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I’m worried about the future of the hi-fi industry

Our planet is a crazy place. And let’s face it: humanity is just a strange collection of organisms driven primarily by … possession. And money. Because that’s status. The more ‘bling’ the better. And well… we do have to show off our successes, don’t we? Pessimistic? Perhaps it is. But – in my opinion – true. Look around you. And look at the state of the world. Driven by data-gathering social media and mostly mindless, ‘buyable’ influencers driving Lambo’s – rented or otherwise – into the guardrail. Now I don’t intend to go too deep into that, but I do want to project a few things onto the hi-fi industry. And I sincerely hope that we can still turn the tide there.

NB: this is my vision, my experience and my feeling. Do not consider this a scientifically based article. I am not an economist

Let’s start on a positive note. A hobby is fundamentally something wonderful. It brings people with the same passion together and brings pleasure, relaxation and can even lead to beautiful developments. And it doesn’t matter what kind of hobby it is: photography, film, music, sports, gaming or hi-fi.

There is also a nice side effect: where many people come together, there is always talent to be found. And among these people there are always enthusiasts who have the gift of developing beautiful products and manufacturing them on a larger scale. From this, brands are born. Small, or sometimes medium-sized. And sometimes big enough to feed a few families and make a good living from it.

So far so good. That’s how it works in an economy.

Growth and limits

We go a step further. The big, well-known brands. Everyone in our industry knows the big brands. And also the bigger niche brands. The brands that get talked about a lot in the media and can be found in any respectable store. We don’t really need to mention them, because they dominate the market. Sometimes rightly so, sometimes not. It’s a mix of quality, marketing and margin. Let’s leave it at that.

What is noticeable is that with some of these parties the priorities have shifted a bit. That can be for all sorts of reasons. Many times it is driven by external investors who would like to see more margin. This reduces innovation. New versions appear practically every year without any real new developments (especially in receivers). Perhaps they can mention a new dac chip in the spec list. Or an extra input in the form of hdmi e-arc. Or just nothing, except a V2 after the type number.

What the thinking behind this actually is, you can probably fill in for yourself; we touched on it briefly in the paragraph above. However, it is the beginning of the end if you ask me. It leads to disappointed customers and it creates a breeding ground for negativism around hifi and high-end audio. And I don’t have to explain to you that this industry is already looked at with slanted eyes. Partly driven by vague, non-working and often far too expensive tweaks that have nothing to do with the core of the hobby.

Then a second, obvious trend. Breathing new life into an old model in order to capitalize on the retro-hype. Or even breathe new life into an old brand in order to make money again with a very old model. Because, well… the price is not retro at all.

This strategy – your author’s opinion – can almost be called sad. Perhaps we should also produce the Intel 8086 – or even better: the 4004 – again, in order to be able to run DOS 1.1 on a 5.25-inch floppy disk. Very retro… but pretty useless.

Driven by passion

Fortunately, there are still enough brands and companies that do not want to sit still and do bring innovations. Sometimes in collaboration with others. It’s a great idea to join forces! Purifi is in fact a kind of co-operation. (Peter Lyngdorf, Bruno Putzeys and Lars Risbo, for example, are founder/co-owner). But out of that, a nice new technology was born, namely the Eigentakt class D amplifier. (Also speaker units for that matter…). And that Eigentakt really brings something beautiful to the market, is now pretty clear.

What is striking about this collaboration is that behind this club there are passionate people. And many are actual scientists. It is not a large, anonymous companty that pulls the strings and only wants to see turnover and profit figures… Unfortunately, we do see that more and more.

Marionette

Because where it often goes wrong – in my opinion – is when a brand becomes so big that people or companies from outside the industry become interested. Investors. People that – often – have no feeling with hifi audio, but just want to have a ‘toy’ on the side. And at the end of the line are only interested in black figures in Excel-sheetes. Because the toy has to make money.

Now we all have to eat and let’s all hope that the brands we love so much just turn a profit. Because otherwise there is no future for this hobby at all. The point is: investors want profit at all costs. And that means often at the expense of innovation, quality and sustainability. And that is not a desirable situation.

Knocking on doors

The problem is that we see very clearly that more and more brands are owned by a few large holdings (see list below). They keep buying and growing. In theory, this can lead to interesting cross-pollination and healthy cost savings. But it also leads to a lot of similar products. After all: shared components and layouts. Now there is probably something to tune, but these are nuances…

What if you buy a Citroen C1, a Toyota Aygo or a Peugeot 107? Same product, different looks.

It can also make companies lazy. Why not just shop at home? Or very close to home? A streaming-pcb here, a power supply there… input and output board… put a case around it and done… we have a new product.

It really happens more than you think. Even in the ultra-high-end market. Because who supplies optical, high-end drives at this time? That’s right… Denon. And yes Goldmund uses the same drive in its 200,000 Euro player as Denon in its DCD 2500 and A110 series. This is not to say that these players perform equally….But it does make you think….

