Price, Value, Worth and COGS

[FrantzM]

So "It all adds up" to tripling the price of a product ... There is not a shred of doubt in my mind that prices in High End will continue to increase ... The manufacturers don't have to come with any excuses or explantions: We make them up!

 

[KeithR]

And into what load will that amplifier produce 300 wpc? And does that amp double down as the impedance drops like a D'Agostino Class A design (no way a 300 watt Sony will do 1200 watts into 2 ohms; as a matter of fact, had a distributor recently bring over their highly touted integrated amp and the first thing it did when confronted with the Summit-X's load was blow a fuse)?

Actually a lot of costs have increased:

Shipping costs have risen greatly.
Many parts and circuit board prices have gone up because of oil prices
Teflon caps are what 5-10X more than a polyprope cap? Remember, polystyrene are no longer made So a large value teflon cap runs in the $300 range and multiply that times 20-30 pieces for something say like the 20K cj GAT preamplifier.
While on the topic of caps, check out the price of the Dueland caps (be sure that you're sitting down) that Vandersteen uses in the xover of the Model 7.
Metalwork and machining costs have increased.
The dollars weakness in the foreign market eg. an arm lift from Japan that cost $5 a couple of years ago is now $15 to 20. This is just an example and sure this holds true for other imports say transports too.
Rent and electricity costs have risen markedly.
I'm sure there's a lot more that haven't considered.
It all adds up.

Doubling down in power output has little to do, if any, with high end audio pricing. You can find Parasounds that can do that at 2500 bucks as I recall.

And sure, costs have gone up (although many are farming out to china now)---but audio prices have gone up much further. I was shocked after talking to a speaker manufacturer how little a lot of this stuff costs.

The problem in high end audio is that few wince at high prices in the audio press, and it is expected that something at 100k is better than something at 20k. One magazine in particular won't review the super high end as a matter of policy which is interesting.

 

[MylesBAstor]

So "It all adds up" to tripling the price of a product ... There is not a shred of doubt in my mind that prices in High End will continue to increase ... The manufacturers don't have to come with any excuses or explantions: We make them up!

Frantz:

You're the one accusing manufacturers ripping people off so why don't you break down the costs involved in bringing a product to market and present them? I've only given you some things off the top of my head and it isn't meant to be all inclusive.

It doesn't seem that anything I could say will dissuade you otherwise.

 

[KeithR]

So "It all adds up" to tripling the price of a product ... There is not a shred of doubt in my mind that prices in High End will continue to increase ... The manufacturers don't have to come with any excuses or explantions: We make them up!

FrantzM- what is really happening is that a designer sells like 5 units a year---so has to price his stuff dramatically high as to provide himself a living. Audio has become EXTREMELY esoteric.

 

[MylesBAstor]

Doubling down in power output has little to do, if any, with high end audio pricing. You can find Parasounds that can do that at 2500 bucks as I recall.

So you're saying that building a bigger and stiffer PS is free of charge? And BTW, Parasound didn't build JC's designs exactly as described. The Parasound products are definitely built to fit a price range.

Problem is, and don't know how many people realize this, there are areas in the price range that really don't sell. For example, the $5000 to $10K region for speakers is largely dead zone. That's why in part Magnepan for example priced their speakers as they did; and there's people out there that don't like the $5K price tag of the new 3.7s.

And sure, costs have gone up (although many are farming out to china now)---but audio prices have gone up much further. I was shocked after talking to a speaker manufacturer how little a lot of this stuff costs.

I think that depends on the speaker and price range.

The problem in high end audio is that few wince at high prices in the audio press, and it is expected that something at 100k is better than something at 20k. One magazine in particular won't review the super high end as a matter of policy which is interesting.

Sorry but you're really generalizing and think you're really wrong that reviewers don't give a second glance to prices either. And no, I don't assume anything. I've heard as many crappy expensive products and inexpensive products.

If you're talking about AA, I don't think they've held to that rule recently either.

I might be wrong but only a few are farming product manufacturing to China and those that are, are at the lower end of the price scale.

 

[KeithR]

I'm talking about Stereophile actually, Myles. JA has mentioned that preference online, since there isn't a big enough market for 200k speakers and the ilk.

Can you point out in your reviews where you've had issues with pricing? or what are the super high end products that don't deliver the goods? From my limited understanding--most reviews are of gear that reviewers like or prefer, so that super high end gear basically is *usually* going to garner a favorable review. There is basically always a positive feedback loop (sorry, no pun intended!) that supports this type gear.

Last review that I recall that debated price/performance was of a Lamm amp by Art Dudley (and he loved the sound still).

 

[microstrip]

Hi

Let's not trivialize the argument. I understand that an assault to the SOTA will likely be more expensive than one run-of-the-mill product . The 300 watts amplifier High End amplifier is likely better than the equivalent mass produced one which sole attribute is to produce that wattage. So we are in agreement that a SOTA product will cost more but what does explain the flight toward those inane prices? Why top preamps went from 15 K to now approaching 100K!? Why for example the Wilson MAXX3 cost $35,000 more than the MAXX2? And I repeat the question : What are the "massive cost" in manufacturing a preamp? Have these cost increased threefold since 2000? COGS? Research? Research???

