fi market has largely vanished -- which is a large part of what Wooch said.

The high tide of Hi-Fi was the '70s and early '80s when everyone was into it and the middle market was huge . Since then the middle has drifted away from Hi-Fi to home theatre and/or mobile audio which catered to by mass-market products. The residual Hi-Fi middle is served by only a few brands, viz. Cambridge Audio, NAD, and to a lessor extent Marantz, Musical Fidelity, Vincent, and minor Chinese brands. All of this stuff is made in China.

The high-end has survived, on the other hand, by going even more up-market. This works, IMO, because of the changing demographic, i.e. traditional hi-fi is nowadays the purview of middle- and retirement-aged guys (yes, guys), with more discretionary income to spend on expensive toys.

And a lot of the more affordable items have moved to direct sales and DIY. So there is a greater gap in the middle of the market.

Though on the bright side (like what Wooch said): there is far less obvious difference between some of the affordable gear and middle market gear. So the online brands are often as good as (if not better than) the more middle market items from Rotel, Nad, Cambridge, Marantz etc... Of course none of that is really good for retail stores.

[Ajani]

ebitda

earnings is a cost??? :eek6::eek6::eek6:

[bobsticks]

earnings is a cost??? :eek6::eek6::eek6:

Lol, no, I was focusing more on the "amortization" and "depreciation" components of the equation.

As Feanor has stated, there's sort of a limited demographic that is participatory. It's important to know two things:

1) Most people progress upstream in this hobby and are somewhat loyal to local, boutique merchandisers the higher they go (read: the more costly the upgrade)

2) Integral in those transactions is a trade in value for older goods in pursuit of newer equipment.

Most stores are contractually obligated to carry certain lines that fall within what can only be called a production zaibatsu...for example: B&W and Rotel...B&W products tend to hold a high resale value while Rotel products do not. Often these losses are absorbed by the dealer as these grey area transactions are not always profitable.

For this reason and those raised by Wooch, operating a Hi-End Audio boutique isn't always a walk in the daisies

[Woochifer]

Obviously. I never claimed the factors were unique to HiFi retail. In fact I said "so far not too much worse than other retail stores".

What I then noted as being the real problem is that sales are slow. What HiFi products could you sell that turn over quickly? As I mentioned, it's not like KFC or other fast food franchises, so by default margins have to be high in HiFi.

The rest of your post is really just a detailed analysis of why the turnover is so slow.

But, your analysis remains focused just on product. That narrow analysis misses the bigger picture issue that I pointed out, which is the shrinking market for home audio components in general. Of course sales are slow, that's what happens when you have a market segment that is now half of what it was 20 years ago. You can't have rapid turnover and maintain high margins without high demand, and home audio is simply not a high demand market segment. That's why stores that myopically double down on audio component sales are the ones that have gone under.

The total market for home audio components amounts to less than $2 billion annually. To put that in perspective, that's less than the sales from 20 Walmart stores. Harman International gets $3 billion annually from its OEM automotive division alone. All of their home and pro audio divisions combined generated less than $1 billion in revenue, and they are among the sales leaders in every category.

The key part of my post actually focuses on how stores can/do survive in a rapidly changing market, which IMO is much more important than microanalyzing the whether the high margins are justified, and the product turnover rates. Stores that diversified their product lines, and offer a broader range of services are the ones that have survived. They don't need to take drastic measures to turn product over quickly, because they make their money off of stuff like home installation, consulting, construction, accessories, and repairs.

[Ajani]

Lol, no, I was focusing more on the "amortization" and "depreciation" components of the equation.

As Feanor has stated, there's sort of a limited demographic that is participatory. It's important to know two things:

1) Most people progress upstream in this hobby and are somewhat loyal to local, boutique merchandisers the higher they go (read: the more costly the upgrade)

2) Integral in those transactions is a trade in value for older goods in pursuit of newer equipment.

Most stores are contractually obligated to carry certain lines that fall within what can only be called a production zaibatsu...for example: B&W and Rotel...B&W products tend to hold a high resale value while Rotel products do not. Often these losses are absorbed by the dealer as these grey area transactions are not always profitable.

