Rappin' Up in a Down Year

At the end of every CES, we struggle to find the underlying themes that bind the show to the industry and the world at large. The overwhelming theme this year was the economy. Attendance was down—the official estimate was 10% off of last year's, but everyone I spoke with snorted in derision at that figure.

How down was it? Halls were navigable, even on Saturday, the busiest day. Taxis queues were less than 10 minutes, down from up to an hour last year. And, while restaurants were crowded, I saw one manufacturer book at table for six at the wildly popular Bouchon for Saturday night on Friday night. No, it wasn't a "normal" year.

So who didn't come to CES this year? Many dealers, especially dealers who weren't shopping for anchor lines. Buying one to show and one to go is an expensive proposition and any dealer who felt comfortable with his product mix either stayed home or flew in for one day. The attendance at the LVCC was down too—the collapse of the big box A/V retail chains meant that most of that sector wasn't so much looking for more stuff but rather for ways to offload the inventory on hand.

Even the big Japanese A/V companies were low-key this year. Kalman Rubinson, who attended the Wednesday press conferences, said that each presentation basically consisted of "Here's a TV, here's another TV, here’s another....

There was very little "affordable" high-end gear this year. There will always be some, of course, but the ratio of bang-for-the-buck products to ultra-high-end gear was skewed this year. The reason? Ordinary people aren't buying audio because they are concerned about other things right now—how much less the value of their house is than their mortgage, their existing credit card debt, or even if they are going to have a house to keep all their stuff in.

This is not a trend that began in September 2008, it has been going for at least two years and the manufacturers are hewing to a tried and true principle: If they ain't buying it, don't make it.

I spoke to one manufacturer who specializes exclusively in gear under $2k and he said he had no Christmas bump this year—that not only were his YTD sales down 30% in 2008, but the buying season resembled mid-summer, a traditional slow sales period.

On the other hand, I spoke to a loudspeaker manufacturer who was marveling that sales of his $80,000/pair flagships went up by 40% in the months since September. Asked why he thought that was, he reflected for a minute and said, "The people who can afford $100,000 for a pair of loudspeakers aren't effected by the economy the way you and I are—they have money enough to be comfortable. But all of the things they traditionally acquire are money-losing propositions right now. Buy property and you'll take a loss. Buy stocks, ditto. Invest in the market and you'll probably eventually make money, but it's a nerve-wracking proposition. So the answer is to buy stuff that makes you happy."

He reflected a minute and added, "Heck, in this market, if you hang onto the cash, you lose money."

I spoke to several DC economists (one at the World Bank, one retired) about that reasoning and one responded, "Given the interest rates on Treasuries, there is really no opportunity cost for cash-rich rich-folks to buy luxury consumer goods."

You can't blame manufacturers for focusing on where the sales are. Keeping their employees working is good for all of us.

That doesn't mean we're happy about the status quo, but railing against it is futile. We just report on what we see—and we hope to see a resurgence of affordable high-end soon.

On a happier note, this was the year that the high-end really embraced the computer as a source. Ayre, Music Hall, Chord, Esoteric, Wadia, and High Resolution Technologies. Bel Canto offered a USB to 24/96 D to D link, while Weiss went its own way with a FireWire DAC. Peachtree Audio offered a DAC input on it Nova integrated amplifier, as did Simaudio (as an optional module) on its Moon i3.3.

High-end music servers are a growing category. Sooloos's merger with Meridian has already borne fruit and Qsonix and Soneteer continue to refine this category. Blue Smoke brought us the Black Box, an all out attack on the computer's weaknesses as an audio source.

If that's not what the High End is all about, I don't know what is. Jon Iverson likes to say that the mass market creates the demand and then the High End perfects the paradigm. That's precisely what these companies are doing—and it shows that there's health in high-fidelity despite all odds.

And that's why I am smiling in the photo (right), with Home Theater editor Shane Buettner (left) and Jon Iverson (center), webmaster for Stereophile, Home Theater, and UltimateAV.com.

COMMENTS
Frank's picture

Now, now, Dave - let's not tempt anybody..

suits_me's picture

"but the ratio of bang-for-the-buck products to ultra-high-end gear was skewed this year." This is no more a neutral phenomenon than is an unashamed 60k interconnect, and the skewing's been accelerating for years. The flight to the absurd high end in all market sectors reflects a distorted economy and society, and the inability to recognize unworkable disparities or obscene consumption itself becomes causal of that economic distortion. The concentration of compensation and of wealth literally is at the levels historically seen in banana republics, and cannot possibly support a viable economy or liberal democracy or quiescent populace. And then it's a wonder that some posters react with vitriol against cause-effects like 60k interconnects? Which surely mark some kind of new "low"....

Terry's picture

Wes Philips is getting chunkier again, dont go back Wes! Stay slim!

