Audio Dealer Business Model

LenWhite said:

Despite all the discussion the quantity of high resolution music (even RBCD quality) remains extremely small, far less than even SACD at this time.

For those assembling computer music server devices today, it's a daunting task to achieve playback on the level of a really good CD player given the computer software/hardware complexities and myriad of alternatives.

Further, I'm not sure how the audio industry plans on protecting copyrights, especially of high resolution music. Someone paying for the original download will be able to simply give away as many copies of essentially the master as they wish without consequence. Surely this will significantly reduce the revenue of recording artists and producers.

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My thinking is that if you want to woo more people, in this case college students and young professionals, you've got to adapt and be relevant to their lifestyles. These kids aren't buying CDs, they're downloading or listening to internet radio stations. They also don't have permanent addresses so mobility is a major factor. The damage was done years ago and much as we'd like, it is not going back to where it was. This system will still give a big improvement on compressed files. We audiophiles like to thumb our noses down on these but in truth they are listenable at as low as 192kbps and their equivalents. To me at least, at these rates and higher the sins are of omission rather than commission. I personally think that if we want Gen Y and Gen Z which is the mass base of music consumers to ask for and thus force the industry to give us the HiRez files we are all hoping for, they've got to hear both the promise and limitations of what they are listening to now. I think the system I mentioned could do that.

LenWhite said:

But I also think there are lots of people between the ages of 40 - 60 who no longer have the obligations of children and are beginning to think more of their own needs. I believe many of these people have never been exposed to a really good stereo system and are also potential clients.

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Amir, this is another opportunity for you. Just down the road you have the Maserati dealer, the Ferrari dealer, the Bentley dealer, the Jaguar dealer. Make a deal with them to set up systems in their waiting rooms in exchange for leaving your calling card. It's all about exposure to the right people. Most have never been exposed to a really good stereo system, and it doesn't take much to get them hooked. It should be an entry-level system that must not cost much more than the upgrade on the sound system in the cars they are considering.

Unfortunately, my stuff is too expensive, otherwise I'd work with you to get more exposure. We've had people walking into the factory, hear the system playing background music in my reception area, and stand there mesmerized. But when they hear that it's a $10,000 system, they mentally turn off. You need to get them to be mesmerized with a $2,000 system, and as Jack suggested the Paradigm Titan/Sonus/iPOD system might just be the ticket. They shouldn't need to be told that it's better than a consumer system. They should know it for themselves - and they will if they love music.

I discovered why wives don't like the hifi system in the living room when I was dating, and the expensive system I owned then didn't get me to score more often even with women I met at concerts and jazz bars who loved music - you make them feel uncomfortable when there is one sweet spot. If you sit in the sweet spot to share music with them, you make them feel like you are being demeaning. If you give up the sweet spot to them, they feel that you are being condescending.

It's the same with wives - one customer I visited and became friends with him and his wife when I convinced him to throw out the listening seat and buy a couch - the couch that the wife wanted so that she could spend time with him reading her book or knitting when he's listening to music. That was over 5 years ago. He went from my $20,000 loudspeaker that his wife didn't want him to buy because it was selfish, to my $80,000 loudspeaker that his wife wanted him to buy because now she can be with him when he's listening to music. He is away from home on business 3 weeks out of a month, so she now values her time with him even more. And his former loudspeakers are now the basis of a $60,000 home theater for the wife in the living room. That's over $100k in sales for the dealer - all with a $3,000 couch.

My epiphany in audio came years before I got into the business - when I managed to broaden the sweetspot (I was using the Maggie 3.5's then) to encompass a loveseat and two people, I also enjoyed the system and the music much more because I could lounge on a comfortable couch to enjoy the music even though with the tweeters on the outside and the broader sweet spot, the absolutely best was not as good as it was with a narrowly focused sweet spot. I could then comfortably listen to the same system critically, as well as background music while doing something else. I also enjoyed music more when I could share the music with someone.

Jack's suggestion about the comfortable home environment (and without shoo-ing his kids away) is a very important point. Sometime ago, I suggested to a dealer to put a kid's padded play area in his store with speakers sitting on the floor and a LCD monitor playing kid's movies. It leaves the young parents to shop and the dealer to close the deal while keeping the kids distracted (oh, and when you install the home theater, throw in a system for my kids too.)

amirm said:

The equipment is the easy part. Not sure of the logistics to get it placed some place there. I will look into it. It is an intriguing idea!

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I don't know if you have the same thing in the universities here - in London, some enterprising dealer left a nice system (or sold them at a discount) in the Student Travel Office. This is a travel-agent on-site which sold travel packages to students. They used it to play world music and travelogues (which tend to have good sound).

Also it is of my opinion that the less expensive the system, the better the room acoustics need to be. Even the way you have the Salons and Everest were not optimal.

Bruce B said:

Also it is of my opinion that the less expensive the system, the better the room acoustics need to be. Even the way you have the Salons and Everest were not optimal.

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There is no hope of that for any consumers we want to attract [in this thread]. And we risk having them hear one thing in the showroom, and heaving another when they take the equipment home.

