Accommodation pricing for the industry reviewer's ...your opinion?

Bruce B said:

So has anyone actually refused to buy a piece of equipment because they weren't offered a discount?

I ran into this about a year ago. A speaker manufacturer refused to lower the price even 1 cent below MSRP. I really wanted those speakers in my room, but that scenario really turned me off from the whole company.

Another thing that people may not be aware of is that speakers and electronics have a typical 50% accomodation price. Things such as digital components and especially cables are much more and can be as much as 70% off!!

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I have only been privy to the details surrounding one accomodation pricing deal...a speaker and in this case the "reviewer" paid 18% of the msrp. That obviously is way under what most consider the 50% number...but whether 50% or 15%, there's no way a reviewer can remain objective under these circumstances....no way.

es347 said:

I have only been privy to the details surrounding one accomodation pricing deal...a speaker and in this case the "reviewer" paid 18% of the msrp. That obviously is way under what most consider the 50% number...but whether 50% or 15%, there's no way a reviewer can remain objective under these circumstances....no way.

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Pardon me but usually the review is handed in before the piece of gear is purchased. Not the other way around. So how can that influence the outcome?

Before or after Myles, I see a huge conflict of interest....my opinion....nothing more than that.

Boy, this is a run away thread if I ever saw one!

My late two cents. I think a lot of issues discussed here can be dealt with with due disclosure. If anything can lead to potential bias, even remotely, it should be disclosed. Once there, then people have the information to decide how to use the information.

US federal law now mandates that online sources list potential bias such as what is discussed. Look at this good example: http://www.luminous-landscape.com/about/disclosure.shtml

"Products For Review
Products reviewed on this site are generally on loan from the manufacturer and are returned after testing, though more than a few are purchased outright for testing and then sold afterward. If I find a product of personal interest I will purchase it after testing, usually from a retailer but occasionally from the manufacturer. Wherever I buy it I try and get the best discount that I can, but I always make sure that the price is "reasonable", and not so inexpensive as to be construed as any sort of a bribe.

For the record – I have never been offered any sort of compensation (gift or bribe) for any review or article that I've written, and would, of course, not have accepted one if it had been.

Products on loan, such as cameras and lenses, are returned after the testing period. Software products are not returned, because manufacturers don't want them back. Printers are also not returned, because similarly, manufacturers don't want them back due to the high shipping costs. I therefore keep them for long-term testing and then when they are ready to be replaced with the next and newer version for testing I work with the manufacturer to donate the old model to a local school.

Small accessory items (usually those under $250) are usually kept, since sometimes the cost of shipping them back is disproportionate to their value, and manufacturers usually don't want them returned for this reason. If they interest me I'll continue to use them; if not I give them away to friends.

Products reviewed by contributors are almost always items that they themselves own, since few people receive review samples. If the product is on loan to a submitting reviewer I always find out the nature of that person's relationship with the manufacturer and try and ensure that any claims are reasonable and can be substantiated.

____________________________________________________________________________________

Travel
I always pay for my own travel and accommodation when going to trade shows. If a visit to a manufacturer is part of a "press junket" with others journalists attending a structured event, I will accept paid airfare, especially when the travel is international.

It is usual for company's hosting a visit to entertain, but in my experience it is always with a budget, and rarely includes excessively expensive restaurants or wine lists. (Those days are long gone).

Other than small items, like branded sweatshirts and caps, I have never been offered a gift by a manufacturer and wouldn't accept one even if it was offered. No cash or any other form of compensation would, of course, ever be accepted."

He goes on list some other items the same way.

What is nice about such disclosures is that if in the process of writing it, the author worries about how he will look, I am sure he will take steps to remedy .

Money is the ultimate conflict of interest. Some conflicts cannot be overcome. Voluntary disqualification is often the only solution. Or to forfeit the monetary interest. A blind trust is often benficial.

No Good Deed Goes Unpunished!

Where do I start? I personally have a problem with accommodations. They usually come back and bite the manufacturer in the ass for a few reasons:
1. Inevitably, once the reviewer finds something they prefer, they turn around and sell the component. Since they bought at a much lower price then a consumer can, they are more apt to sell it for less which hurts the resale of the product and inevitably the brand.
2. Some reviewers say they will not make money on a component when they sell it as that is unethical. Well, I think most manufacturers would prefer the items be sold at a higher price to reinforce brand value. If the reviewer has an ethical problem with this, they should allow the manufacturer to resell the component and keep anything over what the reviewer paid.
3. Anybody and everybody these days is a reviewer. There are only a handful of people out there that are truly doing this long term and as a career and are not looking at this as a way of getting equipment on the cheap or long-term loans.
4. There are so many people out there that have a reason why they should be accommodated that it really gets ridiculous. They write a blog, they worked at an audio store, they are a musician, their brother's wife had a friend... etc. Where does it stop.

