Where the Rubber Meets the Road Michael Kay of Lyric Hi-Fi & Video

Michael Kay of Lyric Hi-Fi & Video

Lyric Hi-Fi & Video, 1221 Lexington Avenue, New York, NY 10028. Tel: (212) 439-1900. 146 East Post Road, White Plains, NY 10601. Tel: (914) 949-7500. Web: www.lyricusa.com.

Steve Guttenberg: You've been at this for more than four decades, so it's not too much of a stretch to say that you practically invented the art of high-end retailing.

Michael Kay: I think I brought a lot of people into this. I love music and art and equipment. I loved music first, and then I got involved with the equipment. And here I am, 78 years old, and I'm still fooling around with that stuff—and it still gives me the same thrill. Andy Singer was a customer of ours before he started his own store.

Guttenberg: Even after all these years, you're still an audiophile?

Kay: Last night I had a guest at home, and we listened to some music, and it was unbelievable. Right now, I have achieved the best audio performance I've had in many years.

Guttenberg: Wow. How did you do that?

Kay: Accidents happen. Sometimes you don't know. You see, to produce good sound, you need more than just good equipment, it's also the environment, your company, you—it's a lot of things. A good fiddler doesn't guarantee a good evening.

Guttenberg: Did you start out in the retail business?

Kay: No, before I graduated from college I got a job as a technician with the Greek radio network in Athens. I was working with Dimitri Mitropoulos. Artists are all peculiar, they're all difficult, they all want things their own way. That was my beginning. I left Greece in 1955 and went to Canada. I developed a company called Kyma Electronics in Montreal.

Guttenberg: So when did you start Lyric?

Kay: I came down to New York in 1959 and picked up Lyric.

Guttenberg: It was already there?

Kay: Yes, it was started by another Greek, but he was a sick man. He sold it to me for $40,000—stupid me, that was a lot of money back then! But I liked the people, I liked the business, and I liked the movement and energy of New York. I consider myself lucky, very lucky—I found myself in the right spot at the right time.

Guttenberg: How many of your customers were audiophiles?

Kay: A very tiny amount.

Guttenberg: What product lines did you start with?

Kay: Marantz, Fisher, Scott, Bozak, JBL, but I never had McIntosh because Mac had a bad experience with my predecessor. I had Crown—they made great tube reel-to-reel recorders.

Guttenberg: In more recent times you've stayed with lines like B&W, Classé, Genesis, Proceed, and Sunfire.

Kay: I don't like changing lines—I have difficulty making a decision to buy a line. But once I make that commitment, I want to stay with the line for a very long time. I don't think it's fair to your customers to keep changing lines back and forth. Most of the people who buy hi-fis are looking for stability.

Guttenberg: You've had Magnepan for decades. How did you come across them?

Kay: I didn't come across Magnepan, I came across Audio Research when a friend of mine showed me his ARC preamp. I think it was an SP1 or 2—this could have been 30 or 35 years ago. Later, I met Bill Johnson at the Chicago CES, when he was introducing the SP3 and D75. When I started as an ARC dealer, Johnson brought along some Magnepan 1Us. As primitive as the Maggies were, they were lovely-sounding. They didn't have great highs or lows, but they were very pleasant. So I took on ARC and Magnepan.

Guttenberg: By the time you took on ARC in the mid-'70s, most folks were buying transistor gear. They were buying the "new" technology?

Kay: Yes, they were excited by but not completely sold on transistors. If you wanted high-end, you had no choice: you had to buy tubes. They bought Marantz or McIntosh. A guy named Mr. Hardley, an excellent engineer, made copies of the Marantz 7 and 8 with transistors. Hardley's stuff was beautiful, had the same power, and they were stunning. But he was a little ahead of his time, and he couldn't sustain his business.

Guttenberg: You've had long relationships with both Mark Levinson the man and Mark Levinson the company.

Kay: I discovered Mark Levinson by accident. A friend of mine heard Mark's first preamp, the LNP-2, in Mark's basement and suggested I give him a call. He sent it down to us, and my customers all went crazy. But Mark only had the one piece, and I wanted 10 of them! Mark wasn't sure about the price, but we settled on a retail price of $1600.

Guttenberg: That was a lot of money back in the early '70s.

Kay: It was huge, and when Mark got John Curl to help him, the price eventually went up to $6000.

Guttenberg: You also invested in Levinson's company.

Kay: Yes, he was broke and needed money. Then he got Sandy Berlin to run the business—he's a magnificent fellow, and an excellent friend.

Guttenberg: So you're not just selling boxes, you're getting involved in the design process.

Kay: We shape the industry. We're in the field—the dealer is in the front line, he gets the heat, but he sees things the manufacturers don't see. We give them feedback. I helped develop the Carnegie One phono cartridge with the people at Benz.

