"The Law of Diminishing Returns"???

I have been told my some, that any components, amps, pre-amps over $1000, the improvements are very very small. Are we better off just tweaking our audio systems or getting better components? What would get you more for your money?..............Richard
The asking price for most new high end gear is absolutely ridiculous. Then again, if one was to introduce a reasonably priced product that was truly excellent, it wouldn't get the respect that it deserved because it was "too cheap". Folks might say "it offers great bang for the buck" but never really think of it as being "world class" simply because of the low price. Price equates to reputation, status and prestige and reputation, status and prestige are what much of "high end" sales are based on.

Having said that, finding individual components on the used market that you really like and then upgrading some of the internal parts can produce stunning results. The cost for this can be quite reasonable if one is willing to get their hands dirty rather than paying someone else to do the work & order the parts. Even most gear that is VERY expensive will benefit from such an approach. Sean
im not sure how accurate that theory is, ive had gear that cost very little sound great & at the same time gear that costs a bundle sound like a turd dropping off & vice versa.

with me its been more of which peices work well together & compliment each other.

i think that matching components is more important than the cost factor weather high dollar or ecnomy.

Everybody has their own point where spending more money makes little sense. For most audiophile that point would be greater than $1,000/component. Truly great sounding systems can be assembled for $7k, but if you want state of the art sound you would have to spend more than $50k. Where you are on the spectrum is your personal choice. It's like driving on an interstate, those driving slower than you are road blocks and those driving faster are maniacs.
It's also what you like to hear in music and what you buy. You may find a $1,000.00 DAC that produces wonderful music but I can't think of an amp at the price which will do the same. Same for pre-amp and speakers. However, there is no "break-off" point at which differences become miniscule. I went from $1,500.00 speakers 7 years ago to $5,000.00 ones. The new ones were not 3.5 times better but the improvement was so meaningful that there was no question. Same thing for going from $3,600.00 amp to $6,500.00 one. Difference was more than worth it. However, I have gone from an $8,200.00 pre-amp to $1,500.00 passive and was happier with the passive. I've just now gone from the passive to a $5,250.00 pre which is musically better so easily worth it.
"that any components, amps, pre-amps over $1000, the improvements are very very small"

This is not true... unless you ask my wife! If you do critical listening as most of us do, I think you'll find there is quite a big difference in components over $1000. There are hundreds of components out there from different manufactures who sound very very good, however they just sound "different". (Such as tubes vs. solid state, and box speakers vs. planers.) Tweaking a component is (usually) a low cost alternative to upgrading the sound, however, don't think that buying equipment over $1,000 will yield little improvements.
The point where you are satisfied is the point of diminishing return.
I have $200 speakers (my used price) connected to a $1,800 amp, a $1,500 pre, with cables that cost more each than the speakers!. I am satisfied.
Sean is correct. If you know which parts make the biggest difference in the sonics of each component, the upgrade path can produce excellent results at a cost savings. Too many of the mods that I have seen while being very good, cost too much and more parts are used in not critical areaas then there has to be, running up the cost. System matching also pays a key role in obtaining good sound. That being said, in my recent expereince and what has already been covered in many threads, room treatment and AC conditioning plays an even bigger part of getting your system to sound better. My local tech and audio designer has designed some capaciotrs to install on each of my dedicated lines and the system improved a ton. He also designs resonable priced cables and isoaltion devices that compete head on to the big buck items and I have been installing them to a much greater effect then when I had the higher priced gear. I am now wondering what that gear would sound like with what I have done to my system now. I also think that there ar too many reviews of equipment on Agon that are really usless unless the AC and room is up to speed. I am hearing differences in cables, cords, equipment that were only minor before. Not that I think the more you pay for an item the better it is, it comes down to the quality of the design and how it is implementeed. My tech guy has a modified Pioneer PD-65 that is an eye opener for what Sean has already stated above. It killed a few higher priced CDPs we comaprd it to. Same with his ICs, power cords and isoaltion devices. Most designs seem to only address one aspect of the problem. If you look at the different manufacturers, they all have very good ideas but it just seems like they have never put them all together in one cord, cable or device. You have to go up the ladder in price to get what you needed in the first place. Isn't funny how cables and cords are costing more then your components. Wire does not cost that much and most people are trying to use wire as a tone control to obtain the sonic picture they are looking for. It is better to begin by treating your AC, room and component vibration first and then selecting your components, cables, wires, etc.

