The audio business sector - audio manufacturing and sales. From one-person home businesses to monster corporations

[Xulonn]

This topic was inspired by the following quote in an Arcam AVR review:

My impression of Schiit is that they are a two man design/marketing operation. Low level with no dealers.

Arcam is a part of Harman which is a part of Samsung.

Great summary of the differences in business models and types of companies, @anmpr1 - that will help some who are not familiar with such things to understand audio companies that vary greatly in size and organization - as well as "personality".

Teac, Samsung/Harman/Arcam, etc. are corporations that don't really don't give a damn about individual customers, and it typically gets a piece of widely publicized criticism to get their attention.

Small companies like Schiit, by comparison, can live and die based on reviews, and need to walk a delicate line to satisfy their small and often diverse customer base which can include both audio subjectivists and objectivists. Personalities can have a huge effect on reviewer/small manufacturer interactions as we have seen here at ASR. But one-man personality-driven ultra hi-end (based on prices only) companies rely so heavily on subjectivist ego-stroking that a bad ASR review will only dent their egos temporarily.

With our current instant global communication model based on the internet, the manner in which a small audio company handles even one complaint can significantly affect their business. It's been fun for me to observe the psychology of these attitudes and interactions play out now that Amir and ASR have been established as dedicated and resistant beacons of "truth in measurements" that are not going away any time soon. It's nice to have an honestly critical science-based domain that can't be beaten down by threats of "no more freebies" for testing and review. Subjectivist reviewers on YouTube will always have their fans.

I have been into audio since the early days of audio magazines in the 1950s, when the only option for communication with the then current audiophile media was snail-mail letters to the editors. But in the current communication environment, I prefer a structured, organized, and searchable environment for my interactions with fellow audio enthusiasts, and we have that here at ASR where members range from newbies to audio legends. The fact that Stereophile contributor Kal Rubinson hangs out here a bit, and even John Atkinson, the long-time editor (now Technical Editor) of Stereophile, pops in occasionally with a comment.

My excitement was re-energized this morning when I got up and saw an email from IOTAVX that my 7.1 HDMI AVP had just shipped from the company in the UK. It in on the way to Panama via Miami, Florida where it will arrive in a couple of days. It only cost $906USD including shipping to Miami, and I wish I could have sent it to Amir for testing. However, it is only "passing through the U.S." with no customs/duty fees to be paid, and those charges would have had to been paid had I sent it to Amir in Seattle.

Over the coming days, I will add posts about my purchases and interactions with dealers, designer/builders, and manufacturers over many years. Please add your purchasing, selling and service/warranty stories as well. Lets give credit to those who deserve it, forgiveness to those who might have had a bad day and responded rudely, snark against wankers in the business. Can we do this without vitriol?

 

[pozz]

It's a good idea to clarify these things. The structure, reach and size of corporations/manufacturers, their entry points into the market and customers are all differentiating factors that inform their production, design and ad-level decisions. This isn't information that's readily available, either.

 

[Speedskater]

Jason Stoddard at Schiit Audio has a 135 page blog about the company.
https://www.head-fi.org/threads/sch...most-improbable-start-up.701900/post-10194517

But perhaps they should have put more effort into product development and less into blogging.

 

[Xulonn]

Jason Stoddard at Schiit Audio has a 135 page blog about the company.
https://www.head-fi.org/threads/sch...most-improbable-start-up.701900/post-10194517

But perhaps they should have put more effort into product development and less into blogging.

Actually, having a web presence and accumulating "followers", many of who are active in social media is a low-cost substitute for paid advertising. In sales, we always looked for a "hook" or "story" or "hot button" to trigger an emotional attachment to the benefits of the products we were selling. Schiit has definitely developed a social media "following". Don't expect the same from Arcam - it requires the personal web presence of likable people.