For this reason and those raised by Wooch, operating a Hi-End Audio boutique isn't always a walk in the daisies

Yeah I guessed you weren't talking about earnings :devil:

The only way I see to run an exclusively HiFi store is to focus on the ultra luxury end of the market with truly jacked up prices as some dealers have moved towards. The other option is to do as Wooch suggested and diversify. One of the few HiFi dealers in Jamaica, does just about everything else other than sell HiFi. They don't even keep any stock on hand or a demo room. They just facilitate ordering several high end brands like Krell, Mark Levonson and Revel. Yes, they stay in business, but it really sucks as a consumer to not be able to audition squat at an authorized dealer.

[RGA]

I think the main thing for the older stores that have survived is that they go with the market.

Soundhounds has been operating for 5 decades and they have their audiophile belief systems - many of these guys open shop because they love hi-fi. But they preferred vinyl to CD - but that doesn't stop them from selling CD or digital. The owner prefers tubes but they still sell SS.

The interesting thing is the stuff they like the best they don't even advertise on their website.

It's not really about the margins since most of the gear is in the ballpark. The money is in all the things that Woochifer mentioned.

Further if you want to be successful you need to have wide options. I may want to run a store can sell all my dream gear but if I want to keep the lights on I need to have gear every audiophile who walks in could possibly want.

So Soundhounds carries the turntables and CD players but they also carry the digital streaming from Ayre and Linn and Meridian. They now have their bases covered for the source guys and enough selection between them to give the customer a choice between several models. Same for panels - Quad/Magnen/Final Sound/Martin Logan. You're a panel guy you're not stuck listening to the one and only brand the store carries (if they even carry one at all). Home theater - B&W and Paradigm - pretty safe bets and big names in the industry so you can't go too far wrong - indeed most stores only carry one or the other and these two for years were compared - well it's nice to be able to walk in and directly compare them. It's also nice to be able to directly compare a Denon to a Marantz, Arcam, Cambridge Audio, NAD, Rotel and Anthem.

If you cast a very wide net then you have something for everyone. Those tiny little stores with two speaker brands and no turntables or tubes cuts out a chunk of the audiophile market which still likes those things in very large numbers (see the poll on the Soundhounds site as an example) Sound Hounds. Purveyors of Fine Audio Equipment. (http://www.soundhounds.com/)

[Ajani]

I think the main thing for the older stores that have survived is that they go with the market.

Soundhounds has been operating for 5 decades and they have their audiophile belief systems - many of these guys open shop because they love hi-fi. But they preferred vinyl to CD - but that doesn't stop them from selling CD or digital. The owner prefers tubes but they still sell SS.

The interesting thing is the stuff they like the best they don't even advertise on their website.

It's not really about the margins since most of the gear is in the ballpark. The money is in all the things that Woochifer mentioned.

Further if you want to be successful you need to have wide options. I may want to run a store can sell all my dream gear but if I want to keep the lights on I need to have gear every audiophile who walks in could possibly want.

So Soundhounds carries the turntables and CD players but they also carry the digital streaming from Ayre and Linn and Meridian. They now have their bases covered for the source guys and enough selection between them to give the customer a choice between several models. Same for panels - Quad/Magnen/Final Sound/Martin Logan. You're a panel guy you're not stuck listening to the one and only brand the store carries (if they even carry one at all). Home theater - B&W and Paradigm - pretty safe bets and big names in the industry so you can't go too far wrong - indeed most stores only carry one or the other and these two for years were compared - well it's nice to be able to walk in and directly compare them. It's also nice to be able to directly compare a Denon to a Marantz, Arcam, Cambridge Audio, NAD, Rotel and Anthem.

If you cast a very wide net then you have something for everyone. Those tiny little stores with two speaker brands and no turntables or tubes cuts out a chunk of the audiophile market which still likes those things in very large numbers (see the poll on the Soundhounds site as an example) Sound Hounds. Purveyors of Fine Audio Equipment. (http://www.soundhounds.com/)

Sound Hounds is one of the dealers I'd love to visit.

Too bad that to run a HiFi store like them would require lots of capital to stock so many brands + a large store. I don't see too many other stores being able to copy them.

[RGA]

Sound Hounds is one of the dealers I'd love to visit.

Too bad that to run a HiFi store like them would require lots of capital to stock so many brands + a large store. I don't see too many other stores being able to copy them.

Well and it helps when your rent is dirt cheap.

