Why are AVRs and AVPs so expensive?

[Sancus]

There is no demand for low end or midrange AVPs since the vast majority of HTs use passive speakers, and splitting amplifiers and AVRs makes things more annoying to set up which is the exact opposite of what most buyers want.

 

[bungle]

There is no demand for low end or midrange AVPs since the vast majority of HTs use passive speakers, and splitting amplifiers and AVRs makes things more annoying to set up which is the exact opposite of what most buyers want.

Well, we could say that there is no demand for AVRs/DACs either (or passive speakers) as most of the consumers just use speakers they have in their TV (or just watch/listen everything on tablet/phone), or if they go fancy they buy some wireless speakers (active) or a soundbar (active as well).

 

[voodooless]

Well, we could say

You could, but you'd be wrong If there is demand the products will be made. If there is demand, there is competition. If there is competition, prices will drop. Clearly, none of these factors is a thing with AVPs. Compared to AVR's the market is tiny. The AVR market is small compared to soundbars. That's just economics 101.

 

[techsamurai]

There is no demand for low end or midrange AVPs since the vast majority of HTs use passive speakers, and splitting amplifiers and AVRs makes things more annoying to set up which is the exact opposite of what most buyers want.

Low-end definitely not. Mid-range providing AVP sound processing that matches the 8015 or 8500HA, definitely.

Why else would all these external amps like the Emotiva BASx and Outlaw exist? People are not going to use <$1,000 amps with the AV10 or the Trinnov Altitude pre/pros.

In the videos of 2 of the most expensive home theaters where they had 10,000 watt amps, they also had Crown XLS amps. I was shocked. One of them had nearly a full rack How on earth can you have Crown XLS amps when you have Trinnov, Ascend, MadVR and your projector alone costs $80k? Clearly, they have a place. Why waste another $30k on something that won't necessarily brings much improvement, if any.

 

[bungle]

Low-end definitely not.

We can definitely approach this on low end too, e.g. eARC input on cheap DAC that can only process PCM.

 

[techsamurai]

You could, but you'd be wrong If there is demand the products will be made. If there is demand, there is competition. If there is competition, prices will drop. Clearly, none of these factors is a thing with AVPs. Compared to AVR's the market is tiny. The AVR market is small compared to soundbars. That's just economics 101.

What is the soundbar to AVR market and how has it changed over time? Does anyone know that? I use crutchfield to gauge it by counting soundbar products vs AVRs but that just shows a trend, not the actual market share. I suspect Atmos has all but killed Home Theater which I foresaw the day they announced it.

 

[peng]

But wouldn't that impact low cost AVRs? Denon has an AVR that costs $299. Does it not do the same decoding (not processing just Dolby Atmos decoding) as the 8500HA?



Are Toroidals smaller in general than EIs? I didn't know that.

I don't want to turn this into an EI vs toroidal discussion as I agree that a proper EI design can sound as good. The Sansui 9090db settles that argument in a way that nothing else can.

Having said that, EIs are generally found in cheaper gear. You can find an Denon EI AVR for $300 - I've never heard of anything with a toroidal at that price point. You look at anything aspirational it's all toroidal Musical Fidelity 8xi (dual toroidals), Dan D'Agostino Momentum (massive single toroidal). I remember looking at pictures of smaller audiophile stereo amps (not the known brands) and they all had toroidals except for one that actually had 2 of them. But yeah, I'd take Sansui sound over a toroidal any day.

EI transformers are not always selected on cost or audio quality basis, could be to suit the designed layout. High quality EI core ones can be more expensive than lower quality Toroids.

I have a $250 QST 185 WPC stereo power amp amp that uses a good size toroid, and as you mentioned, the low cost Outlaw power amps also have good size toroid. All else being equal, toroids are typically lighter.

 

[voodooless]

What is the soundbar to AVR market and how has it changed over time? Does anyone know that?

I found this one:

There are some more comprehensive reports out there. All paywalled though.

 

[Sancus]

Low-end definitely not. Mid-range providing AVP sound processing that matches the 8015 or 8500HA, definitely.

The 8500HA has an MSRP of $6K, there are processors much cheaper than that so I'm now confused what exactly you're asking for? I thought it was an AVP under $1K? There's just no reason to make such a thing.

I was using "midrange" to describe things in the ~$2K range like the Denon 4000-6000 series type stuff.

Anyway, I don't see AVPs as being cheaper to manufacture than AVRs that include pre-outs in the first place. Yes, you drop some components, but you also drop economy of scale since fewer people will buy the product. And the software development costs remain the same, and are probably the majority of overhead at this point.

 

[bungle]

I found this one:
View attachment 265085
There are some more comprehensive reports out there. All paywalled though.

The hometheatre in a title is a niche already. But also you might want to invest on things where you think the ball is moving, rather than what current marketshare shows. Yes economies of scale will most likely not apply early on.