Schiit is looking at the modern young crowd, and not old people like me. And it seems that they are succeeding. I admire tham after their recent adaptation and technical improvements following the publication of unflattering measurements. If I was looking for a low cost two input stereo preamp with volume control plus a nice little four-band EQ, I wouldn't hesitate to buy the $50 Schiit Loki preamp plus the $149 Sys EQ.

 

[anmpr1]

Company problems occur in many ways. Could be changes in the market place. That's a major factor. Think of Shure and Stanton. Shure is still active, but not in the phono business. Stanton was bought by Gibson Brands, and terribly mismanaged (that seems to be a given with pre-bankruptcy Gibson--now under new management). I'm not even certain Stanton is an entity anymore. Grado (family owned) diversified into headphones, but still makes a wide range of phono carts. But Grado is family owned, and that fact evidently made all the difference in the world versus Stanton.

When a founder leaves a company things often go south. A good example is Bob Carver. After he left Phase Linear and set up new digs there was really no reason for anyone to buy PL, and that organization soon closed shop. Dynaco and David Hafler's company was another example. On the other hand, Mark Levinson is the other way around. Under Harman's wing the brand is apparently successful. Mark Levinson (the man) has never run one of his companies, long term.

I prefer to buy from small to medium independent companies At least if all other things are equal (which often they are not). Trying to find someone at a Harman subsidiary (in my case, dbx) for help was almost impossible. I'll never buy direct from them again. For them, and brands with an established dealer network, it is better to buy from a dealer you can trust. On the other hand, I can call Benchmark today and speak to someone helpful if I need it. Their chief engineer participates here at ASR. For a consumer that is very valuable. My guess is that you can likely speak to someone from Schiit--maybe even one of the principals if you call. Try that with Sony, or Panasonic.

 

[hellboundlex]

Emotional attachments to brands are not a bad thing, as they can help us define personal style, and certainly increases the enjoyment of a product. McIntosh people come to mind. It's a good product, but a better product if you have an emotional attachment to it.

In the same way, I have formed an emotional attachment to Geshelli Labs. Their product is good, but it is even better when you can discuss it with the designer, and they are quick to replace defective units. Anyway, my love for Geshelli means that when I order their next product (Eirish) I am likely to love it too, even if it flawed.

Of course if my emotional attachment to a company leads me to enjoy bad sound and spread it, it is a problem. Also, if my emotional attachment leads me to overlook when a brand gets purchased and loses its soul, it is a problem. I think of Marantz, for example.

 

[mansr]

Teac, Samsung/Harman/Arcam, etc. are corporations that don't really don't give a damn about individual customers, and it typically gets a piece of widely publicized criticism to get their attention.

Small companies like Schiit, by comparison, can live and die based on reviews, and need to walk a delicate line to satisfy their small and often diverse customer base which can include both audio subjectivists and objectivists. Personalities can have a huge effect on reviewer/small manufacturer interactions as we have seen here at ASR. But one-man personality-driven ultra hi-end (based on prices only) companies rely so heavily on subjectivist ego-stroking that a bad ASR review will only dent their egos temporarily.

What annoys me about many of the smaller outfits is their cult of personalities. They each have their in-house guru, and each of these gurus apparently possesses some mystical knowledge allowing him, and only him, to design audio components the _right_ way. Of course, as with traditional religions, they can't all be right.

I much rather get my equipment from an anonymous but competent engineering team with the resources to do real design work.

 

[Purité Audio]

Emotional attachments to brands are not a bad thing, as they can help us define personal style, and certainly increases the enjoyment of a product. McIntosh people come to mind. It's a good product, but a better product if you have an emotional attachment to it.

In the same way, I have formed an emotional attachment to Geshelli Labs. Their product is good, but it is even better when you can discuss it with the designer, and they are quick to replace defective units. Anyway, my love for Geshelli means that when I order their next product (Eirish) I am likely to love it too, even if it flawed.

Of course if my emotional attachment to a company leads me to enjoy bad sound and spread it, it is a problem. Also, if my emotional attachment leads me to overlook when a brand gets purchased and loses its soul, it is a problem. I think of Marantz, for example.

