"Secrets" about the consumer audio business you may find interesting

[Oristo]

I have a friend who could be considered an intensely serious audiophile.
Back when Jim Thiel was arguably the leading boutique loudspeaker designer,
my friend decided that he wanted a pair, so we did the factory tour and met the principals.
While obviously proud of his speakers, it seemed to me that Jim's primary focus was
factory processes to consistently manufacture them to his expectations,
and he spent more time innovating and sorting those processes than designing speakers.

My perspective may be distorted by personal history; my father and his brother bought a small factory after WWII,
spent over a year learning exactly what materials and methods were essential to a good product,
then spent years improving their production facility to make that product faster and better.

My last employer's decline began when demand for that class of products passed it peak,
but that decline accelerated when manufacturing was outsourced,
and product designers and developers could no longer simply stroll from their labs and offices to visit assembly lines for new models.

 

[Jimster480]

I have a friend who could be considered an intensely serious audiophile.
Back when Jim Thiel was arguably the leading boutique loudspeaker designer,
my friend decided that he wanted a pair, so we did the factory tour and met the principals.
While obviously proud of his speakers, it seemed to me that Jim's primary focus was
factory processes to consistently manufacture them to his expectations,
and he spent more time innovating and sorting those processes than designing speakers.

My perspective may be distorted by personal history; my father and his brother bought a small factory after WWII,
spent over a year learning exactly what materials and methods were essential to a good product,
then spent years improving their production facility to make that product faster and better.

My last employer's decline began when demand for that class of products passed it peak,
but that decline accelerated when manufacturing was outsourced,
and product designers and developers could no longer simply stroll from their labs and offices to visit assembly lines for new models.

I think that people underestimate how big of an issue this is. My father works with various manufacturers of Toys and while "volume MFG" is definitely much cheaper than it used to be. Quality control + accuracy of design is a big task to deal with. They often spend 1 entire year working on samples of a product from the time that the "final design" is agreed on to the time that volume production starts. Since basically small runs have to be made and then people have to fly around to go take a look at the product and then samples are mailed to board members/people working on the project. Then if a change needs to be made lots of documentation is done and sent back to the factories.

The other thing is logistics because they play a big part in whether a product can be profitable or not. As well as the delivery time for the product. You must estimate sales on the commercial end and place orders many months in advance since large orders come in containers from overseas.

 

[Barrelhouse Solly]

I'm late to the party. My dad was in the dime store business for many years so I started learning about retail when I was in grade school. My mid life crisis resulted in becoming a programmer because I was getting too old to do heavy lifting. I worked for 15 years in the corporate office of a specialty retailer that concentrated on what I liked to think of as products for people who wanted to look nouveau riche. I have to say that the points in the original post are, based on what I learned, completely valid. One thing that the original post didn't cover was licensing, which only applies to things like "designer" apparel or celebrity endorsed products. Beats fall into the latter category. The retailer I worked for sold name brand electronics for the list price, more or less. The markup was between 40% and 18%. Where they made their money was private label goods. They tried for 60% to 80% calculated as a percentage of the selling price. Calculated that way a 50% markup means retail price is twice wholesale.

Based on my general retail experience I'm not surprised if things like imported no name sub $100 DACs outperform a lot of $500 ones. Audio is a business where "prestige" contributes to the retail price.

 

[Axo1989]

What you should be doing is apologizing for not only falsely accusing me, but also coordinating and filing fake reports against me and my company through several avenues.

Uh huh. Another thing that never happened.

Feel free to gish gallop into the sunset.

 

[Oristo]

This should have been included as a coda for my Thiel story.
Warning: Louis is passionate and intense...

 

[Keith_W]

I love Louis Rossmann! He is great for exposing anti-consumer behaviour of tech companies. So you know which companies to avoid! He has repeatedly targeted Apple. Some of his recent videos include Arlo, touchscreens in cars, Amazon, car subscriptions, and a few others.

 

[Newman]

…AudioScienceReview, above and beyond any other source of information, is the best way for us purchasers to be aware and thus buy quality. Period.

In what way do ASR reviews assess the quality of an audio product?

To me and I think the general populace, quality is not the measured performance of one sample when new. It is more about two things:-
(1) the consistency of new production, ie what proportion of them have a manufacturing defect that affects either appearance or function or performance, and
(2) the longevity of the product, ie what proportion of them develop an issue in either appearance or function or performance, at the ages of 5, 10, 15 years?

In what way do ASR reviews assess this? I don’t see it.

 

[MattHooper]

This should have been included as a coda for my Thiel story.
Warning: Louis is passionate and intense...

Yeah, as a long time Thiel fan, and having just bought Thiel's flagship 3.7 before they went under, I watched them go down the drain in real time. It was bad enough when they started making high end but totally un-Thiel-like designs (even though they measured well), but then they had a succession of management/buyers who took the brand name and thought they could turn it in to some life-style product, selling thins like soundbars and blu-tooth speakers. Like, yeah, the people for whom the Thiel brand name would have any cache are the ones looking for smart speakers (their last CEO was some sort of "brander" who admitted in interviews she didn't really know anything about speakers). Boy did they tank fast.