JIMV's picture

Can a high end company more serious than a vanity artisan operation stay in business selling a few score $100K items a year? If so then the margin on those things is phenomenal.

Jerry's picture

How does your statement of “You can't blame manufacturers for focusing on where the sales are. Keeping their employees working is good for all of us.” translate to the US manufacturing base when with companies like Music Hall (Roy Hall) everything they sell is an import and somewhere between 50-70% are of Chinese origin. I believe that if the proper inquiries are made of Signal Path (Peachtree Audio (Decco /Nova and ERA speakers) all they are is a Chinese importer. I suspect the same for some of your other examples. Look at our monetary deficit with communist China and their lack of fair trade practices and government sponsored industrial espionage. Take away China as a source and Wal-Mart disappears. Buying the products of these Importers that specialize in Chinese goods or any non Canadian Manufactured goods; makes about as much sense as sending your 6 year old son out to play Cops and Robbers with his friends, with a loaded hand gun.

Ted Clamstruck's picture

Nice post Wes. That's a funny picture of you there, and interjects some much-needed humor into this coverage.As you've probably noticed from other blog comments, Stereophile has been taking some heat for not acknowledging the skewed representation of gear that's priced in the stratosphere vs. gear priced to match the means of the typical audiophile in this economic crisis. By not saying anything, the mag is perceived (fairly or not) as implicitly approving such a situation. The fact that you have mentioned this situation, and made a good attempt at making some sense of it, speaks well for you and your ability to relate to the typical Stereophile reader. In this regard, you have succeeded much better than other Stereophile writers who have posted to this blog, including your own editor.It's much better to treat the subject as you have, rather than the defensive, chip-on-the-shoulder approach of other Stereophile writers on this subject.

Frank's picture

The rarified world of almost any class of luxury goods is normally "regulated" by collectors who routinely acquire and sell by auction. If the most recent price paid for a 1951 Vacheron Constantine Flyback is determined by the watch collectors community to be $10,000 more than its' value, the community at large is immediately aware of it, and the buyer must bite the bullet (at least for a while). Similar scenarios exist in the art world, automobiles, antique furniture, firearms, even dolls. No such constraints are present in the rather insular world of high-end audio. I have yet to see an early Audio Research amplifier on the block at Sothebys, and doubt that I ever will. In any case, it will not make international headlines. So the purveyors of these goods are freed from the only meaningful mechanism that would determine their actual (real) value. I don't see that changing anytime soon.

Carlo Iaccarino's picture

First of all, let me thank all of you for the show coverage - as for other shows, it allowed me to almost vist CES and stay up-to-date without even moving from my far Italian desktop. Now, to my comment. Basically - if I don't misunderstand you - you are saying that audio in general and high-end in particular - at least nowadays - is something that belongs only to the "well-heeled" ones? If so, sadness apart, I can hardly "buy it", for two main reasons. 1) how many rich customers (the ones not worrying to shell out 100 kilobucks only for 2 loudspeakers) there may be for that market (which presented a 40% increase in just the last 3 "critical" months...)? Do you think their number is high enough even to let the "market" survive? 2) Isn't middle-class the real backbone of this (and other) hobby? Moreover, aren't those people (in which I also include their young relatives...) more likely than others to buy/have music (even in "liqud" format):why would

Carlo Iaccarino's picture

... something didn't work with my last post. Here are its last remainig words:why wouldn't they be a good "target" for a sanely-priced good vendor?

John Atkinson's picture

Ted Clamstruck, when you write "In this regard, you have succeeded much better than other Stereophile writers who have posted to this blog, including your own editor," you misunderstand the nature of the Show coverage. In all the earlier entries, our responsibility is to _report_ what we saw and heard, not to editorialize on the implications. _That_ is reserved for this final summing up, whether it is by Wes Phillips as it is this year or by Jon Iverson last year.

tom collins's picture

when studying economics in the late 70s (another fun economic time), the first lesson on day one was that you could base your model based on how the world really was, or on how you thought the world should be. but, if you chose the second option, you would not only flunk the class, but your model would have no relevance. this is great talk in theory, but very hard when people are losing their jobs and houses. but, what good would it do for anyone including the editors to sugarcoat the reality of today's situation. the above comment is right on point, the high end market in the end is about making a profit. no profit-no company, the end. i think it is fantastic that many of the makers have great passion for their work, but still, no profit - no company. when autos started on the scene, many buggy makers either started making them or closed shop. when zenith tv could no longer afford to make tvs here, they either had to import or die. some of you may not like it, but that's the world as it is.

