I'm surprised so many audio companies exist

[sweetchaos]

Wow. Whoever maintains this site is truly dedicated

Not as dedicated as me.

 

[DonR]

China is a massive and growing market.

 

[sweetchaos]

Yeah, Chinese audio companies are growing. The problem is they’re not in English, so Google doesn’t index them very well (unless you’re a native Chinese reader), so finding speaker companies (which is what I care about) isn’t very easy.

 

[Koeitje]

Audio products are just very easy to make

 

[kemmler3D]

To sanity-check the market size a bit: There are said to be about 60 million millionaires on earth. For the sake of argument let's say the target market for high-end stuff is limited to millionaires. Not strictly true but not far off for stuff like Magico or Wilson.

Say there are 1000 niche speaker brands (approximately right)

Say that the fancy-speaker-buying population is 5% of the millionaire population. (probably too high, but let's go with it).

Say millionaires get on the upgrade treadmill and the average purchase cycle (time between speaker purchases) is 5 years.

That means in any given year we have 600,000 millionaires buying speakers. So an even 0.1% market share gets you 600 customers per year, about 2 orders a day. If you are charging $10K per order on average, you have a $6M business on your hands. That sort of fits my notion of a boutique brand in this space, doesn't seem too outlandish, but it also means most "high end" audio brands are closer to being run out of a garage than in a nice workshop with a Klippel and real engineers on staff.

It also means there can only be a very small number of non-mainstream audio brands that invest in R&D or advanced manufacturing in any serious way.

 

[anmpr1]

I’ve created a master list of speaker companies.


Over 1000 found.

When Peter Aczel was still employed in Madison Ave he was responsible for the Rectilinear account. In one of the more revealing ads the company admitted that very few speaker companies actually make their own drivers, instead buying them from one of the handful of actual driver manufacturers, and then stuffing them into cabinets they might have actually made in their shop. The ad claimed that the loudspeaker business was the easiest to start up, because in many cases (at least back then) the 'designer' didn't even have to know how to design a loudspeaker!

His association with Ohm was a bit different, because the Walsh driver was not a 'ready made' product. When he started Fourier it was all off the shelf stuff. His factory built the boxes and designed the proprietary crossovers, but that was the extent of it.

 

[TurtlePaul]

Unlike a lot of industries which are driven by profitability, starting an audio company is a passion project. Like wineries, I think a lot of these companies start without a target for revenues or profitability.

 

[Angsty]

Most of these audio manufacturers are boutique small businesses. One of my favorite new ones is Classic Audio in the UK, which is literally a one-man phonostage operation. The annual revenue is likely to be under $20 million for most of these audio businesses.

Even a long established company like Luxman likely has under 100 employees in Japan. I think the best analog is the fine watch industry.

 

[anmpr1]

I think the best analog is the fine watch industry.

Maybe. I don't know how far to push the analogy. I suppose that most boutique audio manufacturers buy 'off the shelf' components to a large degree. Certainly there is custom metal work for the chassis. I don't follow the high-end timepiece scene, but do major Swiss wristwatch companies buy parts and movements from a supplier? Or is all fabrication done in house?

Few people probably desire a ten year old preamp or phono stage. Perhaps it is more akin to German luxury cars than it is to high-end Swiss watches. With cars, they are nice for a few years, and then the original owner bails because of massive depreciation and upkeep cost. Plus, folks in that market can likely afford a new model every few years or so. On the other hand, I guess a 20 or 30 year old old preamp has a better chance of everything working than a thirty year old Maserati or Jaguar. Piech's wunderkind--the VW Phaeton?

Early Levinson and Cello gear appears to hold close to dollar for dollar value (sans inflation). Less so later Madrigal and Harman stuff, which tends toward the generic. At least that's my impression from slumming the used marketplace, and looking at asking prices. Not sure of actual selling prices--anyone can ask anything for what's in their closet. Even Mark's 'budget label' Red Rose Chinese sourced gear appears to hold reasonable value, considering. Classic McIntosh is always worth top dollar. Probably a few others.

As far as actual selling prices? An operation like SkyFi in the US is probably a good indicator of demand/retail prices for refurbished high-end gear. Personally I would never buy anything used off Ebay or Reverb. But YMMV.

Some 'equivalent' gear is just not worth fixing, or buying used. I have a 30 year old Yamaha AX-592 (has all the visual appeal of a generic 'black box') that I will throw away if and when it fails. On the other hand, if I had a 50 year old CA-2010 I'd seriously look to getting that repaired and refurbished. Totally a visual/tactile thing. New higher end Yamahas don't have the feng shui of their old stuff (although electrically new is probably as good if not superior).

Actually, monster Japanese receivers from the '70s hold value. That does not surprise me. Those exist within a captive market. It is easy to find something new that has the look and feel of a '70s cottage high-end amplifier, or even 'trad' Japanese (today's Lux and Accuphase product has that). But you can't find anything that looks like a Pioneer SX-1980 except a period SX-1980.

