You may be correct (or not), and I wouldn't know - but you are making a political statement. You see people in the middle class buying iphones and coach purses and high def tv's. I am just making observations of consumerism patterns found in our society.
A question of value in today's hi-end.
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You may be correct (or not), and I wouldn't know - but you are making a political statement. You see people in the middle class buying iphones and coach purses and high def tv's. I am just making observations of consumerism patterns found in our society.
In this continent as in other continents, there will always be several classes of society; the lower ones, the middle ones, the higher ones, and the ultra higher ones!
That is just the way things work in most places. Anything else is just cheap whiskey for any classes at all!
That is just the way things work in most places. Anything else is just cheap whiskey for any classes at all!
Just saw this link on cnn. Luxury sales are booming. And it's not just by the super rich doing the buying, it is people making $150K/ year or more. But people are buying fewer, but more expensive things. They are calling it the "barbell effect" in the article (vs. the hour-glass effect I referred to in a previous post) - buy a Chanel jacket and wear it with a cheap t-shirt from Target.... Buy an expensive pair of Wilsons or Magicos and pair them with cheaper electronics, until you upgrade those. No one really knows what is in your home.
http://money.cnn.com/2011/03/09/pf/consumers_prefer_luxury/index.htm?source=cnn_bin&hpt=Sbin
http://money.cnn.com/2011/03/09/pf/consumers_prefer_luxury/index.htm?source=cnn_bin&hpt=Sbin
I read this a lot but I see little evidence of it. In the U.S. there is plenty of upward income mobility.
I think this is just used to justify income redistribution and I'm not in favor of that. The government is never efficient.
Also, some here might be assuming lack of audio sales for some mythical middle class squeeze but I think the reality is that there are more alternatives for the entertainment dollar (just as with CD declining in the face of growing game and app sales).
If you buy a new Mac or iPhone you can brag about it to your neighbor and they will nod approvingly.
If you buy an expensive piece of high end gear then your neighbors will ridicule you for wasting money.
Perception is a bizarre thing. There are lots of reasons why high end audio is not as sexy as it once was.
I have never really placed importance on pleasing the neighbors. I love good sound, I will spend money to get it, and it is a fine use of money in terms of payback.
If you buy a new Mac or iPhone you can brag about it to your neighbor and they will nod approvingly.
If you buy an expensive piece of high end gear then your neighbors will ridicule you for wasting money.
Perception is a bizarre thing. There are lots of reasons why high end audio is not as sexy as it once was.
I have never really placed importance on pleasing the neighbors. I love good sound, I will spend money to get it, and it is a fine use of money in terms of payback.
Is High-End to please your neighbours or your set of ears?
Is the Internet Music considered High-End content?
Is Streaming the way of the future?
Is High-End expensive or could it be real good value?
Is High-End different now compared to lets say about twenty years ago or so?
Is there still light in tubes?
Is there life after death?
* Should I asked that new girl I just met if she wants to go at the Classical Concert Hall?
{My wife don't mind as long she's an audiophile.}
Is the Internet Music considered High-End content?
Is Streaming the way of the future?
Is High-End expensive or could it be real good value?
Is High-End different now compared to lets say about twenty years ago or so?
Is there still light in tubes?
Is there life after death?
* Should I asked that new girl I just met if she wants to go at the Classical Concert Hall?
{My wife don't mind as long she's an audiophile.}
Bruce B
WBF Founding Member, Pro Audio Production Member
garylkoh
WBF Technical Expert (Speakers & Audio Equipment)
The question of what's "value" in high-end, and what's "middle-class" is a complex dynamic in the global economy. As Bruce said, $75k doesn't leave much discretionary income in NY, SF, Seattle or even Singapore, Sydney, Hong Kong, or London.
I was looking at global salaries over the weekend and was quite shocked by what has happened. A Manager in the IT industry with 10 years's experience was commanding $250k in Singapore, $125k in Seattle, $180k in NYC and $325k in London. (These are "top" salaries commanded by head-hunters, so not typical but for this particular firm that sent me those numbers.)
It may be down to the relative cost of living "well" in those cities, but the low levels in Seattle and NYC was quite surprising compared to Singapore (where I came from) and London (where I studied). But then, rental properties in London and Singapore are 3 times more expensive than Seattle and Bellevue. In London, a large part of that salary will also go to taxes, which are far lower in Singapore.
On a global perspective, I have read elsewhere on this forum that manufacturers have been asked for more expensive products by their Asian distributors. I experienced the same, releasing value-oriented products for the US market, I was taken to task a couple of years ago by some European and Asian distributors that I shouldn't be diluting the Genesis brand by selling products that are too cheap. In the context of the price of cars and other luxury goods in Singapore, I don't think that $180,000 is too much to pay for an amplifier or loudspeaker. That's less than the price of a Honda Odyssey in Singapore.
I was looking at global salaries over the weekend and was quite shocked by what has happened. A Manager in the IT industry with 10 years's experience was commanding $250k in Singapore, $125k in Seattle, $180k in NYC and $325k in London. (These are "top" salaries commanded by head-hunters, so not typical but for this particular firm that sent me those numbers.)
It may be down to the relative cost of living "well" in those cities, but the low levels in Seattle and NYC was quite surprising compared to Singapore (where I came from) and London (where I studied). But then, rental properties in London and Singapore are 3 times more expensive than Seattle and Bellevue. In London, a large part of that salary will also go to taxes, which are far lower in Singapore.