John Atkinson's picture

Excellent comments, tom collins. While it is regrettable that affordable audio was so thin on the ground at the 2009 CES, no blame should be attached to companies that have payrolls to meet for concentrating on product areas where the market is still active. Who, for example, would have predicted Richard Vandersteen, whose Model 2 has been one of the best-selling affordable speakers of all time, would introduce a speaker costing $45,000/pair?

tom collins's picture

thanks for your comment. for a follow-up john, i think many people missed the point that just because more affordable gear was not represented at the show does not mean it is not available. nad, rotel, arcam and other value leaders are still available in the dealer's shops and they would dearly like to sell us some.

Matt's picture

Carlo, I very much agree that the middle class is the backbone of this hobby. In the U.S., I'm hopeful that President Obama will help tilt the scales back towards strengthening the middle class. In the meantime, I remind audiophiles that great sounding, reasonably priced products can be found right at home. In the U.S., for example, the Vandersteen 2 delivers most of what high-end can offer, at a real-world price. When you buy "homegrown" products, you're supporting your neighbors who work for those manufacturers.

JIMV's picture

"Posted Thu Jan15,2009, 10:45 AM — By tom collinsthanks for your comment. for a follow-up john, i think many people missed the point that just because more affordable gear was not represented at the show does not mean it is not available. nad, rotel, arcam and other value leaders are still available in the dealer's shops and they would dearly like to sell us some."A very good point. I love reading about fantasy gear. I just hate it when the writer pretends it is value for money, moderately priced, or budget when it costs the price of a car. That is pretense, the audio equivalent of 'The Emperors New Clothes".

suits_me's picture

>"I think many people missed the point that just because more affordable gear was not represented at the show does not mean it is not available...." In turn I think rather the point is that in a distorted economy the "affordable" gear is tougher for manufacturers due to the slimmer margins and dearth of sufficient customers for that audio market segment, thus the distorting flight to the stratosphere. (And so it is noteworthy that even R. Vandersteen has gone to what I consider the ultra high end now, as noted, although at least that estimable gentleman is selling a pair of speakers for $45k, not a pair of interconnects for $45k+.) Now, if the makers of $60k interconnects would only call their product, "The Weimar," I would promise to take a break from my screeds. -- Lastly, at the risk of being incongruous, I do love (semi) high end gear almost as much as music and want to join others in thanking "Stereophile" for its coverage. Your $60k box of Valentine chocolate

suits_me's picture

...Your $60k box of chocolates is on the way. (Ten pieces.)

Jerry's picture

In Sophomore HS Civics Class we read this story about a man that was shopping for this great kitchen that he wanted to order so that he could throw great dinner parties. The only problem was that in order to pay for this fantastic means of impressing the Joneses was that his 23rd generation decedents would have work their entire lifespan to pay off his debt. He made the agreement anyway, because 13 generations ago an ancestor of his had made the same agreement for a purchase that he wanted. What the heck you say. Well that is what our trade dedicate is doing to our future generations of citizens. John may not care, being from the UK and all, but I do and that is a chip that everyone needs to get and real fast. Times are a changing and you may not like the future much at all. Not all of our trading partners share our values and before too long, the bankers are bound to show up wanting their due.

Jerry's picture

I am tired of arguing with folks who can only think of self gratification and not what the consequences of buying all these imports are. JIMV, aren’t NAD, ARCAM and ROTEL all imports?

Stephen Scharf's picture

I couldn't agree with Jim more, and this is what troubles me also with the coverage and general sensibility. It reminds me of real estate salespeople during the housing bubble that became so inured to ridiculously expensive, over-priced homes that the numbers lost any sense of rational meaning. "This home is *only* $853,000"..."these interconnects are $60,000...WTF???I remember that one post referred to a set of approx $35,000 speakers as "reasonably affordable". C'mon, give us a break. Jim's comment, ""I just hate it when the writer pretends it is value for money, moderately priced, or budget when it costs the price of a car. That is pretense, the audio equivalent of 'The Emperors New Clothes". is bang-on.

John Atkinson's picture

Jerry, you are putting words in my mouth when you write "John may not care, being from the UK and all..." Of course I care about the economy (and, please note that despite your little jab, I am an American citizen). But if the only way audio compnaiues can currently survive is either to make expensive products (for the reason I gave earlier) or to outsource production to China to keep retail prices low, that's what we report. Take the Simaudio i-1 integrated amplifier that BJR reviewed in December that retails for $1500 and is made in North America. Too expensive? An informed estimate of its parts costs is around $500, meaning that the retail price is 3x that cost. This is dangerously close to not being enough to cover the share of the manufacturer's overhead, yet I received _not one_ email or recognizing Simaudio's pricing strategy. Some people appear to want to buy a Ferrari for a Yugo price and have it made in America. Ain't going to happen but don't blame Stereophil

John Atkinson's picture

...Stereophile for telling you that. And yes, Jerry, you are right about the long-term economic effect of production being outsourced offshore. But if you a were small-business owner faced with an onshore cost-of-manufacture that made your products uncompetitively priced, what would _you_ do?