I think ‘fanboyism’ is on the wane, but just like every other bias ( halo) it is incredibly powerful and ridiculous when the equipment is poorly designed.
Keith

 

[anmpr1]

What annoys me about many of the smaller outfits is their cult of personalities. They each have their in-house guru, and each of these gurus apparently possesses some mystical knowledge allowing him....

I think it depends. Sometimes it's just a name, but there is often solid engineering behind the name. And sometimes you never know the name until you dig deeper. Think of Dynaco and the later Hafler company. People following the scene recognized David Hafler's name, but he employed men like Ed Laurent, Erno Borbely and the ubiquitous Jim Bongiorno (SAE, GAS, Marantz, Sumo), all assisting in the design department.

Anyone who has ever scratched the surface of high-end audio knows Mark Levinson's name, but it was John Curl and the lesser known (but perhaps much more important) Tom Colangelo, and audio polymath Dick Burwen doing the heavy lifting. I think Curl's initial fame derived simply because his initials were on the preamp. Mark relized that mistake and soon changed his naming convention! LOL

But you are correct that often the name is the sell. And that is not always good. Nelson Pass has designed some pretty beefy amps. But as his little 'class A' project (tested by ASR) shows, sometimes even with the big names you have to ask, "Where's the beef?"

 

[mhardy6647]

Just a comment on Bob Carver as an audio businessman, if I might -- offered 'as-is' and to the best of my understanding (i.e., a comment, not immutable fact!).

[EDIT: In my impression...] Not just Phase Linear -- he has a history (right up to the present day) of starting an audio company on a wing & a prayer, and either running it into the ground or (perhaps, and more kindly put) losing interest in it, selling the pieces to some larger concern, and moving on.

https://positive-feedback.com/indus...and-the-formation-of-glass-audio-america-llc/

 

[anmpr1]

Bob Carver... has a history (right up to the present day) of starting an audio company on a wing & a prayer... and either running it into the ground moving on.

I never heard that complete story. He did start PL from a coffee can prototype, and used initital order dollars to finance the company. That story is well known. Was Carver Corp or Sunfire started in such a way? By then, his name was well known and I suspect he was able to obtain decent financing from major sources--not a 'wing and prayer' situation. But I don't know details so perhaps you could offer more insight? Moving on? Yes. He did that. Running them into the ground? Don't know about that aspect.

However it is, Carver is not alone in the multiple company history department. I mentioned James Bongiorno. Look at how many companies he was associated with (may he RIP). Or Mark Levinson.

Small audio concerns have difficulty lasting in the marketplace. Consider Marantz--one of the most famous. The back story is that their tuner bankrupted the company. But Saul wanted everything first class and was not interested in compromise. Once Superscope and the Japanese took over it essentially became a different company.

Think McIntosh. Mac has been through the wringer, ownership-wise, but has managed to more or less keep the same vision of Frank and Gordon. More or less (lately less than more, it seems). So for that I suppose you have to give them some love.

Sometimes it's not 'running the company into the ground' but rather the fact that what you are selling is just too damned expensive to make and then recover your investment/profit.

The overall economy can quickly tank an audio company. If folks are facing recession with loss of work, stereo gear is going to be on the back burner.

Technology can change, and what was once important and popular is no longer. How many analog oriented companies went south once digits became the norm?

The only American audio company I can think of that has lasted intact from the early days of audio, with their original idea, is Joe Grado's company. How they do it would make a good marketing story. Ortofon is another I can think of, in Europe. There are probably a few others.

 

[mansr]

Technology can change, and what was once important and popular is no longer. How many analog oriented companies went south once digits became the norm?

That's not unique to audio either. Does anyone remember Kodak?