 

[bungle]

We can also look ecomonies of scale in component scale. In that sense you should have almost equal benefits, as components that go to avp and avr are mostly the same. Heck, it is easier to customize cars than audio stuff it seems.

 

[techsamurai]

The hometheatre in a title is a niche already. But also you might want to invest on things where you think the ball is moving, rather than what current marketshare shows. Yes economies of scale will most likely not apply early on.

Thanks, I'm actually surprised that Home Theater had such a high market share but this is about the time Atmos was introduced. I'd love to see the new numbers during the Atmos era.

 

[LightninBoy]

I suspect Atmos has all but killed Home Theater which I foresaw the day they announced it.

I have similar suspicions. At the least it made ht even more of a niche market than it was before.

 

[bungle]

What I think has happened is that markets are not competing anymore. Few big companies now own it all. And yes, we are not getting anywhere. Demand is there, but monopolies don’t need to serve demand.

 

[techsamurai]

Anyway, I don't see AVPs as being cheaper to manufacture than AVRs that include pre-outs in the first place. Yes, you drop some components, but you also drop economy of scale since fewer people will buy the product. And the software development costs remain the same, and are probably the majority of overhead at this point.

But you've absorbed the software development costs for the other products so I'm not sure why you need to absord all of it through the AVP? The AVP just uses the same software which the company will use for 10 years with minor tweaks.

The 8500HA has an MSRP of $6K, there are processors much cheaper than that so I'm now confused what exactly you're asking for? I thought it was an AVP under $1K? There's just no reason to make such a thing.

I was using "midrange" to describe things in the ~$2K range like the Denon 4000-6000 series type stuff.

I'm not saying $1,000 although Emotiva's MC1 certainly showed it can be accomplished at that price point - sure it's a 1st attempt but the next one will be much better, I'm sure.

It could be in the $1,500 range or $2,000 - as long as it wasn't just raising the price. I'd expect a $2,000 AVP to have more sound quality than a $2,000 AVR and more than a $1,500 AVP. So more price brings elevated performance. A $2,000 AVP should be as good as 8500HA probably once you slap on an external amp or two.

 

[HooStat]

You keep forgetting that good quality RCA cables can be hundreds of dollars. Buying an AVR saves tons of money that way.

But more seriously, it is probably more efficient to skip the AVP because the economies of scale are better. Amplifiers are pretty much all the same at this level, and good enough for most applications. And think about stocking AVR and AVP, writing instructions, providing service and support.

Having said this, there is definitely a market for a high quality $1200 AVR. But as a company, I would be afraid to go after it because it would be trivial for someone like Denon/ Marantz to eat my lunch if it worked out to be profitable. As you correctly point out, there is a very low barrier to entry for those folks.

 

[chelgrian]

You keep forgetting that good quality RCA cables can be hundreds of dollars. Buying an AVR saves tons of money that way.

But more seriously, it is probably more efficient to skip the AVP because the economies of scale are better. Amplifiers are pretty much all the same at this level, and good enough for most applications. And think about stocking AVR and AVP, writing instructions, providing service and support.

Having said this, there is definitely a market for a high quality $1200 AVR. But as a company, I would be afraid to go after it because it would be trivial for someone like Denon/ Marantz to eat my lunch if it worked out to be profitable. As you correctly point out, there is a very low barrier to entry for those folks.

There is no reason for even the most fancy RCA cable to cost more than about $20 and most of that is going on the connectors and cost of termination. Anything more expensive than that that is snake oil.

 

[HooStat]

There is no reason for even the most fancy RCA cable to cost more than about $20 and most of that is going on the connectors and cost of termination. Anything more expensive than that that is snake oil.

That was a joke. Hence the emojii. I completely agree with you.

 

[TSB]

You're paying for the (software) development cost. Modern AVR's have a LOT of features. Developing, licensing, integrating and testing those (making sure they don't interfere with each other) is a lot of work. And when you get to the high-end AVR's with niche functionality - they are not selling a large number of them. So the development cost is split over a small number of units.

 

[techsamurai]

You're paying for the (software) development cost. Modern AVR's have a LOT of features. Developing, licensing, integrating and testing those (making sure they don't interfere with each other) is a lot of work. And when you get to the high-end AVR's with niche functionality - they are not selling a large number of them. So the development cost is split over a small number of units.

Yeah but they use the same software for a long time. They also share it across their entire lineup so it's not model specific. It's not like they have to build a new app for each model every year from scratch. I'm sure Marantz and Denon share the same software and hardware for the menu and for storing information so the economies of scale are huge compared to the old days. Same for Pioneer, Onkyo, and Integra. If anything, it was probably more difficult to write the software in the old days as software development has advanced massively and you can have graphical web user interfaces as opposed to building a screen app from scratch and placing things at X and Y positions and building custom controls.