The capital is high because you have to stock stuff but the higher end models you don't - people will wait a couple weeks for an D802. Most of the expensive stuff comes in a massive amount of color options and when you spend $10k you want it the way you want it. I said before that Audio Note was a problem for them - it is and it isn't. They have the demos and low priced stuff but if someone wants anything expensive it has to be built to order. But Soundhounds gets the money up front. Essentially that makes them an order taker and that is a bonus in the sense that they're not paying to stock it nor is it taking up space that could be used for something else. So while they will lose sales because people won't wait 10 months - it's not a big deal for them since they carry enough competing brands that can have the person walk out the door today.

I also like that they buy bulk deals - refurbished gear - and older models. They pass it along to customers who get rather excellent prices compared to what I've seen in other parts of Canada and the U.S.

That's how I got my AN K/Spe retail for $2950 I paid $1500. They absolutely would not negotiate on the price however - it is $1,500 that's what the sticker says and that's exactly what you pay. Still when I upgraded they gave me the full $1,500 which is no big deal since that's what they go for used anyway. But they bought in large bulk the entire world stock of the model so they probably got them at a very low price. I've seen them do this with other stuff like my Rotel preamp.

Of course you need to have the space and the money to be able to take advantage of those deals and you have to know the kind of customers you have - will they mind buying a one model year old model (the Rotel is the same except for cosmetic and model number) but if you can save half the money - why not.

In another market buying a one model old model is a no-go.

[Mr Peabody]

I can totally agree it's the middle area that is squeezed out, in my recent search for a possible replacement power amp for my CJ it was difficult to find anything in that $3k give or take area, Levinson $8k, CJ's hybrid $8k, Boulder $9k, Sim Audio monoblocks came close at $4.5k but I'm not a fan, and so on, I forgot now what all I even looked at. I wanted to buy new or at least have a return because I wasn't sure I could even afford anything that I liked better. Even on the internet it wasn't easy but I did find a few option like the Musical Fidelity M6 $3.5k, I really was wanting to try the Channel Island D200 mkII at $3.5k for a pair of monoblocks. What eventually happened is I saw a chance to get a Van Alstine 400r at a discount, it was another amp i was considering so brought it in first and liked it.

One thing that helps retailers they get a serious discount below their typical cost for "display" gear. The two main B&M stores here that sell high end I believe survive on the install as mentioned, one really is into home automation. Consider also some of the brands carried may only have a limited number of dealers in the U.S. so sales aren't only local sometimes. In my area I also see "audio installers" who sell out of their home and may have just a couple systems as demo but are allowed the big name lines because they are "custom installers". It seems this type of seller is also able to provide more customer unique services than a store may be able to do. I bought my Revel speakers from such a retailer. But if he had not brought a pair over to listen I would not even have considered Revel because I had a bad image of them from a past experience. The downside of this type of sale profile is getting your name out there. I get the impression they may be able to get the brands but may not be able to do the same type of advertising.

[Poultrygeist]

Some of the prices thrown around on this forum are obscene, as if there's an automatic assurance that high price means something. It doesn't but until you've heard better for far less keep drinking the Kool Aid.

[Mr Peabody]

Poultrygeist, you assume too much, the prices were to illustrate a point and no one spoke of value, however, I did hear many of the amps I mentioned and found them to be very good. You keep buying your Chinese dime store gear and playing them through 4 inch drivers and drinking what ever you drink that makes you think you are in audio nirvana.

[RGA]

Maybe people should not be using the word koolaid and start using the word "listen"

Before you attack Poultry - maybe listen to the gear he is talking about.

Poultry has a point but to be fair he's not comparing apples to apples - DIY is something quite entirely different. People never factor in their own labour or the price of the equipment they buy to build stuff. A soldering iron say, electricity, a workbench etc.

On the other side - Poultry don't assume that everyone who has money is a complete moron and that everything expensive must by virtue of it being expensive is lousy or not worth it.

I have heard lots of DIY gear and lots of production gear. And in some unique cases the same design both in DIY kit versus the same thing in manufacturerd products.

I've heard cheap and expensive. And guess what you're both right. Some cheap stuff takes down expensive stuff - some DIY clobbers production models - then again some of it doesn't.

