Since closure he says that he's received request from 20 or so
people to build them VR-6s, but that he is unable to do so at
this time. He does have hopes of reopening a VSR repair facility,
with his son, later in the year. Although unless the insurance
comes through, this will be a separate enterprise than VSR and
there is no way to honor warranties.
So he's not finished yet, although for the moment he's out of the
speaker business and trying to get back on his feet financially.
Also, there was some discussion on VSR replacement drivers. It is
true that replacement driver information was passed along to Madisound.
Some of the VSR drivers were standard stock units (from Dynaudio, Eton,
etc.), however others were custom-made. The Audax 5.25" midrange,
that is found in many VSR designs, is available in two forms.
1) You can purchase the standard Audax replacement driver, currently
in stock from Madisound. It's a nice driver and should work reasonably
well.
2) Or you can have Madisound, and presumably other dealers, order the
special VSR-modified version of this driver directly from Audax.
Audax still has some in stock. The modified driver has a different
coating on the cone and well held to tighter testing tolerances (+-1dB).
Naturally this will cost more than the regular stock driver.
Dana
I mentioned to him that I liked the Waveform Mach 17 but noted how its
price had gone from $6000 to $9000 in 4 years. Albert remarked that John
Otvos had probably discovered that it cost way more than $6000 each to sell
them. He said this because that is what he found out.
Back in 1995 he was selling the VR4 for close to $3K. But over a year
later, he found out that he was losing money on them at that price (It can
take a while to finally figure out all of the costs of running a business).
So they were hiked to $3450, and then to $3950 when the Gen II's came out
(which weren't that much more expensive to make).
Funny thing, I remember a couple of years ago, that someone was attacking
VSR for overpricing their speakers. This person did some kind of cost
breakdown on what a VR4's components cost and determined that they were
grossly overpriced and should be selling for a lot less. That was about
the time that AVS found out that they were underpriced and he was losing
money on every one he sold.
So everyone out there picking up VSR's on closeouts at 50% off, you should
appreciate the fact that you are getting real deals.
Dana
greg pavlov
[not affiliated with DFCI or Harvard]
**************************************************************************
For the definitive intro guide to rao, see:
http://members.aol.com/whosbest54/
**************************************************************************
>Back in 1995 he was selling the VR4 for close to $3K. But over a year
>later, he found out that he was losing money on them at that price (It can
>take a while to finally figure out all of the costs of running a business).
It tool Al a year? And he willingly admits this to even people he's met for
the first time? Ai carumba! I'm sure all of the prospective investors he is
trying to line up will be absolutely thrilled to read about this.
The man can make great-sounding speakers, but he is no Amar Bose when it comes
to business and marketing.
Thank goodness he isn't an Amar Bose when it comes to the sonic
performance
of his speaker line either :-)
I too had the opportunity to meet Mr. Von Schweikert at Hifi '99. It
was
early on Friday afternoon at the Harmonic Technology booth and we talked
for
about 15-20 minutes about a variety of topics. His Tower of Power Sub
that
I purchased -- it blends beautifully with my beloved Acoustats...
Speaker design in general... And quite some time on the Harmonic
Technology
cables, in particular the differences in construction (and sonics) of
the
Truth Link and Pro-Silway cables. He asked questions about my equipment
and recommended my dealer loan me both the Truth Links and the
Pro-Silways.
His message (though not an exact quote) was, if you can't hear the
difference
between them, get the Truth Links and buy software ;-)
I also met several other interesting people, like Jeff Joseph of Joseph
Audio,
and Robert Harley, a writer for TAS and TPV.
I wish I could have spent more time there at the show -- but the reality
of the
world settled in.....
Ahh to have an unlimited budget for my audio addiction. I'm sure I
could
spend it all ;-)
--
************************************************************
* A goofy Unix SA working for a large computer equipment *
* manufacturer and services provider. Opinions expressed *
* are mine and not my employers. jkotches@_pobox_.com *
************************************************************
> Alan Dana wrote:
>
> >Back in 1995 he was selling the VR4 for close to $3K. But over a year
> >later, he found out that he was losing money on them at that price (It can
> >take a while to finally figure out all of the costs of running a business).
