Accommodation pricing for the industry reviewer's ...your opinion?

[caesar]

What I am saying is that there is a whole bunch of s__t in this industry and it exists because there are reviewers that want free stuff and manufacturers that will play that game for good press. Happens more than you'd want to know. So I get a little frustrated when there is all this outrage because a reviewer gets a discount going through the proper channels set up by the magazine and abides by the rules of an agreement.

Ultimately it's about making more sales, isn't it? Someone above mentioned that it costs $18K to get a full page ad in a magazine. Who even notices that ad, with all of the information overload we have in our busy lives?

Now take the marketing investments ARC or Magico make. They understand that advertising has died. It's all about buzz and publicity and constant attention to their product to break through the clutter. ARC sends Jonathan Valin a $40K amp that cost them maybe $5K to $8K to make. Magico sends Valin a $60K speaker that costs them $10-12K to make. He holds on to this gear for 2 or 3 years- for free! He puts it on the cover of the magazine, blogs about it 5 times a week, compares it to everything that crosses his door step and everything he hears at a show. ARC and Magico are constantly brought to the customer's attention via Valin, who is a very good communicator and an expert praising the gear any chance he gets. (And, of course, nothing measures up to these why they are in his posession until he is sent the new model for free!) How much would it cost for a competitor of ARC - BAT, CJ, VTL, Spectral, etc., to duplicate this kind of publicity by a figure of such status in the industry? Almost priceless. An unfair competitive advantage indeed.

Seems very dirty indeed. And, hypothetically, there could always be additional back door cash deals in addition to a long term loan and that publicity. But to start righting the wrongs, how about
1) 3 months MAXIMUM for an equipment loan?
2) complete transparency for the price paid for an item?

 

[Gregadd]

I've posted this before. At this years RMAF 2010 at Harry Pearson's Seminar I posed the following question to HP himself. Why is it that High end reviewers don't have standards? It's no big deal. Every other professional organization does it. His response was, "because we ar all stars." He later volunteered that he never purchased equipment because he did not want to have a financial interest in that equipment. Therefore when a better piece of equipment came along he had no problem getting rid of it. Add to that when the Infinity IRS was his refernce I asked him would the Wilson WAMM be his reference if Dave Wilson would give him a long term loan. He never responded.

Things have changed. Did you know that grocery stores sell shelf space? Did you know that bands now pay night clubs to perform? Lawyers pay for referrals. Let's not even mention Microsoft. The notion that you will hang out your shingle and customers will come to you because your are honest and competent is long gone. Be real. Whatever you will not do. Your competitor will do aggressively.

Even if your competitor is ethical he'll crush you with market power. I saw a store that was in business for 25 years close within days of a Walmart opening next to it. They did not even try to compete.

I appreciate Jeff Fritz. I think he's gonna pay a price. I don't care much for Peter Aczel of the Audio Critic. He could not get a decent stream of review samples if his life depended on it. Why because he speaks his mind. As paranoid as it may be.

Is there anybody who trusts movie reviews? I don't advocate anybody abandon thier ethics. You are going to have a tough time.

 

[Orb]

But this is exactly my point. Whether there is accommodation or not, it doesn't matter. It all comes down to whether the person is honest and/or there is an entity there to police it. It's kind of like having a law on the books that is never enforced. What difference does it make?

What I am saying is that there is a whole bunch of s__t in this industry and it exists because there are reviewers that want free stuff and manufacturers that will play that game for good press. Happens more than you'd want to know. So I get a little frustrated when there is all this outrage because a reviewer gets a discount going through the proper channels set up by the magazine and abides by the rules of an agreement.

I agree and am one who does not accept (although I understand some are arguing from a fairness point of view) it is wrong for trade prices if one works in that industry, which reviewers for audio publications are a part of.
Also I think if people want to really focus on accomodation/trade prices, then they really must understand and know the gross profit margin of the audio product (to arrive at its trade price), the costs in manufacturing that product line, and net profit, to a lesser extent if they do not like the figures there is the seperate R&D figure and operating-logistical costs.

