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Beatnik’s Pet Peeve #5: “Why is so much of the High-End equipment so extremely expensive?”

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This has to be one of the most common questions and complaints in the high-end audio world.

It also has to be one of the oddest things about the audio community. I’ve never heard anyone ask why do “supercars cost so much” or why do Swiss watches cost a fortune. Now, of course, lots of people wonder if they are worth the money, but people know they cost that much because they are “supercars.”

Let’s talk about watches for a moment; you can buy a no-name watch that keeps great time for less than $50. You can buy a Seiko that keeps great time and looks really nice for under $100. You can buy a very heavily gold plated Hamilton or such with the same Swiss movement as the $20,000 gold one for around $2,500. Still, if you want a Patek Philippe on your wrist none of those other watches are going to please you. I own one of those gold plated Hamilton watches and even get complimented on it from people with the five figure watches on their wrist. Still, I never have complained that companies make them. There is a market for ultra expensive watches, and that’s why they make them.

People who own Mustangs don’t go around complaining about what a Ferrari costs. I’ve heard them joke about what kind of person buys them, but not that they exist. I drive a Mini Cooper with most of the John Cooper Works package on it. It’s the most fun car I have ever owned. My wife owns the all-electric BMW i3 which is the quickest car they make and in its own way is incredibly fun. BMW also makes an i8 which is a supercar, and I have no problem with that nor do I feel like I have to own one just because it’s faster, more powerful and handles much better than either of my cars.

Audiophiles  – of which I am one – are the only group of people that feel so unsatisfied if they can’t have the best. I think there are a few things we should all admit and come to grips with.

  1. “High-End Audio” has become a luxury industry. Anyone who thinks an audio system that costs over five figures isn’t a luxury purchase is kidding himself. There was a time when HiFi was a middle-class hobby mostly for men but enjoyed by the whole family. Some of them bought kits and built speakers; others bought products from Scott, Fisher and Sherwood. Even then there was what was called the “Carriage Trade.” It was mostly doctors and lawyers, and they bought products like McIntosh and Marantz. Nowadays doctors and lawyers aren’t the really rich and there are a lot more really rich than there used to be. So, now we have moved from just having a “Carriage Trade” but there seems to be a sizable market of “Luxury” audio components for the really rich.
  1. It’s important to know that you don’t have to spend five figures to have a great sounding stereo. I have in house right now a pair of the Audioengine HD6 ($749/pair) powered speakers. Combine them with an Oppo BDP-105D ($1,299) CD player and a nice pair of interconnects and for under $2,500 you have a killer sounding system. You can add a really cool looking and great sounding Tri-Art Pebbles ($1,295) turntable, a Grado cartridge and one of several reasonably priced phono stages such as the one from Margules ($799) and you would still have a system around $5,000. This comes in $5,000 under a five-figure stereo. It’s not high-end but it’s certainly HiFi.
  1. You can get way up the high-end ladder for under $25,000 and if you buy demo and slightly used you can do it for well under $20,000; an example would be a pair of DeVore Fidelity O/93s, a Pass Labs integrated, a ClearAudio turntable, the Oppo 105D and a phono preamp and some cables. That’s less than the price of most economy cars. It has been my opinion since my college days that the cost of my car is about what I’m willing to pay for a stereo.
  1. Don’t fool yourself though; there are products that will move the price up to fifty or sixty thousand that will significantly improve your enjoyment of the music. There are turntables from people like AMG that give you most of what you get from the ultra expensive turntables and there are racks, power conditioners and cables that will actually give you a significantly more satisfying musical experience. I think when you move into the price of a luxury automobile you need to be honest with yourself and admit this is a luxury product, though with neither the car or the stereo have you reached the supercar status. You do realize there are people who own more than one super car and more than one mansion. Is it any surprise that audio companies try to tap into this money as well as ours?
  1. Last, one of the things I find most confusing in the audiophile world is which products sell. I know you think I mean the really expensive, but that’s not what point number five is about. I’m talking about which products in a company’s line sell. I have a friend who ten years ago was an Audio Note UK dealer. Audio Note sells their products in Levels. The Level One products and the Level Four or Five products amounted to over 90% of his Audio Note sales. Back then when I purchased a pair of Audio Note AN-E speakers, I opted for the least expensive Level Three speaker; I thought it was the sweet spot in the line. I think we miss the point that truly high-end companies have to make statement products. This doesn’t mean that even they think everyone is going to buy it or that it is the sweet spot of their line. Don’t feel like there is nothing worth owning between a companies least expensive and most expensive product.

