High End Passion and Craftsmanship For Sure . . . But Also Occasionally High Cost and Unreliable?

[Ron Resnick]

The industry of high-end audio chronicles designers' passion for emotionally-engaging sound, the pursuit of engineering perfection and the love of music. We are an unusual industry, comprised of a few relatively large companies, and many small companies. Many high-end audio manufacturers start as one person efforts, literally in their garages.

Putting to one side the Veblen good phenomenon a lot of components in the industry are expensive. Are they expensive because they use expensive parts? Often this is certainly the case and provably so. Are finished audio components expensive sometimes because extremely small production volume requires manufacturers to pay a lot for the component parts with little to no economies of scale?

Most of us audiophiles love the concept of a passionate "mad" scientist being driven by his love of extraordinarily reproduced music to invent exotic designs and audio components which advance the state of the audio arts. I know I love this idea.

But with small startups which are inadequately funded does this also inevitably mean inadequate testing of components before they are sent to reviewers for review in the hope that a positive review will jump-start the designer's entire business? Are there cases where small manufacturers send to reviewers components which are barely past the prototype stage? If the review is positive might the designer suddenly be faced with a relative avalanche of orders which he/she is not in a parts position or in a labor position to satisfy in a timely manner while also maintaining the highest production standards of sample-to-sample consistency and quality?

These are very difficult questions, I fully appreciate. I hope it's obvious to everybody that I completely love this hobby and this industry. But our love for this niche industry shouldn't mean that we, as consumers, should be hesitant or afraid to ask and to discuss these kinds of questions.

What do you think about these questions?

 

[Bobvin]

After contemplating these questions, and however many responses it might generate, do you expect the tongue-wagging (keyboard pounding) is going to somehow make a difference? Do you think the principles of these companies, large or small, really give *!# what members of this forum think?

Seems like mental masturbation to me.

 

[DDgtt]

Thanks Ron. You bring up a lot of great points and questions. Let me touch on a few from my perspective and experience. We are an unusual industry. The large majority of companies in high end audio are started by one person with a passion. We're not the only industry where that's the case, but we sure do manifest it strongly.

In terms of the cost of high end audio equipment there are a number of ways, from a manufacturer's perspective, to determine pricing. The reality of these prices are mostly justifiable but there are some that are not. A number of years ago I was in a foreign country (outside of the U.S.) at a high end audio trade show. Out in the hallway I was chatting with a few fellow manufacturers and the topic of pricing came up. One of the gentlemen said to me, "how do you determine the pricing of your products." I responded by saying, "we use strict cost analysis, and determine the pricing based on our hard costs." One of the other fellows said "that's crazy, you should base your pricing on what the market will bear." I was naive enough at that point to assume that almost all manufacturers based their pricing on true cost analysis. Fortunately in my audio career I've been able work for, or with, manufacturers who's pricing is legitimate and honorable (based on true cost analysis). Regardless of how products are priced, I can attest to the fact that the audio business is not a "get rich quick" scheme. It's a labor of love.

Parts buying power and the ability to build products in a timely fashion are some of the biggest challenges facing high end audio companies. How much parts inventory can relatively small companies afford to stock? And even if they have all parts in stock can they afford good machinery and the labor to operate the machinery and assemble the products? Much more difficult than most consumers realize! Therefore, do you want the quality and performance of high end products built by small companies, or are you willing to compromise performance for the price of more mass produced products? Fortunately, there are those occasional products out there that are extraordinary performance values for the price. I've been lucky enough to purvey some of those gems myself!

 

[A-Line]

Hifi is full of cottage companies that supply a need. My other hobby is amateur astronomy and the same happening there as well.

A new quality entry level analog set up is often at least €6-10K. Buying quality used components is often a better option. These days money is tight for the average young person, even older adults, so that's a limiting factor.

With prices constantly increasing to insane levels for high-end audio new people into hifi will have to settle for what they can afford. Right now Chi-Fi is getting most of the business because it is affordable.

 

[hb22]

Ron

I understand a little about these things and I can say with certainty, that there should not be a turntable for 50,000 euro or more! This is a stretch, a mockery and greed.

