A Plea For High-End Audio Manufacturer Honesty and Transparency

[JiminGa]

Just an observation based on working with manufacturers that further supports your view...

On point #3: most, probably 95%, of high end companies have fewer than 30 employees and less than $10 million in revenue.

I'm willing to bet there are NO high end companies that we commonly mention here with 100M or more than 500 employees. I do not include Sony here as "high end". As you say maybe a couple of dozen employees and < 10M.

 

[Lee]

Wilson has stated publicly they have around 50 employees.

 

[tima]

release dates need to be realistic and mores even conservative.

Wilson has a good model for this. They will inform press about an upcoming release, sometimes several months in advance with a request not to release marketing materials until a certain date. Sometime during that period they will state a product availability date for initial roll-out at a specific dealer's showroom. I've never known them to miss an availability date.

Models will trickle out to other dealers after the launch event. Unless they are buying a demo or floor model most purchasers are told there will be a wait time to fulfill their order, say 3 - 6 months and from my experience they hold to their wait time.

It's all quite methodical. No doubt having 50 employees with a few focused on on-time delivery makes a difference.

I would not put money down on a product that is not released and available. Don't need to be first.

 

[Lee]

Wilson has a good model for this. They will inform press about an upcoming release, sometimes several months in advance with a request not to release marketing materials until a certain date. Sometime during that period they will state a product availability date for initial roll-out at a specific dealer's showroom. I've never known them to miss an availability date.

Models will trickle out to other dealers after the launch event. Unless they are buying a demo or floor model most purchasers are told there will be a wait time to fulfill their order, say 3 - 6 months and from my experience they hold to their wait time.

It's all quite methodical. No doubt having 50 employees with a few focused on on-time delivery makes a difference.

I would not put money down on a product that is not released and available. Don't need to be first.

Yes, they do a great job here. It's also cool ow they slowly release information to the public in the weeks leading up to the launch date.

 

[microstrip]

I'm willing to bet there are NO high end companies that we commonly mention here with 100M or more than 500 employees. I do not include Sony here as "high end". As you say maybe a couple of dozen employees and < 10M.

Yes, WBF seldom refer to Bang and Olufsen, that has a revenue around 350M. Bowers and Wilkinson are supposed to have a similar revenue.

 

[Elliot G.]

I'm willing to bet there are NO high end companies that we commonly mention here with 100M or more than 500 employees. I do not include Sony here as "high end". As you say maybe a couple of dozen employees and < 10M.

I think you are correct and at one time Harman was very big in High End audio but not today. I think Focal is fairly large as well and with Naim they might be in the 100mil area but no where near 500 employees. I have been to their facilities a few times and they do have a bunch of people.
I would think that B&W and Paradigm because of all the products they make could also be close but never the number of employees..
As far a the uber high end you are certainly correct as they are all small companies

 

[gleeds]

The industry of high-end audio chronicles the passion for emotionally-engaging sound, the pursuit of engineering perfection and the love of music. The designers of our components come to audio from many different fields, but each designer wants to fill our ears and our souls with joy from the sound of extraordinarily reproduced music.

We are an unusual industry, comprised of a few relatively large companies, and many small companies. Many high-end audio manufacturers start as one person efforts, literally in their garages.

High-end audio is a very unique hobby-based industry in which manufacturers often are in direct communication with end-users, often through WBF. This post is a request for greater honesty and transparency from manufacturers in this industry.

A manufacturer announces a new product, and the manufacturer's distributors and dealers discuss that product publicly. To the end-user the buzz states explicitly or at least implies that the product appears to be a completely engineered, completely tested and ready for production component.

Hobbyists order the component from dealers and the order payments go up the distribution chain back to the manufacturer. If the manufacturer does not have stock on hand, then these payments are used to produce the next copies of the component. In a small, under-capitalized manufacturer this is fine, because the companies are not large enough to produce a quantity of components and maintain an inventory. This is why in our industry orders often take several weeks or months to fill as the manufacturer literally produces the component to order after receiving payment.