Once we correct your small math mistake : MAXX2 - usd 44900, MAXX3 - usd 68000 , so difference is usd 23100, it is very easy to explain : the MAXX3 uses many of the more expensive solutions found in the Alexandria X2 series 2. If you want details Wilson did their best to explain it apologizing for the increase in price.
See for example the Stereophile online review:
http://www.stereophile.com/floorloudspeakers/wilson_audio_specialties_maxx_series_3_loudspeaker

I hope you do not pretend there is no difference in sound between a MAXX3 and a X2 series2.
See that for example the opposite can happen : the Sasha decreased its price compared to the Watt/Puppy 8, due to the use of better design options . mainly a single box.

People seem to forget that products are often designed to a target price - the designer is free to make a product to be sold at a certain price, that must be sound better than lower price ones and competitive with similar priced ones.

Surely there are examples of expensive products that do not represent good value for money, and are just opulent products, as referred once by Dave Wilson. But happily the number of ultra-expensive units is very low and we must analyze them in a one by one basis - not as an whole.

 

[KeithR]

Once we correct your small math mistake : MAXX2 - usd 44900, MAXX3 - usd 68000 , so difference is usd 23100, it is very easy to explain : the MAXX3 uses many of the more expensive solutions found in the Alexandria X2 series 2. If you want details Wilson did their best to explain it apologizing for the increase in price.
See for example the Stereophile online review:
http://www.stereophile.com/floorloudspeakers/wilson_audio_specialties_maxx_series_3_loudspeaker

I hope you do not pretend there is no difference in sound between a MAXX3 and a X2 series2.
See that for example the opposite can happen : the Sasha decreased its price compared to the Watt/Puppy 8, due to the use of better design options . mainly a single box.

Sasha lowered its price to compete with Magico V3---which was kicking the puppy 8's tail.

 

[KeithR]

One more thing---as a Martin Logan owner---i would think you would be more of a stickler on high end pricing. They have been a model of pretty much the opposite. The Summit X i believe is 20% more than the prior version from 10 years ago!

similar to my Magnepan example earlier.

 

[microstrip]

Sasha lowered its price to compete with Magico V3---which was kicking the puppy 8's tail.

Perhaps. As I said "products are often designed to a target price - the designer is free to make a product to be sold at a certain price, that must be sound better than lower price ones and competitive with similar priced ones."

If Wilson market research found they needed to have a speaker selling under 30k they targeted at this price. But we can be sure that if the Sasha would sell at usd 40000 it would be a better speaker.

 

[MylesBAstor]

One more thing---as a Martin Logan owner---i would think you would be more of a stickler on high end pricing. They have been a model of pretty much the opposite. The Summit X i believe is 20% more than the prior version from 10 years ago!

similar to my Magnepan example earlier.

List on the Summits when I bought them was 10K; the Summit-X lists for 14K. But I still believe that the ML-Xs are a hard speaker to beat; but certainly I can appreciate what a Sasha/Evolution/NOLA/Sonus Faber, etc bring to the table too

And there were certainly other products that might have owned that coudn't afford either

 

[Old Listener]

At an abstract level, I can accept the idea of audio gear as a luxury category where costs have risen to spectacular levels.

What I hate is that the hobby that I have enjoyed for 40 years has been hijacked. There isn't much left I can identify with.

I doubt that people like Edgar Villchur, Henry Kloss, Scott and Fisher would feel at ease with high-end audio as it exists now either. Henry Kloss in particular continued to find ways to bring good sound to the market at very affordable prices.

Bill

 

[MylesBAstor]

I'm talking about Stereophile actually, Myles. JA has mentioned that preference online, since there isn't a big enough market for 200k speakers and the ilk.

Can you point out in your reviews where you've had issues with pricing? or what are the super high end products that don't deliver the goods?

I think I listed in another thread products that I didn't believe delivered the goods: Richard Gray, Koetsu and Air Tight cartridges, Unison amplifiers and a few others. But this might be slight OT--but isn't the quality of high-end products the highest its been? Go back and reread early TAS and even the SOTA gear back then had very, very significant issues, both of the sonic and reliability kind. There was one product that killed a person if I remember correctly.

From my limited understanding--most reviews are of gear that reviewers like or prefer, so that super high end gear basically is *usually* going to garner a favorable review. There is basically always a positive feedback loop (sorry, no pun intended!) that supports this type gear.

I totally agree with you on this. This in fact was something tried to get around with my mag by assigning gear to reviewers.

 

[MylesBAstor]

At an abstract level, I can accept the idea of audio gear as a luxury category where costs have risen to spectacular levels.

What I hate is that the hobby that I have enjoyed for 40 years has been hijacked. There isn't much left I can identify with.

