The Hub: Here's some GOOD NEWS from the audio biz


The darkest hour is just before the dawn. Just around the corner, there's a rainbow in the sky. Such aphorisms were used during the Great Depression to either encourage the public or delude it, depending on your degree of cynicism.

Well, here's an aphorism for the new-millenial recession: So what if times are tough? We're gonna find a way to make it anyway!

The audio marketplace has changed dramatically in the past few decades. When times are tough, there is a tendency to focus on those changes we view as negative: stores closed, familiar names gone, a lack of interest from the younger generation.

But there have been at least as many changes in the audio marketplace that are not just positive, but nearly beyond belief to audiophiles and music-lovers of a certain age. Back in the early '70's, believe it or not, the most-reliable conduit of information on new and exciting audio gear was tiny black-and-white classified ads in the back of Audio magazine. Stereophile, The Absolute Sound? They were published sporadically, if at all.

If you wanted product info, it usually meant writing a letter. Getting an answer might take weeks, if the company were polite enough to respond; many were not. Curious about the experience of others with a product, a manufacturer's history or product resale value? Good luck: there were no Forums or Bluebook. Want a record they don't have at the local store? Get out the Schwann catalog, and wait weeks after the store orders it, if they're obliging; write a letter and wait even longer, if they're not.

Let's face it: we're spoiled. Today, in a matter of seconds, we can find out about a piece of gear, see it, learn where it's available, read reviews of it, maybe buy it. Music? Nearly every band or orchestra has a website with enough information to satisfy the most obsessive fan, videos of live performances, sources for discs or downloads. Reviews or criticism? How many music sites and blogs are there? A million, literally?

Really: spoiled. Music-lovers and audiophiles today have an embarrassment of riches. Be grateful for what we have available to us.

While we've had some rough times, the audio marketplace is adapting, correcting itself. News from most dealers and manufacturers indicates increasing levels of sales, at a more consistent level than the up-and-down spikes and troughs of the last few years. Many markets avoided the drastic upheavals of the US market, and whole new areas of the world are opening up as strong markets for quality audio gear.

If those aren't enough causes for celebration, there are probably more genuinely good-sounding moderately-priced audio products than at any time in history. Feel free to cheer. Really.

Audio writer/blogger Steve Guttenberg writes, "The most promising trend is the number of great sounding affordable products on the scene. My blog today covers under $1,000 speakers, for example. I think vinyl's continuing comeback is a good sign, and the remarkable growth in high-end headphones is impressive."

Retailers, distributors and manufacturers today must focus on differentiation, creating reasons for a customer to come to them, specifically, rather than another store or brand. Those who are doing that, are succeeding.

"We're up this year, and store traffic is steady," says Larry Marcus of Ann Arbor, Michigan's Paragon Sight and Sound. "People have learned that they can't decide on a product in 10 or 15 minutes. We have to make products available in the home without the customer getting killed if it doesn't work out."

Distributor Charlie Harrison of USA Tube Audio/Ayon Audio says, "We're on the upswing, we're adding new lines, we have absolutely no complaints."

US manufacturers are actively working to enter the new markets opening up around the world. When Grant Samuelson of Shunyata Research talks about being in the west and east, he's not talking about Colorado and Connecticut. He was stuck in Moscow--Russia, not Idaho-- for a week following the Icelandic eruption.

"Few have any idea what is really going on out there," says Grant. "I do, having been West, East and back again this summer. No one I talk to is throwing in the towel, and all remain positive in their outlook. It is tough out there, but good people and businesses remain proactive and look at improving the positives and letting go of what you cannot control."

Similarly, David Schultz of Transparent Cable is traveling to newly-opened markets, and finds them to be booming.

"I’m at a show in Vietnam right now," writes David. "A large distributor has sixty dealers attending the show. Next stop is Vientiane, Laos, for dealer training.

"The two channel and home theater business is flourishing in the following countries: Singapore, Malaysia, Vietnam, Indonesia, Laos, Hong Kong, Taiwan , South, Korea, South America (mainly Brazil).
India is slowly growing and will be a powerhouse in about three years.
Japan is still struggling, but doing well."