Frankly speaking, I generally have a problem with the review process as a whole. Most reviewers I have read do not really understand what good sound is and that synergy, room size and acoustics has so much to do with a proper experience. They think that just by dropping a component into a system that one can properly evaluate that piece and write about it as gospel. Not true at all.

I think the best reviewers are the ones who's biases you clearly understand and that they are consistent. I can tell you that Fremer is one of the best for a number of reasons; he is extremely thorough, consistent and whether you agree with his tastes or not, you can always read his review and know with all certainty whether or not the component he is reviewing would appeal to you.

Did I diverge?

jtinn said:

Most reviewers I have read do not really understand what good sound is and that synergy, room size and acoustics has so much to do with a proper experience. They think that just by dropping a component into a system that one can properly evaluate that piece and write about it as gospel. Not true at all.

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This is 100% correct. It takes months to years to optimize a system. Many people don't understand that adding a component, no matter how extraordinary the price, will not immediately provide the absolute sound. Those who shuffle components through their system every few months are perpetually doomed to be dissatisfied, IMO.

I very much like amirm's example above. If "accomodation" pricing means "dealer price" for a new product, I don't see a problem with that. After all, if one is persistent and knowledgable enough, one can get "dealer price" or very close to it on almost any product (I don't mean everyone/anyone can do that with anything they want, though). Used loaners or demos could be reasonably sold for even less.

From comments here, it sounds like most "accomodation pricing" is generally within these guidelines. The 15% of MSRP example is hopefully an outlier.

In any case, full disclosure would be very desirable, and would perhaps obviate some of the objections and resentment toward reviewers that has been presented here?

rbbert said:

I very much like amirm's example above. If "accomodation" pricing means "dealer price" for a new product, I don't see a problem with that. After all, if one is persistent and knowledgable enough, one can get "dealer price" or very close to it on almost any product (I don't mean everyone/anyone can do that with anything they want, though). Used loaners or demos could be reasonably sold for even less.

From comments here, it sounds like most "accomodation pricing" is generally within these guidelines. The 15% of MSRP example is hopefully an outlier.

In any case, full disclosure would be very desirable, and would perhaps obviate some of the objections and resentment toward reviewers that has been presented here?

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I agree,
basically a reviewer is getting an option similar to an employee/dealer-sales channel, that is usually trade price.
The benefit for the reviewer is that they have far greater flexibility in choosing what product they want to purchase with the trade price whereas an employee/dealer is locked into who they work-sales channel for, can any reviewer comment if it is not universal.

I think a reviewer's characteristic/personality bias exists even if they do not own products, however I appreciate there are a few bad apples in the review business that really do screw this up for others, but then these people are known so does it really matter if others also receive trade price.

Anyway, of those are are against this, how many still subscribe to magazines?
Myself subscribe to 5 magazines and trade price purchases never bother me as reviewer personalities/histories can be read or found pretty easily, and I would think others who subscribe to many publications possibly feel the same.

Relating to full disclosure, it would be rather good if audio companies released information relating to their gross and net profit margin for products and also after operating costs, like we see with manufacturers on the stock market.
Now this would be useful.

Edit:
Just thought, however if reviewers are sold products at trade prices then they should be contractual obligations such as holding item for X amount of time and/or restriction on selling price to stop some who may be able to do profiteering.
This is usually in place for employees but I bet it is not for reviewers.


Cheers
Orb

Ultimately, for a manufacturer, the objective is to design/build products that people will want and to let people who might want the products know about them.

I agree with Orb that there is no difference between a reviewer and an employee in the dealer-sales channel. With Genesis, they get the same deal, and they both have to sign an agreement that they don't quit in the time that they own the product and they have to hold the product for three years before selling it. The owners of the dealership likes this as it means that the salesman who buys a Genesis product is committed long-term. I control it by making the owner of the dealership attest to the buyer being officially employed at the dealership, and I will call the dealership and ask for the person by name.

My rationale is that the salesman at the dealership is more likely to be credible recommending something to the customer if he has the product at home, and he had to pay good money out of his pocket to get it. He could have probably purchased it at dealer price anyway without us knowing, so there is no loss from the manufacturer's view.