 

[microstrip]

(...) Most of us audiophiles love the concept of a passionate "mad" scientist being driven by his love of extraordinarily reproduced music to invent exotic designs and audio components which advance the state of the audio arts. I know I love this idea. (...)

Well, I respect your love, but can't find anyone who fits in your concept I admire. Surely there will be an exceptional case I am not remembering now, but the people I know about in this hobby having a serious scientific background were not "mad" scientists. IMO science can drive technology in the high-end stereo, but there is little place for it elsewhere.

 

[Bobvin]

Ron

I understand a little about these things and I can say with certainty, that there should not be a turntable for 50,000 euro or more! This is a stretch, a mockery and greed.

Are you suggesting there are no audible benefits to be had from a turntable priced over 50k vs one priced slightly less than 50k? Why do you say 50k should be the upper limit? What about the craftsman who spends years listening to various prototypes finally landing on the design and choice of parts to introduce a model that takes 3 months to machine, assemble, and package for a single unit. Is he not justified to charge not only for time and materials but also R&D — is he not deserving of recouping those costs plus some profit too?

Are there other products you believe should have an upper limit to price?

 

[Ron Resnick]

Do you think the principles of these companies, large or small, really give *!# what members of this forum think?

In an industry this small I absolutely believe that at least some companies care what members of this forum think.

PS: Vaguely similar to the way almost no one admits to voting for Richard Nixon the second time around yet he was elected president, I believe that WBF is monitored by industry people more widely than many of them would admit publicly.

 

[Mike Lavigne]

in my 30 year high end experience i have not really seen higher end gear also with high performance not sorted out or supported appropriately, with a couple exceptions.

----early Tenor Audio OTL amplifiers had astonishing performance, but were too much on the edge of reliability. it took the company changing hands to get the reliability issues resolved years later.
----an unnamed super uber preamp/phono stage where the deposit money for the units were then used to develop the product and the actual sorting out never quite got done, with some buyers ending up holding the bag. benefit of the doubt maybe all intensions were honorable. but in the end there were winners and losers. it was a long time ago.

i don't have the knowledge to judge the skill/brilliance of either of these manufacturers. but i have no reason to equate their issues to a lack of technical prowess. or economies of scale? or deep enough pockets to support the launch?

those are the only times i've seen this come across my view. no doubt there are dozens of that sort of thing happening. but assigning an actual root cause for the result would require intimate knowledge of the whole picture.

 

[Ron Resnick]

do you want the quality and performance of high end products built by small companies, or are you willing to compromise performance for the price of more mass produced products?

This puts very deftly an excellent question!

 

[Ron Resnick]

Ron

there should not be a turntable for 50,000 euro or more! This is a stretch, a mockery and greed.

Sorry, but picking an arbitrary price and declaring it unacceptable is kind of silly.

 

[hb22]

Are you suggesting there are no audible benefits to be had from a turntable priced over 50k vs one priced slightly less than 50k? Why do you say 50k should be the upper limit? What about the craftsman who spends years listening to various prototypes finally landing on the design and choice of parts to introduce a model that takes 3 months to machine, assemble, and package for a single unit. Is he not justified to charge not only for time and materials but also R&D — is he not deserving of recouping those costs plus some profit too?

Are there other products you believe should have an upper limit to price?

I have been making turntables for 45 years. I have made a lot of prototypes, I have learned a lot, with measurements and testing, but mostly by listening, also by regularly visiting the Philharmonic and the opera. My product costs 6k and is the pinnacle of craftsmanship, simple as a turntable should be, with extremely small tolerances. I have the knowledge, the ability and the money to make a 100kg or more turntable and sell it for 100k euros, but this is stupidity that will slowly lead to the collapse of hifi...

 

[hb22]

Sorry, but picking an arbitrary price and declaring it unacceptable is kind of silly.

It is very likely that you misunderstood me.

 

[DaveC]

After contemplating these questions, and however many responses it might generate, do you expect the tongue-wagging (keyboard pounding) is going to somehow make a difference? Do you think the principles of these companies, large or small, really give *!# what members of this forum think?

I do think audio companies pay attention to forums and other social media to a degree. Audio companies, just like any other, must offer something of value to make a living. They have to be in touch with what their potential customers want and have some way of gaging how what they offer compares to their competition.

