In the March 2023 issue of The Absolute Sound Robert Harley, Editor-in-Chief, defends broadly and unashamedly the arrangement of long-term loans of high-end components by manufacturers to reviewers.
1) Robert writes that "[l]ong-term equipment loans are essential to writing the most accurate and insightful reviews." If a well-known and highly-respected reviewer has been purchasing his own equipment for his reference system for decades does that mean he has not been writing the most “accurate and insightful reviews"? How would a respected reviewer's reviews have been better if he had never purchased his loudspeakers or his turntable or his amplifiers? Are the reviews of a self-financing reviewer tainted in some way because he/she pays for his/her own components?
Robert justifies the practice of long term loans by asserting: "Inserting a new product into a highly transparent system whose characteristics are known intimately by the reviewer is the gold standard for writing an accurate and insightful review. Anything less is a compromise. . . . Without long-term loans, reviewers must either evaluate expensive products in systems they can afford (i.e., that are not up to the sonic standard of the product under review) or change the entire playback system with each new evaluation." Robert concludes: "This arrangement also benefits readers by identifying those products that are truly exceptional."
I feel these arguments both prove too little (how do any of these assertions actually justify a potential or an actual conflict of interest, and the specter of bias in favor of the loaning manufacturer?) and prove too much (so most reference systems owned and paid for by the reviewers themselves are a "compromise"?). How does the long term loan arrangement "identif[y] those products that are truly exceptional?" Doesn't the arrangement simply identify which companies are willing to loan/give components to reviewers in return for marketing bragging rights and for Associated Components list value?
2) I fully appreciate 1) the self-selecting process of focusing on components a reviewer strongly suspects in advance he/she is going to like, and 2) the sensible editorial strategy of assigning a review component to a reviewer with prior experience with an earlier version of the same product, or at least some prior experience with the manufacturer. Yet I find it difficult to believe that even with these legitimate drivers of the component-to-reviewer assignment process every component is worthy of the highest praise.
Jonathan Valin has long term loans from, I believe, among other manufacturers, Acoustic Signature, JL Audio, Magico,* MBL and Soulution. When was the last time you read a negative review by Jonathan of a product sent to him for evaluation by one of these companies? (I readily concede this particular argument is not at all dispositive, because it is very possible that Jonathan has genuinely loved every single component he has ever reviewed from each of these companies. My point of this particular argument is that the long-term loan arrangement raises the specter of bias.)
3) I believe that in any other industry, and according to any regulatory body responsible for regulating a particular industry, the practice of long-term loans would be described in one word: "bribe." Robert exculpates the reviewer receiving the loan from impropriety by explaining: "The assumption is that the reviewer is beholden to the manufacturer, when it is the manufacturer who benefits more than the reviewer from the loan."
How is this a defense to an apparent or to an actual conflict of interest? How does the fact that the manufacturer receives a bigger benefit from the loan than does the receiving reviewer absolve the reviewer's apparent or actual conflict of interest? Isn't this like the beneficiary tippee of an insider trading tip defending himself from liability for his ill-gotten gain because the tipper from whom he received the tip made more money than he did?
4) Robert takes a puzzling swipe at reviewers buying review components at discounted accommodation pricing: ". . . I'm not as clear about how buying such a piece of equipment at a huge discount wouldn't make a reviewer feel even more "beholden" -- and personally invested in that product." I think that a reviewer who receives an accommodation discount of, let's say, forty percent, and pays sixty percent of his or her hard-earned money for a component, is less beholden to a manufacturer than is a reviewer who receives that component for free. Robert does not explain why a reviewer who receives a 40% discount is more beholden to a manufacturer than is a reviewer who receives a 100% discount.
Isn't a reviewer less beholden to a manufacture after a completed purchase transaction than he or she is from an ongoing loan which the manufacturer can withdraw at any time as punishment for a critical review? Which tells you more about how much a reviewer liked a particular $200,000 component: A) paying $120,000 to have it and use it, or B) paying nothing to have it and use it?
5) Robert emphasizes that The Absolute Sound "adheres to the ironclad rule that the review sample must eventually be returned to the manufacturer. Although the reviewer may use a product for several years, it belongs to the manufacturer." For how many years has Jonathan Valin had possession of his Lloyd Walker turntable (assuming the Proscenium possession started out as a long-term loan)?
If we were in tax court I believe that a transaction denominated by the participants as a "loan" which continues for as long as a "borrower" wishes likely would be re-characterized either as a sale or as a gift. Under The Absolute Sound's "rule" what does "eventually" mean in practice? With long-term component loan arrangements in this industry does "eventually" mean upon the retirement or the death of the reviewer? I would characterize a long-term component loan as a gift, rather than as a loan.
6) Section 4 of the Statement of Principles of the Association of International Audiophile Publications provides: Reviewers and their publications will not be allowed to negotiate to keep review samples as "compensation" for their reviews. In my opinion a long-term loan which continues for as long as the receiving reviewer wishes is substantially the same -- a distinction without a difference -- as a "keep." This Statement of Principles was a modest attempt at a code of ethics for the high-end audio industry. Conspicuously, The Absolute Sound has chosen not to sign onto this industry self-regulatory effort.
7) I will leave you with this simple question: if a reviewer wants to continue to retain and use a piece of equipment loaned to him by a manufacturer that is worth tens of thousands of dollars, or hundreds of thousands of dollars, do you think the reviewer will be more likely to report favorably on, or to be less critical of, a new component from that manufacturer sent to that reviewer for evaluation?
