What makes a $20,000 cd player cost 20,000?

Oh - all these "reliable sources" - give me a break. Your question about the price is easy to answer. Part of it is research, part of it is development, part of it is cost no object design, which means material, hand selected electronical parts etc.. Part of it is man power i.e. hand work and part of it is exclusivity and/or hype. But - hey, that all applies to ANY high end stuff, or do you really think that a 5er BMW f.e. is "worth" the money they ask? I'm driving one at the moment because my MINI has electronic ailment. The Beamer is a WONDERFUL car, but not worth 65.000! Ok, and here is my "reliable source": WADIA 270/27ix upgraded by Great Northern - forget anything else.
Happy listening!

There's an unfortunate trend in this country to equate value with cost. Because a component cost a mint, audiophiles believe it must be far better than one more reasonably priced. I believe many manufacturers capitalize on this belief. They know audiophiles will turn up their collective noses if they were to offer their units at lower prices, so they soak us for all we're worth. They can do this because we let them. As the saying goes: "I've met the enemy and it's us!"

The fact that somebody will pay 20,000 for it.

Does a $20.00 quartz Timex keep better time than a $ 5,000 ''manual'' Rolex ? The answer is ''yes''. Is a Louis Vutton handbag worth $ 1,000.00 ? Can you really tell the diffence between a $ 20.00 wine and one that cost $ 200.00 a bottle (some do, most cannot). DOES A 1" THICK FACEPLATE ON AN AMP IMPROVES ON THE SOUND ? .Well maybe a bit (because of the sheer mass and resulting isolation from vibrations), but maybe not to the extent that it warrants paying for it. Is a $ 300,000 Ferrari faster than a Viper?

High-end audio is really a high-end hobby. As such, we pay for PERCEPTION OF EXCELLENCE and TRADITION, EXCLUSIVITY, AND SUPERLATIVE PRESTIGE.

If High-End audio was merely based on performance, no way many products would command such insanely high prices.

This is why we will NEVER see true blind testing of audio gear anytime soon, from professionnal reviewers, it would be just too risky and dangerous to admit that some ''budget'' gear sound as good and often much better, than much higher-priced, ''established'' big name gear. (Listen the small Cayin TA-30...a shocking example of this)

And this is why someone who spends $ 5,000.00 on a Rolex watch pretty much couldn't care less if it kept good time or not.

Marketing is much more about perception over product. And the ''high-end'' does not escape this fact. Of course there are true deserving high-pricer out there, but many do not justify their worth sonically speaking...but ahhh...that 2 foot thick CNC-machined faceplate sure looks good right? And don't get me started on $ 3,000.00 interconnects and $ 7,000.00 speaker cables. One last thing, is there any room left for the artist and his or her music in this madness, or are we just too busy showing how good-looking our Rolex is?

The cost of a product is basically determined by labor, material and overhead. Top-notch players will use parts that are more expensive (i.e., you can get caps at Radio Shack for 49 cents but an audio quality equivalent cap can cost 20 dollars let's say.) Then you have to add the cost of R&D, insurance, sales and marketing, distribution, cost of money (borrowing to get the factory ready), and company human resources (health care, bennies, perks, etc.) On top of that there are taxes. Once all that is figured, then the question becomes profit margin, which is the toughest to figure since you have to take in factors such as demand and competition. All in all, it's way more involved but the bottom line is the cost of the parts required usually plays the biggest role.

It is rare that a product will be priced in the stratosphere for no other reason than just to make audiophiles take it seriously. Some do put bells and whistles on products such as exotic wood, lacquer finishes, overbuilt casings, hand-made components, etc, to make them appear better than others for those more interested in appearances - but may do nothing for the sound quality. But then again, some people can't get past the fact that they're listening to a $500 cdp (like the Marantz CD-63SE) instead of excellent quality sound for the money and then some.