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It should be noted that financial troubles for audiophile manufacturers is nothing new, even in the best of times. Often these companies are run by people with much bravado, a tremendous amount of technical knowledge, but very little marketing or business experience. Sometimes even those with good business plans hit a plateau as fads come and go. Many iconic companies of the past have purchased by conglomerates, including McIntosh, Audio Research, Quad, Marantz, and a host of others.
Those who have fared better than most are companies that tend to be more diversified. There are a few manufacturers who make high end products for both the pro audio and home based user market. I spoke to James Tanner, VP of one such company, Bryston, based in Ontario, Canada. Bryston has been making award winning gear for over 40 years. When asked if Bryston, in the current recession, had altered its approach to product development, Mr Tanner offered the following:
“Bryston has never designed a product with a price point in mind. We manufacture products with a no cost object approach because our goal is ultimate performance without the compromises that cost restrictions impose. Due to the fact that we are involved in many more audio markets beyond the relatively small audiophile market (Broadcast, Pro, Studio, Industrial, etc.) we fortunately have a much better cost effectiveness in our products as opposed to companies that cater strictly to the audiophile market. We are able to purchase reasonably large amounts of parts at a time, which gives us a very good cost advantage when negotiating with our suppliers; especially during economic down times.”
When asked about current feedback from the dealer network, Tanner replied, “Their business is definitely down and they, like us, are fighting for every sale available. Being able to adapt to changing consumer buying trends (Internet) and needs of their potential customers is causing some to go through a lot of restructuring. The walk-in traffic is not happening at the levels that it used to. Therefore developing new ways to attract and service the evolving client base is an indisputable priority.”
Certainly, another huge factor in the shrinking audiophile market is undeniable and crushing competition from other sources of entertainment. Internet, gaming, HDTV, portable music devices, and smart phones have altered the way consumers spend their idle time. Sitting down and listening to music on a state of the art system seems a quaint notion to many.
When asked his thoughts on what the road ahead looks like, and how Bryston can adapt to this new environment, Tanner replied “I would say that we as an industry can no longer rely on high-end audio being a priority for the iPod generation as it was for my generation. We have to figure out how to bring the typical young music listener forward and help develop their interest in ‘listening’ seriously to music as opposed to what I see now which is ‘collecting’ music. When I was growing up, the hierarchy was buying your car, then your HI-FI system. Today it’s computers and Bryston is looking at how we can develop products that can motivate the iPod crowd to use their music storing devices to integrate with a very high quality playback system. Our new BDA-1 External DAC (Link) is an example of one attempt to address this market segment”
To get a perspective of a manufacturer with a focused product line, I had the opportunity to get some observations Ken Dawkins, VP of North America for THIEL, a very highly respected, long time maker of loudspeakers. When asked about the perception of “value” in high performance audio being more important then ever in the current economic climate, Dawkins responded, “I would say to an extent that is probably true in some categories. At THIEL, we have not altered our plans to continue to introduce new product, both loudspeakers and whole house audio systems that are based on ultimate performance parameters and, in some cases, proprietary technology. THIEL has often been viewed as a company that offers "value" in high performance audio and that may be more important now than ever before. We will work diligently to continue the legacy left by our late co-founder, Jim Thiel.”
In response to a question regarding the need to cutback on R&D, expansion, and product development, Dawkins stated, “While THIEL has always been a conservatively run company, we have had to tuck in our shirt and tighten our belts both on the personnel side and perhaps on the marketing side. However, as an engineering driven company, technology and product development continue to be our focus. As with organizations in most industries, THIEL has diligently tried to find new and more efficient ways to bring product to market and to market that product. For example, we have expanded out channels of distribution, added rep firms, forged relationships with other companies both inside and outside of audio and participated profoundly in the social networking arena.”
In regards to dealer feedback, Dawkins responded, “There is continued concern, especially among the traditional independent dealers. Part of the problem is that there appears to be no real ability to forecast the short-term or long-term future right now. Further, there are profound issues within given markets.... the insurance industry in Hartford, the auto industry in Detroit, real estate and tourism in Florida. In addition to the larger economic malaise, each area of the country faces its own set of issues, some greater than others.”
While Bryston, Thiel, and a handful of others have been faring reasonably well considering the climate, some manufacturers have resorted to clever marketing strategies or pricing changes to reignite sluggish sales. One example comes from Rega, a long established maker of turntables, amplification, speakers, and CD players. They recently had a “cash for clunkers” trade in program for two of their CD players, the Saturn and the Apollo. They were willing to accept any CD or DVD player, working or not, for up to 25% off of the new unit. Tough times indeed. Internet retailers like Music Direct and Audio Advisor offer deep discounts on newly discontinued products, and as well as additional buying incentives.