JIMV's picture

"I am tired of arguing with folks who can only think of self gratification and not what the consequences of buying all these imports are. JIMV, aren’t NAD, ARCAM and ROTEL all imports?"Yes, but is it worse for America to buy quality foreign made gear or to pay US prices for gear of similar quality and having to borrow to do it? This debt is in turn largely owned by foreign companies or a government like China.The end result is the same, the money moves from here elsewhere but if one simply buys the item, at least the personal credit problem is avoided.

Matt's picture

JA, I can hardly believe that a retail $1500 has $500 in parts. Given the retail markup, that would leave close to zero margin for the manufacturer after they cover labor and overhead (including customer service - good luck with customer service for a Chinese amp). Wow!JIMV, I'm certainly not an economist but I don't follow your argument at all. Even if I did borrow money to buy my made in America gear, and even if my local credit union was getting the money from China, doesn't my buying decision help support local workers?

Dave's picture

While it may seem absurd to many that the prices being asked by several hi-end manufacturers are so high, I suspect or at least hope that these same manufacturers know wherein their market lies. If there are enough people willing and able to spend say $100K on a pair of speakers then why not cater to that demand. I have noticed that there actually seems to be still a 'drop-off' point if you will; that defines the high point in speaker manufacturing... seems to be in the region of $150K +-. Nobody seems to be starting their line at say $200K and then working into the millions of dollars...I wander why? With a manufacturing budget of say $1M I would think one hell of a speaker could emerge.

Ecka's picture

The vitriol expressed by suits_me and Stephen Scarf is as unfortunate as it is ill informed.To criticise an audio product without having heard it is clearly nonsensical and does raise the prospect of an agenda against PSC ( the company making the $60,000 interconnect),as, this is not the only place where such vitriol has been expressed by suits_me. I personally have had dealings with PSC since 1994 and currently use their cables in my system. This choice is based on my personal repeated comparisons with other high end cable manufacturers. In this time I have upgraded my cables to my level of affordability and have always been very happy with my investment. The time and trouble that PSC takes to ensure the correct choice of cable (including conducter type, arrangement differential length requirements appearance etc)are a value added service and a very important element in my decision to buy these cables.So lay off the vitriol especially if you have NO experience with the product or the company.

John Atkinson's picture

Matt wrote "I can hardly believe that a retail $1500 has $500 in parts. Given the retail markup, that would leave close to zero margin for the manufacturer after they cover labor and overhead (including customer service)..." That was my point. The usual multiplier from parts cost to retail price is at least 5x. That allows a large return on investment that the manufacturer can stay in business. Simaudio cut their margin to the bone because they wanted still to be competitive on price without having to move manufacture offshore. No-one other than me appeared to notice or care, especially not the cheapskates who have been commenting on our CES coverage :-(

Jerry's picture

John, your formulary isn’t even close to a real world businesses model for most companies. But we also have CEO’s who make a 100 or 200 times what their counterparts in the rest of the world do. On the day after when somewhere between 34,000 (Circuit City) to 100,000 people lost their jobs, how can you John or tom collins still believe what you said? I guess there went the Kellogg School of Business and Supply Side Economics theories that you studied in college, which may turn out to be quicksand. To quote one of my bosses, “I am sure the Romans and the Greeks thought the same thing just before the roof collapsed on them”. He also made another good point; there are 2 types of marketing here in the US. One based on fair value, which maybe a few believe in, or the second the market of greed. Cronyism to the max; “I can't believe that it's been 21 years since Thiel founders Jim Thiel and Kathy Gornik and I emptied the first of many bottles of fine wine talking about music and loudspeak

Jerry's picture

Out of all the audio establishments that I have visited over the years, I have only felt that 2 of them had my best interests at heart. The first is Holm Audio, Woodbridge, IL where a gentleman spent a couple of hours trying to convert me back to LP’s from CD’s and gave me a taste of tube vs. transistor. At that point what I wanted was a quality CD changer ($700 {2002 dollars} NAD T571 ) for long nights of Virtual IT off hours work. If I am ever back in that area with the time to spare, Holm is on my list of stops. Impulse buying has its rewards. The second is in Kansas City, MO. The second is Primus Audio Pleasure in Kansas City, MO. Primus Audio is staffed by individuals who care (even thought they had not sold me the product) and were able to determine that my product was not the problem, but household power was. Issue resolved, bone headed importer lost all of my respect and also kill my respect for your rag. By the way Primus does handle SIM Audio, which I intend to look into.