Happy Listening (my two cents).
Sean is correct this time.
I agree entirely with Elizabeth. In my listening experience, spending more does not necessarily lead to being more gratified with the sound, despite the fact that as others have mentioned you will notice significant differences in higher priced components. Rather, it's about the synergy of the components, and even more important, about the components' synergy with you.
Instead of expounding on what's been said, which I believe all have their merits, let me just give you another example of what can work together.

I have a $9k amp and a $150.00 passive. Yes, those are the NIB prices. I'm on a preamp quest but haven't found anything yet that knocks my socks off, so I continue to use the little passive.

It really is all about synergy.
There is some truth to what you claim. Certianly, the cosmetics seems to be a big factor when the price is above $2K or $3K when it comes to amps. This is why I concentrate on Parasound, Plinius etc.., because they are a good value at their price-points and the manufacturer has not put exhorbitant monies into cosmetics. The guts is what counts in my book.
Forget the pricing. As Driver says, it is all about synergy - between your components as well as between your stereo and your ears. The ones hung up on cost can have it. Experimenting will yield far greater results than going by pricing hierarchy. Arthur
I do believe that synergy is very important in audio equipment and it is not all about price, however I think the original poster is trying to find out that once you get over $1,000 are the improvements very very small? And the answer is no.
Interesting thread. Everyone has made valid points already, I'll just add my two cents.

In my opinion, with this hobby there is no absolute. There are too many opinions, theories and variables to think otherwise. One reviewer gets blasted for treating his room for a more "accurate" presentation of the equipment while another gets blasted for being honest about existing room modes. One cable manufacturer says anything other than silver is junk while another makes outrageous claims about copper. Some think DIY'ers are cheapskates while others think its the only way to get it done right. One thing we must do in this hobby is decipher or filter through all the information, specs, reviews...and forums...we can't seem to peel our eyes away from, and get out and make our own decisions and conclusions. Do your own experiments, its fun and you'll learn alot about the gear and yourself. At least get out and see if your own opinions align with anyone elses.

Diminishing returns, of course. But the point where cost versus performance starts to dimish is different for everyone. Its different between components as well. There is always the point where it will cost X amount of dollars for a component to cover all the bases...at least the ones important to you. After that its up to you to assess the worth.
Your right, synergy is important but I really think our rooms are the most important thing of all........I think that room treatment and Isolation devises will get you more for your money than just getting better components alone.....Do you agree or not?........Richard
Sean hit the nail on this one and I will give an example which I think is germaine to the issue. Kevin Carter of K&K Audio (who has also designed for VAC and Art Audio), developed an extremely nice tube 6n1p-based tube phono stage through his work on the Art Audio Vinyl Reference. In his own company, he offered his phono stage as a kit (around, or as a pre-built piece. Just about every one I've heard that has tried one is WAY more than satisfied (I have said before that I think it is the equal of stages upwards of $4K). He now offers a linestage (Mood Indigo) that goes for about $1,700. By all accounts it is just a fabulous piece, but has not sold particularly well. One reason is that K&K is a small word-of-mouth concern without big time promotional or distributing budgets. Another was revealed in a conversation I had with Kevin who said he has found that that the price is too steep for some DIY'ers (kit) and too low for "high-end" audiophiles to take it seriously (pre-built). Sad. Maybe he should put a $5,000 price tag on it and market it like it is the next best thing since sliced bread. To his credit, he hasn't.

