Money and the High End: The Price is the Product 

Virtually all manufacturers of High End audio equipment (there are at least two hundred of us, not counting outfits who target primarily the Mid-Fi market like Polk or Klipsch) have seen a sales decline in recent years. This trend is alarming and worldwide with sales dropping steeply in Asian and European countries as well as in the U.S. According to industry figures published in the trade magazines, the slump averaged 30% per year after 1995 (the first year where a falloff was noticeable) until now. As of 1999, highend audio has lost 60% of its business and even more of its customers, numerically speaking, measured against four years ago.

This is not a big secret. The largest consumer book, Stereo Review, last year published an editorial applauding the waning of the High End as an influence on audiophile consumers. This from a magazine with over 400,000 circulation (more than all the other audio mags combined) who feature Japanese equipment on just about every cover, review exclusively brands who are S.R. advertisers, and who never met a speaker they didn’t like. I have never even seen a representative from Stereo Review at a Specialty Audio exhibit at CES, and I’ve been an exhibitor since 1980. The magazine has changed its name, to Sound and Vision and its focus, presumably, to the consumer who listens to music while watching television. But they are right about diminishing clout from the High End and can feel secure about editorial challenges from that side of the street, since nobody wants to make an enemy of Hachette Publications, which also issues Audio.

The rumblings are audible from the High End press as well. Stereophile, which went from a pamphlet sold outright to Larry Archibald, a car mechanic turned publisher, for $20,000 to a thick glossy resold to a conglomerate for over $30,000,000 (Larry would not confirm or deny the sales price when I pressed him, repeatedly, over drinks at the CES party his magazine throws each year), is now being resold and rumor has it many of the old crew will be gone. Since I know and like most of them personally, particularly Editor John Atkinson, his wife Laura who is an ad manager, reviewer Tom Norton, and the aforementioned L. Archibald, this will be a loss. These people would actually review product from non-advertisers or dare to criticize product from steady advertisers, which cost them two accounts at the minimum I know of .

Fi Magazine, a new glossy started about 17 months ago, folded in January. Small pubs like Listener, Audiophile Voice, and Sensible Sound all barely hang on, scrabbling ad dollars among the same small pool of highend manufacturers. Audio Critic, a fiefdom of Peter Aczel, has undertaken a series of vicious ad hominem attacks on personalities in high end audio, distinguishing White Hat good guys (e.g. Bob Carver) from badder-than-bad Black Hats (The Wilsons, among many others). Since many people I like appear on the Black Hats list (I don’t rate a mention, but my colleague John Curl gets an in-between vote), I am outraged at these unwarranted character assassinations.

Unwarranted, but not entirely without substance. People like Dave Wilson, whom I have known since before he started his company in the early 80’s and was happy to do favors for back then, charges more money for less hardware than anyone in the world. He cops to it too: poor people or the value conscious are not his market. He was the first to go to customer’s homes and spend days setting up and tuning their new Wilson WAMMS. He realized how setup, associated equipment, and listening environment affected sound quality and did his best to make things better. He is not evil or even an opportunist: just a High Ender who believes in the usefulness of a big price tag in establishing product credibility. 

Not that others are free of guilt. A close friend in this business told me of Dick Sequerra’s brainstorming the retail of his new top-of-the-line. “ Do you think, John,” asks Dick, “that the system should sell for $60,000 or $100,000?” Guess what: Dick decided the speaker would sell better at $100,000. I see other people, like Eggleston, charging the magic $100,000 figure for their flagships. No, the price is not justified by the bill of materials or any other criteria for determining end user pricing. It is just a high price, plain and simple, designed to command respect for that reason only. Critics not impressed by this ploy sometimes write painfully truthful comments: see the current Bound for Sound an unflattering evaluation of Eggleston’s big speaker. Of course, BfS doesn’t accept advertising. And they did say the VMPS display was “Regardless of Price Best of Show”. That gives them superb credibility in my book.

