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Why is There Not More Consolidation in Audio?

I’m new here and know I have a lot to learn about various equipment, but it strikes me that there is an almost unlimited amount of options in audiophile-level products.  This is not just in models offered by a given manufacturer but also in the number of manufacturers.

When I look at most product lines, there were once many companies that produced the items, but over time some became financially insolvent and closed, or they were bought up by better-positioned competitors.  This was true with beer.  This was true for soft drinks.  This was true with automobiles.  This was true with gems and jewelry.  This has been true with all sorts of food manufacturers.  We had many more options before and now we have few options.  

I know that some audiophile brands have gone by the wayside. There are references here to, “If you can find one of the old __________, they were pretty good.” And a bit of research shows me that the manufacturer went out of business and/or was absorbed by a competitor.  Still, choices abound.

My questions are:  Why hasn’t consolidation happened more with high-end audio?  Do you think the choices will remain plentiful or will a few manufacturers come to dominate the market and squeeze out weaker competitors?  Is there something about the audiophile customer, or the audiophile market, that makes it likely that more options are sought rather than fewer options (e.g., each person seeking a unique collection of equipment rather than to own the same equipment as others)?
bob540
br3098
997 posts
 
Interesting question and one that deserves a long and thoughtful answer. But not from me.

But seriously, I have been a an audio dealer and worked with an audio distributor. Many people (me included) would say that there are too many manufacturers of high end audio gear for the size of the market. How many speaker manufacturers do we really need? (the correct answer, of course, if as many as I personally like)

High end audio is largely a hobbyist business. There are a few large companies producing gear but there are more small outfits that produce some some great and unusual gear. Not all audio hobbyist forms stay small but very few get gobbled up by large corporations.Why? Because most smaller audio manufacturers are barely profitable and don't have stable business models. One bad season or the principal passing on shutters the company. We've all see that recently.

But the audio hobbyists are also innovative and willing to be different. Without them we probably wouldn't have products such as modern tube amps, discreet DACs or any speaker that doesn't resemble a JBL studio monitor. But large corporation are only interested in gross profit margins. If they can make make a decent ROI by acquiring a unique brand, great. But most audio businesses do not show the kind of balance sheet that would attract investors or invite an M&A.

And that's probably the way it should be, IMO
erik_squires
16,289 posts
 
High End Audio has, in my mind, always been seeded by the DIYer. The innovator. The team in a garage with an idea and a passion.

Also, they are emotional and financial masochists who will continue to brave the HE market regardless of outcome.
bkeske's avatar
bkeske
5,597 posts
 
I believe jond basically covered it.

Consolidation happens when larger companies see profit in buying smaller companies or to eliminate competition. This is such a tiny niche market there's really not much of a point except for a few bigger brands. 

asvjerry's avatar
asvjerry
4,724 posts
 
HE exists for the same reason (or rationale) that fine wine, watches, cars, residences, clothing, and all the other trappings of 'taste' or just sheer "... I've got the $ to indulge myself upon 'X'..."

There is a point where true 'performance' and the means and (perhaps unconscious desire) to impress oneself or others....

Now, I'm not a 'shrink', nor do I claim to be one.

All I'm involved with is making myself Happy.

What and how 'others' are up to and about is their business. *G*

As for 'what happens' with the current uproar....my jury is still Out.

I'll CMA for the time being; suggest you do the same.

Don't believe everything you hear or read for the moment.

Keep your head, let others lose theirs...;)
bob540 OP
411 posts
 
Some very good responses.  Since posing these questions, I happened upon a site that lists now-defunct electronics companies. There are many more than I realized, and few that I ever knew about.  So, as others said, the history of audio businesses is extensive.  I had thought this proliferation was a more recent trend, but it goes back quite a ways.  I will probably get around to visiting some high-end audio/video showrooms, where I will likely “discover” more names I didn’t know about.  Seems like an area of interest for those with capability for encyclopedic knowledge.
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