I am beginning to appreciate that much of the fun in this hobby can be had by finding such designers and equipment, though. For me, it leaves more dough for MUSIC, since my pockets are less deep than many here.
I think that the Law of Diminishing Returns really does exist, but the problem is perpetuated by the manufacturers themselves. I'm convinced that many manufacturers make a new component(as a prototype initially) then assign a value to it based on it's sonic standing amongst competitors products. So if a component is manufactured that has a potentially low retail price, and is astonishingly good for the money, then the public rarely gets the benefit of it, because the manufacturer jacks up the price so it sits nicely alongside competitors products in a similar price range. I believe this is rife in the cable manufacturing industry, where exorbitant prices are charged for cables with an apparant low material cost. Then when the pricing is questioned, we are given the usual "high cost of development' speil.

So basically, the standard could be a lot higher, for a lot less, and the point at which the laws of diminishing returns come into play could be at a much lower price level, if the manufacturers were brought to task over their peer driven pricing policies.

It's funny that this happens unabated in the high end audio industry, and the buying public rarely questions it.

I just bought a Toshiba unit that plays Video DVD's, CD's and various other discs. It has Dolby Pro and a built in 192khz 24 bit upsampler. It sounds remarkably good against my $5000 CD front end. I paid $59.00 for it, brand new from Best Buy. Now you tell me that the high end manufacturers are not 'price fixing'.

It is partially true unfortunatly, the breaking point moves left or roght depending on your room size, musical preference and .. yes.. disposable income.

It's an exponential curve. I've always felt that--and it's true in most things. Everything from houses to cars. You can get a really good performance car reasonable--the Subaru WXsi (think that's the right model number). It's a 5 second car. You can get a really really good sports car for double that. And then you can get some incredible exotic for $100k+ and a McLauren for about 4 times that.

Luxury homes are the same way. $ per square foot goes up dramatically for better everything--but by how much.

Audio is no different, it's a luxury, and it's a combination of what Elizabeth said and to some degree what you want. Some people want a certain look and ergonomics even though they know it may not sound is good dollar for dollar.

What's my personal take on it all? You reach the point of dimenshing returns very fast if you haven't dealt with room acoustics. Of course, that's my own admitedly biased opinion--but I do think it's very true. Once acoustics are dealt with, it's amazing how modest upgrades can make a much more significant difference.

Now, here's a story that I hope you get some entertainment out of. I didn't--and you'll see why. We demoed a PARC unit for a potential customer (one of my dealers actually). As you may know the PARC goes between the amp and pre-amp and thus requires an extra interconnect. In this clients home the bass peaks were a real problem, around 10 db at one point. So the PARC made everything sound so much better it wasn't even close. But the client decided not to buy the PARC at this time, because he didn't want to spend another $11,000 on that extra set of interconnects. I could have put in some really nice $1k interconnects on both ends added the PARC, had far better overall sound, sold the other interconnects and possibly made change--go figure.
We just moved one of our systems from one room into another. If it had started out in the latter room, we would have surely traded out components and cables in order to 'get it right'. Only because we've already heard the system in the first room do we know that it works for us, because right now in room #2 it sounds mediocre at best. So yes, Rpatrick, the room treatment is crucial. I've been in several listening rooms in which the treatment simply negated the effects of the room, and the speakers which were seven feet from me sounded almost like headphones. No joke.

Also, Magnepanmike is absolutely right that the improvements up the audio cost ladder are often huge. However, the question is always "Does that work with the other components toward the end goal of meeting MY standards of satisfaction?" Everyone seems to agree that spending more often gets you more, but is it necessarily more of what YOU want? I've literally gone from one opinion extreme to another after doing something as simple as swapping out interconnects. And the component I was deciding whether or not to keep were the speakers, not the interconnects.
Hopefully, all of these responses have answered your initial question.
All the best,
The law of doubling!
My own personal belief is that when one wants to upgrade a component, if the new list price is DOUBLE that of the existing piece, there will be a noticeable sonic improvement.

Now for the caveats! Synergy is the most important factor, as many have previously said. What type of sound do you want? Slam and bass punch? Midrange to die for? Sound-stage and holographic presentation? Treble response clean, effortless and "to the moon"? Do you like to "crank it up", with a bass response to a TRUE 20 Hz (in this later case, room tuning is mandatory!)

