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Old 11-29-2007   #1
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Default Retiring Baby Boomers Fuel Two-Channel - Sales Surge in 2007

Make no mistake, the audiophile business was created by and thrived on the economic power of post World War II Baby Boomers. Fueled by the musical renaissance of the late 1960s and 1970s, the demand for increasingly accurate and realistic music reproduction became more and more important to this large demographic as they aged. By the 1980s a man's stereo system was nearly as much of a societal status symbol as his car he drove. And as Boomers made more and more money, the gear pioneered by the early works of audio designers like Dan D'Agostino, Mark Levinson and Bob Carver (to name just a few) made for an entire luxury goods category.

Roll the tape forward to the advent of home video and the ensuing long term popularity of home video specifically VHS tape and ultimately DVD and the world of audiophiles wasn't quite as happy of a place. By the Millennium, gone were the glory days of status-symbol speaker systems and big amplifiers parked on the floor of your living room having been replaced in affluent people's homes by flat HDTVs, in-wall speakers, touch-screen remote controls, home automation and beyond. Additionally factor in the failure of both SACD and DVD-Audio, a long running drought of creatively important popular music and the rise of MP3s and Internet sites like Audiogon that offers audiophile gear at prices lower than most dealers can by them for - and you can clearly see serious trouble for the audiophile business in the twenty first century.

Not everything is as bad as it sounds in 2007. With decades of dreaming of owning that Audio Research tube preamp or a Linn LP12 turntable more than one audiophile company is reporting a spike in their two-channel sales despite the downturn in the housing market, a slumping Wall Street and $4.00 a gallon gasoline. Some suggest, the Boomer audience, now reaching their early sixties, are finally getting access to the retirement money that they have saved for decades and that is part of what is fueling their audiophile dream purchases. Others suggest that Boomers who saw huge gains in real estate in recent years as well as even bigger gains over the past three decades are often downsizing their family homes to smaller (and many times more than one) homes which can leave discretionary funds to buy some of the more luxurious audio and video goodies.

Questions abound if this spike in audiophile sales is sustainable when music is sold to the masses on low resolution downloads or 25 year old Compact Discs. The answer is 'yes' if the Boomer's children, Generation X, can be sold music in a way that is meaningful to them. Unlike the generation below them (Generation Y) who are now in college, Generation X is a lot more like their parents in terms of the ways they consumer luxury goods. If record labels ever realize that Blu-ray and HD DVD can provide copy-protected HD sound and HD video that competes with HD video game systems and popular home video titles you could see a significant and sustainable growth period in high end audio in the next twenty years. If selling low-resolution audio is the future of the music business, their future is even more ugly than the labels think and without great new music or remastered back catalog titles audiophile sales will surely suffer even more severely going forward.

The big question about future generations being posed actually reaches past the Boomer-like, Generation Xers, all the way to Generation Y and teenaged kids called the "Millenials". With a culture of short-attention span entertainment and disposable, hand-held devices driving social networks that pride themselves with the idea of taking away creative control from the record producer or movie director will entertainment be completely revolutionized 25 years from now? Or will the tech-saturated kids of today revert to more analog, more organic pursuits as they age and increase in financial prominence? If Generation X is any guideline for the generations below them, this prediction is completely possible. While Xers are definitely connected to the Internet and many new media, they are also driving the "green" movement and have been the power behind local, sustainable farming as well as artisinal winemaking and Eastern health trends like yoga and Pilates. Time will tell if the younger generation will follow in the footsteps of the generations before them.

by: Jerry Del Colliano
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