 

[JeffS7444]

I few years ago, I sat in on a demo conducted buy Bob Carver and his business associate (whose name eludes me). They'll tell you without prodding that they're in the tube business simply because they like tubes, (and also because tube amps sell, I thought to myself) But what tube amps! They're doing some sort of trickery by modulating the filament current, resulting in less heat output and, they claim, greatly extended tube life. It felt to me as if I could touch the glass envelope of one of their output tubes without risking a burn, though I didn't actually try. The combo of those amps and their ribbon speakers sounded magnificent, and prices seemed alright as those things go.

 

[JeffS7444]

Emotional attachments to brands are not a bad thing, as they can help us define personal style, and certainly increases the enjoyment of a product.

Well, it needs to be accompanied by periodic reality-checks, lest one winds up making excuses for paying too much for inferior or outdated product based on past glories and can blind a person to genuinely good new trends from unfamiliar sources!

 

[mhardy6647]

I few years ago, I sat in on a demo conducted buy Bob Carver and his business associate (whose name eludes me). They'll tell you without prodding that they're in the tube business simply because they like tubes, (and also because tube amps sell, I thought to myself) But what tube amps! They're doing some sort of trickery by modulating the filament current, resulting in less heat output and, they claim, greatly extended tube life. It felt to me as if I could touch the glass envelope of one of their output tubes without risking a burn, though I didn't actually try. The combo of those amps and their ribbon speakers sounded magnificent, and prices seemed alright as those things go.

Frank Malitz is the Svengali (for lack of a better word) of the current venture.

The claim is that the tubes run downright cool -- and the output transformers are tiny (the whole amp is tiny compared to a traditional 75 wpc stereo vacuum tube power amplifier). My curiosity about that little amp is off the charts (as is my skepticism).
I invoked it elsewhere on this forum recently, in fact. Darned near bought one when they were introductory priced at something like $2400.

https://www.audiosciencereview.com/...-be-reviewed-by-amir.4800/page-18#post-391808

 

[Xulonn]

25 used Carver Crimson 275's for sale at HiFiShark.com starting at $1,750 - and they weigh only 20 lbs compared to 67 lbs for a McIntosh 275!

They are indeed intriguing - and beautiful.

 

[watchnerd]

My turntable is made by Michell engineering, a family-owned outfit, run out of a village 30 miles north of London.

Now that John Michell has passed, it's run by his son-in-law.

My tube RIAA stage was hand made by Don Garber of Fi. I think it was one of the last things he made out of his house in NYC as he built it and shipped it about 1 year before he died:

My Hashimoto MC-907 SUT was handmade by Asakura-san, US distributor for Hashimoto.

My cables are by Blue Jeans, which are basically a small shop making custom Belden and Canare cables.

Analog / vinyl seems to support cottage scale more easily.

My speakers (Dynaudio), subs (Martin Logan), and electronics (Devialet) are from bigger operations.

 

[Trouble Maker]

Working for a very large OEM (an order of magnitude larger than Harman) who at every level emphasizes the customer, I know that universally saying care for the customer is only inversely proportional to the company size is beyond a gross oversimplification.

 

[CDMC]

But you are correct that often the name is the sell. And that is not always good. Nelson Pass has designed some pretty beefy amps. But as his little 'class A' project (tested by ASR) shows, sometimes even with the big names you have to ask, "Where's the beef?"

Nelson Pass is pretty clear that his amp projects are experiments and going for different flavors. The guy is a very talented engineer who loves trying different things and shares a lot of his designs with the DIY community for no charge.

 

[Trouble Maker]

Technology can change, and what was once important and popular is no longer. How many analog oriented companies went south once digits became the norm?

A alot of your post resonated with me, but I think especially this part and it reminded me of this article I read.
https://www.cnbc.com/2018/12/07/wal...oto-inspires-him-to-stay-ahead-of-amazon.html
And also reminded of of this Freaknoics interview with Jim Hacket, Fords CEO.
https://freakonomics.com/podcast/ford/

I think not being able or willing to adapt is probably the #1 downfall of many of these companies. I think it (downfall of a company) can just happen even faster with smaller companies in niche markets. But... GE is trying to prove me wrong on that point.