Advertising budget! Big corporations that spend "beaucoup dollars" on multi-paged magazine ad buys, and having an intertwined corporate structure (Harmen, for example), will have a unit cost that can be MUCH greater than a small company that has "word of mouth" advertising performed by satisfied customers.

Cosmetic beauty! I'm using Atma-sphere equipment (Ralph Karsten era), which looks more at home in a studio, radio station, or on the road as P.A. gear. But oh, what super sound for such a reasonable price! Laser etched bead-blasted heat-sinks and chassis, mirror polished tube cages, exotic woods (speakers), gold silk-screened lettering and other beautiful design applications can rocket the list price, while doing nothing for the actual sonic performance of the piece!

Do your research! If you are planning on spending a "king's ransom" on audio gear, you should consider a trip to Las Vegas in January for the C.E.S./THE Show. The knowledge gained could save you a considerable sum, and there are show specials and demo units for sale as well!
I see everyone here agreeing with sean, but i gotta say he is totally wrong.
Sean, get yer head out of yer butt. ;)

The correct forumla is...

N = price of new gear
O = price of old gear
G = total price of current gear minus N and O
I = Slappys IQ after a 6 pack of Sawtooth Ale

N x 3.2(G + O)
-------------- + I(G-N+O) = Improvement per slappy.
G + NIO(6.326/I)



Now we can lay this thread to rest.

As an economist i would say that first you would need do is to derive your personal production function. Where the thing being produced is good sound which can then be translated into utitity or personal happiness. this would be a weighted function with some variables or maybe in this case just one variable, cost. thus making good sound a function of cost, this is assuming that all components have the same cost to quality of sound ratio. if the sum of the weights of the function is greater than one, then you are experiencing incresing returns to cost. if the = to 1 then constant returns to cost, if less than one diminshing returns to cost. Here are some interesting links to items of interest

I think the same thing is true about audio addiction as the thing I observed with some of my friends dependence on weekly sessions with their shrinks, "Everyone is as crazy as they can afford to be."
Used Gear:
Passive Preamps: $1000
Active Preamps: $3000
SS amps: $3500
PP Tube amps: $3500
SET amps: $3000
Monitor speakers: $2500
Floor Standing Speakers: $3500
Planar Speakers: $5000
Cables: $300
Interconnects: $100
"Shitaki" stones :$1.00 each

New Gear:
Add 40% to 60% to the above numbers!

take care & good luck!
I nominate Slappy as Audiogon "Jester in house". He's too entertaining to go without recognition.

Any backers?
My experience has been somewhat different. I should mention that I believe there are exactly 6 ingredients that make for outstanding sonics:

1. A certain caliber of equipment including a full range pair of speakers. Certainly need not be expensive.

2. Properly addressing the electrical AC via dedicated circuits/lines, cryo-treating, grounding (or not), etc., and line-conditioning.

3. Properly addressing (at the components, rack, and speakers) the air-borne and floor-borne vibrations captured by the components as well as any internally generated resonance.

4. Speaker placement.

5. Finding the right amplifier.

6. Selection of ics and speaker cables.

And yes, I realize that room acoustics is not in this list as I believe speaker placement can cover a multitude of room deficiencies.

Now with that said, I believe that each of these categories when properly addressed (whatever that means), can make nearly every subsequent and appropriate tweak or upgrade potentially produce some fantastic improvements.

I know others talk about diminishing returns, but I think it's just the opposite. Each of the categories I list above represents potentially serious to very serious performance bottlenecks in any system.

Eliminating just one of those 6 bottlenecks often times can make a night and day difference. Eliminate most/all of those bottlenecks, and you've got a musical presentation that is perhaps unlike most any other system (regardless of MSRP) so long as that other system falls short in one or more of the above categories.

At the very least, without properly addressing each of these categories, it is perhaps impossible to realize a system's full potential no matter how much one spends on upgrades.

I guess what I'm trying to say, Rpatrick, is that if per chance your friend(s) had a well-heeled system that properly addressed all (or improperly addressed most/all) of these 6 categories, and one good component is subsequently swapped out for another, then what your friends have been telling you is probably fairly accurate.