Stephen Scharf's picture

Using "vitriol" to characterize readers comments is excessive, in my opinion. Readers should be able to post their comments with respect to keeping a reality check on the excessively prices and margins high-end mfrs are charging for products without them being viewed as vitriol. I have a lot of respect for John as an editor, and I appreciate the hard work that he and his staff did at CES in providing coverage. My personal view is pretty much aligned with Jim's about the blogs editorial content that gives the view that components that cost a much as a Mercedes automobile are modestly-priced and "affordable". While I very much recognize the very hard work that the staff did in covering the show, I would have much preferred to have seen more balanced reporting on value-structured products than $130,000 20 Wpc tube amps and $60,000 interconnects.

suits_me's picture

"If there are enough people willing and able to spend say $100K on a pair of speakers then why not cater to that demand." There are not enough people to support such an over supplied, over heated market over time, as the housing bubble just got through showing. It's a distortion. And besides, the bulk of the objections have focused on absurdly priced interconnects, hilariously costing more than some houses at this point.

suits_me's picture

"To criticise an audio product without having heard it is clearly nonsensical and does raise the prospect of an agenda against PSC...." I never commented on the sound of the oft mocked 60k interconnects. I said the pricing amounts to a con, that there aren't enough recordings of sufficient quality in the universe to justify such absurdities and that I'd have no interest in hearing such a product in any evaluative sense, (I mean, as opposed to wandering into a show room to see what's going on.) There's no agenda against whatever company of geniuses thought to soak audiophiles to the tune of 60k for interconnects, merely open mockery. Hope this helps.

Mark PSC AUDIO's picture

"Open mockery" doesn't amount to as many posts as whoever is hiding behind those messages had already posted , I'm afraid. But that's all right, just want to present the manufacturer's point of view : if there's a client with specific demands and means, ordering a custom made gold/silver interconnect , why not meet those demands? 25 gold ribbons per pin(x3 for balanced cable) multiplied by 1.5m would cost a lot just for the raw material, not to mention labor costs, margins etc...It's ridiculous to think that you can stop anyone who can afford such luxury (like the $1.5m watch or a $1m gold Stratocaster you'd find in Las Vegas shops) by writing endless rants about how unfair it is to afford or produce expensive cables in a current economical climate. Incidentally, our audio-communist "suits_me" seems to complain only about the prices of cables, nothing else. It's most intriguing that he managed to complain about DH Labs $11K speaker cables. Do we sense a

Mark PSC AUDIO's picture

Do we sense a cheap cable brand rep hiding behind those posts?

tom collins's picture

mark: thanks for your take. i had planned to just let this thread die because it has become such a waste of time, but had to say that i am glad you got in on the conversation. why not produce such a product - how about if you didn't do it, someone else would. i think these guys (you know who you are) should sell all their gear and worldly possessions and join a monastary where they can pray for human nature to change. these guys are pretty much carrying on the political right v. left battle we just weathered. no one is going to change their mind by anything that is said here, but just like rush limbaugh, by God, they are going to keep saying it whether it is logical or not.

Jason Victor Serinus's picture

Yes, Tom, much of this thread is tiresome. Every argument has been addressed, both by John and Mark of PSC (whose cables I hope to hear, btw). Yet the assaults continue from the same posters, multiple times, again and again. It's as though they want blood, or at least JA and myself on our knees, Speaking just for myself, I see no reason to go there. As someone who takes responsibility for his actions and believes in criticism / self-criticism, I respond to criticism by examining my actions to see if there is cause for complaint. I also ask what I might do differently next time. I see no fault with my coverage. I walked into a room that of a company I'd never heard of before, and spent quite awhile exploring their product line. Then I wrote the report. Someday I hope to hear PSC cables, but that had no influence on my report. Since my coverage is accurate, I can only conclude that the thought police are again at work. No thank you. I wish they'd go after all the US corporations with offshore shelte

Jason Victor Serinus's picture

let's try that again...I wish they'd go after all the US corporations with offshore tax shelters and plants in China instead. (BTW, did you notice that I intentionally say manufactured in the USA in a number of my blog entries)? How about taking it up with the people in Washington who have put us into this mess. Take it up with the people who control the media, and have made the American people among the most mis-informed First World populace on the planet. Instead, Stereophile has become the target. As someone who lives in a Oakland, CA, one of the most crime-ridden cities in the USA, where innocent people are frequently the target, I'm accustomed to the terminator mentality that sees life as a cross between a football game and shooting range. That's not where I want to go. Hence, folks can complain 'til the cows come home. I know that my coverage is fair and accurate, and that our blog is extraordinary. Hence, without a trace of guilt, I continue to enjoy the music. -END-

Dave's picture

Suits_me.."If there are enough people willing and able to spend say $100K on a pair of speakers then why not cater to that demand." There are not enough people to support such an over supplied, over heated market over time, as the housing bubble just got through showing.AND YOU KNOW THIS HOW?