On a global perspective, I have read elsewhere on this forum that manufacturers have been asked for more expensive products by their Asian distributors. I experienced the same, releasing value-oriented products for the US market, I was taken to task a couple of years ago by some European and Asian distributors that I shouldn't be diluting the Genesis brand by selling products that are too cheap. In the context of the price of cars and other luxury goods in Singapore, I don't think that $180,000 is too much to pay for an amplifier or loudspeaker. That's less than the price of a Honda Odyssey in Singapore.
I don't really like analogies between Audio and Cars. They are totally different in their overall purpose.
* Me I'd like to stick with the cost of parts and fair labour. You know... True, concrete, realistic approach on what's best for the money.
If one person can build an amp with parts that cost the same as an another manufacturer, and the final results are quite similar, and that one costs $10,000 and the other $100,000 ... then it's a no-brainer decision.
** I think there is the 'exclusivity' and 'uniqueness' factor in play here too. Also the prey on customer's ignorance about paying someone else (with extreme expertise) for custom made products with much better value and performance as well!
There is the business aspect from the manufacturer with high profit margin, versus the other real possibilities that are out there with more down-to-earth true values!
It ain't the manufacturer that dictates the market, but the ignorance of certain rich people of our society in different areas of the world!
* Me I'd like to stick with the cost of parts and fair labour. You know... True, concrete, realistic approach on what's best for the money.
If one person can build an amp with parts that cost the same as an another manufacturer, and the final results are quite similar, and that one costs $10,000 and the other $100,000 ... then it's a no-brainer decision.
** I think there is the 'exclusivity' and 'uniqueness' factor in play here too. Also the prey on customer's ignorance about paying someone else (with extreme expertise) for custom made products with much better value and performance as well!
There is the business aspect from the manufacturer with high profit margin, versus the other real possibilities that are out there with more down-to-earth true values!
It ain't the manufacturer that dictates the market, but the ignorance of certain rich people of our society in different areas of the world!
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garylkoh
WBF Technical Expert (Speakers & Audio Equipment)
I do not think that it is fair to characterize anyone who buys a high-end product beyond our own aspirations to be ignorant. In fact, it would be difficult to find rich and ignorant people because if they are ignorant, they would not have the means or wherewithal to be rich - unless they struck the lottery, in which case they won't be rich for long.
From the point of view of a manufacturer - I don't see many high-end manufacturers who are rich from a higher than normal profit margin. I'm in it for the love of the music, and I would be far richer if I hadn't bothered....
Besides the cost of parts and fair labour, you need to add the cost of marketing, and research and development. It's all a continuum - if I paid for higher-tolerance parts, I could cut down on labour to measure and match. If I spent for more marketing, I can't spend as much on research. The higher the volume, the greater economies of scale you can achieve. Unfortunately, with economies of scale, you also have a greater difficulty to maintain a level of execution quality. With lower price, there are also more competitors, and then the sales channels have a different problem. Once you start battling with Sony and Samsung, you're toast!
Besides, just like a Hyundai provides transportation from one point to another as well as a BMW, a pair of speakers from Samsung would deliver as much sound as any high-end brand you would name. Sorry that you don't like the analogy between cars and audio, but as a consumer, I see more similarities than differences. What I would NOT like to see happen, though, is for the world to end up with 9 audio companies.
From the point of view of a manufacturer - I don't see many high-end manufacturers who are rich from a higher than normal profit margin. I'm in it for the love of the music, and I would be far richer if I hadn't bothered....
Besides the cost of parts and fair labour, you need to add the cost of marketing, and research and development. It's all a continuum - if I paid for higher-tolerance parts, I could cut down on labour to measure and match. If I spent for more marketing, I can't spend as much on research. The higher the volume, the greater economies of scale you can achieve. Unfortunately, with economies of scale, you also have a greater difficulty to maintain a level of execution quality. With lower price, there are also more competitors, and then the sales channels have a different problem. Once you start battling with Sony and Samsung, you're toast!
Besides, just like a Hyundai provides transportation from one point to another as well as a BMW, a pair of speakers from Samsung would deliver as much sound as any high-end brand you would name. Sorry that you don't like the analogy between cars and audio, but as a consumer, I see more similarities than differences. What I would NOT like to see happen, though, is for the world to end up with 9 audio companies.
A high price does not necessarily represent a lack of value. I do remember the time when every dealer coveted the latest "best buy" product. IMO the Wilson SASHA repesents extraordinary value. Something I never thought I would say.
The problem now is the discretionary income is being siphoned away by higher prices for every day necessities Big ticket items may be a better market for manufacturers.
The problem now is the discretionary income is being siphoned away by higher prices for every day necessities Big ticket items may be a better market for manufacturers.
Gary, we were discussing the U.S. market only. It's very hard to suggest a middle class squeeze pro or con globally as there are too many factors to account for in each country. Real estate, labor laws, tax rates, basic necessities, all quite variable across the globe.
garylkoh
WBF Technical Expert (Speakers & Audio Equipment)
Bruce B
WBF Founding Member, Pro Audio Production Member
Yes, but I still don't know of a way to prove the existance of a global middle class squeeze.
But on luxury selling in ultra high end space, I will offer up this data point. A good friend owns a very high end cable brand. His sales are coming mostly from Russia, Germany, and Asia Pacific. There is a large global market for the really good stuff.
garylkoh
WBF Technical Expert (Speakers & Audio Equipment)
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