My take is a bit different. First, I think the most important thing si to get the best possible source - and an ic which allows it to transmit its sonic might to the amplifier. Second, is the right loudspeaker, whose sonic signature and size fits best to your music taste and the room you plan to put into. Than come the amplifier, which is able to drive that speaker and a right speaker cable. Finally you tune the system with right ac treatment gears, power cables, isolation devices, and acoustic treatments. If you reach a kind of synergy whic you like, when all is at place - comes the issue whether any change would really represent a diminishing return. But than, when you put everything in place, you thought you have found the sonic nirvana at home - comes an outstanding gear which you just take home for audition - and that shows the weaknesses of your system . and you begin again the system upgrade process until you dont reach the new synergy - at a higher level. And than ...
Some musing about this thread...

An interesting article (The Tyranny of Choice) in the latest Scientific American Mind brings a different twist to this question. The author, Barry Schwartz, suggests that there are two categories of people with respect to their perception of their options. "Maximizers" are those who those who always aim to make the best possible choice. "Satisficers" are those who aim for "good enough." Maximizers tend to make the most product comparisons - both before and after product purchase, and they take longer to purchase. When satisficers find an item that meets their standards, they stop looking. Maximizers exert enormous effort to checking out consumer information resources and trying new products. They also spend more time comparing their purchases with others. Schwartz indicated that his research indicated that maximizers tend to be less satisfied and less happy.

To make a guess, Elizabeth would likely fall within the category of "satisficers" - note her last comment - ‘I am satisfied." It would also be safe to guess that she is very happy with her system, but may occasionally change a piece if it breaks. Those of us who are "maximizers" are never truly happy (with our system). As Schwartz's article suggests, too much choice may lead to unhappiness, and there is plenty of choice in the hi fi world. This choice is expanded by the Internet and forums such as Audiogon.

The industry and our own beliefs lead to high expectations about stereo equipment. This, I believe, leads us to pay the high prices in our search for the holy grail. One ad on Audiogon states, "Go on, want the best, make me an offer before someone else beats you too it." Many manufactures make claims about being the "best", and I've had many salespersons extol the virtues of their product and chastise other products. On manufacture states on their web site: "The XXXX is one of the best five amplifiers in the world regardless of price." This ad is designed to kick maximizers in the teeth. Schwartz suggests, "High expectations almost always guarantee that experiences will fall short, especially for maximizers...", and there seems to be an expectation that spending more will meet our expectations. However, in a world of diminishing returns and stereo equipment that, by it's nature, falls less than perfect, will anything actually satisfy a "maximizer". As many on this thread have commented, increasing money spent for equipment brings diminishing return, and the quest for the best might also equate with diminishing happiness.

Boas said, "...spending more does not necessarily lead to being more gratified with the sound, despite the fact that as others have mentioned you will notice significant differences in higher priced components. Rather, it's about the synergy of the components, and even more important, about the components' synergy with you." I believe that Boas2 is right on with his statement. Synergy means... "the interaction of two or more agents or forces so that their combined effect is greater than the sum of their individual effects." This suggests that the listener must also be willing and able to be satisfied, which is a difficult thing to do for those obsessed with perfection, as Ajhau's contribution to this thread would attest. I believe that examining and quelling our own desires and expectations about stereo equipment is the only way to avoid the trap of diminishing returns and diminishing happiness. Perhaps, we need to consider tweeking ourselves as part of the changes to our system to develop better synergy.

I think you have nailed it.

Now, how do we tweak ourselves?

I know wine helps, but I am trying to avoid becoming an audio alcoholic!

Anyway, I am very intrested in reading the entire article.
Can you let me know wich issue it is in?

Loudandclear, you ask, how do we tweak ourselves? you smoke some good "WEED"........Richard
So slappy,how many beers in a six-pack again.

For me,the best value for money spent happens at what would define as mid-fi.