But what if, in reality, the manufacturer uses the first purchaser order payments merely to continue and to complete the design and the testing and the pre-production of the component? I think this is wrong.

If a manufacturer conveys talking points to its distributor and that distributor conveys those talking points to its dealers and its dealers convey those talking points to prospective purchasers, I want those talking points to be scrupulously accurate. I don't want those talking points by the manufacturer -- which then are propagated downstream -- to be merely aspirational. If a product is announced as in existence and ready for purchase then that product should be actually fully designed and actually fully tested and actually in production or ready for immediate production.

Unfortunately in high-end audio many manufacturers are under-capitalized with inadequate funds for proper testing of new components under development and about to be released. Manufacturers don't have a dozen prototypes which they send out across the world to be tested in situ in many different audio systems comprised of many different components. High-end audio manufacturers are not like Porsche which sends out prototypes across the world to be test driven from the freezing roads of Finland to the desert roads of Saudi Arabia.

This is not the consumers' problem. This is the manufacturer's problem. Low volume manufacturers in this industry should not use early purchasing consumers as the beta testers. In my opinion many components in this industry are too expensive for the manufacturer effectively to be using the first purchasers as the beta testers.

I advocate for complete honesty and transparency from manufacturers. A hobbyist should not have to wait many months or even a year or more for a component to arrive at his/her front door as the product's design and testing and reproduction -- unbeknownst to the purchaser and maybe even unbeknownst to the distributor and to the dealer -- actually is completed.

Manufacturers should not announce product release dates which are not realistic.

Manufacturers should not take payments for products which are not yet actually fully designed and actually fully tested and actually in production or ready for immediate production.

Manufacturers should not use early-adopting purchasers as beta testers.

Partisan preferences for particular brands and components aside, I hope we all can agree that manufacturers should be scrupulously honest with us hobbyists.

Ron, I'm sorry to disagree with your statement, especially about parts testing by small manufacturers.

Three manufacturers you know, especially WestminsterLab (a small company), exhaustively test every part in the chain. As their distributor, I typically maintain a minimum stock of two to three of each model to send to reviewers, dealers, and prospective clients. The same is true for Rockna Audio and Trafomatic; again, small but well-run and stable companies.

Again, here on WBF, all the manufacturers I represent comment on their threads regarding technical matters, including parts testing and other relevant topics. Within our small but growing dealer network, we intentionally keep it small by design, selecting only those dealers who share our passion, knowledge, and willingness to learn as much as possible about our product. If they are not, they are not our retail partners.

I'll admit to occasionally falling prey to hyperbole when I need to spend big bucks in the mainstream press for ads to assist our brands in being better known. I'll revisit that in the interest of promoting transparency as a priority. As for WBF as a sponsor and distributor, I believe the best policy is to inform and educate as many people as possible about our product, making them aware of its benefits.

As we have spoken, I admire and support what you're advocating; however, let's be careful not to paint with too broad a brush when it comes to manufacturers.

 

[Elliot G.]

Yes, WBF seldom refer to Bang and Olufsen, that has a revenue around 350M. Bowers and Wilkinson are supposed to have a similar revenue.

both of those companies have an automotive component and that is game changer for them in revenue

 

[Mike Lavigne]

Esoteric/TEAC has over 500 employees and does $100m annual revenue. but they are not exclusively high end.

 

[SCAudiophile]

Accuphase has 80-100 employees. No published revenue figures...

 

[Elliot G.]

Ron,

Here is my take...

1. It's okay to use customer funds to fund development as long as that is made perfectly clear upfront by the manufacturer.
2. Customers should be aware of the high failure rate of companies in our industry.
3. Honesty rules should also apply to this and other forums and all types of media. Forums and influencers should disclose all financial relationships they have with various products like WBF has with Taiko, CMS, etc. Influencers like Jay/Darko/Guttenberg/etc. should disclose where they are a dealers or have a financial relationship or offer consulting services.
4. Manufacturers should disclose any running changes and I would ideally like to see a right for the customer to get an economical update on any major ones. dCS and others are especially good at this.
5. Ideally manufacturers should spend more time in development and have less frequent updates.
6. I agree that release dates need to be realistic and mores even conservative.