We have new markets, new resolve, and as Anssi Hyvonen of Finnish loudspeaker company Amphion emphatically points out, new opportunities:

"The highend industry has bitched and moaned about iPod and mp3s, but iPods could be the great Trojan horse, the way we get people excited about quality again," writes Anssi. "The hard-disc space is cheap, and transmission speeds such that we do not need compression anymore. What is there to complain about? Now we just need to create systems that people can relate to, play some real music and get them excited about quality. It took me one weekend to lure my 10, 12 and 14 years olds into better sound, once I found a correct approach."

In a future entry of The Hub, we'll explore what that "correct approach" might entail.

Yes, the audio industry is different from what it used to be. In many ways, it's better. While old-timers (present company included) obsess over the differences, newbies are discovering the joys of walking around with a thousand songs in their pockets, openly exploring streaming music and servers, even discovering vinyl.

Let's look at the incredible opportunities in the audio world --and it is truly a world, not merely a national, industry -- and learn, adapt, and grow. We went over the top with the doom and gloom; we admit it. Our bad.

So, we go forward with new rules, and a strong, new aphorism.

Here are the rules: no more whining, backbiting, dissing or dismissing. You've got something to say? Great: focus on the good stuff, the possibilities, the POTENTIAL. No mourning, no moaning. Seriously.

And here's the new aphorism:
SCREW the economy, we're gonna have fun!
audiogon_bill
@Decibelcat: I've worked on projects that have been featured in AD and other architectural/design publications. People who spend the energy and money to have well designed homes don't want technology showing. I spend most of my time on projects making sure things are "out of sight". The technical aspect is easy, it's the "integration" that takes a lot of work.
About a year ago, my favorite local dealer told me that his business was booming surprisingly in direct contrast to the economy.

His shop carries only good sounding gear at various price points. Most of what he sells offers excellent value. His overhead is low, being open mainly on weekends. He has never steered me wrong over the course of many years.

That's a good combo that appears to be working.
Why aren't they buying the knockoffs coming from that area?
Everytime I try to sell something here on Agon, I have 3 people from Asia asking me to ship to them.
It has exploded over there, and they want all the US stuff for sure.
Not only audio, but clothes, shoes, cars, computers, and audio for sure.
These facts have been known for the last 10 yrs.
Its just that it was underestimated as to their interest.
Companies are actually understaffed to compensate for the demand.
Its the largest market in the world, period.
The US looks like a pea in a pile of grapefruits compared to their markets.
I worked for Whirlpool for 16 yrs, and a friend of mine was sent to Asia as a manager for their market.
He told me they were extremely unprepared for the market value of our (US) products.
Rumour has it, thats why Whirlpool invested heavily in Mexican production to keep up with the demand.
Every company is unprepared for such a market!
Billions, upon Billions of consumers, everyone clammering for US made products.
If Sam Walton was alive now, and still believed in US made products, he would have surpassed Bill Gates long ago as the richest man in the world.
Bill would be on food stamps compared to Sam.
If you think about it, if we did not move most of our operations, and production over to China, they would not be able to afford our products!
Not that I am happy about that, but I think in the long run me may get 60% of our investment back in this lifetime.
The next generation may reap the harvest for sure.
Me, I am to old, I am breathing heavy from typing this!
For the most part I am in agreement with Audiogon Bill. Screw it lets have some fun. Yes the previous threads were enlightening to where we have been and the ills of the audio industry. Not the first time that the economy and other factors have dealt a blow to this hobby/business nor wiill this downturn be the last we will see. It is just that this one is deeper and more profound than those of years ago.

I would not have stayed in this hobby for 53 years if I did not enjoy what this brings to me each day. Oh I do remember the good ole days as Bill pointed out with having to order records you wanted and write actual letters and mail them for information, that I do not miss at all. Yes the internet for all it is, has brought forth very many positives we could only dream of 30 years ago or so.