That is a trick question. it depend son how long the six pack has been in my evil clutches. LOL
Slappy, I've heard tell that you're a few cans short of a 6 pack :-)
Not short, just guzzled. They all end up in the same place eventually. Flushed away.
Hey Slappy, do you think my "Freezer Tweak" would improve those Diminishing Returns just little???.........Richard
Slappy, Are you going to stand for FatParrot's gossip about you?

((While Slappy is thinking about that,I take one of his beers---speaking of something diminished.))
Where's Slappy at? He's not going to have any beer left after I have one.........."Slappy".......we need more beer!...............Richard
Maybe this will help those Diminishing Returns........ http://forum.audiogon.com/cgi-bin/fr.pl?aamps&1103489890&3&4&
Talk is Cheap!........Trying my "Freezer Tweak" will make a BELIEVER out of you!!!.........This the best way I can say it!
Sometimes the law of diminishing returns has more to do with ones obsession rather than a certain price piont. I never thought that a 700.00 i/c would be bettered by a 1500.00 in a monetary sense, but after hearing the rightness of it. The 1500.00 i/c looks like a bargain in terms of musicality not to mention the high investment cost already attained.Can you live without the 1500.00 cord?? My answer is no because I've heard the sound difference and would feel slighted by the cheaper i/c. It is like that first grilfriend that one never really forgets!! All the best of holiday cheer everyone-Dennis
I can agree with Sean about modding components but does anyone here know how to do this? I would like to mod my Denon UD-M31 mini-system? I've asked at everysite I know with no responses.
Short of reading a bunch of books on power amp design, power supply design, we're pretty much stuck with what industry has to offer.
Cdc: It helps to have background in electronics when doing mods, otherwise one ends up spending time and money that they don't have to when working blindly. By working blindly, i'm talking about people simply pulling existing caps, diodes, etc... and replacing them all with higher grade parts of equivalent ratings. While that method surely works, it is both more time consuming and less cost efficient than being able to read a schematic and picking / choosing what parts would be the most critical in terms of upgrading. There are folks that i know that have done that though and literally replaced all of the caps and diodes in a device. While they were quite happy with the results, i'm sure that they could have achieved similar results for measurably less money. Sean
Thanks Sean. Upgrading components is a good place to start. I liked your past ideas about ISO transformer but I think of:
1) better power supply / larger e-core transformer to replace torroidial. Naim and Cyrus both do this to upgrade their amps.
2) better shielding and placement of components.
3) better filtering caps. Maybe a bunch of smaller ones instead of a couple bigger ones. Again, more power and cleaner power.
Probably only an experienced EE could just open a component and see where the designer cut costs.
This will help those Diminishing Returns.....QuickSilver contact enhancer!!!.......WWW.XTREMEAV.COM
I would like to tell you all more about the QuickSilver contact enhancer, its been breaking-in now for about a week now. On Audio.....I am hearing a deeper tighter and more extened bass and the noise floor has lowered a lot now....I am hearing things now that was covered-up before! The highs are more extened and sweeter now and the midrange is more transparent and its just amazing it just blossoms now! I also hearing more air around the voices and Instruments and the soundstage is much more 3-Dimensional....broader....deeper! On Video......I noticed better definition and the contrast is a lot higher now and the colors look much more real looking. The picture now looks more sharper and cleaner and the depth of field and resolution just amazed me!! QuickSilver opens a window into a new level of Visual and Listening pleasure!! Give this stuff a try and see what you think.......Brain is a very nice person to deal with too..... www.xtremeAV.com
Don't Overlook the Room

This is a great thread.

Here's my take, as a guy who has been into hifi for 30 years.

In my earlier (college) days I sold hifi, so I could get the saleman's accomodation price (half off) on a lot of good gear. I'd buy at half off and sell it at 75% of list and keep on moving up until I was way beyond what most college students could afford. If TAS (The Absolute Sound) recommended it and it was made by Audio Research (which I still love) or if it was something generally regarded as world-class, I was lusting after it if not listening to it.

Then, like a lot of folks, a career, computer technology, a wife, and then a family took my attention.