JIMV's picture

"Wow! JIMV, I'm certainly not an economist but I don't follow your argument at all. Even if I did borrow money to buy my made in America gear, and even if my local credit union was getting the money from China, doesn't my buying decision help support local workers?" - Anytime you buy anything you help local workers. The question is, does the purchase of a reasonably priced foreign made item have a worse effect on the economy than buying product one cannot afford on credit recognizing the money goes out of the country anyway. I believe the personal result of debt cancels out the advantage of buying local.

JIMV's picture

"25 gold ribbons per pin(x3 for balanced cable) multiplied by 1.5m would cost a lot just for the raw material, not to mention labor costs, margins etc..."Some basics...no one as far as I know makes solid gold anything. Gold plated, even on pure silver, uses VERY little gold. A $100K 'Gold' filled Amp might have all of a half troy ounce of gold in it but more likely 1/10 or less. 1/2 oz of pure gold is worth about $420 today. Vermeil (gold on silver) as in interconnect might use a few ounces of silver and a tiny amount of gold with a metal value of well under $100.Folk who speak of gold connectors and silver cables all rely on folk not knowing just how little metal is in the thing and how much the metal is worth. Oh, and gold and silver are very easy to work, unlike say, platinum, so the labor costs are minimal.

Jerry's picture

To quote a sales manager of mine, “Take a pound of crap and package it fancy enough and spin the right song (sales tale) to go with it and you can put a $1,0,000 price tag on it and sell it”. The people who buy you equipment are those for the most part have been raping and pillaging the economy and could really care less who they step on. Apparently the lesson learned here is that the instant orgasm of self indulgence rules. But in this day and age when the dust settles, if US government ever starts IT forensics on what has been occurred in the last year, we will find a whole lot of unsavory characters foreign and domestic. The list will most likely include many of the foreign companies and governments that have absorbed (or purchased) our trade surplus and killed Wall Street all the while enriching them selves and play stock options bingo. Competitively produced and MADE IN THE USA. We have over 11,0,000 unemployed. I have got to find out if audiophiles were the model for the Frazier show.

Mark PSC AUDIO's picture

I strongly advise that JIMV checks the battery in his calculator before writing his next comment. 25 ribbons x3 = 75 ribbons. For a pair of 1.5m you'll need 150 ribbons in total.If you already found the way to make a pair of gold /silver cables as cheap as you mentioned, perhaps you could attempt making one yourself. We could then compare "A to B". If the cost of labor in the US is much lower than in Australia - perhaps you may be able to lower the price from 60K to something like $9.95. Skilled labor in Australia is very expensive: eg: a concreter makes 2K a day in Western Australia where the economy is booming thanks to very high commodity prices and huge demand for metals. For your information: platinum happens to have a much lower conductivity than silver/gold. The parts are playing smaller role when calculating a recommended retail price, while the R&D which could take years, is much more expensive.Nice try JIMV...

JIMV's picture

Pure 24 Carat Gold costs under $850 and ounce. Do you have any idea how many connectors that much gold could cover? Hundreds. Silver is around $11 a troy ounce. For a 50lb amp to be worth $100K in gold content, it would have to consist of over 10 pounds of pure gold. If silver it would have to weigh over 800 troy pounds. The price of the product simply is not the result of the cost of any precious metals within. No audio product contains gold measured by the ounce much less the troy pound.You confuse the cost of manufacture with the cost of materials. I do not. Weigh that interconnect...How much does it weigh? half a pound, a pound max. Is it 100% gold....nope, 100% silver?....nope. They may have a few ounces or so of silver in them and perhaps 1/10 of an ounce of gold plating MAX....that makes a value in metal of under $200....the remaining $59,800 is manufacturing and markup....LOTS of markup.

suits_me's picture

"There are not enough people to support such an over supplied, over heated market over time, as the housing bubble just got through showing. AND YOU KNOW THIS HOW?" Simply because economic history shows how distortions always wind up, be it tulip bulb or real estate or internet stock option manias. It is "never different this time." This is not a complex idea. In fact, all the show reports say that all but the ultra high end of the audio market is reeling, and I'm unaware of any consumer segment (or society) which can withstand the loss of the low and middle end. At a certain point it has to cascade. 60k interconnects are a marker of these unsustainable imbalances. Lastly, while I am not a "cheap cable rep," I do wonder with glee what would constitute cheap cables in the mind of someone grossing 60k for each pair sold. Whoever is selling these unspecified "cheap cables" certainly is not competing for marks, I mean, customers, with the 60k interconnect folks.