BTW, our theater is designed for the Revels and we do take the equipment there when we can arrange it by appointment. For most people though, we want to showcase that their great off-axis performance means that they tolerate typical living rooms exceptionally well. From a sales point of view, sitting in a bright open showroom is also more inviting than sticking people in a treated and (visually) sterile room.

The usual suspects in budget audio 30 years ago are still the usual suspects in budget audio. The prices have gone up somewhat, but there's still good stuff to be had. Only last year, Rega did a show in Manchester, England, which featured the company's P1 turntable the (now discontinued) Brio amplifier and a pair of RS1 speakers. That was less than £1,000 (Even with the new Brio-R the price of the entry level system comes in at about £1,100). Add in stands, speaker stands and cables, and you are still looking at less than £1,200. Add the matching CD player and you are still not much past £1,600.

Richer Sounds (Cambridge Audio, Mordaunt Short and more) can shave a lot more off that figure. As can NAD and PSB, or Rotel and B&W or even Creek and Wharfedale. We don't talk about these systems much in print these days because most of the readers of the magazines long since left the shores of the entry-level. And to a B&M dealer, stocking and demonstrating some of these products, can represent a service to an online rival rather than money in the till. "Thanks, but I can get it for 30% less online" at the end of hours of demonstration time represents a frustrating experience for the dealer the first time. By the fifth, they begin to question the point of stocking such product lines.

So people buy online, often buying random systems that they have no idea how to install properly and think the mediocre sound they get from that equipment represents what good audio can sound like.

garylkoh said:

(...) My epiphany in audio came years before I got into the business - when I managed to broaden the sweetspot (I was using the Maggie 3.5's then) to encompass a loveseat and two people, I also enjoyed the system and the music much more because I could lounge on a comfortable couch to enjoy the music even though with the tweeters on the outside and the broader sweet spot, the absolutely best was not as good as it was with a narrowly focused sweet spot. I could then comfortably listen to the same system critically, as well as background music while doing something else. I also enjoyed music more when I could share the music with someone.

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Jack,
Last time I have expressed a similar view in the forum someone told me I was not "listening seriously" ...
I also need a system that sounds good in a broad zone, and that can be listened acceptably at an upright position - and this is a good point of the Soundlabs. I am now listening to a pair of Wilson Maxx3 and they also seem to have a broad zone of acceptable listening quality, although they sound better at the center sweetspot.

Some dealers set their systems with very narrow sweetspots - a bad thing as usually the prospective client brings one or two friends, that can influence the purchase decision and can emit unfavorable appreciations just because they are sitting in lateral positions.

After one of my divorces, I had to start from scratch again. I think the best (least expensive) system I had put together was a YBA Integre DT driving a pair of Joseph Audio RM-25si? I think that was the system. Digital was a Sony XA-777ES and TT was a Well Tempered. This came very close to the other "cheap" system I had which was a Classe' 70 driving a pair of Maggie SMG's Those were the days!!!

amirm said:

There is no hope of that for any consumers we want to attract [in this thread]. And we risk having them hear one thing in the showroom, and heaving another when they take the equipment home.

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Made me think of this one:

That's hilarious!

LenWhite said:

Alan,

Are you aware of any audio dealers in Europe that have used some of the sales techniques discussed in this thread so far? Have any of them promoted via communication vehicles such as social networks stereo seminars at their shops using their sales personel to demostrate stereo and instruct on system setup and what to listen for in good audio systems? Have any of them negotiated arrangements with colleges or retailers such as high end auto dealers to showcase stereo systems?

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Yes, I know several who use facebook, and who tweet and blog. I know other who have seminars, offer clinics, set-up advice and the rest. They get the usual suspects turn up to these events.

I also know a retailer who worked extensively with the local college network, offered 10% off at the presentation of a student union card, etc, etc. He gave it up when he found that he was giving 10% discount on £20 ear buds that he was buying for £18, and one or two £100 PC monitor speakers that he was buying in at £85. And nothing else. His student market effectively evaporated around 2004. By and large, students are too busy trying to pay for being students now to spend more than they need to on audio, I'm afraid.

I was involved in an event a few years ago where we offered people the chance to hear what their iPod can do when plugged into a good audio system. This was in a large department store in London and traffic was absurdly high. The only people who volunteered to have their iPod plugged into good audio already had good audio. Most wouldn't engage because it was 'too much bother' to take the iPod out of their pocket. The most successful conversion process I did was to plug a DAC connected to an audio system to a PS3 playing Guitar Hero. The kids playing got it immediately. That window of opportunity has closed now; Guitar Hero is long out of fashion.

As to high-end auto retailers, Burmester has concessions with Porsche, but the connection simply doesn't trigger in most car salespeople's minds. They want to sell cars, not someone else's products. Does Naim for Bentley, Mark Levinson for Lexus or Dynaudio for VW generate many sales for the audio companies involved? Traditionally not as much as you might imagine.

Sadly, I think the combination of an uninterested and disinterested 'Meh' generation and the sheer lack of money in the system right now spells some bleak times for what audiophiles consider to be good audio in the West. I expect these things will come round in time, but it won't be tomorrow. In other regions, where plenty of people still love music and the sound it makes the way we do, the audio world is a very different place.