Concentration of wealth

Gregadd

WBF Founding Member
Apr 20, 2010
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Could it be the concentration of wealth could actually save high-end audio?
If the ultra-rich search for bigger and more expensive toys could the influx of cash keep manufacturers and dealers afloat?
My dealer friend said audiophiles make terrible customers. I know that is true because I am one of the worst.
Maybe they could sell a 200k system to pay the bills while waiting for audiophiles to pull the trigger on the latest audio darlng. We know flagship models. bring in attention and foot traffic. But they usually sell a more affordable model.
If money is no object who knows what designer can do.
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Could it be the concentration of wealth could actually save high-end audio?

Think not given the ever escalating prices and the changes occurring in listening habits and the small amounts of units sold at those prices and the competition to buy other luxury items.
 
I think one should start by looking at the successful audio companies and see what they are doing. I see lots of models at different price points with trickle down technology. Like with car companies, the cost of entry seems very high. Of course there are many smaller companies which are also successful and they seem to have all sorts of different marketing and sales approaches. Then there are the large companies like Technics and Sony. They are putting a foot in the water and testing the market. Imagine if they went all out with their resources and distribution.

Brick and mortar is not what it once was, but the health of the high end would make for an interesting discussion. I think we have been discussing this in other threads for a while now. Those with more experience and history in the hobby will have their opinions about the quality of current offerings. We may complain about the high prices, but it seems to me that we do have plenty of choices these days. I am thinking particularly of all the great cartridges out there. I am also reminded of KeithR's recent speaker search thread. These are good times, no?

As for the concentration of wealth: Some markets seem to drive the extreme high end, and some of that tech trickles down to benefit the rest of us. That is a good thing. I would like to see a growing interest among the younger music lovers. They seem to value a slightly different way of consuming their music. If only we each had more time to pursue our hobbies....
 
i don't think you can generalize how wealth accumulation might affect high end audio across different cultures.

certainly we have not seen any significant increase in numbers of high end audio sales in the USA even as wealthy get wealthier. we do see more really spendy products from a few manufacturers. price does not seem to matter too much at the top end. but sales up and down are not changing much other than the rebound from the 2008-2011 recession.

OTOH it does seem to have worked differently in Asia, for i'm sure a number of reasons.

vinyl and headphones are growing, but not sure that's a high end audio situation. my local audio club has similar demographics that it's had for 25 years.
 
Sure it can!

In fact, I was thinking about the very same thing a couple of months ago, and while doing a quick search on my computer I've found a thread in the Audio Exotics forum about Zanden's new top of the line, cost no object electronics ("Chouku", "Jinpu" & "Chukoh").

One of the posts details how those 100k-200k per unit audio novelties came to life, and to resume on the subject, they were made possible because one prominent member of that community (probably the forum owner, I don't remember) asked Yamada san (Zanden's designer/owner) if he could build a cost no object line and if he had an idea of how they will be if he agrees to do it.
Yamada san response was along the lines of: "I already know exactly how they would be, but I don't have enough money for development" which was met with a response along the lines of: "we'll pay the development costs but we'll be the only dealer that sells the products".

IMO, there're very high chances of the lower end Zanden electronics benefitting from trickle down tech of the top ones, and that's where the more average user benefits himself with a higher quality product. Also, don't underestimate the power of the used market, which broadens the possible user base thanks to a lower price compared to buying an unused product.

As long as a wealthy, concentrated target audience exists, such as, for example, Hong Kong, this is going to happen cyclically year after year (let me name a few more: Wadax Atlantis Reference DAC, Thales Statement tonearm, Hartvig Statement turntable which doesn't even figure on the manufacturer's website, etc). All that we have to do is to wait a couple of years for the used units once the shine wears off or to the trickle down model tailored to a more "occidental" budget and tastes.