Fast forward to about 2.5 years ago and I discovered eBay. As a computer guy I knew all about eBay the business model, but I didn't really understand what was out there. One day I found that all the old stuff I loved even before I discovered ARC SP3A-1s and D76As in the 1970s, like Marantz and Sony receivers, and Advent speakers, and Phase Linear 400s, and Dynaco PAT-5s, etc, etc. was all out there just waiting for a bid. The next thing you know, I'm pretty much where I left off in the 1970s; all good stuff, but it's still not quite providing the sound I'm shooting for. So what the heck, back in those days I had to work the wheel and deal of the salesman's special to get the gear I wanted. Now, if I don't mind eroding the nest egg, I can afford a little more. And besides, technology has improved, not by as much as you would expect over 30 years, and not by anything resembling the continuous huge compounding effect of computing's Moore's law, but it has improved at least for selective gear here and there.

So, I start upgrading, to the latest and greatest in amps, preamps, cartridges, and finally speakers. Next thing you know, I've got way more invested in gear than any thing you could imagine in 1970s dollars, and probably more than most people would imagine in 2005 dollars. I have a hifi friend who says he never tells his non-hifi friends how much he has invested in his system because they would think he is just plain nuts. And this isn't just a phenomenon for affluent hifi-ers, it seems to be the case for all sorts of hifi-ers. I think there are plenty of us guys who don't have much of a retiremnent plan but who have or had a decent system.

Well, what do you get for all this? In addition to spending some $, you get a fairly staggering investment of time. Getting the last 20% of sound not only requires an 80% or better increase in financial investment, it takes a lot of time and effort. It also takes up some space. It's pretty hard to make all the fine tunes without dedicating a room to hifi.

And then it hits you. You just can't get from here to there in most rooms. You've thought for 30 years that you just intuitively known where to place your speakers, but then you trip across the Cardas formula on the Web. You place your speakers in the recommended locations and as good as your side to side and front to back imaging was, it get's better. In fact, it kind of snaps into a whole new level of focus. So, you start studying room dimensions and you find out that the ideal room is a subject of lots of discussion if not debate. It turns out that there are is probably a minimum size and very likely an optimum ratio of room width, length, and ceiling height. Further, the ideal room is not a rectangle - it's shaped more like a quasi pizza pie, or more likely a concert hall with walls that run on a diagonal and a ceiling that is sloped. And by the way, bass traps, and a half dozen other acoustic treatments are a good idea. And don't forget the AC system with the dedicated 20 amp (or better) circuits. And even if you are a do-it-yourselfer, and you are willing to spend the time and money on specturm analyzers, microphones, software programs, and other tools, you probably don't have a degree in acoustical engineering so you will probably have to hire one, along with a contractor or two. In fact, what you discover is that even though your gear would make almost anyone on Agon or Aasylum envious, it's probably only performing at a fraction of it's potential unless you get the room right - which you might get by happenstance if you are win-the-lottery lucky, but otherwise you won't get it unless you spend about as much on the room as you spend on the gear.

So, yes, there is a point of diminishing returns.

I'd say there are two inflection points on the curve of investment and sonic return. One is somewhere around a Thorens turntable, a good size Marantz reciever, and a pair of Large Advents. Another inflection point is somehwere around a Linn SP-12, an Audio Research SP3A1 and a D-70MkII and a pair of Dahlquist DQ-10s or Yamaha NS-1000s. (If you have other gear that you prefer, fine, but the total cost will probably come about the same as one of those two systems.) After that you are headed for a $10k system going on a $hundred k system.

After the first two inflection points, you have hit the law of diminishing returns if you don't (by luck or by design) get your gear set up in a great room. Without the room being right, you are going to find that a dollar more invested in the room won't give you more than a few cents of improved sonics back in return.

I'm not saying the journey isn't worth taking; it's a great hobby, but don't overlook the cost or sonic importance of the room. If you're prepared to make a great room and spend the money and time to get it all dialed-in, go for it - the final result will be something you will enjoy in terms of music and project satisfaction. If you aren't ready to get the room fixed, think twice about going much past the first, second, or certainly the third inflection point because the law of diminishing returns will hit you noticeably harder at each inflection point.
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