[Ajani]

Maybe people should not be using the word koolaid and start using the word "listen"

Before you attack Poultry - maybe listen to the gear he is talking about.

Poultry has a point but to be fair he's not comparing apples to apples - DIY is something quite entirely different. People never factor in their own labour or the price of the equipment they buy to build stuff. A soldering iron say, electricity, a workbench etc.

On the other side - Poultry don't assume that everyone who has money is a complete moron and that everything expensive must by virtue of it being expensive is lousy or not worth it.

I have heard lots of DIY gear and lots of production gear. And in some unique cases the same design both in DIY kit versus the same thing in manufacturerd products.

I've heard cheap and expensive. And guess what you're both right. Some cheap stuff takes down expensive stuff - some DIY clobbers production models - then again some of it doesn't.

:thumbsup:

This is a point I've tried to make to many many many persons *cough cough* over the years - Just suggest good products for persons to audition rather than trying to bash what they own or like.

Bashing the products people own/like because they are expensive, not DIY, SS, low efficiency or digital is silly. It only means that they are even less likely to take any suggestions you make seriously.

The same way that we ignore the ravings of reviewers who have different tastes from us (why some people follow Art Dudley but ignore anything liked by John Atkinson and vice versa) we will also tend to ignore the advice of fellow forum members who bash all the brands we like. If all they ever rave about are some obscure products that we will have hell to audition, then chances are low that we will get around to auditioning them. People don't seek out something obscure, or worse build it themselves, unless they really believe there is a good chance they will like it.

Why would I believe I will like a product, if the person recommending it hates everything I own and like? So their recommendation goes to the bottom of my audition list.

[RGA]

Ajani I do agree with you but let me play devil's advocate because I know that I for one come across as a zealot - does knowing you're a bit crazy make you sane? I dunno.

But here's the thing - I started out in this hobby basically as a HUGE fan of Bryston/B&W and 15 years later I could not be further away from them.

And I remember arguing with people on AudioAsylum who were recommending the lesser known hard to find and polar opposite designs Turntables/tubes and oddball speakers.

And the arguments I made were:

How can B&W be bad - they get great reviews
How can B&W not be better - they have much larger economies of scale - they're a massive company who can afford the best engineers, and can make better parts for less money
How can Bryston be anything less than the best - they have a 20 year warranty - they must be built better. They stand by the product. They must be the best - did you see the noise floor rating and the watts. They're bigger they have economies of scale - they're used in recording studios (so is B&W) - etc etc etc. And I genuinely liked the sound of it compared to what else I heard at the time.

I listened to the ravers anyway and gave other stuff a try. And I went on that forum and ate crow. They were right. And to this day I am very happy but I am also somewhat frustrated and irritated because the science stuff I tie myself too simply doesn't correlate to the goofball measuring equipment I ended up buying.

The fact is people are not always going to agree on anything - Speakers for example all have strengths and weaknesses - on AA someone was looking for HE speakers to play electronica pop, rock and metal.

You know my standard go to speaker here is Audio Note. And the guy actually asked about it so I didn't stick it in there. But for that type of music - he was also looking at the new Klipsch Lascalla or Cornwall (I forget which). But for that kind of music if that's all you're going to play it probably betters the AN's. Simply because the horns have more presence and impact and it's better suited to the style of music. The AN E is a classical Jazz speaker designed for unamplified acoustic music. It's also a little more intimate focused than bombast powerhouse. Mind you I still recommended them because they do the other stuff well but not as well as some others.

I have also made the mistake I think of not pointing out what they don't do as well as some others. I still raved about them - you know me - but that's largely because I am a big picture guy and don't want to focus on the odd weakness I deem completely unimportant because people tend to latch onto the one negative sentence you write about.

I mean I am on several forums - do you know how many spiral debates I've been in where someone will read the Art Dudley review and try to attack the E based on a couple of lines he wrote as downsides - all the while the guy bought the damn things - which they leave out of their argument.

Poultry very likely knows the limitations of most of the single driver speakers - but he wants to focus on what they do right (midrange) and the price paid for entry.

And I can't really argue what he says because Midrange is very important - I find ease of drive (SET friendly) to be absolutely critical, and who doesn't want to save money when they can? He may also agree that a production model is better but if you pay $8,000 for it and the improvement is not all that big then it's hard to justify.