 

Back to the original question, “Why is so much of the high-end equipment so extremely expensive?” I’ve covered some of the reasons I think this question is asked and some of the constructive ways to deal with it. Personally, there is another question that bugs me, why are there so many high-end products and who the heck buys them? When I go to shows, and I see so many different products from so many different companies. There are plenty of established companies but there are also so many small companies. Somewhere there must be a lot more audiophiles than I’ve ever dreamed.

 

Copy editor: Laurence A. Borden
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16 Responses to Beatnik’s Pet Peeve #5: “Why is so much of the High-End equipment so extremely expensive?”


  1. Chris Templer says:

    Hi Jack,
    Somewhat rhetorical question. The price is because the manufacturers have figured out that some fool will buy their product whatever the price due in a big part to dishonest reviewers. The last of the good guys was Peter Aczel, present company we hope, excluded. A friend has got a pair of famous name 800 Watt valve monoblocks and they sound no better, certainly less sweeter, than an old Leak Stereo 20 and wherever you care to look the trend continues.
    Keep up the work
    Chris Templer
    South Africa

  2. Mike Rubey says:

    Hi Jack,
    One of the perceptual problems is that we are not talking about jewelry or automobiles but electronics and virtually all other “consumer” electronic technology comes down substantially in price over time. The stuff is mass produced by robots out of generic parts bought at ship load prices by companies big enough to stock every box store on the planet. High End Audio is for the most part just the opposite. Boutique companies hand building equipment from the best parts available. Many of them offer several grades based not always on size or power but by the amount of silver in the signal path. Most of us understand that it is possible to get 90 – 95% of optimum without going to price extremes. Ultimately it becomes a matter of priority. The example I use when people get self righteous about me being over indulgent is a boat. Guys spend crazy money on boats to go fishing or skiing and no one gives it a second thought (wives excluded). People use their boats a whole lot less than I use my stereo. Also boats have ongoing running and maintanence costs that have earned them the “hole in the water where you throw money” analogy. The one item in high end audio that is my pet peeve and that I will always fail to understand is how it is possible that a set of 1M interconnects can possibly be worth as much money as a new Ducati……never minding the interconnects that cost as much as a new Mercedes. I don’t know how it’s possible that these items exist and that these companies do enough business to stay in business but they apparently do. It is my perception that this more so than anything else cast a shadow of incredulity over the whole high end audio industry. My system is a Audion 2a3 Silvernight base model, Rethm Trishna speakers, and a 47 Labs 4735 CD player. The cables are dirt cheap Swiss Gothems which my dealer swore he likes as much as the high end cables he sells. My system blows my mind everyday. I had an old friend over last week and Alison Krauss had tears running down his cheeks. The system cost $15K new. I got the speakers and CD player as demos and saved a few thousand bucks while maintaining full factory warranty. I have a 13 x 16 dedicated listening room and in that size space I believe that my system is giving me 95+% of a cost no object system. Frankly I’m just glad this stuff exist in our world.

    • Jack Roberts says:

      Well, you kind of made my point, watches have come way down in prices for one that keeps good time, but some people want one that does something other than keep time. It’s called luxury. By they way your system is one I would really enjoy as long as I could add a turntable to it. What else would I play all my LPs on. Still, you’re fooling yourself if you really think you’re get 95% of what is available if you were to just double the cost of your system. By the way if someone want to pay as much for their audio system as you do for a boat and its upkeep, that seems reasonable to me.

  3. Jeffrey Maidlow says:

    You must be right. There seems to be a very large population of audiophiles that have the means to purchase such expensive equipment. I am quite happy with my low to mid range price system which is in the 12k-15k range. Yes there are components that I would like to upscale but I have to remember listening to the music is my main reason for my hobby.

    • Jack Roberts says:

      It’s the main reason for some, but not all. I’ve met some great people in this hobby who to me seem to own very little music, but have real expensive system. I don’t think there is anything wrong with them making a different choice from me. I have spent a small fortune over the years on LPs and even some CDs and SACDs. I could have just listened to FM or now a days, just streamed music. It’s just not the same to me.