I really cannot see how a universal figure is reached by some here without knowing how it applies to the specific product, however knowing all these figures will help for the lay person to appreciate whether the trade price and rrp is a rip off or not.
To me the issue is not trade prices for reviewers but knowing the manufacturing info I mention above that is available in other sectors.
And while a few may feel this information is impossible, other international manufacturers manage this as part of the information reports they give to stock markets and investors.

Coming back to your other post Jeff about expense to manufacturers to loan review equipment and not all can afford this, it is fair to note that the best distributors are very active in providing review gear and try to engage with the magazines.
As an example over here in the UK I would say the reviews of Wilson Audio/Sonus Faber/Krell/Magico/etc come about due to the distributor Absolute Sounds (not the magazine), rather than the manufacturer.
I appreciate same country magazine, manufacturers may engage but there is still room for the best distributors to be involved IMO.

Cheers
Orb

 

[Jeff Fritz]

I appreciate Jeff Fritz. I think he's gonna pay a price.

I appreciate it. We've been publishing since 1995 and have no intention of going anywhere, though. In fact, our business and our content are stronger than ever. Just like with our "Worst of CES," we know there will be some push-back, but that's life.

 

[Alan Sircom]

I've posted this before. At this years RMAF 2010 at Harry Pearson's Seminar I posed the following question to HP himself. Why is it that High end reviewers don't have standards? It's no big deal. Every other professional organization does it. His response was, "because we ar all stars." He later volunteered that he never purchased equipment because he did not want to have a financial interest in that equipment. Therefore when a better piece of equipment came along he had no problem getting rid of it. Add to that when the Infinity IRS was his refernce I asked him would the Wilson WAMM be his reference if Dave Wilson would give him a long term loan. He never responded.

Really, are you kidding? Standards in publishing? There are horror stories in every branch of publishing. I know of a musical instrument reviewer who can't play, yet they use him because he writes better than the musos, a car journo who couldn't drive or write for months because of a broken collar bone who got his wife to write up reviews... based on driving notes from his girlfriend, a movie reviewer who magically wrote a review, despite sitting on a beach 2.000 miles from the cinema he was supposed to be in. Cameras given glowing reviews, despite the company being sent a non-working photo sample.

These things don't change. I know of a recent launch of a product by a beauty company where the company flew hundreds of journos from around the world to a very exotic location for a week to launch a new product - the launch itself took 10 minutes and involved handing everyone in the room their own Apple iPad gift loaded with the press release and photos, then handing them a Gucci bag containing the review samples. Naturally, they all got to keep the iPad and Gucci bag as a 'gift'.

Even those who try to retain an internal set of standards are liable to be undermined by those further up the food chain. I know of a journo who had her findings and conclusions in a test completely reversed when they ended up in print. When she challenged this, she was immediately dropped, and later found out that the section editor was sleeping with the marketing manager of the company that ended up being promoted from fifth to first in her test. In two decades working in audio, I've never encountered anything approaching that level of inherent corruption.

Now I'm not trying to say something like 'by these standards, audio reviewers are angels', but the level of corruption in this industry is ultimately limited by the amount of money floating about. Those really 'on the take' will move on to fields with more rich pickings.

Let's be completely honest here; As an editor, I earn somewhere in the region of $65,000 per year and have a $320,000 mortgage on a $600,000 property in London (if that sounds impressive, ask a fellow Londoner; Londoners will know that $600k doesn't buy you a great deal of real estate). I work in the high-end and the majority of the reviews in my magazine are currently written by me; the tools I need to prosecute that job to a minimum level would cost me roughly 2-3x my annual salary at full retail, simply for the reference system. The cost of a system and the devices needed to properly evaluate and compare might make that figure nearer the cost of my house. So, should my salary dictate the direction of the magazine I work on?

