commodity liquidity

I have been into audio for over 12 years.

These are very complex issues.

The primary problems this industry has are:

1 - Solid state electronics last virtually forever. If electronics seriously degraded (like automobiles do) over time, the industry would be fine.

2 - The industry is lacking innovation/technologcal advancement that advances it's market. There has been advancement in high end audio, but it has not done much to expand it's market. It can be compared to the PC industry right now. The PC industry suffers from many of the same problems as high end audio; however, it is MUCH more black and white in the PC industry, and their is much more competition. However, there is a MUCH bigger market for the PC than high end audio.

3 - Because electronics do not degrade per se, there is a pool of electronic gear in the market that is ONLY growning in size. Since online sites for used gear have sprung up, this has given new value to this gear and made it possible for people to both sell and buy it rather easily at 50% or so retail.

4 - High end audio retailers insist on marking up very expensive gear a healthy percentage. This is a double edged sword and a fine line these retailers must walk. If they sell the gear too cheaply, it floods the ever growing market. This flooding can impact all retailers' sales. If retailers mark the gear up too much, they risk never selling any pieces. This is a tough situation.

5 - More generally speaking... In the 60's and 70's stereo technology was expensive. A person would have to shell out some serious money to get good sound. Today, stereo has penetrated everywhere. Acceptable sound is so cheap for people that very few ever want to aspire for better sound.

6 - There is an emergance of online retailers (i.e. Outlaw, Perpetual Technology, Oddyssey, etc.) that produce very good products that can sell them for a lot less direct than a manufaturer can sell (a comperable) product through a retailer. Retailers that are mean spirited will say these online only products are hokey junk. They can say nothing else because deep in their heart is serious fear that these products are actually very good value.

7 - Lots of retailers are selling 'DEMO' equipment online. They are selling it almost at their cost. [See 4 above]

Ways the industry may be able to save itself:

1 - Personally, I think the industry needs to try to enter more mainstream. Sounds like heresey eh? I think the entire industry needs to band together and do a universal advertising campaign. Like the 'Drink Milk' campaign done by dairy farmers. When was the last time you saw an ad for high end equipment on TV???? I think we need an ad on TV that challenges people to go to their local hi end audio retailer and listen to real music.

2 - If hi end audio companies were really geniuses (this may be totally outlandish), they would consider banding together with a new sales strategy. The strategy would be simple. Only lease their gear. Do not give consumers the option to buy the gear until maybe it has been leased for five or more years. *THIS MAY TURN OFF SOME CONSUMERS* Some people really value the concept of ownership. But if enough hi end companies only leased their product (amps and preamps especially), their would not be the pool of audio gear on the market today. It would also give folks more brand loyalty because companies could give the option of trading up. *THIS IDEA MAY NOT WORK AT ALL* But, I'd like to see someone try this business model.

3 - Manufacturers need to control their dealers better and make better products. There are a few companies who have very tight controls over their dealers. (I can think of REL and Magnapan off the top of my head). These two companies make superior products. It is difficult to find this gear used or even DEMOED. Magnapan only lets dealers mark up their gear 35% as opposed to 45% of many dealer markups.

Anyway,

These are my 2 cents worth.

Peace.

Keith

I definately think that it's the economy. Many people are out of work, and those that aren't may be preparing for the possibility of being of of work soon. I myself have downsized my system significantly.

My previous system was Boulder L5ae preamplifier, Boulder 102ae power amplifier, Avalon Acoustics Symbol loudspeakers, Cary CD-303 cd player, Music Metre Canto interconnects, Chang 6400-ISO power filter, Basis 1400 turntable / Basis-Rega RB300 tonearm / Benz Micro L2 cartridge / Coda 03p phono preamplifier, Zoethecus rack.

My new system will be Linn Classik K reciever / cd player, Acoustic Energy AE-1 Series II loudspeakers, Sound Anchor loudspeaker stands, Cardas Crosslink interconnects and speaker cables, Basis 2000 turntable / Graham "Robin" tonearm / Benz Micro L2 cartridge / Musical Surroundings "Phonomena" phono preamplifier, Marantz CDR-631 CD recorder, Zoethecus rack.

It's about the money. I have chosen to spend less, in order to plan for whatever the future of our economy may bring.