Guttenberg: So it doesn't look like the Internet is going to "save" the high-end industry.

Kay: I never believed it. The Internet can't sell art. It can sell product—CDs, vacuum cleaners, or whatever—but it can't sell a concept. And who's going to service it? It's like the mail-order outfits, that's exactly what it is, and that's fine for mid- or low-fi, but the Internet can't sell high-end.

Guttenberg: I know it looks like fun to most Stereophile readers, but selling high-end audio or home theater is hard work. A salesman has to be a psychologist; you have to read your customers' minds.

Kay: Yes, you have to foresee all of your customers' problems. What our customers tell us and what they really want are completely different. So we talk to them, have a cup of coffee, find out what they want, who they are, where they live, what are their preferences in life, their favorite wines—and then we'll play them something. There's so much psychology involved, and personal attention is important.

Guttenberg: You can't come right out and ask how much money they want to spend, and so much of the time they don't even know.

Kay: I never ask about their budget. I start with speaker size, and then move on to a price. Then I know where I stand.

Guttenberg: In the 1980s you opened a store right near Lincoln Center.

Kay: My West Side store was designed to service the general public, but we didn't know how to do that—I lost a million dollars on that store. The Wiz [a local electronics supermarket chain] does that sort of thing. Only because of the strength of my other two stores did we survive.

Guttenberg: And yet you can't just sell expensive two-channel audiophile gear anymore.

Kay: No, in the Manhattan store, it's close to 50-50 home theater and two-channel. Every room in this store, except this very-high-end one, has home theater—and as long as I'm around, I'm going to keep it this way.

Guttenberg: You look like a man who enjoys his work.

Kay: Yes, Steve. Cat Stevens finished two records, Catch Bull at Four and Tea for the Tillerman, right here in this room.

Guttenberg: I heard about that. He used your Magnepans to monitor his mixes?

Kay: Yes, that man kept me here all night, and then he would go to the studio the next day. He'd come back again a few days later; he would sometimes stay till 6am, and I'd have to kick him out so I could get a few hours' sleep. I've also developed friendships with Isaac Stern and many others. It was rewarding to see my work being appreciated. It bothers me that the new generation doesn't seem interested in quality. Today the in thing is surround.

Guttenberg: Which reminds me—will SACD and DVD-Audio make it?

Kay: In two-channel you have two "problems," in surround you have five problems. Let them make up their goddamned minds. What is it—four, five, six, or 10 channels? Finish it—the concept has to be finalized so we know what it is, so we can tell the people. The copyright issues are also holding them back. In another five years, maybe. They're going to have to come up with new ways of recording and mixing surround. Till then, I'm staying with two-channel at home.

Guttenberg: You know, it's interesting: the movie industry consistently spends just 1% of their budgets on recording and mixing sound. Sound is an orphan child.

Kay: Yes, sound is an afterthought. And the stupid movie industry, their DVDs don't have good sound. Surround is just atrocious—they've forgotten about the quality of the sound—but the picture is very, very good. Unless they bring the sound and picture together on the same level, it's a mess. But the marriage of sound and picture is going to happen because it's natural. For thousands of years it was inconceivable that we would hear music without seeing the picture. When Thomas Edison developed the phonograph, he didn't know what do with the picture, so he forgot the picture. When we listen to our two-channel systems, we depend on our minds to create the picture, and it would be better if we had the images to go with the sound. That would be the absolute best—to have them as equals.

Guttenberg: [Sighs] Only audiophiles care about this stuff.

Kay: Only a few real music-lovers buy these things. And most of the true music-lovers don't have the money to buy the good stuff; they struggle to get what they get. A lot of my customers buy these things in lieu of something else—or they want to inflate their egos. Others are fascinated with electronics, with the engineering, and that's a big draw for them. But among my customers I find some who appreciate what I do, and I appreciate them. I believe in music; I've made money from music, and I want to give something back to the music-lovers.

Guttenberg: Is custom installation a big part of your business now?

Kay: We're doing a lot of custom installations, but those customers rarely ask about how this damn thing is going to sound!

Guttenberg: What about tube gear—will those manufacturers stick around?

Kay: I don't think that tubes are going away. They're not going to be an expanding part of our industry. I prefer tubes, but I promote transistors. Tubes belong in audiophile systems.

Guttenberg: How has your role changed over the 42 years you've been in business?

Kay: I don't think it's changed all that much—I'm the same, and when you get me talking about the music and our industry, I'm 30 years old again. We've worked hard, believing in what we do, being as honest as we can. I haven't changed any of my ideas. I'm still here six or seven days a week, and I still love what I do.