>
> It tool Al a year? And he willingly admits this to even people he's met for
> the first time? Ai carumba! I'm sure all of the prospective investors he is
> trying to line up will be absolutely thrilled to read about this.
Well, while it was the first time we had met face-to-face, I have had a
couple of exchanges via email, and he was aware of some of my pro-VSR
posts to this group - so it wasn't like he was talking to a complete
stranger.
> The man can make great-sounding speakers, but he is no Amar Bose when it comes
> to business and marketing.
That first year or so, I believe AVS was having the time of his life
bringing his new speaker designs to market. And he is first a designer,
not an accountant. So I don't find it all that surprising that he later
found out that to cover the complete cost of his operations, he had to
adjust his prices. I've seen this before on startup audio companies (and
computer and software companies). Plus, to give him a little credit, at
least the price adjustments weren't that major. The VR-4 increased from
3150 to 3950 over 4 years and a model upgrade. Inflation alone would
account for a $300-$400 increase over that period, plus more R&D cost from
the redesign. So that's a relatively minor adjustment.
My primary reason for pointing this out is as a response to all of the
posts that attack high-end companies for overly inflating their prices.
While I'm sure this is true for some, most of them aren't making that much
money. VSR is an example of someone selling a $3150 speaker that wasn't
even covering the full cost of selling it. AVS contends that his business
was healthy and would be doing well today if it hadn't have been for the
flood (one might seriously question the decision to not purchase and
verify that they had adequate flood insurance).
Compare to this to the following story about a local computer chain. They
started a store-brand PC business and sales were brisk. Over the next 2
years, they opened 8 more stores around the state. The inflow of revenue
from continued brisk sales was enough to continue to pay for startup costs
and parts. Then 2 years into it, they started noticed a cash shortage, so
they brought in an auditor. He found that between their loans, their
inventory, and gross underestimates on the cost of providing long-term
warranty service, that they were more than $1 million in the red. Within
the next 4 weeks they closed all but one store and consolidated all
operations there. But 5 years later, that one store is still in
business. But they didn't have a clue that they were losing money, the
owners thought they were getting rich.
Or we can talk about how IBM found a way to lose $992M from their PC
operations last year.
As to Amar Bose, well AVS might have been able to make money off his $3150
speaker if he used only $3 drivers and minimalistic cabinets. I believe
all high-end marketers must take a back seat to Amar Bose when it comes to
making a profit.
Dana
Well, comparing Albert's operation to IBM is like comparing apples-and-oranges.
Big Blue is a large multi-faceted corporation with enough resources to spend
and lose millions on various projects as long as their other ventures are doing
well. VS, OTOH, was a small start-up specialty company that had to make a
profit on their speakers in order to stay financially solvent. VS was not a
diversified company, nor was it a subisidiary backed by a larger conglomerate.
The benefit/risk ratio of the 2 entities are vastly different when it comes to
the final decision of whether or not to release new products.
And anyhow, I don't think tales of other companies suffering even greater
catastrophic losses would bring any comfort to potential investors Albert is
trying to court, if indeed, he is pursuing them at this point.
<< As to Amar Bose, well AVS might have been able to make money off his $3150
speaker if he used only $3 drivers and minimalistic cabinets. I believe
all high-end marketers must take a back seat to Amar Bose when it comes to
making a profit.
>>
Good point when it comes to profits. At the rock-bottom costs of materials
that Bose uses in all their stuff, I guess it would be hard (if not impossible)
for another company to equal that margin while making something that actually
sounded "decent."
Be that as it may, I do think that high-end companies could learn a bit about
promotion and marketing from Bose. The only thing different, of course, would
be that instead of advertising a lot of "hype," other companies could be
effectively promoting products that are worthy of such hype. In order to
survive in the 21st century, the high-end industry and the audiophile press has
to get out of the thinking that a company with wide exposure to the general
public is "selling out" and becoming "mid-fi." This is ridiculous. If the
quality of their products remain SOTA when it comes to performance, it
shouldn't matter that their products are sold at independent dealers, factory
direct, or even (gasp!) Circuit City.