*I would argue that a long-term loan arrangement is in operation even if a manufacturer replaces the loaned component with a new model from time to time.
1) Robert writes that "[l]ong-term equipment loans are essential to writing the most accurate and insightful reviews." If a well-known and highly-respected reviewer has been purchasing his own equipment for his reference system for decades does that mean he has not been writing the most “accurate and insightful reviews"? How would a respected reviewer's reviews have been better if he had never purchased his loudspeakers or his turntable or his amplifiers? Are the reviews of a self-financing reviewer tainted in some way because he/she pays for his/her own components?
Robert justifies the practice of long term loans by asserting: "Inserting a new product into a highly transparent system whose characteristics are known intimately by the reviewer is the gold standard for writing an accurate and insightful review. Anything less is a compromise. . . . Without long-term loans, reviewers must either evaluate expensive products in systems they can afford (i.e., that are not up to the sonic standard of the product under review) or change the entire playback system with each new evaluation." Robert concludes: "This arrangement also benefits readers by identifying those products that are truly exceptional."
I feel these arguments both prove too little (how do any of these assertions actually justify a potential or an actual conflict of interest, and the specter of bias in favor of the loaning manufacturer?) and prove too much (so most reference systems owned and paid for by the reviewers themselves are a "compromise"?). How does the long term loan arrangement "identif[y] those products that are truly exceptional?" Doesn't the arrangement simply identify which companies are willing to loan/give components to reviewers in return for marketing bragging rights and for Associated Components list value?
2) I fully appreciate 1) the self-selecting process of focusing on components a reviewer strongly suspects in advance he/she is going to like, and 2) the sensible editorial strategy of assigning a review component to a reviewer with prior experience with an earlier version of the same product, or at least some prior experience with the manufacturer. Yet I find it difficult to believe that even with these legitimate drivers of the component-to-reviewer assignment process every component is worthy of the highest praise.
Jonathan Valin has long term loans from, I believe, among other manufacturers, Acoustic Signature, JL Audio, Magico,* MBL and Soulution. When was the last time you read a negative review by Jonathan of a product sent to him for evaluation by one of these companies? (I readily concede this particular argument is not at all dispositive, because it is very possible that Jonathan has genuinely loved every single component he has ever reviewed from each of these companies. My point of this particular argument is that the long-term loan arrangement raises the specter of bias.)
3) I believe that in any other industry, and according to any regulatory body responsible for regulating a particular industry, the practice of long-term loans would be described in one word: "bribe." Robert exculpates the reviewer receiving the loan from impropriety by explaining: "The assumption is that the reviewer is beholden to the manufacturer, when it is the manufacturer who benefits more than the reviewer from the loan."
How is this a defense to an apparent or to an actual conflict of interest? How does the fact that the manufacturer receives a bigger benefit from the loan than does the receiving reviewer absolve the reviewer's apparent or actual conflict of interest? Isn't this like the beneficiary tippee of an insider trading tip defending himself from liability for his ill-gotten gain because the tipper from whom he received the tip made more money than he did?
4) Robert takes a puzzling swipe at reviewers buying review components at discounted accommodation pricing: ". . . I'm not as clear about how buying such a piece of equipment at a huge discount wouldn't make a reviewer feel even more "beholden" -- and personally invested in that product." I think that a reviewer who receives an accommodation discount of, let's say, forty percent, and pays sixty percent of his or her hard-earned money for a component, is less beholden to a manufacturer than is a reviewer who receives that component for free. Robert does not explain why a reviewer who receives a 40% discount is more beholden to a manufacturer than is a reviewer who receives a 100% discount.
Isn't a reviewer less beholden to a manufacture after a completed purchase transaction than he or she is from an ongoing loan which the manufacturer can withdraw at any time as punishment for a critical review? Which tells you more about how much a reviewer liked a particular $200,000 component: A) paying $120,000 to have it and use it, or B) paying nothing to have it and use it?
5) Robert emphasizes that The Absolute Sound "adheres to the ironclad rule that the review sample must eventually be returned to the manufacturer. Although the reviewer may use a product for several years, it belongs to the manufacturer." For how many years has Jonathan Valin had possession of his Lloyd Walker turntable (assuming the Proscenium possession started out as a long-term loan)?
If we were in tax court I believe that a transaction denominated by the participants as a "loan" which continues for as long as a "borrower" wishes likely would be re-characterized either as a sale or as a gift. Under The Absolute Sound's "rule" what does "eventually" mean in practice? With long-term component loan arrangements in this industry does "eventually" mean upon the retirement or the death of the reviewer? I would characterize a long-term component loan as a gift, rather than as a loan.
6) Section 4 of the Statement of Principles of the Association of International Audiophile Publications provides: Reviewers and their publications will not be allowed to negotiate to keep review samples as "compensation" for their reviews. In my opinion a long-term loan which continues for as long as the receiving reviewer wishes is substantially the same -- a distinction without a difference -- as a "keep." This Statement of Principles was a modest attempt at a code of ethics for the high-end audio industry. Conspicuously, The Absolute Sound has chosen not to sign onto this industry self-regulatory effort.
7) I will leave you with this simple question: if a reviewer wants to continue to retain and use a piece of equipment loaned to him by a manufacturer that is worth tens of thousands of dollars, or hundreds of thousands of dollars, do you think the reviewer will be more likely to report favorably on, or to be less critical of, a new component from that manufacturer sent to that reviewer for evaluation?
*I would argue that a long-term loan arrangement is in operation even if a manufacturer replaces the loaned component with a new model from time to time.
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