I doubt that people like Edgar Villchur, Henry Kloss, Scott and Fisher would feel at ease with high-end audio as it exists now either. Henry Kloss in particular continued to find ways to bring good sound to the market at very affordable prices.

Bill

Bill: I respect what you're saying but in the end, isn't it the market that drives what ends up being built? If this "high priced" gear wasn't selling, it would have disappeared quickly. OTOH, how many pieces do you think they're selling. For instance, cj's ART is limited to 100 pairs. That's less than one/country world wide

Another example is the people who clamor for a magazine dealing with affordable equipment. Maybe now, with the internet, that's a reality, but it wasn't with print publications. There were quite a few that tried and failed along the way. That's because possibly the people who buy this equipment won't support the magazine or don't care. I know. I wrote for one and reviewed lots of lower priced equipment. And as a reviewer, I really enjoyed finding and reviewing these lower priced pieces of gear since it was essential to attracting people to our industry.

 

[microstrip]

(...) For instance, cj's ART is limited to 100 pairs. That's less than one/country world wide

Myles,
You can hire me as a proofreader for your magazine: 125 pairs, not 100.

"Like its companion GAT Preamplifier, the ART Amplifier will be offered in an edition of just 250 units (125 pairs) to be sold through selected Conrad-johnson dealers and distributors."

BTW, can proofreaders buy at industry prices?

 

[FrantzM]

Frantz:

You're the one accusing manufacturers ripping people off so why don't you break down the costs involved in bringing a product to market and present them? I've only given you some things off the top of my head and it isn't meant to be all inclusive.

It doesn't seem that anything I could say will dissuade you otherwise.

Myles

The accusation inference is yours and one you must substantiate. Please do show me where I have "accused" the manufacturers of ripping people off? The inference is yours not mine. Before you accuse you must be prepared to prove.
I have maintained throughout this whole discussion that any claim of superiority must be substantiated, especially when it comes from a reviewer. Our hobby has some objective basis to it. If a product is clearly superior it should prove so under most if not all conditions. We are not talking about Haute Couture here, where there are NO references whatsoever. Costs have not increased threefold in Electronics why have prices?
I would like to add that I don’t expect High End Audio to be inexpensive. I simply would like prices to be commensurate with performance and reviewers to strive for objectivity. Very few do.

 

[MylesBAstor]

myles,
you can hire me as a proofreader for your magazine: 125 pairs, not 100.

"like its companion gat preamplifier, the art amplifier will be offered in an edition of just 250 units (125 pairs) to be sold through selected conrad-johnson dealers and distributors."

btw, can proofreaders buy at industry prices?

ok

 

[MylesBAstor]

Myles

The accusation inference is yours and one you must substantiate. Please do show me where I have "accused" the manufacturers of ripping people off? The inference is yours not mine. Before you accuse you must be prepared to prove.
I have maintained throughout this whole discussion that any claim of superiority must be substantiated, especially when it comes from a reviewer. Our hobby has some objective basis to it. If a product is clearly superior it should prove so under most if not all conditions. We are not talking about Haute Couture here, where there are NO references whatsoever. Costs have not increased threefold in Electronics why have prices?
I would like to add that I don’t expect High End Audio to be inexpensive. I simply would like prices to be commensurate with performance and reviewers to strive for objectivity. Very few do.

So we are in agreement that a SOTA product will cost more but what does explain the flight toward those inane prices? Why top preamps went from 15 K to now approaching 100K!? Why for example the Wilson MAXX3 cost $35,000 more than the MAXX2? And I repeat the question : What are the "massive cost" in manufacturing a preamp? Have these cost increased threefold since 2000? COGS? Research? Research???

That's sure how I intepret this post Frantz.

Just for my edification Frantz, what piece of SOTA gear do you think justifies its cost?

 

[andy_c]

What I hate is that the hobby that I have enjoyed for 40 years has been hijacked. There isn't much left I can identify with.

Exactly! I got into EE as a young guy in the mid '70s due to an interest in audio I've had since the late '60s. I have a similar sense of alienation now.

I doubt that people like Edgar Villchur, Henry Kloss, Scott and Fisher would feel at ease with high-end audio as it exists now either. Henry Kloss in particular continued to find ways to bring good sound to the market at very affordable prices.

Hafler too. He provided better performance than the popular Japanese equipment of the time, in exchange for a simple, spartan appearance of the gear. Now it's swung around to be a sort of beauty contest of industrial design, though it seems many audiophiles are in denial of that. People love their bling, yet still insist it's all about the sound.

 

[Bruce B]

For what I have observed with my limited sampling of folks who buy really super high-end equipment.. (about 20 or so) I'm talking $70k Dacs and >$200k speakers and >$100k amps... They could give a Rat's ASS on what it sounds like. They bought the pieces for what they looked like and the status.
There was one guy that bought a Clearaudio Statement and had never played it. He said it was too much hassle, but it had a Wow factor!