>Be that as it may, I do think that high-end companies could learn a bit about promotion and marketing from Bose. The only thing different, of course, would be that instead of advertising a lot of "hype," other companies could be effectively promoting products that are worthy of such hype. In order to survive in the 21st century, the high-end industry and the audiophile press has to get out of the thinking that a company with wide exposure to the general public is "selling out" and becoming "mid-fi." This is ridiculous. If the quality of their products remain SOTA when it comes to performance, it shouldn't matter that their products are sold at independent dealers, factory direct, or even (gasp!) Circuit City.<
It shouldn't matter but it does.
And you forget one crucial part of the marketing mix; price.
Part of the appeal of the high-end is the high-end pride of ownership.
Despite early high-end products now performing at a basic level (early
Pro-Logic only processors) there is still status attached to those who
are using a Lexicon CP-3 rather than a Pioneer DPL, DD, and DTS receiver.
Some high-end companies are using very effective promotional copy and
review/independent endorsement style advertising. It's effective and it's
promoting Lexicon (amongst others) as a manufacturer of quality
components that peform at the very highest level.
There is a great Lexicon ad out right now - I think in Stereophile Guie
to HT.
Now the point is the the high-end can't be mainstream - mainly because
the mainstream don't want, don't need and can't afford it. If you want
mass market promotion (ala Bose) you want mass market sales and Lexicon
will not achive this - it does it want its market position compromised so
it is seen as offering budget branded components to the masses.
We have had this here in NZ where some 'audiophile' equipment has changed
from being distributed through audio stores only to now being available
in mainstream chains that sell fridges and microwaves as well as NAD,
JBL, B&W, Harmon Kardon and Onkyo.
The associated 'value' of these products has now been reduced - because
you can buy them at Bond and Bond..(same as Curcuit City)..the same can
be seen in the perceived value of Monster Cable as a high-end product.
It is the exact same issue as 'alternative music' vs the mainstream -
today alternative rock is typified by mutli-millionaires who occupy the
mainstream and sell their music to teenagers - but you can't have it both
ways. You are either in one market or the other.
The same profile applies to high-end companies they can't produce
products with high end appeal high end costs and high-end performance and
sell them to the mainstream. The mainstream doesn't want it.
Perceived brand value to high-end companies is crucial it goes to the
heart of their credibility and they won't want Circuit City selling their
gear because of the mass market junk it will be associated (and demo'd)
with.
Face it - part of the appeal with the high-end is the high end itself.
And if some high-end products were to be distrubuted to the mainstream
through mainsteam dealerships the high-end fraternity would be the first
to leap on the product saying it was never any good anyway.
It's happened.
Max Christoffersen
> Be that as it may, I do think that high-end companies could learn a bit about
> promotion and marketing from Bose. The only thing different, of course, would
> be that instead of advertising a lot of "hype," other companies could be
> effectively promoting products that are worthy of such hype. In order to
> survive in the 21st century, the high-end industry and the audiophile
press has
> to get out of the thinking that a company with wide exposure to the general
> public is "selling out" and becoming "mid-fi." This is ridiculous. If the
> quality of their products remain SOTA when it comes to performance, it
> shouldn't matter that their products are sold at independent dealers, factory
> direct, or even (gasp!) Circuit City.
I'm not convinced that high-end products will ever sell in large
quantities to the general public. Even those companies that are
broadening their markets and getting their products into a lot of
storefronts, are not seeing that much interest in their upper line
products. For example, NHT is getting a bit of a following, but most of
the interest is in their SuperZero and SuperOnes, with a sub. Same for
Paradigm, where interest levels are far higher for their Atoms & Titans
than for their Reference series. Infinity also offers a wide range of
speakers, however most of the store displays are for the low-to-mid-priced
products.
As a general rule, very few of the American public are inclined to drop
$5K on a pair of speakers, or $10K for a big surround sound speaker
system.
For example, one of my friends owns a 50" TV and a KLH surround sound
system. I was telling him about my trip to Hi-Fi'99 and listening to the
Dynaudio $85K/pr speakers - and that the total price of the Dynaudio/Mark
Levinson would run up towards $200K. He listened for a couple of minutes
and then asked "Okay, so it did sound good - but really, did it sound much
better than a $1000 complete system?" And he was serious. In his mind it
wasn't the old 80-20 rule, he thought that $1K should and does purchase
95% of the performance of a $200K system.
