“I told you so.” Nasty words, but inescapable of late. I just can’t stop saying them. As hi-fi retailers – real ones, stocking decent equipment and blessed with an awareness of the high end – are disappearing as quickly as typewriter manufacturers and cathode-ray tube TV sets, some might ask how it all happened so quickly, or how it can be stopped. But I, for one, don’t consider a 25-year-long descent to irrelevance to qualify as “quickly.” Those guilty of allowing purist audio systems, capable of making divine music, to become unloved and obsolete were warned.
Retailers, manufacturers and audiophiles with any longevity in this industry know that specialty hi-fi stores first appeared in the mid-1950s, as an off-shoot of electrical goods stores, maturing to the point where they were free of “white goods” by the end of that decade. Suddenly, hi-fi justified its own dedicated retail outlets. Gone were the days when audio separates were sold side-by-side with refrigerators and washing machines. The trajectory was quick, the plateau reached by the late 1960s.
For a good 30-35 years, a decent “stereo” figured in the top 10 of most consumers’ “wants lists.” Everyone got lazy. Hi-fi sold itself. Cool bachelor pads in Playboy featured killer systems. A specialty audio product could sell 50,000, 100,000 or more units. If you don’t believe me, do some Googling and terrify yourselves with the unit sales of Dynaco amps, AR speakers, Shure cartridges and the like.
As of 2011, hi-fi doesn’t figure in any consumer research Top 20s for the targets of disposable income or “must haves.” Audio systems have been nudged downward by smartphones, iPads, gaming consoles, state-of-the-art cooking ranges from Viking or Aga and aluminum-clad coolers from Sub-Zero, fine wines, luxury vacations, better attire, fountain pens, digital cameras. Hell, most 15-year-olds draw a blank if you even say “hi-fi” or “stereo.” They probably can’t hear you through their vile ear-buds. They certainly don’t covet dad’s sound system
More indicative of this trend is a figure quoted to me a few weeks ago, apparently from an industry body, maybe even the CEA. I was told that in 1997, global sales for “high end” separates totaled $500,000,000. Projections for 2011 were $270,000,000. Keep that near-halving in mind, because we live at a time when, despite a financial crisis, other luxury sector vendors are enjoying phenomenal growth. Why aren’t we?
Despite all the warning signs, the audio industry* carried on behaving like audio geeks when they should have grown up. The lost opportunities are numerous, the self-inflicted obstacles shameful.
We created unnecessary wars – digital vs analogue, stereo vs multi-channel – and we refused to stop playing the customer-repelling formats game. How much damage was inflicted by failed formats? From the 1980s onward, during an era where every single luxury item has enjoyed increased sales thanks to increased levels of sophistication, only high-end hi-fi plummeted.
Cigars (despite anti-smoking legislation), fine wines, artisan fountain pens, custom-made luggage, tailored suits, five-star dining – the list of luxury goods with upward sales is endless. What they all share, that hi-fi doesn’t, is the manner of presentation, and the perception of what ownership imparts. Shout all you like about how high-end manufacturers share the same production and performance values as Mercedes-Benz or Montegrappa in their quests for excellence, but don’t you dare tell me that anyone in audio knows how to sell to the self-same clients.
Where does the “I told you so” come in? As far back as the late 1980s, I was bellowing, kvetching and whining about pending doom, not least in magazines like the UK’s much missed, scurrilous trade organ Private Eye-Fi. My decibel screech increased logarithmically as I saw how it should be done, how it should have been done, the whine increasing as I moved deeper into the worlds of wristwatches, exotic cars and other boys’ toys. The satori was painful, the analogy with our failure inescapable.
Many of you would like to deny any culpability for the diminishing of the appeal of high-quality sound systems, blaming it all on such “villains” and “cancers” as digital, the iPod, the economy, the Wife Acceptance Factor, the lowering standards of contemporary music, or other real or imagined causes. All are responsible.
But what you might learn from is a similar catastrophe that happened to another once-vast industry, with a devastating effect which crippled a 300-year-old tradition in under a decade: in the 1970s, quartz arrived and killed off the mechanical watch, seemingly overnight.