Ultimately, isn't this rather like castigating a crane driver because he doesn't own the crane he uses in his work?

 

[Gregadd]

Alan sadly I'm not kidding.

Luckily across the pond most small construction companies.can rent thier heavy equipment. OTOH small construction exhibit a level of corruption that would make the audio review industry look like angels. Just ask anyone who in America who has contracted to remodel thier kitchen or bathroom.

 

[jazdoc]

My take away from this thread is that the high-end audio press exists largely as a vehicle for the industry to promote itself, not as advocates for the audiophile. Reviews are simply a means to that end. Like many others on this thread, I would prefer that the press serve as a consumer advocate, not the industry's. However, as long as everyone (publishers, reviewers and consumers) understand this, I don't see the status quo as a 'problem'. I enjoy the audio press primarily to keep up with new industry developments and as entertainment; much like my subscription to Vanity Fair.

 

[Steve williams]

There was never any doubts in my mind that the high end audio press serves the industry rather than the audiophile. Maybe I should start reading my wife's Vanity Fair

 

[Gregadd]

My take away from this thread is that the high-end audio press exists largely as a vehicle for the industry to promote itself, not as advocates for the audiophile. Reviews are simply a means to that end. Like many others on this thread, I would prefer that the press serve as a consumer advocate, not the industry's. However, as long as everyone (publishers, reviewers and consumers) understand this, I don't see the status quo as a 'problem'. I enjoy the audio press primarily to keep up with new industry developments and as entertainment; much like my subscription to Vanity Fair.

That's the role of every media . To provide eyes for advertising. The idea that the press should serve its readers was a novel idea. That's why it got JGH fired. A magazine like Consumer reports is an exception. You can bet that a high rating in CR is highly coveted. While they don't allow advertising with thier ratings you can bet the salesman will tell you they are rated best by CR.

 

[jazdoc]

If you share the opinion that the high end audio press exists to promote the industry, then industry accommodation for 'reviewers' makes sense. It's a cost of doing business. I think the semantics we use are misleading. Reviewer implies independence. Perhaps writers who accept accommodations should be deemed 'promoters'. Promoters should not expect direct compensation if they are being indirectly compensated via industry accommodation.

 

[Steve williams]

Promoters should not expect direct compensation if they are being indirectly compensated via industry accommodation.

well it would then become obvious to me at least that they would gladly forgo the very low compensation per review for the sake of the 50% accommodation

 

[mep]

There was never any doubts in my mind that the high end audio press serves the industry rather than the audiophile. Maybe I should start reading my wife's Vanity Fair

Now that's funny Steve!

 

[mep]

well it would then become obvious to me at least that they would gladly forgo the very low compensation per review for the sake of the 50% accommodation

This reminds me of being a waiter or waitress. You don't take the job because of the salary which is usually below minimum wage, you take the job because of the tips.

 

[Steve williams]

In reading through this entire thread IMO the only reviewer who makes valid points as to changes he would like to see is Alan Sircom. Kudos to him.

 

[rbbert]

Many of the comments in this thread make me wonder about the actual financial state of the high-end audio industry itself. On the one hand, for several years we've been reading in the high-end mags about the plight of high-end dealers but also about the financial difficulties of the industry as a whole. From posts in this topic and the CES topics, it sounds like many of the manufacturers are doing very well indeed.

 

[mep]

Maybe because Wall Street rebounded and all of the brokers are back to getting their multi-millon dollar bonuses they use as discretionary income.

 

[Alan Sircom]

Many of the comments in this thread make me wonder about the actual financial state of the high-end audio industry itself. On the one hand, for several years we've been reading in the high-end mags about the plight of high-end dealers but also about the financial difficulties of the industry as a whole. From posts in this topic and the CES topics, it sounds like many of the manufacturers are doing very well indeed.

Some perspective is in order. Sony spent more money on its CES stand than most top-line high-end audio companies make in a year.