My biggest worry is the customer getting screwed. They should be aware that if customer funds have to be used then they should probably understand and consider that the chances of that company going bankrupt are higher due to being undercapitalized. Customers should also know about all the financial relationships so they can weigh that into how much they believe the review was objective.

Lee,
this is total fantasy and it has been going on since time and memorial. It is far better today as there are many professional audio companies that would never dream of doing anything like this. These companies have capital, science and ethics but this doesn't represent the entire Industry.
As a dealer I have learned I'm not paying for what I am not getting. As a distributor the rules are somewhat different.
At the end buyers need to be ware and when a buyer is purchasing directly from a manufacturer that is a sign to be careful period.
I think that the lure of the deal is what makes this something that many will take a gamble with and if they do that then they need to recognize the potential risk. If you are buying direct, particularly from a company outside the boundaries of where you live the risk is higher period.

IMO it is never ok to use customer funds to develop a product that is what Investors are for. IMO that is scam stuff in my mind and no one can convince me of any other thought.

 

[Lee]

Lee,
this is total fantasy and it has been going on since time and memorial. It is far better today as there are many professional audio companies that would never dream of doing anything like this. These companies have capital, science and ethics but this doesn't represent the entire Industry.
As a dealer I have learned I'm not paying for what I am not getting. As a distributor the rules are somewhat different.
At the end buyers need to be ware and when a buyer is purchasing directly from a manufacturer that is a sign to be careful period.
I think that the lure of the deal is what makes this something that many will take a gamble with and if they do that then they need to recognize the potential risk. If you are buying direct, particularly from a company outside the boundaries of where you live the risk is higher period.

IMO it is never ok to use customer funds to develop a product that is what Investors are for. IMO that is scam stuff in my mind and no one can convince me of any other thought.

I don't understand what is unreasonable about my post. If the customer is notified that they are using some funds for R&D, what is the harm? At least the customer then can make an intelligent decision as opposed to not being notified at all. The industry is mostly tiny firms. This at least mimics the kickstarter approach.

A scam would involve not telling the customer what they are doing. At least this way the customer is fully aware and can decide whether to gamble or not.

I personally would want the company to be better capitalized but perhaps the kickstarter approach would be good as a stepping stone for some tiny firms that have a useful innovation.

 

[Lee]

Accuphase has 80-100 employees. No published revenue figures...

Source? Is it all high end audio revenue?

 

[SCAudiophile]

Source? Is it all high end audio revenue?

There is no published revenue number.

 

[Lee]

There is no published revenue number.

I was asking where you found the employee count.

Also, I was wondering if we knew if they were in non-high end audio categories.

 

[SCAudiophile]

There don't seem to be precise numbers out there current by year. They seem to always mention approximations. I took the common summary of answers from various sources.

I am not aware of Accuphase making any products that are not considered to be high end audio quality...

Accuphase Laboratory, Inc.　All product

www.accuphase.com

 

[Elliot G.]

I don't understand what is unreasonable about my post. If the customer is notified that they are using some funds for R&D, what is the harm? At least the customer then can make an intelligent decision as opposed to not being notified at all. The industry is mostly tiny firms. This at least mimics the kickstarter approach.

Name one time this has ever occurred ?
Never on 50 plus years ever heard of this

 

[Porsche]

Name one time this has ever occurred ?
Never on 50 plus years ever heard of this

never happen, its an absurd comment

 

[treitz3]

Be kind, please...

I am not sure about the timing, or if this is even the case, but I was one of the first to get a pre-order on an untested product. The Snubway.

I am so glad I did this. Yeah, if it didn't work out? Eh....things happen, but it sounded before the launch like something I would be interested in.

Absurd to one may be a completely different story to others. Personally, I am glad I did this and have zero regrets. Now I have multiple products from this same manufacturer/designer...as do many other folks on this forum.

Tom

 

[Lee]

Name one time this has ever occurred ?
Never on 50 plus years ever heard of this

The whole point of the thread is suggestions by Ron on how the industry can do better. Prior history is not a factor.