Having fleeced the gullible for so long, High End audio is now paying the piper. Insane pricing is not the only culprit. Nutjobs such as Peter Belt and,to a lesser extent, Tice with their AC line conditioning clock, cast this business in disrepute with most scientists, who labeled this tinkering “voodoo” along with many other tweaks which actually do help the sound quality. Let me give you an example of the latter. A company called Audio Prism makes a CD damping pad which you place on your CD before play. On the CD, that is, after exposing the underside of the damping pad to the shine of a strong light bulb for ten minutes or so. The pad then glows in the dark, emitting green light at a wavelength that of the CD laser beam. The idea is to absorb unwanted portions of the color spectrum and let the laser work in an all-green environment for less scattering and better tracking of the pits and lands. At least that’s the theory (hope I got it right). The glow lasts about 30 minutes, enough to pay half a CD. You then stop play, light up the pad again for a few minutes, and place it back on the album and hear the rest of your music under proper (for the CD) greenish light conditions. What a howler!! And it works. Beautifully. Without a doubt. I bought one ($40).

My friend Clark Johnsen, a dealer and associate since 1980, has promoted many tweaks which defy logic and work well. He advocates cleaning and destatic-ing treatments for CD’s, along with demagnetizing them (what??). He promulgated the observations of Mr. Wood concerning correct absolute polarity of program sources being played over a stereo system; again, Clark is dead-on: hearing the music upside-down (vocalists inhaling notes, trumpeters sucking their instruments) is quite debilitating to listening pleasure. It’s something I always check for when playing LP’s. CD’s are supposed to have a polarity standard and all be the same. Clark thinks many have out-of-phase tracks and he may be right.

Other people in the High End insist on resurrecting old technology and promoting it as new technology. In speakers, this means above all, HORNS. Bruce Edgar builds a $20,000 horn, that French outfit a $65,000 horn. Horns?? With phenolic drivers? Many milliseconds of delay? The “megaphone effect” (reflections within the horn throat that make everybody sound like Rudy Vallee)? Yes, the efficiency is amazing, as is the sound pressure. Yes it’s impactful and sounds better with those 5 Watt single-ended triode power amps. Yes the overall sound quality is marginal to dreadful. No, there’s nothing you can do about it: change the driver, change the horn throat, equalize, use better materials. Nothing really helps. Don’t listen to horns, they’re bad for your aural health.

The High End sucks up money like gravel in an aquarium. My CES neighbor told me ruefully that he had lost his entire $250,000 investment in his company in 1998 alone and expected more losses this year. His product: a $3,000-a-pair 6” 2-way. It sounded OK. In my expert look, it cost about $80 a side to make. I can’t tell you how many High End outfits are just vanity corporations for people who want their name on a product. They don’t make a profit, even at ridiculously high prices, because there aren’t enough foolish high end customers to go around. Hell, there are barely enough discerning customers loaded with taste and refinement (VMPS customers, for example). 

And then there are occasional assaults on the High End arena by midfi operators looking to polish an image. The latest is Harman International with their Revel speaker line. I was scouting the halls in my CES exhibit space (St. Tropez Hotel) and discovered Revel had set up shop there. A brief, tightly programmed demo was hosted by a design engineer who pointed with pride to the Oscar (or some similar award) his design group had gotten just for developing the peerless Measurement Program which led to the appearance of the $3,500 10” threeway on display in his booth. The man was so sincere and convincing I expected the world from his loudspeaker’s sound. The room was acoustically treated (or at least heavily draped), program material was selected excerpts on DAT (orchestra, vocals, synth/pop). You had to sign up for the demo and wait outside until the time arrived. I sat in a good chair. I listened. I waited until everyone else had filed out wordlessly. I turned to the engineer and said: “Too bad you didn’t develop a measurement program for boxiness. Or two-dimensionality. You can reproduce the 30Hz synth fundamental, but the orchestral music has no bass (Note: sure sign of an overdamped system). I didn’t recognize Ella Fitzgerald: I thought it was some saloon singer. I wish you lots of bucks.” And I left. This is how I make friends at shows.

Actually I’ve been around so long almost everyone is nice to me and listens to my reactions. I even get my own program material played. Some are jealous. Checking in at a Show hotel a few years ago I spotted Bud Fried. He caught sight of me and joked (only semi-seriously): “Aha, here comes the guy who gets all those good reviews!” I eyed him carefully and replied: “Bud, you get what you pay for.”

Brian Cheney