Mutton in Wolf's Clothing

I was visiting a high-end audio manufacturer several years back, and as the chief engineer and I talked about speaker design, the company's president popped her head around the door and told him that she was sending MacroVision their annual five-figure check.

"MacroVision?" I was surprised. "You don't make video recorders." (MacroVision owns and licenses the technology to prevent the copying of analog video signals.)

"We're about to launch a DVD player," the engineer explained, "and you wouldn't believe the licensing fees we have to pay. MacroVision is just one of them. But as we feel we should design and manufacture a DVD player of our own rather than put our label on a mass-market player we've upgraded, we have to pay for those licenses."

This was something I hadn't considered. Back in the 1990s, six companies (Toshiba, Hitachi, Matsushita, Mitsubishi, Time Warner, JVC), subsequently joined by three more (Philips, Sony, Pioneer), established a pool to license their patented technology to manufacturers of DVD players, recorders, and discs. To make a DVD player from scratch therefore requires its manufacturer to pay multiple license fees each year, which must be amortized over the number of units sold. This makes it difficult, if not actually unfeasible, for small companies to enter this market, unless they can justify charging a much higher price than they'd otherwise have to for their players. The same was true, if on a smaller scale, for CD players, as it is now in the new world of Blu-ray players. The pay-to-play hurdle to be jumped is high.

This barrier is trivial for large corporations, but for a small company—and compared with the names listed above, all high-end audio companies are small—it makes sense either to base the design of a CD, DVD, or Blu-ray player on a kit of parts from an original equipment manufacturer (OEM), on which most of the license fees will already have been paid—or even to base its product on another manufacturer's complete player, buy it in bulk, and discard any unused parts.

In the latter case, the small manufacturer is free to do as little or as much extra as they want, but at minimum, they usually add their own power supply and analog circuitry and house it all in a new chassis, to justify the premium price. This was the case with the subject of the very first review I wrote for Stereophile, of the California Audio Labs Tempest CD player, in October 1986. Under its impressive-looking skin, the Tempest was actually a Magnavox FD-2041. However, while CAL kept the original transport and its control board, as well as the D/A circuitry, including the Philips SAA7030 digital filter chip and twin 14-bit Philips TDA1540 DAC chips, they added a completely new analog board featuring 6DJ8 tubes and premium passive parts, a new power supply and transformer, and a new enclosure. The Tempest cost $1895 compared with the original's $399, and while I concluded that the sound quality was the best I had heard back then, I did caution that the Tempest's price was on the high side for a product using digital technology that would soon be superseded (which it was).

Thus it continued into the DVD and SACD era, with many high-end manufacturers basing their players on a Pioneer platform. Ayre Acoustics, for example, transformed the ugly-duckling Pioneer player into a swan, in the form of their C-X5e universal player. (I bought a Pioneer SACD player that uses the same transport and motherboard as the C-5Xe, and it sounded and measured worse than the Ayre in every way.) Again, all that was left of the original Pioneer was the transport and its control circuitry; everything else was new, and proprietary to Ayre.

Then, this past January, the Audioholics website reviewed Lexicon's BD-30 Blu-ray player and revealed that, under the skin, the $3500 BD-30 was the $500 Oppo BDP-83. At first, I wasn't surprised; Lexicon itself had said last fall that the BD-30 was based on the Oppo, and Kalman Rubinson, in his March 2010 "Music in the Round" column—submitted to me a month before the Audioholics exposé—had found the differences between the Oppo and Lexicon players minimal: "there seemed to be a bit more brightness and clarity in the treble, and at times a little more richness in the midrange. But the differences were so small that, absent an A/B comparison, I would probably not have noticed them. . . . I do not think that most buyers would find the minor improvements cost-effective."

According to Lexicon, however, "We had our electrical and electronic engineering teams go through the audio and video circuitry in meticulous detail to make some performance improvements to both the analog audio and video circuitry. This, more than anything else, is where we made our biggest improvements to the end product. . . . The BD-30 is also customized with its own firmware, making it notably different than the Oppo in terms of upgrades. The BD-30 goes through final assembly at the Harman offices in Elkhart, Indiana."

But apparently Lexicon hadn't just based their design on the Oppo—it was an Oppo, to which had been added a hefty front panel and chassis and THX certification. As the photos accompanying the Audioholics report revealed, it looked as if the complete Oppo player had been dropped into a new chassis, with no other hardware changes made. Oh, dear!

The story broke far and wide on the Web—you can find threads on the Stereophile online forum here and here—and many commentators used Lexicon's apparent selling of mutton dressed as lamb as a rod to break over the back of the High End in general, and to condemn reviewers who hadn't pointed out to their readers this or other similar occurrences.

However, Stereophile has always tried to examine the provenance of the products we write about. See, for example, our review of the McIntosh MS750 media server, where we both made it clear that the MS750 was an Escient under the skin, and concluded that McIntosh hadn't done enough to improve the audio performance of the Escient platform. And back in November 1991, we indicated from the outset of our review that Theta's Data CD transport was, in fact, a Philips laserdisc player to which Theta had added a reclocking circuit before dropping the complete player into a new chassis. In general, however, our experience has been that companies using a bought-in product as a platform for one of their own add a lot more value than Lexicon appears to have added to the Oppo.

If it is a truism that, as Jon Iverson wrote in "As We See It" in June 2007, "audiophiles perfect what the mass market selects," we also expect audiophile companies in search of that perfection to do more than slap on their products a hefty front panel and an equally hefty price.