Many audiophiles love changing gear. I am guilty of this to some extent myself. I also agree with the above comments re the weakening economy. Peace. Craig.

wow, there are some great points here. especially about leasing audio equipment.
if only the equipment makers had consciously employed the 'planned obsolescence' strategy of american carmakers, the industry would be in better shape? i suppose that means we can be thankful for the concern for good sound, rather than just profit.
the fact is, i think the market for used components kind of obscures the fact that a good sounding system is extremely easy to put together these days, even for under $1000. as someone above has suggested. obviously what keeps all the hairshirt super high end brands in business is the rather unrealistic pursuit of sound which is indistinguishable from live. this is truly a holy grail, in the sense of barely attainable, yet the idea sends the faithful out on crusades of buying, trying, trading, and tweaking, only to be disappointed by something, somewhere along the line.
still i admire the fact that so many talented people have ventured out into the business of making a better mousetrap.
meanwhile the companies big enough to have a business plan have come up with their version of planned obsolescence, that is, the constant mkII-ing and mkIII-ing and 30.5ing, companies like Audio Research and Madrigal. They're asking you, no, 'brown-mailing' you to be customers for life. Look at John Atkinson of Stereophile. He's been on the Madrigal upgrade path for over ten years, I can't imagine he has any spending money left (of course, he gets his for half price). I don't think Madrigal would have the cake to have brought out its reference series if they hadn't had a steady source of support and advertisement from the editor of a major, influential magazine. having heard ml gear, i honestly don't like the sound very much, even if it is very impressive. i even suspect that the fact that solid state just doesn't connect listeners to the music very well is responsible for the pentagon-like level of expenditure plowed into making solid state even palatable, thus cyanate ester circuitboards in ml amps. and still, does anyone actually enjoy their reference systems, as opposed to being able to hear a oboeist clear her throat while the trombones go full tilt?
i like the underground guys who make good sounding products at low prices, all the little SE tube internet direct guys out there who are telling us to wake up, get some sensitive speakers, and enjoy the updated technology of 1910.
am I rambling? sorry, I just figured it would be entertaining.
meanwhile, audiophiles discussing the viscissitudes of components and their sound has become rather like medeival monks heatedly discussing the number of angels who could cohabit a pin. interesting for the initiated, but irrelevant and decadent as far as the rest of the world is concerned.
meanwhile, our president is discussing the best and perhaps sneakiest way to the destruction of those dams muslims in the middle east who just don't seem too interested in signing on to the consumer economy.
i guess its as good an opportunity as ever to immerse ourselves in the trivia of audio system matching.
thanks and peace guys (and gals)

Great post Tacs!

I like companies that are doing this direct through online as well. I am not as tube oriented as you are (not adviseable to drive Maggie 3.6's with tube gear), but if I had some very efficient speakers my oppinion might dramatically alter reguarding tubes. I do have a tube preamp though (SF3SE... gotta love it).

I think companies like Perpetual Technologies, Outlaw, Odyssey, PS audio, etc.(companies that sell direct online) have a strong future in hi end audio.

The only problem is that this could be the beginning of the demise of most hi end shops if more and more companies go this online route. And this could very well signal the end of most hi end audio.

This occurs because hi end shops do serve an important purpose. This purpose being that they demostrate the products. They try to effectively to get people interested in these hi end audio products. Without these hi end audio shops, who will be left to get people interested in this esoteric stuff??? This would have a serious negative impact on the industry.

I think that hi end shops need to form different relationships with their manufacturers. Both parties need to pursue what both parties desire: the need to sell more product. [NO MATTER WHO SELLS IT.] Manufacturers need to be able to sell directly to consumers, giving their Dealer in the area of the consumer a commission on the sale (and for every sale in his area). This would probably save Dealers money (in the long run) and enable to make more money. Dealers would no longer have to keep much inventory. Keeping a lot of inventory is not cheap, and effectively eats into profits. It also saves Dealers shipping costs (to get the merchandise). Manufactuers would ba able to lower costs online and effectively sell more product.

However, selling more product takes us back to the ever growing problem of more and more used equipment out there.

As I said in my last post... this is a very difficult issue.
Extremely complex... with no easy solutions.

Speaker and CDP manufacturers and have the only good news... Speakers and CD players have moving parts that eventually wear out. Plus speakers are more prone to damage [in general] than other SS electronics.

Peace.

Keith