Oppo Ceasing production

I've been in this hobby since I was 15 years old-- back in the 1970's-- so what's changed? Money, in the form of disposable income. Wages and salaries for the middle class have been stagnant or in decline since then. Economic mobility in the US has collapsed. Not my opinion-- this is simply a straight read of decades worth of economic trend data. Kids aren't getting married or starting families nearly as much today either-- no money, little job stability, and diminishing prospects for this to turn around anytime soon. 

It sucks that young people today grow up listening to music (crap sounding MP3's in most cases)  through cheap bean-sized earbuds. It's another reason for the loudness wars-- no one listening to loud music via earbuds wants wide dynamic range-- they want it compressed and LOUD-- and this is all most of them will ever be able to afford.

Hi end mfg's have been jacking prices to create a "patina of prestige" around their products-- it's got nothing to do with cost for many of them. So the hi-value brands like Oppo are appealing to a vanishing class of people-- and I use that word intentionally. The US and for that matter, the EU middle class-- are an endangered species and there aren't going to be enough rich audiophiles to keep most of the remaining companies healthy for very much longer. The US middle class was the driver of economic growth and prosperity for our economy-- now they're just targets for rent-seeking monopolies-- and that has left consumer spending, compared to what it was decades ago-- anemic at best.

The average American can't even come up with $400 cash to pay for an emergency expense-- like a car repair. So what are the odds they'll be able to put together a few thousand dollars spare to buy an entry level system? Diminishing at best.

So this isn't about changing times and preferences-- a preference to only listen to low quality music on cheap earbuds-- it is about the change in the economic circumstances of most Americans. This is not politics-- though that has played a LARGE role in this state of affairs-- it's basic economics. Downwardly mobile populations of people do not make a great market for high quality goods and services, they make a good market for Wal-Mart and The Dollar Store. 

" There has to be more here than meets the eye. How can a company that has been in business for some time suddenly not have the resources to continue to manufacture products that presumably they are making money on. This seems especially hard to believe when the bulk of your business is direct to customer which means you get paid immediately when you sell a product. Who took the money?"

Oppo Players are assembled in China.  The factory that assembles the units requires a a minimum order to do a production run.  Also, suppliers of custom parts, such as face-plates, circuit boards, etc also require a minimum order.  In addition, there is a "up front" charges for developing dies for casing, masks for circuit boards, packaging and literature and software.

For hypothetical reasons, lets say that Oppos Assembler requires a minimum production run of 3000 UDP-203's. 

parts and assembly costs =  $185
Development, support, overhead and shipping  = $130
Profit = $100
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Dealer Cost = $415.00

Dealer profit = $135
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Total cost = $550.00

Now if Oppo sells you a unit directly, their profit goes up to $200 ($235 - $35 shipping).

So for a Production run of 3000 units, Oppo's cost is $915,000.00!  Assuming half of sales are direct, profit would be $450,000.

The unknowns here are what is the development cost including molds, dies, etchings, etc.  How much is their overhead, salaries, healthcare, building lease/mortgage and advertising?  How long does it take for 3000 units to sell?  Only the people of Oppo know the answers to these questions.  


From my conversation with them,  I got the impression that doing another production run was going to eat up too much of their operating capital.  UDP-205's sold out in three days from the announcement.  How long before UDP-203's are out of stock?  Developing a new products takes a long time.  So, it they do another production run, do they have enough cash in the bank to pay salaries and their mortgage?  How many sales of month do they need to cover these expenses?  Is the Parent Company tired of footing the bill for a subsidiary that has an ever shrinking market?

Remember, we're the minority here.  Most people these days are quite happy to stream "4K" Netflix or watch on a phone/tablet/computer.  I watch more content these days on my computer (4K 32" monitor) than I do on my TV's and 4K projector.  More content produces are forcing more content online.  Right now I'm watching F1 practice my computer because it's not available on TV.

I think Oppo made the smart choice, but I'm not happy about it.  Hey, let's wind down our operation and give our employees time to find new jobs before we start bouncing payroll checks.  This is something Toys-R-Us failed to do.

Just my opinion, but I think Oppo could have raised their price as much as $500 more (Model 205) per unit and it would have still been a viable product. 
I mean a product with such Fantastic 4K, Blu Ray picture quality, + SACD, DVD Audio, CD playback for under $2000! 
I still would have bought it.

ozzy

Anyone looking for NIB Oppo 205 without getting ripped off, I got you, for now.