I would also like to mention the influence of forums, which, at least to me as a user or potential customer of "insert X" audio product, makes it much more easier to get an idea of how good/what kind sound character has compared to "insert Y" audio product, from like 10 differents opinions in 10 different systems. Yes, is not even remotely as accurate as hearing it or making the comparison in person, but for sure is much better than reading outdated, highly biased and useless magazines as TAS or Stereophile, which may go bankrupt in 15-20 years max IMHO, as the old media model of "one man paid by the advertiser gives his opinion about the advertised product" is dying thanks to the wonderful presence of online communities.
This, of course, forces manufacturers to up their game and better themselves every time, now is much more difficult to please, certainly much more than paying for an ad, get a glowing review and users claiming "it is the best I've heard!" while neglecting to mention their previous gear was an iPod ;)
 
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I wonder what effect t a flagship has had on these three manufacturers turners none for vlue
Magnepan 30.7
McIntosh mc901
Vandersteen 7 with no o amps
Are they merely a progression of thier R & D? Or are they merely entering a lucrative share of the market? Both?
 
Here are a few things that many of you already know.

One magazine that rich people do read is the Robb Report. If you find a copy, look at the audio companies that advertise in it - usually very expensive full page color ads. You can also see high end cars, watches, boats, etc. as well as articles about them. BTW, Robb Report was said to be Michael Jackson's favorite magazine.

Word of mouth is very important. Wealthy people have wealthy friends and if they see and hear something at one of their friend's home(s) they get interested, just like seeing their latest car or watch. They often will ask where they got the system and go to the same dealer to get their own. High touch service is very important, including installation. For most, price is less important that quality service.

The very wealthy often have several residences, so if they have one system in one home, they well could want other systems in each of their homes. I've heard very interesting stories from dealers and manufacturers I know.

Many (most) of the very wealthy, own their own businesses. They often use their businesses in the purchase of high end products - so that they are deductible or if they have a cash business, they escape paying taxes through barter or cash transactions.

Finally, one of the major benefits to the very wealthy of the 2018 tax bill in the US (in addition to lowering the tax rates for businesses and individual income tax, especially for higher brackets) was the doubling of the estate tax exemption to an inflation adjusted $23M (for 2020) for a married couple. For those over that limit ($11.5M for an individual), their estate tax is 40% (and in some states there is an additional state estate tax which typically starts at a lower point). So expenditures which reduce your assets that are over that amount save you (your estate) 40%.

Larry
 
Looking @ state-of-the-art designed cars ultra hi end audio will always be supported by well financed heels (common wealth). The more expansion of wealth the more music diversification and sharing. We'll never get poor, it's impossible...not here not now. I know it, you know it, they don't all know it.

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Could it be the concentration of wealth could actually save high-end audio?

In another thread I recently suggested the "Investment Class" may well indeed buy a $40,000 CD player as a distraction of the moment. I mean why not? They can afford it.

Recent tax breaks in the last few years to float the top one percent of the top once percent even higher has got to have some trickle down effect, don't it?

However, economic uncertainty caused by an erratic Tweet by a certain someone can undo decades of strategic business planning overnight.

The recent farmer bailout is 2X's larger than the automotive bailouts of 2008-2009, and the Wall Street bailout of same era was a transfer of wealth from the middle class to the one percent of over a trillion. The middle class will be paying that back or at least paying the interest on it.

To be sure, the rich are getting richer, but uncertainty is catching up and chaos isn't as cool as it looked three years ago.

Super Rich Rethink Buying Yachts in Uncertain Economy
By Michael Sasso
November 8, 2019
https://www.bloomberg.com/news/arti...ethink-yacht-buying-amid-economic-uncertainty
Even the ultra-wealthy can get skittish about dropping $50 million on a boat, so superyacht salesmen like Thom Conboy are having to do more hand-holding these days. A checklist of global challenges -- including the U.S. trade war with China, a messy Brexit and Germany teetering on recession -- has been weighing down sales............