Jim Thiel's brother, Tom Thiel, who worked for Thiel doing cabinets and design, regularly posts in an audiogon Thiel Owner's thread. All sorts of fascinating insight in to the development and history of the brand.

 

[Jimster480]

In what way do ASR reviews assess the quality of an audio product?

To me and I think the general populace, quality is not the measured performance of one sample when new. It is more about two things:-
(1) the consistency of new production, ie what proportion of them have a manufacturing defect that affects either appearance or function or performance, and
(2) the longevity of the product, ie what proportion of them develop an issue in either appearance or function or performance, at the ages of 5, 10, 15 years?

In what way do ASR reviews assess this? I don’t see it.

I agree, ASR doesn't assess quality/longevity in this manner. I run into the same thing with the testing that I do. Unless it is a product that I keep and use every day for a long period of time I honestly don't know what the longevity is when I am testing it. So I am writing a review and recommending or not recommending something based on just the initial product perceived quality and some of the things that I can know about the product when I am writing the reviews.
I have gone back and changed reviews because the products I once really liked ended up becoming useless in a short period of time.

 

[AdamG]

Why does every thread like this end up using Car analogies? Please everyone stop with the Car stuff. Back to Audio subject matter please.

Thank you kindly for your understanding and support. We’re all here because we love Music and we care about the faithful unadulterated reproduction of same. Let’s talk about that here at Audio Science.

 

[Spkrdctr]

But Adam! My 1970 Chevelle 454 will outperform some home speakers....OK, I'm kidding. I too don't get too many car analogies. if someone is going to use a car analogy, they have to borrow my well known on ASR Broad brush. Problem is, I don't lend it out. It gets me in enough trouble without it getting other people in trouble. So, people, don't even ask for my broad brush. Adam lets me use it and only me! LOL

 

[Oristo]

I love Louis Rossmann!

(Louis, 2 weeks ago - after ten years, John Deere FINALLY lost): "I am a man that yells into a camera"

 

[Deleted member 60987]

JD Power btw is completely inaccurate. if you know about the car industry you know that this is nothing more than a marketing agency today. None of its ratings mean literally anything.

Where there's ratings there is often bribery. Look at the housing bust, where those crappy triple A ratings were more like C. In that case it might not have been direct bribery, but they hired the agency and they would go to Moodys if not S&P. The Big Short got into that. Then you look at the media. You think they would tell you anything negative about auto makers or pharmaceuticals? They know who butters their bread.

 

[Newman]

Then you look at the media. You think they would tell you anything negative about auto makers

The VW emissions scandal was not withheld by the media.

 

[Deleted member 48726]

The VW emissions scandal was not withheld by the media.

No it wasn't. On the contrary most larger recalls are getting headlines.

 

[Jimster480]

The VW emissions scandal was not withheld by the media.

This is due specifically to the scandal playing into the governmenta hands. They want to destroy ICE vehicles and replace them with electric vehicles. Additionally the government could steal billions of dollars from VW (fines).
So it was incentivised by money and agenda. That's why they told their media pals to spread it everywhere..
As far as sources that are usually accurate, there was suspect and some different evidence of proof for years before hand that this type of stuff was going on. In fact in the EU it was more well known amongst car enthusiasts.
As part of their crackdown against VW the government also came against diesel tuning shops and the enthusiast sports car industry as a whole. Even using swat to raid a few prominent tuning shops under the guise of the same scandal even though the two were totally unrelated.

Although the governments mouthpieces never mentioned how they overstepped all existing laws and came down hard against prominent tuning shops and car racers. They never mentioned how they basically arbitrarily outlawed diesel tuning. They also never mentioned how other manufacturers also cheat but they didn't Crack down on those guys

 

[Newman]

I’m just not a fan of conspiracy theories in general. I also try to look at issues from a global perspective, not limited to home-nation provincial commentary.

Let’s bring it back to audio gear, as per Adam’s wishes. Are the audio media going to tell us negative info about audio companies or gear? Well, I agree with the notion that the business model doesn’t incentivise negatives. I don’t think I have ever read an audio magazine article about the use of prison labour and child labour in the manufacture and supply chain of audio gear from any particular country. Nor a factory tour report that critically discusses anything seen, such as sampling ratio of end products for quality testing, or use of hand assembly where robotics might be more consistent. There will always be a provincial celebration of the existence of home-nation manufacturers, which doesn’t serve either one’s audio or humanitarian interest. Commercial media rely on revenue from the very companies who make or sell the gear they report on, so the business model is strongly incentivised against negative information.

The consumer’s only realistic hope of balanced information is non-commercial media. Hello ASR.

 

[Oristo]

The VW emissions scandal was not withheld by the media.

The VW emissions scandal was about a company designing cars to pass specific required tests.
Guess what? The FCC requires electronics to pass specific tests for RF emissions.
Those test do not prevent companies from selling products which generate high RF energy;
instead, product developers spread that energy over broader frequency bands,
since FCC test criteria specify time-averaged power at each frequency.
This incents many products to interfere with more equipment.
Not much media reports that: Spread Spectrum Clock Generation – Theory and Debate

 

[MattHooper]

I’m just not a fan of conspiracy theories in general.

Likewise. We certainly agree on that.

 

[Keith_W]

Likewise. We certainly agree on that.

Two of you agree? I sense a conspiracy ...