How well does high end hifi equipment sell?

Hi,

I have always wondered how well does high equipment sell. Magazines seem to to reviewing a lot of costly gear. Hifi +, Hifi News, Hifi Choice & Hifi World have all recently feature items of £10,000 or more.

In real terms, it seems that the high end of the market is more costly now than it has ever been.

In the current Hifi News, there is a review of £30,000 pair of Focals. In Hifi+ there are pair of £13,000 + Martin Logans Summit X speakers. There has been an review of the Oracle CD2500 MkII cd player at £10,000.

In recent times, there seems to be a crop of mega expensive items hitting the market. We have seen £100,000
+ Focal loudsppeakers, £100,000 Continium turntables & Kef Muon speakers at £80,000 as examples. Thye number of £5,000 + turntables seems to be increasing all the time.

It seems more and more stuff is hitting the market but how well does it all sell? The hifi market can not handle it all. If you add to this the loads of 2nd hand stuf out there, including yesterday's hifi end, it can make it tough for hifi companies.

Recently Hovland, the High end amp & capacitor company, has decided to stop trading. They are no more. There were not making enough money. They had to make $90,000 a month. There sales were weighted on the international market.(90%) This died for them so that was the end of the company.


http://www.stereophile.com/news/hovland_calls_it_quits/

How many more companies will go down the pan?

SCIDB

 

At a guess I doubt if continuum has sold even 30 Calibruns in total, and even less at anything nearing full price.

Hovland went out of business due to bad management and lack of imagination, they could have dropped their distributors in some territories and gone direct to retail cutting costs in the process and lowering prices, while looking for third party repair houses in each patch to provide warranty support via contract. maybe they didn't see it , or didn't want to work that way.

 

High-end audio (to prevent a lengthy deviation about what does and does not fit the term, I'm going to arbitrarily class anything costing £10k as 'high-end') does sell, but in relatively small numbers; as the prices increase, the numbers sold naturally decrease.

Accurately calculating sales figures (unless you own the company) is difficult though, because it's a fluid international market. One country might be in the audio doldrums, where another country could be thriving. Six months later, it all changes again. Which sort of explains the position Hovland has been forced to take.

This is one of the reasons why a lot of the magazines are suddenly chasing the same section of the market (another reason is when people can't afford it, they often want to experience it by proxy... which is why so many movies shot during the Great Depression were about fabulously rich people doing expensive things in the lap of luxury). Right now in the UK, the upper end of the market is the only bit that is not having a tough time. It's worth putting that into perspective - if a handful of £100,000 pairs of loudspeakers were sold in 2008 and it looks like a similar handful will also be sold this year, that reads like a stable market. If you look at sales of low-end and mid-priced products, the word 'stability' rarely comes into the discussion, except for headphones, iPod docks and £1,000+ loudspeakers.

I suspect there will be more following Hovland, many of whom will choose to go quietly and people on forums in the future will be asking "Whatever happened to..." Still more will cling on, by shrinking back to virtually nothing and placing emphasis on bespoke build, even if that really means 'back to the kitchen table'.

 

My findings are the best selling hifi is foo by a country mile.

 

I've got around 500 customers (I do do jobs usualy at least 3 times for them)

As far I know only 3 of them have had a HIFI end system, by that I mean a system costing more than £5k. The areas I work in tend to be quite well off.

I also get the impression they love it when I comment on it, as I understand it. So many people have no idea what they are listening for.

 

Huh?

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People do love Foo and they seem to love spending money on it. In fact they love buying it significantly more than the equipment, or records, in many cases.

P.S. A whole system for 5K is a long way from the highend. I recently attented the Munich show and a number of single source systems were in the 100's of thousands bracket.

 

On average a customer will use my services 3 times. That is a mean average.

I run a mobile IT services company which means I go to into a lot of houses.

 

I suppose they are not selling as much as they were before.
It depends on the company size and their products if they are now selling enough.

