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I feel bad for speaker manufacturers

Think about it. If you were going to start a company that manufactures audio components, which would you pick? Arguably the worst business to get into would be the speaker business. Right? First, it’s painstakingly hard to market a new speaker that can break through in today’s ultra-competitive environment. Second, the development costs are relatively high because you have to invest in expensive cabinetry (at least on the high end) , electronic components, and drivers. And except for bookshelves, you have to absorb or charge so much more to get your product to your customers because of the relatively large size and heavy weight of the product. Third, and again especially if you have any floor standing speakers of any size, which, let’s be honest, any speaker company that wants to make money will have to have, you have to pay to hump these things to shows around the country and likely internationally as well.

Now let’s compare the life of a cable manufacturer. Let me state up front that I am a big believer that cables, interconnects, digital cables, and power cords can make a big difference in the ultimate sound of an overall system. Tires on a car, right? And yes, they also have several variables to deal with: silver, copper, tinned, dielectric, shielding, connectors, cryogenic, etc. But they’re all small, light, and relatively cheap. You can ship your product for next to nothing with almost no risk of damage, and you can travel to audio shows carrying all of your wares pretty much in a medium-sized backpack. Oh, and then there’s this. While speaker manufacturers are lucky if they can retail their products for four to six times their cost of production, cable manufacturers get to retail their wares for ten, twenty, or even fifty times or more of their manufacturing cost. There’s the well-worn tale of speaker manufacturers coming to shows in a rented minivan while cable manufacturers show up in Ferraris. It’s sad but funny because there’s some truth to it. I credit @erik_squires with generating this thread because in his recent thread he made me think about how hard it is to successfully create and market a truly successful speaker today. Anyway, it almost seems unfair, especially since speakers contribute so much to the ultimate sound of our systems while cables, while crucial, contribute RELATIVELY much less. What say you?
soix
mijostyn's avatar
mijostyn
8,480 posts
 
I could not agree with Prof more. I have never heard an ultra expensive speaker worth the price. Building Loudspeakers is way easier than building electronics especially if you use someone else's drivers. Anyone know how expensive a surface mount PCB unit goes for? Way more than CNC saws and routers. Now some companies like Magico go out of their way to make things as complicated as possible. I did hear a pair of S3s that sounded very nice. Most companies have a sweet spot in their line where price and performance meet. 
pcc67 is right. A lot of us build our own speakers and there are some fabulous drivers out there that you can use. I build my own subwoofers because no one makes one that meets my specification. I do not like plate amplifiers is the reason and I already have room control in my processor. I just want drivers in stiff heavy boxes. 
jnorris2005
185 posts
 
Pity the poor speaker manufacturer who tests and tests and tests and finally comes up with a design that he deems worthy - only to have some sad sack purchase them, stick them in a corner with a Pioneer receiver and give them a bad review on the internet.

As for the OP's comment about wires being "tires on the car", I could not disagree more.  The speakers are ultimately where the rubber meets the road and the minuscule changes brought about by cables are often negated by them.
wolf_garcia
6,686 posts
 
The way to go is to develop a tweak product that provides an inexplicable and mysterious benefit, get core supporters to rave about that product with hyperbole laden descriptions of the massive improvement this new thing provides, charge an arbitrary price for it...maybe 5 thousand bucks or so,  get the supporters to vigorously oppose and reject any questioning of the validity of the tweak, and sit back and wait for the money to roll in.
soix OP
9,388 posts
 
As for the OP's comment about wires being "tires on the car", I could not disagree more. The speakers are ultimately where the rubber meets the road and the minuscule changes brought about by cables are often negated by them.

@jnorris2005 -- Actually, you and I completely agree.  My analogy was meant to imply that you can build a Ferrari and optimize the engine, suspension, etc. (i.e. the more complicated stuff), but if you skimp on the tires it's all for naught.  Similarly, if you go to the trouble of finding your ultimate source, preamp, amp, and speakers but connect them with cheap cables, you undermine the performance of all the goodness the speakers and electronics could otherwise provide. 


soix OP
9,388 posts
 
@prof  -- totally agree with your assessment.  But there are two sides to this coin.  If you've taken an economics course you're aware of the term "luxury goods."  These items, like jewelry or paintings, derive their value because they're desired, and the higher you set the price, the more desireable they actually become.  And yeah, I'm sure there's an element of this in the speaker market, especially at the highest levels. 

But, there's another way to look at this.  What if a speaker manufacturer found a way to build a magnificent speaker through technology or whatever that outperformed speakers 10x their price?   Let's say his speaker cost him $1000 to build, but it competes with or even outperforms other speakers that cost $5000 to build and sell retail at $20k.  Should he charge $4000 for his speakers, or should he price them at $20k?  In the end, there's a difference between price and value.  If the $1000 at cost speakers outperform other $20k speakers at retail, do you really care what it cost to produce them?  In the end, it's the end result that matters to me as an audiophile.  If someone can figure out how to achieve superior results at a lower cost, good for them!  I don't care how much profit he makes, I'm only concerned with what I hear in my room.  But, especially with speakers, if you dare to overprice your product you are flirting with disaster.  Anyway...
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