Well obviously there is no one particular reason for a company to go under. This is a boutique hobby, and many manufacturers are started by one man operations on limited budgets. So many things must go right for a company to grow and prosper with such a finicky group of consumers.
That said, I think that many times the "problem" is that a manufacturer just does not do a good enough job on an accounting cost basis analysis level. For example, my speakers are Soliloquy 6.3i's, from the now defunct Soliloquy company. A 2.5 way design in which each cabinet weighs in at 100 pounds, beautiful machined, adjustable floor spikes and brand name components and wiring. When new they listed for $3195. After listening to them, I would say that Soliloquy went out of business because they underpriced their product. These speakers could have easily sold for $5K, if not $10K with some better marketing. When a small manufacturer tries to offer outstanding value while trying to survive on razor thin margins, it generally does not turn out well. This would be a case of underestimating costs and/or not spending enough on marketing. You have to properly "grease the wheels" to succeed and thrive in any business, not just audio.
So you could say that many companies go out of business because they offer too much value to the consumer and they are not paying enough attention to their "true" costs. Of course this is not always the case, in many cases in the one man operation the one man becomes ill, and cannot keep up with the business. Obviously there could be a myriad of other reasons to, luck is involved in any business venture.
Companies that stick around combine good products/technologies with good business acumen including good customer service, more or less.
Companies that don't, well, they can't compete with teh ones that do.
It's awful difficult for the smaller players to get the word out as it costs upwards of $15,000 for a whole page add in one of the mags and $5,000-$10,0000 for internet sites. I'd assume that lots of quality product has gone by the wayside due to finaces.
You can build a better mousetrap but no one's going to beat a path to your door unless they know of it.
All the best,
You know the adage: How do you become a miliionaire in the audio business? Start with ten million.
The write-up on Soliloquy was interesting and illustrates the difficulties these guys face. I own a pair and agree with Jmcgrogan1's assessment, wonderful speakers for what I paid.
There was no mention of Meadowlark Audio on the web site which kind of surprised me. I have owned several pairs of Meadowlark speakers (still use a pair of the Kestrels). Lots of info on that company in various reviews.
I have fantastic speakers HPS-938 from Hyperion Sound - company that went bankrupt few years ago. They had fantastic, innovative product that won may awards 8 years in a row, but running a business is very different from engineering the product. They lacked marketing and dealer base. Closest dealer to Chicago was in Pennsylvania. Customer support wasn't there either. I called with technical question and was not able to pass receptionist, most likely instructed to dismiss all calls. I would like to keep these fantastic speakers for a long time but sooner or later they might require service. Would I buy again a "giant killer" from small company? Not likely.
is an interesting history summary from one speaker vendor that has been around quite a while and re-invented itself several times along the way to survive.
Great link Mapman. Interesting that there aren't more posts about Ohm speakers. I would sure appreciate reading more about the Ohms, so hopefully, folks who own these speakers will speak-up (pun).
I'm old enough to remember when the Ohms were introduced back in the 70s and 80s. I just don't recall they were viewed as darlings of the audiophile community. Maybe my memory is fading. :(
"just don't recall they were viewed as darlings of the
OHM Fs were and still are to some extent perhaps.
But the rest, even the latest and greatest are not that
exotic and pretty boring to look at.
OHMs have never been marketed to audiophiles, though they
did pop up in various B&M shops in the 80s that catered more
to the masses when stereos were still hot items, prior to
the 80's A/V boom.
But my thought is that anyone these days who has heard and
liked mbl and cannot squeeze that should be looking at OHM.
Not the same, but similar, and perhaps even better in some
THey've been around for over 40 years now, and advertise by
word of mouth only, so must be doing something right worth
noting. I'd say that is focusing on good sound, value, and
I don't sleep at night worrying about that!!
Most new high end products have enough flaws, that are looked over at first because most folks assume new is better, that they deserve to fail. In some cases the company is flawed more than the product.
Bottom line, most new high end companies do not offer a combination of product quality, product reliability, company support and stability to deserve to survive.