Thus I am agreeing with you that the high-end industry has done a poor job
in persuading the American public that higher cost systems can sound much
better. Instead companies like Bose & Sony have convinced the average
consumer that they represent the higher end (and I'm talking Sony's basic
consumer line).
However I will give that Harmon-Kardon is doing a much better job of
getting their boxes in front of wider audiences. And I'm seeing Velodyne
subwoofers at more and more outlets.
What puzzles me the most is that so many people purchase poor quality
speakers. At many stores there is not a single speaker that I would
consider to be even moderately listenable. Mini-rack systems, selling for
$200-$400 & up, usually have cheap junk speakers attached. Yet not many
people complain. And speakers are the easiest components to evaluate in a
sound system. If people don't care about easily discernible differences
in speakers, then there is no way they are going to be concerned about the
relatively minor differences in other components. Or give the slightest
hoot about SACD vs DVD-Audio vs CD.
Remember these are the same people who like VHS VCRs, cable TV, and many of
them find built-in TV speakers to be sufficient. So the step up to KLH
surrounds is considered to be a big one.
Still, the high-end industry can do just fine with a very small share of
the US market. They've just got to find ways to expand it from the
present. I agree that getting better products into mass market channels
would be a step in the right direction.
Dana
Dana
<< What other high-end (if any) are divisions of larger corporations. Like
automotive, all things lead to ford or chrysler, does all audio lead
somewhere????
This would be an interesting post, please let us all know.
>>
Since 1990, McIntosh Labs has been a division of the much larger Clarion Audio.
The idea behind that acquisition was for Clarion to market "high-end" car
audio products under a more prestigious name.
Ironically enough, I have heard some competing dealers bad-mouth McIntosh
simply because they now sold car products. As if selling car stereo products
"in and of itself" automatically tainted their home audio counterparts.
Ridiculous! If they are gonna criticize Macs, they should do on the merits of
the products, not the diversification policy.
Well, several CEOs and CFOs of multi-billion dollar corporations have
taken longer to figure their costs out (Chainsaw Al, for one - but dont
get me started on that!), so there's still hope for AVS...
--
Vandit Kalia GO FLYERS!!!!!
-------------------------------------------------------------------------
The ship of state is the only ship that leaks from the top
<< Max Christoffersen <max...@wave.co.nz> writes:
>And if some high-end products were to be distrubuted to the mainstream
>through mainsteam dealerships the high-end fraternity would be the first
>to leap on the product saying it was never any good anyway.
This is why we have 'branding'. How many people are aware that Mark
Levinson is just a division of Harman International, and that
Harman-Kardon products probably have more engineering expertise thrown
at them than any ML product gets, due to the size of the market and
hence the profits?
Or indeed that Aston Martin and Jaguar are just divisions of Ford,
with the same sort of apportioning of R&D effort? >>
I think this depends, on a case-by-case basis. Sometimes, as in the case
Harman or Fomoco, they are willing to re-invest capital, R&D, and resources
into their acquisitions in order to improve the products made by MK and Jag,
respectively. At other times, the parent company cuts R&D and simply wants to
maximize profits, content to live off the past glories of the new acquisition.
Such was the case when Superscope bought out Marantz.
>Jim Roger <jimmm...@yahoo.com> wrote:
>
>>There's something I'd like to hear about.
>>
>>Like Levinson is a part of Harman
>>
>>What other high-end (if any) are divisions of larger corporations. Like
>>automotive, all things lead to ford or chrysler, does all audio lead
>>somewhere????
>>
>>This would be an interesting post, please let us all know.
>
>Revel is also a division of Harmon International
Quad is now under Bob Stuart of Cambridge notoriety, while Cambridge
Audio is now part of Richer sounds but has the ex-chief designer of
Pink Triangle on board. Complicated, ain't it? :-)
Audiolab has now been swallowed by TAG-McLaren, who can't make a car
run for 200 miles.......