Now this is not new. Car manufacturers do it too. In fact, there it’s even worse because otherwise they just can’t survive (maybe in hi-fi too). And the same happens in TVs, where only Samsung and LG still make LCD and OLED panels. So if you thought you bought a Sony…. nope. That’s an LG with a different engine.

Audio Mohicans

We think it’s a shame though, because it takes away a bit of the magic. Although we must mention that there are still brands that really do everything in house. Usually smaller specialists.

Let’s call them the Audio Mohicans.

These are the brands that develop their own dac chips. Brands that design and solder an amplifier from A to Z. Brands that still develop their own transistors. The tinkers. The purists. The brands we should cherish…. Brands that shouldn’t be part of an investor’s collection who doesn’t understand that developing a device can take years. And that, for example, a proprietary dac chip is something special. That it is something that makes a device distinctive. And that it can’t just be replaced for an “off the shelf” chip. “Because that one does the same thing, right?”….

But we all know: money rules the world. Sigh…

Bigger and bigger

And we see this in the ever-growing, umbrella investment companies. Take Quad… part of the International Audio Group. Arcam? Part of Samsung. Roksan? Owned by Monitor Audio. Bowers & Wilkins? Owned by Masimo. Devialet? Owned by various investors, including Xavier Niel (a French billionaire) and Foxconn. Avant Garde? Owned by EMH Partners… And we could go on and on.

Have I punctured your bubble? Sorry. I was also quite shocked at how few serious brands still operate independently and are thus free to choose completely bizarre projects. Projects that seemingly can’t produce anything, but from which discoveries are made that in time can lead to beautiful products. Fortunately, they are still there.

The question is: How long? Because look at the list below. This is only the beginning…

  • Masimo – Bowers Wilkins, Rotel, Classé, Polk, Defintive Technology, Marantz, Denon, Heos, Boston Acoustics,
  • IAG – International Audio Group – Wharfedale, Quad, Mission, (Tag McLaren), Castle, Luxmann, Audiolab, Leak
  • Samsung – Revel, Arcam, JBL, Harman, AKG, (Bang & Olufsen?), Infinity, Becker, Mark Levinson, Soundcraft, Martin
  • Voxx – Acoustic Research, Hirschmann, Jamo, Jensen, Klipsch, Magnat, Onkyo, (and many more)
  • Lenbrook – NAD, PSB Speakers, Bluesound
  • McIntosh Group – McIntosh, Sonus Faber, Sumiko, Audio Research, Wadia, Fine Sounds Benelux / Asia
  • Armour Home – Q acoustics, QED cables
  • Vervent Audio Group – Focal, Naim
  • Monitor Audio – Monitor Audio, Roksan, Blok
  • Audio Partnership (Richer sounds) – Cambridge Audio, Mordaunt Short, Opus and Gale speakers.
  • Music Group – Tannoy, Behringer, Midas, and some other pro brands.
  • Paradigm – Paradigm, Anthem, Martin Logan
  • GP – KEF, Celestion
  • GoerTek – Dynaudio.
  • Various investors, including Foxconn, Xavier Niel, Renault, Sharp – Devialet
  • EMH Partners – Avant Garde
  • etc…

The scary thing is: these big organizations are getting bigger and bigger. And they don’t feel anything about having to shoot down a brand because it doesn’t make money. Because Mr. Masimo really doesn’t know the team at Bowers & WIlkins. And if Tannoy is going to make a loss, Music Group won’t hesitate.

How then?

But let’s not get sour. Is there a solution? Not a clue. I’m not an economist. And let’s face it: humans are predators. We’re never going to change that. Deep down, humans instinctively choose for themselves (and his / her child). If you need to protect yourself and your family, you will. And if an entrepreneur needs to protect his “baby” – his business / investment – he or she will do so. There is nothing wrong with that in itself either.

Where it goes wrong – and unfortunately I don’t have a solution for that either – is that the collecting urge of the big parties just won’t stop. They are insatiable. And that leads to monstrous creations in which, at the bottom of the line, everything is anonymous to the team that hovers above it.

The only solution seems to be that brands do not let themselves be bought up. That they choose to remain independent. Perhaps that is a crazy choice in the short term – after all: you are missing out on a lot of money – but in the long term it seems a better choice in terms of stability and happiness.

After all. you are not a puppet and you belong to a select group of highly respected Audio Mohicans. And in the end: aren’t we all looking for happiness? Something that money cannot buy, but a hobby and the people around it can bring….

In short: let’s keep the hi-fi hobby alive and support the Audio Mohicans. They deserve our respect.

2 Comments

  1. Hello Jaap, an interesting article.

    Personally I think there is room for both the big players and the Mohicans.

    The big players can and do pull resources to push technology forwards and make what was unattainable to most normal buyers now more attainable (for the most part).

    I like supporting the smaller guys: Sugden Audio, Atoll Audio and Davis Acoustics.

    Personally I’m more worried about the importers/distributors and local dealers for without them you wouldn’t be able to go see and listen to those special Mohican products. Also local warranty work is a lot easier when dealing with your local team in lieu of sending the product out overseas.

    Thank you,
    Brian

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