  4. Rick Justice says:

    Establishing my priorities has been a life long growth task. Having successfully lived through youth and middle age I now am grateful for what sight and hearing I have left and apply them to a much more intense use than ever before.
    I’ve never been wealthy but have always been interested in making the best of what I could afford. Twenty some years ago my wife and I build an Audio Note 300b kit amp, thank you Brian in Canada, and upgraded the interior parts with the savings of our labor. It still brings great joy to us and the cats.
    I began an upgrade of a Rega Planar 3 several years ago that morphed into one of the best learning experiences of my audio life. I sourced parts from Dr. Limm in Malaysa , parts from Gus in Argentina, learned where all of my local open minded milling and grinding shops were and topped it off with Jeff Spall’s marvelous tone arm from Kent, England, using Terence of Californias Pulse, modified Denon 103 cartridge.
    I paid as I went. I read and studied works on turntables that I never dreamed I could understand, and now when I relax to listen every evening I seem to hear the music with a wiser, sweeter ear, knowing the why and how, at least basically, the mechanical noodlings in my vinyl grooves convert to electrical particles through components and wire and back to mechanical noodlings at the speaker.
    Audio should definitely be about dreams but for me knowledgeable reality trumps grandiosity every time.
    To put this in perspective. Several years ago I treated my self to a top tier Seiko Grand Seiko wristwatch that cost me way more than many of my audio trinkets.
    I suppose if I had the time, eyesight and lack of shaky hands I might have tried to source parts for this project as well. All things are balanced with time and I am a happy man.
    be well, rick

  5. Michael Graw says:

    A very precise description of the strange world of high-end. Having defined high-fidelity as the best reproduction of recorded music high-end must be per definition a luxury concept using most expensive materials and component and extravagantly styled cabinets. The improvement in sound quality too often is only virtual (imagination)! If high-end would mean ‘best sound quality’ recording and mastering studios would be filled with high-end equipment.

    • Jack Roberts says:

      Your reasoning makes a lot of sense, but I have found most musicians and recording engineers are looking for something different than most audiophile, even those who choose bargain equipment.

  6. BradleyP says:

    There are so many products because the margins on luxury goods are high, even when a relative handful are sold. I get the feeling that larger pools of buyers for uber expensive gear are found in the Middle and Far East than in Europe and the Americas. Another possibility is that hundreds of prototype products from unknown or boutique manufacturers debut at audio shows in the hopes of lining up dealers and orders that would justify further production, and then little to nothing happens. Then the items end up on ebay as “rare” and “highly sought after” audiophile components possessing mystical capabilities. None of this is to say that there aren’t scores of top-notch companies out there that really are producing excellent, expensive gear and moving forward either the state of the art, value, or both.

  7. la musique says:

    To be really frank, Have a look at the Asian Hifi market, the more it cost the better you are.
    It is all about showing your assets. The only thing is they don’t know any about Music.
    So, we have companies who realise their is money to be made with those fools.
    And unfortunately we have to pay mega $$$ for S……..t

    • Jack Roberts says:

      Many of the Asian I have gotten to know in audio over the years are more into music than most Americans I know. This is especially true when it comes to going to live music or learning to play instruments.

  8. Jim Smith says:

    Hi Jack,

    I wish I had a coherent answer!

    However, I do have some real world observations.

    Having worked with many of the components in the high-end arena, I sometimes come across expensive components that appear to be priced relatively fairly (based on my actual experience with the small audio manufacturer’s “ideal” mark-up). These boutique manufacturers simply cannot buy enough top-line parts or custom metalwork to be inexpensive.

    Sadly, there is another class of audio gear that appears to me to be obscenely overpriced, with no justification (at least that I have seen or heard) for their pricing.

    Unfortunately, some of these grossly overpriced products have a following, deserved or not … :(

    Best,

    Jim

  9. Jack Roberts says:

    Thanks Jim, I’m not sure I asked a coherent question, but thanks for your input. I agree with what you say, but do you have any comment on weather or not you had the same experience with the middle of the line products and how they sell compared to the entry level and top of the line products in a line.

  10. Larry Fisher says:

    The best way to a great system without spending Vebleinesque sums is still to build it yourself. You can still spend quite a lot, but when you see the bill of materials, and understand where the money is going, it’s a lot more palatable. And it’s your choice whether to splurge on fancy capacitors, solid silver wiring and other bling. You’ll also find that the most expensive part is probably the case, and that’s true of many professional products too. Buy a kit, or spend some quality time of diyaudio.com.
    Second best way is to buy used, and there are many good deals to be had on audiogon. And keep in mind that a really fine system will be really fine for a very long time. Had you bought McIntosh, Marantz, or built a Dynakit back in the day, it would still be pleasing you today.

  11. alan trahern says:

    How ironic it is that the next article found on the “Dagogo” homepage following The Beatnik’s Pet Peeve # 5 is a visit to Brian Ackerman’s Aaudio Imports, home of the $800,000+ Lansche based system.

    Did no one else catch this???

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