>>> > Or indeed that Aston Martin and Jaguar are just divisions of Ford,
>>> > with the same sort of apportioning of R&D effort?
>
>Jaguars are finally getting reliable too.
I didn't mean to imply that it was necessarily a *bad* thing! :-)
BTW, VolksWagen also own SEAT, Skoda, Audi and Rolls-Bentley, while
Ferrari is a division of FIAT.
--
Stewart Pinkerton | Music is art, audio is engineering
>
>Stewart Pinkerton <pat...@popmail.dircon.co.uk> wrote in message
>news:37410a9c...@news.dircon.co.uk...
>
>> This is why we have 'branding'. How many people are aware that Mark
>> Levinson is just a division of Harman International, and that
>> Harman-Kardon products probably have more engineering expertise thrown
>> at them than any ML product gets, due to the size of the market and
>> hence the profits?
>
>I disagree here, Stewart. The concept of FLAGSHIPPING in retail is
>extremely improtant. You think about the money that Ford spent in 1964-66
>to win LeMans - it was an incredible expenditure of time money and
>engineering that nowhere near justified winning three races - but it
>probably sold a shitload of Mustangs.
>
>The expenditure on the MLAS products far outstrips its mere sales because of
>two factors -
>(a) The flagshipping of Levinson Products by Harmon International helps sell
>Proceed, Harmon, Citation, Lexicon, etc. Also, the engineering knowlege and
>improvements gained will eventually trickle down into the less expensive
>lines.
Shame then that the ML 'Reference' 30.5 DAC is such an appallingly
poor piece of engineering...................
Trickle down works for racing cars, audio technology is 30 years
behind *real* precision analogue and mixed-signal electronics. The
real development work goes into the common chipsets, which is why I
use an 'el cheapo' Pioneer DV-515 DVD player. No need for DBTs here,
you can *see* the difference easily on side-by-side comparisons!
>On Tue, 18 May 1999 03:24:00 -0400, "Steve Zipser (Sunshine Stereo)"
><z...@sunshinestereo.com> wrote:
>
>>(a) The flagshipping of Levinson Products by Harmon International helps sell
>>Proceed, Harmon, Citation, Lexicon, etc. Also, the engineering knowlege and
>>improvements gained will eventually trickle down into the less expensive
>>lines.
>>
> I am willing to bet that the vast majority of Harmon and
> Citation customers don't know or care that the same
> company makes gear with the Levinson label. Also,
> useful "engineering knowledge" is much more likely
> to trickle to the Levinson-badged boxes, rather than
> the other way around (marketing is an entirely different
> story).
Quite so, the *real* engineering is done by Philips, Sony, Crystal and
Burr-Brown, which is why the 'garage' makers like Krell, ML and Arcam
use their transports and chipsets.
>In article <19990517204156...@ng-cg1.aol.com>,
>paul...@aol.com (PAUL MACCA) wrote:
>
>> Alan Dana wrote:
>
They've just got to find ways to expand it from the
present. I agree that getting better products into mass market channels
would be a step in the right direction.
>> >>
>>
Yes, but maybe more than just a way to expand. Maybe it is the only way
to survival.
>
>And Home Theater may well be the vehicle that can do this.
>
>It my impression that many people who are not inclined to spend money
>on an audio-only system, are enticed into recreating the cinema
>experience in their homes. Look at how many $1500 & up large screen
>TVs are being sold. This is a primary target audience for high-end
>audio.<
No it's not. What makes you say this? Most people have no interest in
high-end audio much less high end home theatre. These people are not
hobbyists - they want a level of performance from their TV/stereo which
suits their needs...the extension from there to a hobbyist is huge
leap..and even bigger one to the high-end.
>Now many of them will be satisfied with some boom & sizzle speaker
>systems, but I feel a lot of them would be willing to consider
>dropping some dollars on a sound system that really impresses.<
This may be the case in future with a generation raised only on CD and HT
but right now - this is still the domain of people who consider home
theatre/audio a passion or a hobby - the people you are describing have
as much interest in their audio purchase as they do their telephone.