"Bottom line, most new high end companies do not offer a combination of product quality, product reliability, company support and stability to deserve to survive. "
Unfortunately, I suspect there is a lot of truth to that.
None of these high end speaker companies make drivers. THey BUY drivers from major companies such as dynaudio, vifa, scanspeak, or worse. They are in the business of building cabinets...LOL...
Since I now in the business of building amps and preamps, budget is one and marketing is the other. Knowing my preamp is way better than anything you can buy that is from the known high end manufacturers, I have a limited buying public because I am an unknown manufacturer. Recently a consumer compared my preamp in his system for a few weeks told me that he had never heard anything like this before. He uses an ARC top of the line preamp. He wants to send the preamp back to ARC because he thinks something is wrong with the ARC to sound so bad in comparison. He understands the design and why it works and he seems willing to purchase my preamp but there is a little hesitation factor in buying form an unknown. The marketing effort that it will require to sell direct is costly and time consuming. If I would to to a select dealer network, the cost would double. I still would only get my half. If ARC built my preamp they would probably charge $50K to made a hand made, point to point wired preamp with custom parts. Sourcing parts long term is also an issue. Drivers are parts change over time and you are always experimenting to improve the sound. Parts are expensive to keep trying and testing and listening.
I hope this helps.
None of these high end speaker companies make drivers
Not always. Hyperion Sound designed their own very innovative speakers. For starters they had no spider web suspension, that adds mass to membrane and affects linearity. Midrange speaker is 6.5" in diameter and has ferrofluid suspension. Designed and manufactured by Hyperion.
Cottage industry with under capitalized hobbyists producing small scale labor intensive equipment selling to a very limited customer base. The real question is why any small high end audio manufacturer is able to survive.
Kijanki ... add Paradigm to the list, at least their high end speakers. The company also makes its own drivers. That's a big reason why Paradigm can pack so much speaker into such a reasonably priced package.
Particularly noteworthy is their beryllium dome tweeter and cobalt/aluminum alloy cone midrange driver. Both drivers also use (i) ferro fluid to cool and stabilize the motors, and (ii) super neodynium (sp?) magnets to increase SPL and lower distortion.
Djcxxx ... excellent question.
The Harmans, Paradigms and Focals have large low-end/lo-fi product offerings that presumably generate enough revenue to absorb a goodly portion of their fixed cost burdens. I've read on a number of other audiophile web sites that some companies have adapted to the current economic model by "ex'ing" out distributors and retailers by offering their products direct to consumers, e.g., Ohm and Von Schwiekert. This obviously knocks out distributor and retailer margins which add a sh*t-load to the end consumer retail cost.
Without having access to the "books," it's hard to know how "hobbyists" or small companies make it. Some do. Most don't for all the reasons I learned 45 years ago in Econ 101 and Management Accounting 101.
I'll say this. If R&D drives innovation, I question how small companies can really do it. The companies I mention above not only have extensive R&D operations, but they also manufacvturer many of their speaker compenents in-house. It should be no surprise that the companies listed above (and Magico too) use beryllium tweaters in their high-end gear. I suspect that many of the other "Big-Boys" don't because they can't.
Big burden for the small company is R&D. It is not only expensive but often access to decent anechoic chamber is very limited. Many companies like Revel use expensive laser refractometers to defeat cabinet resonances. Fortunately for companies like PSB or Paradigm Canadian government formed National Research Council (NRC) and Industrial Research Assistance Program was created. It not only provided grants for companies developing innovative products but provided free access to measurement equipment and anechoic chambers.
The real question is why any small high end audio manufacturer is able to survive.
HIGH margins! Low supply + low demand = HIGH price.
If a company produces products consumer wants, they can survive. Great example is Ferrari and Lamborghini, they want their products to remain exclusive so they jack up the prices to decrease demand by design.
Paradigm and PSB use research labs that are sponsored by the Canadian government. This helps with their R&D costs and allows them to come in at a lower price.