------------------------

I think there's pros and cons to small vs large business, and they vary depending on the product and market. Some products require A LOT of investment and have a prohibitively high barrier for entry making small scale basically impossible... for example cars. The smaller the scale of a car manufacturer, often the less reliable the car because they don't have the investment and experience of a larger scale mfg'er. A good example of this is Koenigsegg and Pagani. Beautiful cars that cost over $1M and make their own parts, although Pagani uses Mercedes drivetrains, Koenigsegg makes EVERYTHING. Obviously, you can't just go to the store and buy a part, it may have to be custom fabricated for you, and the overall reliability of the vehicle is far lower than, say a Corvette or Porsche. The tradeoff is owning a piece of automotive art, something few other have, and a driving experience you can't buy elsewhere.

Audio is not like cars. It's orders of magnitude less complicated, the gear needed to test audio equipment is now relatively cheap, and this lowers the barrier of entry so you see a lot of small businesses owned by people passionate about audio. Unlike cars, audio is much more mature, there's a lot less new tech vs autos. There are some exceptions like class-D amps, DAC chips and cutting-edge drivers, but audio manufacturers can simply buy amp modules, chips and drivers and use them in their products. I don't want to trivialize the design of speakers and such, but let's be real here... they just don't compare to many other more complex products like cars, the saying "this isn't rocket science" applies. Even making speaker drivers is basic and done as a hobby by many people at home with great results. Where audio gets interesting is in the behavior of the entire system and how it satisfies the listener's psychoacoustic requirements, but most audio mfg'ers are only concerned with the components they make.

Also, audio is low-scale but has a lot of competition, so mfg'ers compete for dealer business by offering them favorable margins. Dealer and distributor markup combined with relatively high costs of marketing has driven msrp WAY up, this is typical of any luxury product. High end audio gear fits into the luxury category as it's not commodity, a speaker is not a speaker, but rather a personalized product that only appeals to a niche in the larger market. Just like designer clothes, it's fine if most don't like it, they only need a small niche to buy into it. High msrp combined with a low barrier for entry creates space for small companies. This is the reason I decided to offer cables... I can skip the dealers and ignore marketing, then offer a cable for a small fraction of a comparable dealer sale brand. I don't have to manufacture wire, I can just buy wire. Design and assembly of cables is a lot more difficult that one might think, it has challenges that are actually more difficult than building speakers and amps in some ways, but overall there's enough space that I can offer a product for much less simply by bypassing the traditional sales model and selling direct. Cables are also simple enough I don't have to worry about reliability. It can be an issue in some cases, I have seen poor cable designs that don't work long term, but this is the exception. I happen to be a manufacturing engineer, it's not hard to make cables reliable vs more complicated products. I have less than one warranty issue in a year, I probably average one every three years. This makes my life much easier. With a big speaker, there's more to go wrong and fixing a massive speaker with sales spread around the world may get to be a burden. So I think reliability can be an issue with small scale audio, but on the whole it's not a big deal vs other products.

 

[Iamrael]

After contemplating these questions, and however many responses it might generate, do you expect the tongue-wagging (keyboard pounding) is going to somehow make a difference? Do you think the principles of these companies, large or small,

After contemplating these questions, and however many responses it might generate, do you expect the tongue-wagging (keyboard pounding) is going to somehow make a difference? Do you think the principles of these companies, large or small, really give *!# what members of this forum think?

Seems like mental masturbation to me.

While I can’t read Ron’s mind I would wager that he is most concerned with increasing the amount of members on WBF and how many clicks/visits they make.
These latest strings of threads that “question” the Audiophile have been (smartly) embraced by WBF as there is no running away from the truth.

 

[mxk116]

The industry of high-end audio chronicles designers' passion for emotionally-engaging sound, the pursuit of engineering perfection and the love of music. We are an unusual industry, comprised of a few relatively large companies, and many small companies. Many high-end audio manufacturers start as one person efforts, literally in their garages.

Putting to one side the Veblen good phenomenon a lot of components in the industry are expensive. Are they expensive because they use expensive parts? Often this is certainly the case and provably so. Are finished audio components expensive sometimes because extremely small production volume requires manufacturers to pay a lot for the component parts with little to no economies of scale?