>A good friend of mine has been in the audio retail business for
>over 30 years. About 5 years ago, he converted 80% of his business
>over to home theater - and discontinued some of his high-end lines
>that weren't yet offering HT products. Sales at his dealership
>have dramatically grown since that time - he's doing over twice
>the business he was doing before as an audio-only store. But he
>had to get out and re-create (via advertising) the public image
>of his establishment. For the first time in his life, he's actually
>making some real money from his business.<
I have been to LA around 6 times (from Nrew Zealand) since 1990. Each
time I do the rounds of a few places (Systems Design Group is one name I
can remember)..and as far back as 1991, these guys were looking to change
their high-end audio-only approach to home theatre installs. The writing
has been on the wall for all of the 90s (if not before) and talking with
anyone in the audio field will tell you the same thing..audio only is for
the purists, HT is for everyone - but most won't go to the
projector/dedicated room approach.
>So an alternative growth path to using mass-market channels is
>for existing audio stores to do more mass-market advertising as
>HT specialists. And for high-end companies to focus their
>media advertising into magazines, newspapers, and web pages
>that reach wide audiences - or at least audiences that include
>a larger share of the potential HT market.<
High end is high end. When you have long time hobbyists here debating the
claims of the performance lift on a component product retailing at
$6KUS+, it is little wonder the mainstream thinks we are all crazy. The
Law of Diminishing Returns has a far lower threshold than it did 10 years
ago. You can get very competent performance at an entry level point
(particularly in the US) and most will find that this is where they find
the point of diminshing returns hits the most.
>Clearly this is already happening. Look at how Stereophile,
>The Absolute Sound, and Stereo Review have released HT-specific
>publications. However this is still a passive approach in that
>they hope those people who browse magazine racks will notice
>their bold banners and pay $5-$8 for a single issue.<
These are magazines for hobbyists - not the mainstream. Rolling Stone is
carrying ads for HT as are many other mainstream music mags.
>Seems to me that you would want to attack at places where people
>are voluntarily identifying themselves as potential customers
>of nice HT systems. Like at movie theaters, video rental stores,
>CD/VHS/DVD software stores, TV retail stores, etc.. When I visit
>large prerecorded music stores - like Tower in NYC or a number of
>places in Chicago - I don't notice much advertising or anything
>in a way of an impressive demo, that entices me to listen to all
>of this music on a really nice system.
Primarily because the software and hardware side of the market don't see
themselves as complementary businesses...and ther market simply doesn't
demand it.
>The high-end industry as a whole strikes me as being one of the
>most passive industries going. I'm frequently enticed to purchase
>cars, vacations, computers, and even televisions. But unless I'm
>reading an audio-oriented publication, I rarely come in contact
>with high-end audio.
>
>Dana
You view can be extended into other aareas Dana. You have bought a
car..why haven't you changed the tyres, improved the stock suspension,
modified the exhaust ports, re-chipped it and improved the overall
performance of the car?...because this is exactly what the car industry
would be saying about people who buys cars and don't know how the
performance can be improved with the addition of a few small
(cables..)..oops sorry parts...
Why do we want to turn everyone who has an interest in movies into a HT
hobbyist? They will find their own comfort level - and it might not be
where we think they should find it.
Max Christoffersen
>Seems to me that you would want to attack at places where people
>are voluntarily identifying themselves as potential customers
>of nice HT systems. Like at movie theaters, video rental stores,
>CD/VHS/DVD software stores, TV retail stores, etc.. When I visit
>large prerecorded music stores - like Tower in NYC or a number of
>places in Chicago - I don't notice much advertising or anything
>in a way of an impressive demo, that entices me to listen to all
>of this music on a really nice system.
There is a real-world connection to all of this. Very few of us shut
our eyes at musical performances, and sometimes the visual part of
the performance is very significant to its emotional impact. Case in
point - our last hifi club meeting (last Saturday) was centerpieced
by two live performances.
The violinist was good, but to tell the truth, seeing him play was
merely interesting compared to listening to the fascinating and
expert sawing and dancing of his bow.
The soprano was something else. A big chunk of the total emotional
impact of her performance was her body language. Nahh, it was not
that she was gorgeous. Well, she was nice enough looking for a mother
of two, but Sports Illustrated swimsuit issue fodder she was not.