I am personally more interested in affordable gear than the stupid priced gear. For $100k those prices it should be great - and world class etc. I think you should be able to get a pretty terrific complete system for $5k. I just reviewed one. These are the stereos I suspect most audiophiles will buy. DIY notwithstanding.

[Ajani]

Ajani I do agree with you but let me play devil's advocate because I know that I for one come across as a zealot - does knowing you're a bit crazy make you sane? I dunno.

But here's the thing - I started out in this hobby basically as a HUGE fan of Bryston/B&W and 15 years later I could not be further away from them.

And I remember arguing with people on AudioAsylum who were recommending the lesser known hard to find and polar opposite designs Turntables/tubes and oddball speakers.

And the arguments I made were:

How can B&W be bad - they get great reviews
How can B&W not be better - they have much larger economies of scale - they're a massive company who can afford the best engineers, and can make better parts for less money
How can Bryston be anything less than the best - they have a 20 year warranty - they must be built better. They stand by the product. They must be the best - did you see the noise floor rating and the watts. They're bigger they have economies of scale - they're used in recording studios (so is B&W) - etc etc etc. And I genuinely liked the sound of it compared to what else I heard at the time.

I have no doubt that factors like popularity don't mean as much as some people think. If popularity was key, we'd all be using either Bose, entry level JBL or Klipsch speakers.

I also believe that if more stores stocked a selection of SET/HE setups then that market would be much larger than it is. Many of us will never know (or at least take years to discover) if we are SET/HE fans.


I listened to the ravers anyway and gave other stuff a try. And I went on that forum and ate crow. They were right. And to this day I am very happy but I am also somewhat frustrated and irritated because the science stuff I tie myself too simply doesn't correlate to the goofball measuring equipment I ended up buying.

Did you really listen to the ravers suggestion or did you just happen to find a store nearby that also stocked some of the brands they were recommending? If you did actively go out and listen to what the ravers suggested, how long did it take for them to convince you?

One of the reason DBT fans tend to get ignored is because they are annoying. They don't just suggest cool ways to easily try out DBT for yourself, they tell you that whatever you just heard is something you imagined and that you're a fool for spending the money you did. That approach tends to piss people off rather than get them to consider the DBT point of view. The same applies to bashing popular brands and technology that people own.

If I just spent $10K on a pair of speakers and someone claims that a $500 pair of DIY speakers they built will 'destroy mine', I'm more likely to tell him where to stick his DIY speakers than to go audition them.


The fact is people are not always going to agree on anything - Speakers for example all have strengths and weaknesses - on AA someone was looking for HE speakers to play electronica pop, rock and metal.

You know my standard go to speaker here is Audio Note. And the guy actually asked about it so I didn't stick it in there. But for that type of music - he was also looking at the new Klipsch Lascalla or Cornwall (I forget which). But for that kind of music if that's all you're going to play it probably betters the AN's. Simply because the horns have more presence and impact and it's better suited to the style of music. The AN E is a classical Jazz speaker designed for unamplified acoustic music. It's also a little more intimate focused than bombast powerhouse. Mind you I still recommended them because they do the other stuff well but not as well as some others.

I have also made the mistake I think of not pointing out what they don't do as well as some others. I still raved about them - you know me - but that's largely because I am a big picture guy and don't want to focus on the odd weakness I deem completely unimportant because people tend to latch onto the one negative sentence you write about.

I mean I am on several forums - do you know how many spiral debates I've been in where someone will read the Art Dudley review and try to attack the E based on a couple of lines he wrote as downsides - all the while the guy bought the damn things - which they leave out of their argument.

Poultry very likely knows the limitations of most of the single driver speakers - but he wants to focus on what they do right (midrange) and the price paid for entry.

And I can't really argue what he says because Midrange is very important - I find ease of drive (SET friendly) to be absolutely critical, and who doesn't want to save money when they can? He may also agree that a production model is better but if you pay $8,000 for it and the improvement is not all that big then it's hard to justify.

All HiFi equipment has pros and cons. How can someone's opinion be taken seriously if they leave out all the problems with the product? That's why persons often don't trust salesmen. A salesman will often sing nothing but praises of a seriously flawed product.