I know about a company who sells tube components up to 15K-20K quids per unit and it seems that they have so much work that they are thinking of getting 1-2 new employers. At the moment they are 5.

A few months ago they were telling me that they were thinking of starting catching up with the back oders in case the crisis hit them. Last week he told me they need more employers.

 

Hi,

I'm talking about stuff that costs in excess of £10,000 each for the big items.

There seems to to be a large number of expensive items on the market. The magazines are featuring a lot of it.

SCIDB

 

Then never seen anything like that. I think one of my customers has a setup that set him back £50,000 but I have only glanced at it and cannot remember what it was.

To me and most the public even bog standard Linn stuff is very exotic.

 

£10K per item represents another world / super league to me, influenced by Footballer Bling.

But I would be interested to hear how the makers/retailers/mags do segment the hifi market and of their assessment of its likely health, with and without factoring in the present financial uncertainty.

a) is there a generational thing going on - iPod/MP3 generation etc?

b) is AV overwhelming?

c) has there ever been good money in the hifi crowd?

Of course these may not be the right questions.

The professional musicians that I know dont seem to have hi-end kit as they are interested in picking up what matter to them as performers rather than being a consumer of music

 

a) Yes - those under about 35 download, those over... don't (that's a sweeping generalisation, but a valid one)

b) No - this varies from country to country. 'Home theater' is big in the US, Canada and France, for example. It's less important in the UK (tiny rooms)

c) There is a generation of people who got relatively wealthy from making hi-fi. Most of them have been making things for 30+ years

Most musicians I know are too broke to buy food, let alone a decent hi-fi system.

 

c) lol

yes, that's true of most of those in my acquaintance too!

But on (a) I recall that one of the things I did with my first paypackets was to go buy those Celestion Ditton speakers with Pioneer PLD12 & amp. And perhaps small though my contribution was, this added to the wealth of those in (c).

Then generationally it was a ghetto-blaster, now its an iPod/MP3. Still, we are the generation with the full salary pension, so maybe we will still be propping up the industry, unless the hearing goes before the eyesight and the delights of big screens in small rooms. (I know size isn't everything, but mine is 15' x 15'!)

 

And I am the generation with no pension and a nice council house to move into. I actually don't give a toss anymore the situation is so bleek. Its no wonder we got ourselves into the credit crunch. I don't want to sound like Johnny Rotten but when he sang "No Future" he was right.

Incidently the first proper money I recieved was a £120 college bursery I qualified for as I lived in Manchester, I bought a Project Debut MKII with it which I still have

Then there is the student loan still unpaid that paid for a bit of HIFI stuff oh and a double glazed window.

I have decided at 27 now is the time to stop spending money on HIFI, my Grados will be my last purchase for a while. I am now saving up for my future as I really don't want to become a lost generation statistic.

 

I suggest that you (just) enjoy the music and learn not to feed the itch for a while. The hifi bug will lay dormant imho.

I (first) stopped spending on hifi at age 27 when the first child became a toddler and I had to choose between her and the upgraded Systemdek turntable - instead it had to be a cassette deck, signalling a long time in the hifi lay-by.

(I had earlier [foolishly] cashed in three years of pension contributions when I gave up my job to re-train! - and to feed family and hifi habit.)

The hifi bug returned with gusto when the children left the nest!

 

well if you look at coherant they have just moved into bigger and better premises so business in the high end must be good.

 

Hi,

I do think some high end is selling. There is a market for this stuff. A few pieces of high end a month sold and you could have a nice turnover and profit. Picking the right stuff and having the customers for it and you are sorted.

But there seems to be a lot of items to chosse from. The magazines are featuring more high end stuff. Even Hifi World, which didn't usually feature much stuff over a few £4000, has had £10,000 & upwards items reviewed now on a regular basis.

The production runs of high end will be small but the manufacturers still need to sell. The items will has unique selling points. These could include high level technology & materials. Bespoke design and make, fancy looks, statement products etc. If customers are impressed then they buy or haggle a deal and buy.

SCIDB