Some thoughts about value in high-end audio

Richard Hardesty (former co-owner of high-end retail store Havens & Hardesty, and former equipment review editor for Widescreen Review magazine) recently published Issue #8 of his online audio journal, The Audio Perfectionist, which contained a section on the importance of value in high-end audio. Hardesty commented that he originally wrote the piece for publication in one of the high-end audio mags, but the mag refused to print the article.

I think Hardesty’s comments are worth sharing in somewhat summarized form. I am not going to quote the entire piece, since it is rather long, and if you are interested in reading the full piece I urge you to subscribe to Hardesty’s journal for $35 a year. The main points of the article appear below. I encourage Audiogon members to share their thoughts and/or criticisms.

“Can an $80,000 pair of loudspeakers or a $20,000 pair of speaker cables represent good value? Do hyper-expensive products really perform better? While astronomical price tags have become commonplace in high-end audio, few reviewers have questioned whether these ever-escalating prices can be justified on the basis of actual manufacturing costs or if the highest-priced products offer any real performance benefits when compared to well-engineered components which cost far less.

Instead, it has been generally assumed that those components, which cost more, are built to higher quality standards and sounds better than those components, which cost less. These assumptions are not necessarily true, and they have taken a toll on the high-end audio industry. Infact, retail prices for high-end audio components are often completely unrelated to manufacturing costs and may be used solely as market positioning tools. In the instances where hyper-expensive products actually do provide some audible advantage, the gain is likely to be small and may be achieved at the expense of some other aspect of performance.

When an industry is filled with a variety of products which are artificially priced to position them in the marketplace, that entire industry becomes suspect. Customers get less for their investment in a market where manufacturers are vying for prestige rather than competing to provide value for money.

As is true in most industries, high-end audio manufacturers used to vie for market share by trying to offer more for the money than their competitors. Originally, “more” meant audibly superior performance, but eventually “more” evolved to include better cosmetics or industrial design and/or enhanced prestige. Some manufacturers discovered that, while it was difficult to produce products, which actually sounded better, it was easy to generate lots of attention from magazine reviewers by simply claiming to offer higher performance and attaching a high price tag to new products. Many inexperienced listeners fell into the trap of assuming that a high price was a guarantee of high construction quality and high performance, just as they (often falsely) assume that an expensive car is made better and performs better than a less expensive model.

Because it is entertaining to read about the most esoteric products available, the high-end audio press has emphasized coverage of extremely expensive components and devoted less attention to the high-value, high-end products that most people are actually interested in purchasing. Super expensive audio components have often been subjected to far less scrutiny by the high-end press than these products deserve. Readers have been led to believe – falsely, in my opinion – that affordable audio components can’t really perform at the highest levels and that true state-of-the-art performance is reserved exclusively for the wealthy.

As specialty publications have focused more and more on products that most people simply can’t afford, the high-end audio industry has suffered. Many music lovers have been turned away from our hobby because they felt excluded from a club where components they own or can hope to obtain are subtly denigrated in print, and components with ridiculous price tags are accepted with little skepticism. Many readers of the high-end audio publications have become dissatisfied with components which offer outstanding performance simply because these components sell for only a fraction of the cost of those esoteric products lauded by the magazine equipment reviewers.

While designers will always experiment with components on the fringe of practicality in order to advance the state of the audio art, you don’t necessarily have to participate in their experiments to achieve true, high-end audio performance...I believe it is time to re-examine many of the products at the upper limits of the price spectrum to determine whether they are fairly priced...and whether they present a good value to the consumer in terms of actual performance.

There is an industry benchmark for establishing the fair market value of an audio component – the five-times ratio of parts cost to selling price...A five-times ratio of parts to selling price provides a lean but acceptable profit margin to the manufacturer and the retailer...

An audio component that performs at the highest level is not likely to be cheap. Less consumer demand means lower production numbers and higher costs. Products which are made in very small quantities will have to sell for much more so that the makers, and the dealers, can recoup their costs from a smaller group of buyers...Many high-end audio components are over-priced when judged solely by the cost of manufacturing. When the selling price to parts cost ratio gets to be 10:1 or more, you are surely buying something other than high quality merchandise. That “something” may have value to you...

(At this point, the article goes into an interesting comparison of several sub-woofers made by Paradigm, B&W, Aerial, and Wilson Audio. Hardesty notes that each sub-woofer in his comparison uses drivers ranging from 12” (Aerial and Wilson) to 15” (the Paradigm and B&W), and have built-in amps with nearly identical power. Cabinet construction is also very similar in each case. Prices, however, range from $1500 for the Paradigm to a whopping $10,000 for the Wilson unit.)

I believe that runaway pricing has damaged our industry. Many products are vastly over-priced based on manufacturing costs and few of the over-priced products offer better sound than what can be had for less. Often far less. In the best cases, where a hyper-expensive product actually does offer some audible performance benefit, that benefit is likely to be a small incremental improvement over products that are more reasonably priced.

Many reviewers subtly denigrate the performance of affordable high-end audio components when reviewing hyper-priced components. Reviews often suggest to the reader that extremely expensive components offer dramatically better performance than that available from components at the upper midrange of the price scale. Based on my experience, and I’ve had a lot of it, that is seldom the case...

Value is not a forgotten artifact of the past. There are many audio products available today that are fairly priced based on manufacturing cost, and some of these products provide performance that was unattainable at any price just a few years ago. The very best performance is often provided by components that are affordable by common folk like you and me. If you listen and compare before you ask for prices you may find that you can afford a lot more performance than you expected.”