With a reviewer, having the product mentioned in every review he writes is valuable. But I also agree that for a reviewer, it might tend to some bias. However, aren't we all biased and recommend what we ourselves like?

jtinn said:

3. Anybody and everybody these days is a reviewer. There are only a handful of people out there that are truly doing this long term and as a career and are not looking at this as a way of getting equipment on the cheap or long-term loans.
Frankly speaking, I generally have a problem with the review process as a whole. Most reviewers I have read do not really understand what good sound is and that synergy, room size and acoustics has so much to do with a proper experience. They think that just by dropping a component into a system that one can properly evaluate that piece and write about it as gospel. Not true at all.
I think the best reviewers are the ones who's biases you clearly understand and that they are consistent. I can tell you that Fremer is one of the best for a number of reasons; he is extremely thorough, consistent and whether you agree with his tastes or not, you can always read his review and know with all certainty whether or not the component he is reviewing would appeal to you.

Did I diverge?

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Jtinn did a great job putting the manufacturer's slant on this. I love the line about "anybody and everybody these days is a reviewer."

We know one thing: the best example here is Consumer Reports where they do not allow advertising and buy all of their review items like we do (and then auction it to employees). We also know that without donations from members, they would go out of business! I only know of a boating magazine that duplicated their model, writing truly critical reviews in a sea of boating magazines which create marketing brochures in the name of writing "reviews."

This is a tough business to make money at. The Internet and a million bloggers is reducing their value. Would we all donate money toward a truly unbiased magazine that accepts no advertising and has zero conflict of interest? If you enough of you say yes, then we should hire the ones already posting and be in business tomorrow .

amirm said:

We know one thing: the best example here is Consumer Reports where they do not allow advertising and buy all of their review items like we do (and then auction it to employees). We also know that without donations from members, they would go out of business! I only know of a boating magazine that duplicated their model, writing truly critical reviews in a sea of boating magazines which create marketing brochures in the name of writing "reviews."

This is a tough business to make money at. The Internet and a million bloggers is reducing their value. Would we all donate money toward a truly unbiased magazine that accepts no advertising and has zero conflict of interest? If you enough of you say yes, then we should hire the ones already posting and be in business tomorrow .

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Amir-There will always be biases because it is human nature. The best you can hope for is that people disclose their biases so you can read around them. The closest we ever came to this was TAS in the glory years when they accepted no advertising and they had a stable of great reviewers who could actually write. I would gladly shell out good money for another magazine of that caliber that took no advertising money and had great reviews written by people that you have actually heard of before.

...and the gold standard for unbiased reviewers is......the envelope please (drum roll).....Jon Valin http://www.virtualrimshot.com/media/rimshot1.mp3

The problem with Consumer Reports is they are not a hobby magazine. There's' no way they are going to invest $50k in cables or $100k in speakers. Even if they did there is no way they are going to recommend it no matter what the results.

es347 said:

...and the gold standard for unbiased reviewers is......the envelope please (drum roll).....Jon Valin http://www.virtualrimshot.com/media/rimshot1.mp3

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LOL....

Actually IMO it's "User" reviews. I'm not talking about the guy that posts: "This Amp rocks!". I am however talking about a guy that explains what his room is like, his equipment, and his experience within that environment and how the components match up.

A few thoughts potentially apropos to this thread and the current discussion of reviewer compensation...

Twenty years ago, an audiophile's equipment choices were largely defined by what his local brick and mortar store kept as inventory. Many of these stores were incentivized to work with the young audiophile on a starter system, in the hopes of nuturing larger, future equipment purchases. Audiophiles learned about equipment by reading reviews that were available on a more or less monthly basis from a few print magazines.

Today's environment reflects the disintermediation trends wrought by several factors. The rise of home theater has cannibilized a large volume of audio sales. Brick and mortar stores cater to these customers because the complexity requires their expertise, particularly at installation. The incentive to cater to the smaller audiophile crowd is limited at best. New consumer orientated shows such as RMAF make it relatively cheap to audition expensive equipment, albiet under less than optimal conditions.

Simultaneously, the internet allows to consumers to buy and trade equipment at relatively low costs. This has also given rise to direct-to-consumer manufacturers, bypassing the older retail model. Additonally, the internet allows anyone to be a 'reviewer'. While it is true that a satisfied customer 'reviewing' a piece of equipment that they are enamored with is hardly 'unbiased'; how much different is the perception when professional reviewers benefit from hefty price accomodations? The key asset for any reviewer is not knowledge or ability to turn a phrase (although those things certainly help), rather it is the reader's trust that they can come to a reasonable conclusion about the equipment being reviewed as filtered through that reviewer's unique set of biases. Undisclosed industry accomodations weaken the bond between reviewer and reader by diminishing that trust. One result: readers place less value on professional reviews.

I would gladly shell out good money for another magazine of that caliber that took no advertising money and had great reviews written by people that you have actually heard of before.

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mep, HIFICRITIC at www.hificritic.com, you may of course already be aware of them

Frank

I never thought I would say this, but thanks Frank.