Most of us audiophiles love the concept of a passionate "mad" scientist being driven by his love of extraordinarily reproduced music to invent exotic designs and audio components which advance the state of the audio arts. I know I love this idea.

But with small startups which are inadequately funded does this also inevitably mean inadequate testing of components before they are sent to reviewers for review in the hope that a positive review will jump-start the designer's entire business? Are there cases where small manufacturers send to reviewers components which are barely past the prototype stage? If the review is positive might the designer suddenly be faced with a relative avalanche of orders which he/she is not in a parts position or in a labor position to satisfy in a timely manner while also maintaining the highest production standards of sample-to-sample consistency and quality?

These are very difficult questions, I fully appreciate. I hope it's obvious to everybody that I completely love this hobby and this industry. But our love for this niche industry shouldn't mean that we, as consumers, should be hesitant or afraid to ask and to discuss these kinds of questions.

What do you think about these questions?

I can't comment on the section devoted to the choices and/or motives people use to get their products to market. Good or bad decisions I think are self evident.

However, in my lifetime, I believe there are more "better" choices for music lovers or admirers of mad scientists or those who prefer mature technologies, etc., today than ever before, independent of price. IMO this is made possible by the confluence of a global supply of talent, technology, production and logistics. Nothing new that hasn't already happened to most every other industry in our lives.

 

[Zuman]

High-end home audio seems a lot like high-end automobiles to me. There are vehicles for the masses, and vehicles for the passionate. Similarly, there are audio components for the masses, and others for the passionate.
I've owned Lotus, BMW, Porsche, and Aston Martin, among many others. Lotus was a "mad scientist" company that absolutely advanced the state of the art and pioneered innovations that trickled down to typical daily drivers, and many other high-end car companies also did so.
On the subject of literal "garage industries," Aston Martin is a classic example of a company that was driven by irrational passion, illogical processes, irresponsible management, and unsustainable costs. This resulted in the company going bankrupt several times, and vehicle purchase prices that make most people roll their eyes. The owners of the company and the owners of the cars share the pains of this approach, but many are willing to pay them. I know my Aston Martin DB9 extremely well, performing both its routine maintenance and extraordinary repairs myself, and doing so has brought me closer to those who first dreamt then designed and finally hand-built the car. I cannot work on the car without (and I know this sounds silly) feeling the presence of those who made it happen. And when I drive it (about 4,000 miles a year), I am just so happy. It is not transportation...it is transport.
The closest car I had to it on paper was my Porsche 928 S4, at about one-fourth the cost, and from a profitable company. I liked that car a lot, but it didn't touch my soul the way my Aston does.
I suspect that many high-end audio companies are similar. Someone has a dream, and in dreams we can sometimes fly. But when we wake up, the compromises required to compete in a commercial mass-market world often seem too painful, and the refusal to make those compromises often results in extreme prices and low financial sustainability.

 

[andromedaaudio]

But with small startups which are inadequately funded

I think there lies the problem , i dont think you should be( expect to) in high end audio to make money as a start up manufacturer

I outsource everything to professional companies , which results in a relatively small investment / risk , but high quality
The company who makes my cabinets works with composites / plastics for many many years already and employs 100 s or so people.
If i need 100 pair i get 100 pair
I only buy / use quality products from renowed companies , usually it takes 3 days to have the component order delivered so why the need to have a large stock
Only left is assembly, i never had a LS ( unit ) break down since i stepped away from diamond membranes 12 years ago no matter how hard i played .
And what i read on forums that certainly isnt always the case with some other well established brands

@ Advertizing / shows costs quite a bit with no guaranteed succes off course

But to get to the point where you want to do something commercially many years have past usually and a lot of money spent.

 

[tedwoods]

The industry of high-end audio chronicles designers' passion for emotionally-engaging sound, the pursuit of engineering perfection and the love of music. We are an unusual industry, comprised of a few relatively large companies, and many small companies. Many high-end audio manufacturers start as one person efforts, literally in their garages.