But with all things being equal, the cream always comes to the surface. Yes things will change, that is a given, some of us will embrace the new direction, while others will remain steadfast in the past. I have always chosen to move forward. While the dealers and maufacturers may be on life support, those that have strength will imerge stronger than ever. I am optimistic about the future of this hobby/business and I believe in some areas we will soon see some very major breakthroughs in speaker design, digital delivery and amplifier technology. Lets face it Pass Labs, Spectral, FM Acoustics are not sitting idly by, no doubt their R&D departments are exploring breakthrough designs as I write this. In a couple of years we could look back on this as a blip on the radar and all made changes to deal with it.
Mac: agreed, the strong survive. Those brands that are doing best right now are those that have carefully developed a strong, well-controlled dealer network over decades. Audio Research, McIntosh, Magnepan and many others are doing well.

Wasn't trying to quash nay-sayers; just thought we'd already banged the hell out of the downer-drum, and was trying to concentrate on the positive side of the equation. And yes, when "socializing" often consists of sitting around together while texting other people in other places, it's hard to mimic the spirit of the past. So it goes. Not dissing the young; I just find it a little bewildering.

Audioquest: thanks for the informative and upbeat post. One thing I've discovered through the years is that Euro manufacturers seeking to enter the US market often have much larger-scale ideas than the potential distributors in the US. I'm glad Octave has paired up with Dynaudio. There are a lot of other exciting central-European brands that offer superb performance and excellent values; similarly, the most exciting brands I see coming out of the US right now are the value-kings like Peachtree, Virtue, and a whole bunch of speaker companies. Some are made completely in the US; many are not. These days there are so many global component suppliers it's hard to tell what comes from where, anyone.

As much as I admire the ulta-high-performance cost-no-object pieces, those aren't what bring newbies into the fold. I'd rather see more people genuinely enjoyng music in their home, rather than some fund-manager showing off monoliths in his living room that are rarely played.

Kbark: Yikes! Too many good ideas to even comment on, but the idea of Katy Perry saying "Go, NAD!" in Men's Health is a killer. The issue that has always kept audio companies from mainstream advertising and endorsements is, of course, money. Smaller companies don't have it, and the larger companies, such as the ones you mentioned, do seem to maintain an odd radio-silence when it comes to mainstream advertising. Back in the '50's through the '70's, bigger brands such as AR and Fisher often advertised in upscale mainstream mags. Today, only Bose comes to mind; they're a privately-owned company, BTW, so numbers aren't disclosed--but they're thought to do two BILLION dollars a year. Coincidence? Unlikely. Second thought: Monster comes to mind, as well. Dollars unknown, for them, but most people recognize the brand.

And no, I don't think young kids are stupid, at all. I just think they need more exposure to good audio than they often get. I'm grateful for the long-suffering retailers who allowed me to hang around when I was a teen. I can't say I see much of that happening, these days.

Deci: in my experience, the show-houses don't want the gear showcased. Product-placement? It costs major money. Some years ago I worked with the maker of a striking and expensive amplifier at CES, and we were approached by a placement-broker. They wanted $50k to get seconds of screen-time in a third-tier movie with no major stars. Few audio companies can drop that kind of cash for limited returns, and it likely wouldn't be the best use of the money, anyway.

House also has Piega speakers in his office, no sign of what powers them. He used to have Duevel speakers at home. I haven't heard that those placements really drove a lot of business to those companies. That would require a lot of exposure in a lot of different contexts and venues; besides which, TV shows rarely have "where to buy it" listings, as some mags do.

Kbark, Ballan: more good stuff. Thanks.

Map: Yup, value is key, especially in a down economy. As I said, the most exciting products I see are in the sector audiophiles would label "entry-level" or "mid-fi", and a lot of dealers are doing well bringing folks in with those lines. And upselling them, eventually.

Pep: Made in USA is still meaningful in many markets, ironically moreso over there than in the US itself. Go figger. I was astonished and dismayed when production of JBL pro and high-end gear was moved from Northridge to Mexico. So much for that heritage and that marketing advantage.

Ferrari: Thanks as always for your perspective; it's always heartening to hear from someone who's been mucked-up in this business even longer than I have!

I have no doubt as to the survival of reproduced music in the home. The delivery-methods may change through the years, but the intent is the same as ever, and the tools are available for sound-quality to be better than ever. I, too, am optimistic, while remaining fully aware of the current problems and the future challenges. Ain't no way this stubborn old coot is giving up!

Thanks to you all for your insightful and thought-provoking contributions! Keep 'em coming!