 

[Angsty]

Maybe. I don't know how far to push the analogy.

Fair points. I was referring to (manufacturing) industry structure more than product supply chains or resale values.

I did not have another consumer product industry at hand that was so dominated by small manufacturers (at the top end) other than fine watches. Would love to learn of a better comparison.

 

[ta240]

Audio products are just very easy to make

And most don't have to do their own production; they send it offshore. So it is just a matter of coming up with the design.
Then you either hope a youtube infomercial host will gush about your product or you pay them to do it.

 

[Descartes]

Look, I know this is a mundane observation, but I genuinely struggle to get my head around it.

I say this as someone who has an interest in audio but isn't in the "scene", so I don't personally know anyone who buys serious audio gear.

There are hundreds of audio companies[citation needed] when you include the small players.
Dozens of products that cost six figures, countless that cost five.
Weird, expensive, esoteric handmade stuff, like step-up transformers from Germany or tube amps from Japan, etc.

I don't really keep up with most of the stuff being sold these days, so I had a quick look through a Stereophile show report from this year to confirm if this is still the case.
There's still all the power conditioners and cables, of course. There's still those weird half-million dollar MBL speakers. Room diffusers to put on your floor that look like something my toddler would enjoy climbing. $50k planar speakers from some company I've never heard of. How many sales do the manufacturers and distributors need to break even?

I'm aware that there are wealthy customers who decide they want a nice sound system, but I'd have to imagine many of them just get a home theatre installed. Or if it's a stereo, something big and expensive but somewhat traditional like Focal, B&W or even Wilson.

With all of this in mind, it's a niche hobby. basically invisible - the average layman has no idea that most of this stuff exists. and they'd laugh if they heard how much people spend on it. It's just hard for me to fathom that the pie be so big that all of these people are getting a piece.

So true only geeks like us even know about all this stuff, when I speak with some of my colleagues at work they are perfectly happy with their Bose and Sonos!

 

[Palladium]

And most don't have to do their own production; they send it offshore. So it is just a matter of coming up with the design.
Then you either hope a youtube infomercial host will gush about your product or you pay them to do it.

Also rare-earth magnets, the last major innovation in transducer is from like what, 1980s?

 

[jooc]

I sometimes think about all the audio companies that were around for a few years and just went away after putting out some good products. It seems like there are hundreds of brands of components I've never heard of, yet people remember from that brand's moment in the sun back in the day.

 

[Palladium]

I sometimes think about all the audio companies that were around for a few years and just went away after putting out some good products. It seems like there are hundreds of brands of components I've never heard of, yet people remember from that brand's moment in the sun back in the day.

Here in Singapore, Aiwa etc all-in-one stereo sets were wildly popular in the 80s to the 90s but almost immediately died out in the early 00s to cheap DVD/MP3 players and the Internet even within the middle-aged crowd. To most people, SQ of an audio-only medium becomes immaterial once on-demand visual and interactive mediums exist.

 

[darrellc]

I'm not surprised there are many high end audio companies. It is a target rich environment for parting a certain class of people from their money.

I mean, Steve Huff has just two websites (that I know of) - Huff HiFi Reviews and Huff PARANORMAL.

Oh, and audiophiles would have borne the full brunt of Thorstein Veblen's misanthropy if he'd been writing today. He's hilarious to read and topical as ever.

 

[kemmler3D]

So it is just a matter of coming up with the design.

Yeah, but for every D&D, Buchardt or Ascend Acoustics you have 100 Wilson wannabes. Coming up with a mediocre speaker that makes noise is easy, making a truly good design is hard even if you already have all the parts picked out for you.

 

[anmpr1]

Perhaps what is more surprising is the other side of the coin. Companies that used to exist.

Defunct Audio Manufacturers - Aa & Ab - audiotools.com.

 

[jooc]

I'm not surprised there are many high end audio companies. It is a target rich environment for parting a certain class of people from their money.

I mean, Steve Huff has just two websites (that I know of) - Huff HiFi Reviews and Huff PARANORMAL.

Oh, and audiophiles would have borne the full brunt of Thorstein Veblen's misanthropy if he'd been writing today. He's hilarious to read and topical as ever.

It's true that audio components can be a "Veblan good."

 

[Mnyb]

I'm not surprised there are many high end audio companies. It is a target rich environment for parting a certain class of people from their money.

I mean, Steve Huff has just two websites (that I know of) - Huff HiFi Reviews and Huff PARANORMAL.

Oh, and audiophiles would have borne the full brunt of Thorstein Veblen's misanthropy if he'd been writing today. He's hilarious to read and topical as ever.

It's true that audio components can be a "Veblan good."

That’s probably why we need new products and new brands with new imagined properties as the actual progress in audio creeps by in a far slower pace than the “upgrade treadmill” you are to believe that there fantastic improvements in fidelity all the time every year .

Good old Phillips made an almost fatal marketing mistake when they launched CD they where prophetically telling the truth “ pure perfect sound forever “ and the got laughed at by everyone building the upgrade treadmill......