As I have written in this forum in the past (in a thread about switches, of all places…), a higher degree of sophistication is required today to manufacture anything meaningful and thus the old cottage industry ethos is difficult to be reproduced in modern products without sacrificing absolute quality or resorting to unethical (in my opinion) practices. The example I had used in that thread, a donor board from Cisco or such inside a nice expensive looking box, masquerading as a high-end switch, is befitting I believe…​

Putting to one side the Veblen good phenomenon a lot of components in the industry are expensive. Are they expensive because they use expensive parts? Often this is certainly the case and provably so. Are finished audio components expensive sometimes because extremely small production volume requires manufacturers to pay a lot for the component parts with little to no economies of scale?

In more cases than not, manufacturers avoid using expensive parts and that is done for a variety of reasons with only some of them being directly related to cost-cutting, but usually if a design sounds good with typical, run-of-the-mill parts, this is a sign of success and upgrading the parts of said design cannot always guarantee a better sound. Of course, this applies mostly to analog designs, because in digital the variations are smaller and parts options more limited perhaps.​

Another thing that must be factored in is cosmetics and how these tend to increase the cost, often without any real benefit to the sonic outcome, but here the luxury item rule applies and if someone wishes to have a particular look for the product they intend to buy, they realize that this comes at a cost and thus this type of cost becomes inconsequential.

Most of us audiophiles love the concept of a passionate "mad" scientist being driven by his love of extraordinarily reproduced music to invent exotic designs and audio components which advance the state of the audio arts. I know I love this idea.

The “mad” scientist concept has one major caveat: single-mindedness often goes hand in hand with isolationism and if we are to gain anything from modern scientific practices it is that interdisciplinary approaches are the ones that often yield the best results. In audio this would translate to groups of researchers/engineers/designers from different -or even diverse fields sometimes- having to cooperate in the design of an audio product that would truly strive to make a difference and in fact, the products that are the result of such research and cooperation are usually the ones that offer any type of actual progress, at least in strictly technological terms.
Another aspect of the “mad” scientist concept is that for the most part it has become somewhat dated, referring to a previous time, when one could get away with less sophisticated manufacturing and a more "focused" bed of knowledge. Speaking of that, my mind inadvertently goes to the old Japanese tube masters that could wind their own transformers and make their own capacitors and while much of that is not at all uncommon today, it is difficult to imagine it being applied to digital font ends, for example, and still look credible. While I would be the first one to admit that a modern design does not automatically guarantee real progress, I can also observe the effects of older designs and design principles being diminished in several critical areas of audio reproduction today.​

But with small startups which are inadequately funded does this also inevitably mean inadequate testing of components before they are sent to reviewers for review in the hope that a positive review will jump-start the designer's entire business? Are there cases where small manufacturers send to reviewers components which are barely past the prototype stage? If the review is positive might the designer suddenly be faced with a relative avalanche of orders which he/she is not in a parts position or in a labor position to satisfy in a timely manner while also maintaining the highest production standards of sample-to-sample consistency and quality?

6moons has a couple of good practices regarding this that could be exported and become part of a wider reviewing awareness: they refuse to review prototypes or non-production items from start-up companies, and they make it very clear that all innards of a product will be photographed and thus made known to the public. And while taking a peek inside a product does not always warranty one will be able to make any sort of informed decision about its design, it is however a very good safeguard against shoddy craftsmanship and unscrupulous vendors.​

These are very difficult questions, I fully appreciate. I hope it's obvious to everybody that I completely love this hobby and this industry. But our love for this niche industry shouldn't mean that we, as consumers, should be hesitant or afraid to ask and to discuss these kinds of questions.

These are all very important questions, first and foremost and I have no doubt they have, at one point or another, troubled everyone who is serious about this "hobby" and so, thank you for bringing them up! I hope I didn't come off as dogmatic in any way. if I did, I apologize but it'd be only because of the limited time and space at my disposal, in relation to the vastness of scope these questions require to be answered properly and in depth.
Cheers,
Ted​

 

[Ron Resnick]

While I can’t read Ron’s mind I would wager that he is most concerned with increasing the amount of members on WBF and how many clicks/visits they make.

Yes, more members on WBF is good. But, no, that general thought was nowhere near my specific motivation for this thread.

The opening post contains topics I simply have been ruminating about recently.