However, she was as much of an skilled actress as an excellent
vocalist. Not seeing her act while she was singing would be missing
half the performance, even though the vocal work was first rate. Miss
the visuals of her and you miss a lot of the emotional impact of her
performance. She's not unique.
Sooner or later the 2-channel forever, video-never bigots will have
to face up to the fact that total realism means engaging all the
senses that would be in play at a live performance. That means at
least sight and sound.
Yes, when I mentioned about the high-end better promoting itself, I didn't mean
for companies like Krell and Mark Levinson to "cheapen" their name or image by
competing in the budget sector with all of the mass-market brands. (I am well
aware of what happened to Technics and Marantz. I am not talking about the
same thing here.) When I talked about better promotion, I was thinking about
the people who want and can afford the "better things in life." Walk into a
Lexus dealership and ask all the customers there about what brands make the
best hi-fi. I guarantee you 9 out of 10 will say stuff like Sony, Kenwood, and
Bose. The high-end needs to reach out to the people who can afford and
appreciate the gear but are currently ignorant of them. I maintain that
promoting yourself to this "untapped-as-yet" market segment will not "cheapen"
or downgrade the image of a high-end brand.
Now will reaching out to this market mean millions of dollars of income to
mid-sized companies like say, Theta or ARC? Probably not. But it could mean
the difference between survival and extinction in an electronics market that is
constantly evolving and more than competitive than ever.
<< For example, one of my friends owns a 50" TV and a KLH surround sound
system. I was telling him about my trip to Hi-Fi'99 and listening to the
Dynaudio $85K/pr speakers - and that the total price of the Dynaudio/Mark
Levinson would run up towards $200K. He listened for a couple of minutes
and then asked "Okay, so it did sound good - but really, did it sound much
better than a $1000 complete system?" And he was serious. In his mind it
wasn't the old 80-20 rule, he thought that $1K should and does purchase
95% of the performance of a $200K system.
>>
What can I say? To some people, high-end audio is pointless. But he probably
has an expensive hobby that you could care less for. Just this morning, I
heard a radio commercial advertising a magazine devoted to collecting "vintage
farm equipment." You read it right! Now to a city boy like me whose closest
visit to a farm was an elementary school field trip to a Beatrice dairy farm, I
don't give a squat about a 1950s John Deere tractor. But other people
apparently do. I guess that is part of what makes a hobby a hobby.
<< Still, the high-end industry can do just fine with a very small share of
the US market. >>
And yet, that is what many high-end companies are failing to do for one reason
or another. We've already seen a number of companies go under or come close to
bankruptcy when the Asian economy went sour. There seems to be less high-end
brands than there were back in the go-go 1980s. Now maybe the recent thinning
of the high-end is part of a cycle that will play itself over again. Maybe it
will rebound when the Asian markets are more prosperous. But what if we are at
the start of a trend which will lead to irrevocable changes? Maybe what is
ailing the high-end is the fact that consumers have many more ways to spend
their dollars on electronic entertainment than there were in the 1970s or 80s.
Think about it. 20 years ago, multi-media PCs were still a pipe dream.
Aftermarket car-stereo products were a fringe industry. The bottom line is
that dollars that used to be spent on home audio systems are now being directed
elsewhere. And if this is, IN FACT, what is ailing the high-end, then we are
not looking at a cycle but we are on the precipe of permanent change.
>And if some high-end products were to be distrubuted to the mainstream
>through mainsteam dealerships the high-end fraternity would be the first
>to leap on the product saying it was never any good anyway.
This is why we have 'branding'. How many people are aware that Mark
Levinson is just a division of Harman International, and that
Harman-Kardon products probably have more engineering expertise thrown
at them than any ML product gets, due to the size of the market and
hence the profits?
Or indeed that Aston Martin and Jaguar are just divisions of Ford,
with the same sort of apportioning of R&D effort?
> This is why we have 'branding'. How many people are aware that Mark
> Levinson is just a division of Harman International, and that
> Harman-Kardon products probably have more engineering expertise thrown
> at them than any ML product gets, due to the size of the market and
> hence the profits?