I am personally more interested in affordable gear than the stupid priced gear. For $100k those prices it should be great - and world class etc. I think you should be able to get a pretty terrific complete system for $5k. I just reviewed one. These are the stereos I suspect most audiophiles will buy. DIY notwithstanding.

Yep. I can't say that I have any interest in what can be done with $100K. To this day, my favourite HiFi setup cost only $6K. Yes, there were better sounding setups available for more, but the one at $6K just sounded right and was at a relatively affordable price. Also, it was designed to be used in a REAL listening room. The type of room just about any audiophile has - a modest 2nd bedroom etc... Systems costing $100K are usually designed to be used in mansions.

One of the reasons I can never dismiss a brand like AN (other than that I've yet to audition anything by them) is that they are designed for real rooms. They can be shoved into a corner or at least pressed up against the front wall. I absolutely despise the trend in HiFi to create speakers that must be pulled 5 feet or more out into the room to sound good. Unless you have a mansion or a very large dedicated listening room, chances are high that you will have to place the speakers much closer to the wall than 5 feet or even 3 feet.

[Poultrygeist]

A few days ago I auditioned a pair of obscenely priced Aerial Acoustic 20t V2 ( $32,000 ) powered by a CJ CA2000 at Elite Audio. Sadly the only thing I found elite from this combo was their price point and cosmetics.

If a speaker/amp can't resolve detail at low levels it's not for me.

[Mash]

....Killed a lot of corner hi-fi stores.

The (old) pre-internet strategy was to have hi-fi dealers compete on brand names and not on price. Dealers who carried a particular sought-after brand were kept seperated geographically by the respective manufacturers. Some advertised in hi-fi magizines' classifieds but this was limited.

Today's successful dealers use the internet to draw in their customers, and the more successful of these accept that there are different buyers they can cater to:
* the bargain hound
*the value buyer
*the status seeker
and so on.

The corner hi-fi shop no longer has a protected territory.

[emaidel]

I haven't posted anything on AudioReview in ages, but this thread got my attention. Most of the posts are dead-on, but there were other aspects that decimated the Hi-Fi industry: during the heyday (mid to late 70's), there were stereo shops on almost every streetcorner. There were numerous chains that overexpanded, and ran out of cash as a result.

But there were some other nasty elements that destroyed the business too. Many of the owners of these shops were young men (in their early 30's) who suddenly got very rich selling anything that had the word "stereo" printed on it, and stuffed much of their profits up their noses. Unfortunately, some of these young men actually died as a result.

One of my reps once told me that he had served three tours of duty in Vietnam. He said he saw lots of drugs there, but nowhere near as many as he did in this industry. Getting orders from many a buyer often depended on how much cocaine was offered, and this is no joke, as I witnessed same on many an occasion throughout my career.

Dealers often played dirty tricks against one another including pouring Krazy Glue in the door locks of competitors, or setting up tents in the parking lots in front of a competitor, when that competitor was having a sale. The dirtiest trick on the consumer, at least in my opinion, was the sale of "private label" merchandise, notably speakers and phono cartridges.

Major manufacturers like JBL, or AR sold speakers to retailers who then used those speakers to sell against, and tried to stuff their own private label junk on unsuspecting consumers. The worst though, was private label cartridges which dealers paid as little as $5 for, and then sold at astronomical markups ($200 in some cases), selling turntables at or below cost, but making up the profits on these lousy cartridges.

Surveys were conducted by several polling institutions regarding whom the American consumer trusted the least. The lowest-ranking was the used car salesman, but the hi-fi salesman came in as a close second.

I loved working in the industry, but didn't like much of what I saw, and regretted the eventual collapse of the retail industry. Several major, and respectable chains, had no choice but to close their doors once pricing became so fierce that keeping a B&M store open was no longer profitable.

My son in law once told me I should write a book about the practices I witnessed in the industry throughout its heyday. I think that book would be very long, and that's a shame.

[Mash]

hi-fi dealer who placed AR3a speakers, which Consumer Reports had recently recommended, on the floor, in the corner, with their 'mid' and 'tweeter' controls both set to their center positions. Then they placed the obscure speakers they were "pushing" in much better positions, and many customers bought the "pushed" speakers because they sounded better than the CR-recommended AR3a. Not quite honest? I did get heat over relating this tale.