FleecyEars's picture

What's price got to do with it? I can provide many examples of many cables, whose price does not necessarily reflect the cost of the raw material cost. Eg. Stealth Indra, Audio Note, etc... One should really take into consideration the R&D, labour and actual net cost of the wire as manufactured and prepared from the basic raw material, whether it be copper, silver or gold.I myself have been using a wide range of PSC cables for around 6 years and the current collection includes power cables, interconnects and speaker cables. I have a limited budget, but have managed to acquire few of his pure silver range of cables and find the performance to be exemplary. With the wide section that's available today, I don't have to use the PSC cables, but I do because I love the personalised service and their cables complete anything else I've tried over the years.The Stereophile reports are informative and excellent, but the personal attacks in the comments do nothing to promote or highlight your y

FleecyEars's picture

Sorry, the last line was supposed have read as follows:The Stereophile reports are informative and excellent, but the personal attacks in the comments do nothing to promote or highlight your cause. Get over it and let this forum provide a window to express sensible views and comments.Thanks

Dave's picture

Suits_me, Apparently at the present time there are enough consumers creating a demand for these high priced products ( remember that high price is a relative term)and that manufacturers are able to make a profit by catering to that demand.I see nothing wrong in that. However,I would certainly agree that these products could never be called a sound financial investment likely to produce any kind of financial return.I think you maybe getting confused between financial/monetary markets and retail markets.

Jerry's picture

Amazing, someone on the inside or a talented hacker has removed the last 3 entries from the blog page; there were 51, 2 of which were mine. Was there some truth in what was said? Psychological consoling anyone?

John Atkinson's picture

Jerry wrote: "someone on the inside or a talented hacker has removed the last 3 entries from the blog page; there were 51, 2 of which were mine." We are deleting some of your posts, Jerry, because this is not the appropriate place for you to vent your spleen at a specific audio company or to attack other Stereophile readers. If you (or anyone alse) does wish to air your views on matters that are not connected with this CES wrap-up report, please do so at http://forum.stereophile.com/forum/ubbthreads.php . We will continue to delete posts from this CES report from readers who, in our judgment are abusing our hospitality.

Antonio San's picture

As far as I am concerned, professional sound is the reference. Last year one reporter was raving about JBL everest latest incarnation... That's no non sense professional sound: dynamic and true. Do celebrated violinists record their art on a Strad with 60k interconnects from the microphone to the console? Of course not. End of Matter.

Mark PSC AUDIO's picture

Antonio, "of course not"? AND HOW DO YOU KNOW? Incidentally, there is 72 feet PSC special microphone cable in one of LA's true high end private studio. The original invoice for that job it's showing 82K. (ref to p.4) When your violinist friend will be good enough to record with the top musicians in a professional studio, he will have a chance to spot the cable.

Frank's picture

I would love to hear a recording made in a truly high-end studio, by a truly talented ensemble, and a genuinely gifted recording engineer (regardless of cable type used, as long as it's quality stuff). That's really the next frontier. And it wouldn't matter how expensive your system is/isn't - any decent system would show the benefit! (And yes, CD would be fine and dandy with me!). There are already some fine recordings out there, but they are all too rare. I would prefer small chamber ensemble/orchestra w/woodwinds, but almost anything would do.

Mark PSC AUDIO's picture

I have this funny feeling that our company is being targeted in some strange rubbishing campaign while the writer under disguise of JIMV has no interest in commenting on $139K/pair LAMMs for example & is totaly ignoring info on pa ge 4 of this report which reads: “Siltech’s “crown” is the Siltech Emperor, Containing 8Ns single-crystal silver , a 2m pair of interconnects costs$37.000(BTW: 1kg of 8N silver costs$45.000). JIMV has the audacity to claim that PSC 150 gold/silver ribbons only cost $11!!!, What a pile of rubbish!! Have a look at Zero Gold interconnect from Tara Labs ($18K) or pair of Ypsilon monoblocks from Greece ($70K)? While comments about the price of those monoblocks have nearly started a war against foreign Hi End product in US, shouldn’t the $139K price tag for LAMMs be the cause for a civil war? How about declaring an outright war on all Hi End components priced above $5999? Or better still – a total ban on all luxury items.

Antonio San's picture

Some of the best ever recordings -analyzed in Stereophile like Sonny Rollins West album- were made in the 1950s. In the classical field Mercury Living Presence 45RPMs were never made on such precious cables. I have been recording as a producer in professional studios, listening to professional studio monitors demonstrations for 25 years, so your one job by one overhyped studio is merely an rarity. I recall the owner of Cello, a defunct brand of praised high end, recorded the Terrasson trio in the 90s with his electronic... it sounded average at best. It's like the guy that can afford a Rolls and has to put a golden "spirit of ecstasy" on the hood, in case we did not get he was well off...

Jason Victor Serinus's picture

Today, Barack Hussein Obama was inaugurated as President of the United States. Today, Aretha Franklin, the Queen of Soul, stood up at age 67 and sang magnificently, with great spirit. Today, one of the founders of the Southern Christian Leadership Conference had the chance to stand where Presidents have stood, and not have to return home in the back of the bus. It's time to lay off the bitch fights for one day. Nothing anyone says will change the fact that Mark has the inalienable right to make cables and charge what he will, and those who want to buy them will. Nothing will change the fact that at least one high-end studio values his cables. How many times can we go around in circles about this? Come on. Take a break from it all. Enjoy the music. Smell the flowers. Give it up to Jesus. Let it go already. No one can possibly win here.