I disagree here, Stewart. The concept of FLAGSHIPPING in retail is
extremely improtant. You think about the money that Ford spent in 1964-66
to win LeMans - it was an incredible expenditure of time money and
engineering that nowhere near justified winning three races - but it
probably sold a shitload of Mustangs.
The expenditure on the MLAS products far outstrips its mere sales because of
two factors -
(a) The flagshipping of Levinson Products by Harmon International helps sell
Proceed, Harmon, Citation, Lexicon, etc. Also, the engineering knowlege and
improvements gained will eventually trickle down into the less expensive
lines.
Cheers
Zip
Like Levinson is a part of Harman
What other high-end (if any) are divisions of larger corporations. Like
automotive, all things lead to ford or chrysler, does all audio lead
somewhere????
This would be an interesting post, please let us all know.
>There's something I'd like to hear about.
>
>Like Levinson is a part of Harman
>
>What other high-end (if any) are divisions of larger corporations. Like
>automotive, all things lead to ford or chrysler, does all audio lead
>somewhere????
>
>This would be an interesting post, please let us all know.
Revel is also a division of Harmon International
>>
>> > Or indeed that Aston Martin and Jaguar are just divisions of Ford,
>> > with the same sort of apportioning of R&D effort?
Jaguars are finally getting reliable too.
>> >
>> >
>> > --
>> >
>> > Stewart Pinkerton | Music is art, audio is engineering
>> >
~~~~~~~~~~~~~~~~
Gary Sanford
sanf...@ibm.net
>(a) The flagshipping of Levinson Products by Harmon International helps sell
>Proceed, Harmon, Citation, Lexicon, etc. Also, the engineering knowlege and
>improvements gained will eventually trickle down into the less expensive
>lines.
>
I am willing to bet that the vast majority of Harmon and
Citation customers don't know or care that the same
company makes gear with the Levinson label. Also,
useful "engineering knowledge" is much more likely
to trickle to the Levinson-badged boxes, rather than
the other way around (marketing is an entirely different
story).
greg pavlov
> Alan Dana wrote:
> >>They've just got to find ways to expand it from the
> present. I agree that getting better products into mass market channels
> would be a step in the right direction.
> >>
>
> Yes, but maybe more than just a way to expand. Maybe it is the only way to
> survival.
And Home Theater may well be the vehicle that can do this.
It my impression that many people who are not inclined to spend money
on an audio-only system, are enticed into recreating the cinema
experience in their homes. Look at how many $1500 & up large screen
TVs are being sold. This is a primary target audience for high-end
audio.
Now many of them will be satisfied with some boom & sizzle speaker
systems, but I feel a lot of them would be willing to consider
dropping some dollars on a sound system that really impresses.
A good friend of mine has been in the audio retail business for
over 30 years. About 5 years ago, he converted 80% of his business
over to home theater - and discontinued some of his high-end lines
that weren't yet offering HT products. Sales at his dealership
have dramatically grown since that time - he's doing over twice
the business he was doing before as an audio-only store. But he
had to get out and re-create (via advertising) the public image
of his establishment. For the first time in his life, he's actually
making some real money from his business.
So an alternative growth path to using mass-market channels is
for existing audio stores to do more mass-market advertising as
HT specialists. And for high-end companies to focus their
media advertising into magazines, newspapers, and web pages
that reach wide audiences - or at least audiences that include
a larger share of the potential HT market.
Clearly this is already happening. Look at how Stereophile,
The Absolute Sound, and Stereo Review have released HT-specific
publications. However this is still a passive approach in that
they hope those people who browse magazine racks will notice
their bold banners and pay $5-$8 for a single issue.
Seems to me that you would want to attack at places where people
are voluntarily identifying themselves as potential customers
of nice HT systems. Like at movie theaters, video rental stores,
CD/VHS/DVD software stores, TV retail stores, etc.. When I visit
large prerecorded music stores - like Tower in NYC or a number of
places in Chicago - I don't notice much advertising or anything
in a way of an impressive demo, that entices me to listen to all
of this music on a really nice system.
The high-end industry as a whole strikes me as being one of the