Consumer Reports had recently published that report with their test results showing the AR3a to be a very good speaker IF the owner placed it correctly and set the 'mid' and 'hi' controls correctly, as CR discussed. Consumer Reports had tried to first optimise every speaker before they tested it on the assumption that the buyer would do the same.

This may all be considered benign compared to the story about drugs. Anyway, that dealer retired "very comfortably" but his no. 1 salesman died of a heart attack on the job.

I remember another hi-fi dealer who started his life as a car salesman and then became an assistant sales manager for a not-so-reputable new-car dealership. When that dealership folded he became a hi-fi dealer and retired rather well off. I guess you could say his car-sales job skills transferred very nicely.

[emaidel]

I distinctly remember the AR-3a, and how much better it was than the AR-3 that it replaced. I also remember that Consumer Reports (clearly illustrating it had no business rating loudspeakers) stated that the new 3a was inferior to the 3 it replaced, and that the less expensive AR-2ax was actually a better loudspeaker. All of that was total nonsense.

I worked for the long-defunct Lafayette Radio at the time, and it was company policy to place the midrange and tweeter controls of all speakers competing with the Lafayette-branded "Criterion" speakers in their mid positions, whether or not that was the preferred setting. By doing so with almost any AR speaker, it made them sound lifeless and dull, but by maximizing the settings on the Criterion speakers, in many cases the Criterions sounded better.

I do know that virtually no hi-fi salesman liked AR speakers for two reasons: they weren't the most dynamic sounding speakers around, and it was virtually impossible to make a decent profit selling them. In the case of the Lafayette Criterion 3X, an acoustic suspension design that sold for $89.95, had a store cost of only $31. The AR-2ax, which retailed for $102.40 (a 20% discount off the $128 list price) cost the store $86. Which was the better speaker? Certainly not the Criterion 3X, but I'm sure I don't have to say which one sold better.

[Hyfi]

A few other social factors not accounted for which impacts the decline.

1- Most of our fathers who had and showed us Hi Fi are gone so the Grandkids don't see it.
2- There are less of us now with decent Hi Fi to introduce people, friends, children to
3- Music programs in schools are getting silenced every day so kids don't even know what music is
4-The cost of a ticket to see a concert is now financial rape so less people go see decent shows
5- Not many people in the inner city ever see the Orchestra, due to cost or snobbery

So overall, there is less and less exposure to good music, good musicians and good recordings. All the Record Companies seem to push anymore is lip-syncing bimbos that can't write their own music,
3-note screamer bands, and sleepy time singer-song writer types.

Now we get into what some others have said

6- Portable Players for digital (handheld cassette players did not add much to the equation)
7- The Internet and file sharing
8- Parents who allowed it run rapid and out of control
9- Kids getting used to hearing stripped down versions of songs thru $0.59 ear buds
10- Kid above finally gets a job and buys a stripped down version of a real audio system at the Big Box store mentioned below

and then the Audio problems themselves

1- Way too many brands that really don't offer anything different
2- Way too many cheap brands or mediocre with good PR or just plain Name Brand recognition
3- Pimply Sales Boys that know nothing about Audio, Good Sound, or Music
4- Big Box stores that get the masses because of huge diverse inventories
5-Lack of large enough B&M stores to carry enough different items to make any kind of educated decision or comparison

I do remember when I was first getting into audio. Soundex was a little tiny store front with racks of receivers and speakers like those Vintage guys at AK have. It wasn't big enough for the traffic they had.

Next they moved into an old 3 story house with rooms. Still stacks of new and used equipment but going out the door many times an hour.

Then they built the massive 22 Showroom building. Again, always a sales guy writing up an order or taking a phone order. I did have to wait in line at times.

Gone but not forgotten and sadly missed. Still a few other decent stores in the area carrying a good range of gear but who knows for how long.

[Feanor]

Plenty of excellent points, Hyfi.

But I'll repeat what I've said before many times -- the big "social factor" that killed hi-fi was the consumer preference for video. It was no coincidence that the the decline of hi-fi was coincident with the rising popularity of the VCR and recordable and pre-recorded video. People shifted their interest and their funds to VCRs and better TVs.

Home theatre sound recaptured some interest in sound, but it's still true that the mainstream market still prefers the biggest, 3D'est, slimest TV and is content to match it with HT-in-a-box.