JIMV's picture

"By Mark PSC AUDIO"...Son, if you have read anything I have posted on the regular Stereophile forums, you will find I define the problem not in terms of individual companies or products in the $100K and up range but in the concept of 'value' for these niche products and the reality that very, very, very few folk in the hobby will ever hear such gear much less own it. The heart of the hobby is not the sale of a few hundred megabuck items from a score of companies but the thousands and thousands of items that folk in the hobby will see, hear and own. My comments on citing precious metal content, tank like construction or high end parts is to simply state a reality, that the cost of these things are only a tiny part of the sale price so blaming the megabuck price on gold this and silver that is nonsense. Speaking of 'value' in a $100K product is simply affectation. I aim not at the manufacturers but at the writers who pretend 'budget'. modest, and value apply to 5 or 6 digit pri

Mark PSC AUDIO's picture

This is my final comment as I'm getting very busy with the production. Busy studio producer would never ever pick on 60K interconnect simply because that is not the studio staff they may be interested in. They read totally different sides and magazines and they have "special name" for audiophiles. So my Antonio you are Suits_Me under new name pretending to be Quincy Jones. Well you can always prove me wrong by sending email with the picture or address of your not so famous studio, than my US rep can bring PSC Pristine silver plated $350 (not 60K ) microphone cable with him . It will definitely win against your heavily oxidize nearly not conductive old copper cables. For you information Antonio ( Suits _ Me better) silver is the best conductor and does not oxidize. Would your already red neck go purple if I tell you that there is more than one PSC mic cable in the pro studios there?JIMV you went too far accusing PSC of ripping of their customers and son ..you are BORING

JIMV's picture

mark AT psc...I do not want to crush your fragile ego but I have never heard of PSC Audio and have never seen much less heard any $100K item. If folk want to build them, great. If folk want to buy them, better, but when folk begin to pretend $100K audio gear is good value...sorry BS. Only the folk who have paid $100K can say if they were ripped off, not me. If folk tell me that some item with $5K worth of parts is worth $100K because of those parts, Again I say BS.

Dave's picture

Surely if PSC Audio is able to sell $60K interconnects to enough people then I guess we can say that a market for this product exists. If PSC Audio makes an absolute killing in regards to the profit of these same items and if(BIG IF) the consumer of these products feels that their money has been well spent to purchase the product, is there anything wrong with that picture?I suspect that the ipod has a very high profit margin built in but nobody seems to be complaining about Apple. Is it because their product is at a perceived low price or ?

Bobvin's picture

WOW! What a blog? I am intrigued and amuzed at the contempt shown by some of the contributors. So you think someone's comments on affordability are off the mark--Big f'n deal! If you get spun up on someone's reporting or comments you must have a lot of time on your hands or you're not too happy with your life. Don't earn enough to afford a 60K interconnect? Then it isn't in your scope of value/return. No problem. If you have the $$, like what you hear, and believe there is enough value then by purchase the wires and enjoy life. If you feel the 60K wire is what you want but can't afford it, then find a way to AFFORD it (not go in debt for gods sake) by improving yourself to provide more value to your fellow man in a way you will earn more $$. Don't knock the guy who found a way to afford it, or the guy who makes it. Pricing in capitolizm is often what the market will bear (unscrupulous advertizing aside.)

Antonio San's picture

Editing? woaw what a sorry rag. ciao

Mitchell Erblich's picture

Wes.. Show Report ... I missed the show this year, but here are my two cents anyway.. Your report seemed to show that you are surprised with this trend of the super hi-end and this bad economy. How many a/v manufactures are about to leave the market because of this economy? Should we wait or are we waiting to see who leaves or should we wait for new advances or have we already bought what we wanted? Did you see that the "low end" has been buying IPods in mass?My two existing favorite US hi-end companies have yet to even announce any support for Blu-ray. One of them used to show three lines of products on their website and now only shows one line. Is it due to trickle down or have they gone to one line of only 5 figure products? Time will tell. Will high end save some companies in 09? We know that the middle has fallen due to the loss of Tweeter, Circuit City, Good Guys, etc..And we are just in the first month of '09...

TypELasyfopay's picture

If you are a real estate professional, be really careful in dealing with KoRes Corp. in Weston Florida. Tulio Rodriguez & Monica Cataluna-Shand are shysters and look for anyway to steal ones customers. They attempt to steal your client by requesting their contact information and later contact them behind your back to get them to deal with them directly.

tjones9911's picture

I figure that since 2010 is over now, it's safe to say we can all see the longevity and power of high-end music servers. Can't wait to see what 2011 brings.