Why President Trump's steel tariff didn't save US Steel workers from layoffs
JC Reindl, Detroit Free Press Published 6:00 a.m. ET Dec. 21, 2019
https://www.freep.com/story/money/b...mps-steel-tariff-us-steel-layoffs/2712706001/
...............United States Steel Corp.'s announcement late Thursday that it plans to give layoff notices to take effect later next year to 1,545 workers at its Great Lakes Works production plants, situated in Ecorse and River Rouge on the Detroit River. The plants serve the auto industry............................

Steel industry insiders say the layoffs are one likely result of the dramatic drop in steel prices this year and a current supply glut in the market. Steel prices shot up in the aftermath of Trump's announcement of tariffs in early 2018, only to collapse once older domestic steel plants restarted production and tariff-exempted foreign steel continued arriving on shore.

"Ultimately the steel tariffs did not do what they were designed to do," said Chris Olin, a steel analyst with Longbow Research in Independence, Ohio.............

https://en.wikipedia.org/wiki/Occupy_Wall_Street
275px-2008_Top1percentUSA.svg.png


Trump farm bailout costs more than double the auto bailout that GOP slammed
By Emily Singer
December 2, 2019
https://americanindependent.com/don...de-war-china-barack-obama-auto-industry-cars/

In short, I think the party is over or soon will be.

When the bubble bursts we will all need a pair of those noise cancelling headphones to preserve our sensitive audiophile hearing.

You can hope for trickle down audio technology, but that will not help anything if you are living out of a cardboard box.

Not trying to be political, just touching on the economics side of the discussion.
 
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Personally I can’t wait for the next recession. Silicon Valley is just overrun with traffic, and housing prices have gone beyond absurd.
 
This thread is perilously close to discussing politics, gentlemen..
 
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This thread is perilously close to discussing politics, gentlemen..
I will remove any and all links you suggest.

I am used to providing citation when I make comments, much like writing lab papers in school or a paper in English class with footnotes and or end notes.

In short, I want to assure you that I'm not just pulling comments out of my rear end unsupported.
 
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...And there is Hong Kong.
Yes, indeed.

Nov 26, 2019
How Hong Kong’s economy is reeling from the protests — in 7 charts
https://www.ft.com/content/0dd8e27e-0ae0-11ea-bb52-34c8d9dc6d84
The government has forecast the city will experience its first annual recession since the global financial crisis in 2009. ..................

Hong Kong is the largest market in the world for luxury Swiss watches — but in October the value of Swiss watch exports to Hong Kong dropped 30 per cent, compared with the same month in the previous year, to about £150m.

Very recently someone was talking about a Hi-Fi magazine in Hong Kong, a staff of 10 reviewers, and if unable to write a positive review would return the equipment and not publish a negative review.

HK is known as having a strong Hi-Fi market?

Apparently they have, or had a hankering for luxury Swiss watches.
 
Relying on the uber wealthy to rescue the hobby is a fool's errand. Audiophile manufacturers should leverage the vinyl resurgence and introduce great sounding but affordable stereo equipment. Porsche has seen phenomenal growth not due to their ultra expensive models, but making more cars at accessable price points.
 
The “vinyl resurgence” is a temporary fad that will soon collapse, if it hasn’t already started. I do agree we need ‘great sounding but affordable stereo equipment’.
 
The “vinyl resurgence” is a temporary fad that will soon collapse, if it hasn’t already started. I do agree we need ‘great sounding but affordable stereo equipment’.

Wrong...very wrong. The vinyl resurgence started in 2012, growing every year with 2018 being the largest sales ever with 15% growth vs YAG. Even on WBF, analog related posts and system threads typically have munch more engagement that digital posts.

https://en.wikipedia.org/wiki/Vinyl_revival

https://www.billboard.com/articles/...es-growth-2018-beatles-david-bowie-pink-floyd
 
This threadindustry. On the penchant of rich people to purchase white elephants. Can that influx of cash stabilize the high end indistry?
 

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