Some audio manufacturers who have spent much of the last decade building new markets and designing new products are starting to reap some returns on investment. Those who rested on their laurels and concentrated on home markets are not. The difference between the two is the difference between perhaps 10% growth year on year, and seeing your business less than half the size it was two or three years ago.

The business has changed faster than everyone imagined. Not only in the speed that CD vanished off the map, but in the way the market has shifted away from what were key regions a few years ago.

The one thing the high-end can do very well is put on its game face. We can probably all point to companies that give the impression of a slick, corporate entity, where in fact the company is run by one man and his pet cat.

 

[DaveyF]

Alan, the financial state of the high-end market is IMHO a different conversation/topic than the issue of
whether or not we believe that 'Accommodation' pricing for reviewer's is acceptable or not.
As Steve stated earlier, I too think that you are the only reviewer who has presented anything
that sounds like valid points in regards to changes that you would like to see occur regarding the 'accommodation' issue.
To my way of thinking, all I have heard so far, is simply justification for what I believe is a VERY bad practice in the industry; this from all the other reviewers who have responded.
IMHO, what Jay_S said in his first post on this thread: "I have always found this practice troubling. Most companies over a very small size have strict compliance policies that forbid employees from receiving benefits or compensation from third parties. The reason for these policies is to avoid a potential conflict of interest. In my mind, accomodation pricing is a deep discount, and deep discounts are economically equivalent to compensation. It's simply a bad policy for a manufacturer to compensate an independent reviewer. The fact that particular reviewers can remain honest and impartial while receiving this benefit is a good thing but it doesn't change my view that the practice is inappropriate."-- is something that they should strongly consider.

 

[Alan Sircom]

Alan, the financial state of the high-end market is IMHO a different conversation/topic than the issue of
whether or not we believe that 'Accommodation' pricing for reviewer's is acceptable or not.
As Steve stated earlier, I too think that you are the only reviewer who has presented anything
that sounds like valid points in regards to changes that you would like to see occur regarding the 'accommodation' issue.
To my way of thinking, all I have heard so far, is simply justification for what I believe is a VERY bad practice in the industry; this from all the other reviewers who have responded.
IMHO, what Jay_S said in his first post on this thread: "I have always found this practice troubling. Most companies over a very small size have strict compliance policies that forbid employees from receiving benefits or compensation from third parties. The reason for these policies is to avoid a potential conflict of interest. In my mind, accomodation pricing is a deep discount, and deep discounts are economically equivalent to compensation. It's simply a bad policy for a manufacturer to compensate an independent reviewer. The fact that particular reviewers can remain honest and impartial while receiving this benefit is a good thing but it doesn't change my view that the practice is inappropriate."-- is something that they should strongly consider.

Yes, the financials of the industry are OT for this thread. I'll not bring them up again.

I think the issue of the ethics of accomodation prices can be viewed two ways; as a 'benefit', or as 'tool acquisition'. A reviewer's motivation for owning any given component is not simply to acquire expensive products for their personal listening pleasure, but to collect a series of products that they use to evaluate products under test. Given the latter, what do you propose to resolve the fact that the reviewer needs to have a consistent reference point at a range of prices (in line with the magazine's profile), including systems that may be far outside their ability to afford?

 

[Steve williams]

Yes, the financials of the industry are OT for this thread. I'll not bring them up again.

I think the issue of the ethics of accomodation prices can be viewed two ways; as a 'benefit', or as 'tool acquisition'. A reviewer's motivation for owning any given component is not simply to acquire expensive products for their personal listening pleasure, but to collect a series of products that they use to evaluate products under test. Given the latter, what do you propose to resolve the fact that the reviewer needs to have a consistent reference point at a range of prices (in line with the magazine's profile), including systems that may be far outside their ability to afford?

Alan

out of curiosity how do your feelings on accommodation prices and long term loans sit with your colleagues at TAS or at other periodicals and e-zines