You think that the flat-screen TV replaced the CRT in record time? The digital camera wasted film in a trice? The word-processor slew the typewriter in a blink of an eye? They were nothing compared to the devastation that battery-powered watches wrought, in terms of speed, on the mechanical watch industry. But consumer electronics had an advantage over the watch business because the transitions, e.g. the move from CRT-to-flat screen, were evolutionary developments that the same makers could handle: JVC-to-JVC, Sony-to-Sony. None of them had to shut down. Quartz watches, on the other hand, killed off brands by the hundreds, American lost all of its homegrown makers, the Swiss laid off a few hundred thousand workers.
By the time the Swiss realized that the mass market belonged to quartz, the Asian makers owned that market. But the Swiss did something no-one has yet figured out how to do in audio, to counter the iPod/ear-bud/crap-speakerization of music playback: they went upmarket.
First, a genius named Nicolas Hayek single-handedly saved the Swiss watch industry, by creating the Swatch, which brought mass-market sales back to Switzerland. He beat the Asian giants at their own game, with inventiveness and panache. But then he and a handful of other visionaries did something else which is PERFECTLY analogous to what the revival of the turntable is doing on a microscopic level in our industry: they sensed a desire amongst fastidious consumers to return to the mechanical watch, even though it offered absolutely no technical advantages over quartz, save surviving a nuclear holocaust thanks to immunity to EMF.
What happened to the watch industry still defies logic. Seemingly-obsolete mechanical watches acquired prestige and collectability. They became objects of desire, little machines that attested to manufacturing skills which border on the artistic and the magical. And yet the finest watch in the world tells the time no better than the clock in your mobile phone.
Lest you think I’m praising a scam, note that “high end” watches appeal to individuals for exactly the same reasons that we choose one component over another, even if we’ve reached a point where the two are so sonically similar that measurements don’t reveal differences. We choose one over the other because the company has been around for 50 years, or its output is Class A instead of AB. Watches, though, have other virtues that high-end audio doesn’t: the likelihood that the value will appreciate, the sense that you’re getting you’re money’s worth. Even the most seemingly-overpriced watch has been costed to reflect man-hours. Now tell me how a $5000 meter of cable is as work-intensive as a $5000 chronograph.
But that’s neither here nor there, and I like to think we buy the things we love to enjoy them, not to re-sell them, nor to worry about value-for-money. That only applies with budget purchases, because funds are more of an issue for the consumer, while the Law of Diminishing Returns affects every upgrade – as anyone who knows wine can demonstrate with ease. Where the analogy stops, and where we failed, is our inability to make audio appeal to anyone outside of the audiophile mindset.
I will leave you with one illustration. Imagine you have $2000 or $20,000 or $50,000 in your pocket. Even the least amount is a decent piece of change. You would like to think that whatever salesperson is relieving you of that, in exchange for his wares, will treat with relative respect. You do not, for example, expect a guy selling you a Coke for a buck to fawn over you the way a waiter would who just uncorked a $600 Ornellaia. But you would expect a refined level of comportment from someone about to swipe your Amex through the card reader for $50,000, whether it’s for a mid-level BMW, a Patek Philippe chronograph … or a $50k amplifier.
And that’s where we fall down. Step into any branch of Cellini or Wempe for a wristwatch. Go to ANY Mercedes-Benz dealer on earth, any Hermes boutique, any salon selling Prada. You will not see dirty coffee cups, empty boxes, snotty sales staff. You will not be harangued about your choices, nor fed sales pitches consisting of eye-watering mumbo-jumbo. You will be treated with respect, and you will witness salesmanship worthy of the product that you are about to buy.
In my 40 years in audio, I have met no more than a couple of dozen individuals employed in this industry who would be hired, in any capacity, by Patek Philippe, Harry Winston, Aston-Martin, Montegrappa. Having met the CEOs of those companies, visited their factories, seen their retail outlets, I weep for us.
Talk not to me of their margins – they are the same, or worse than audio. Talk not of such companies being larger concerns with deeper pockets: you would be surprised how small are some of the great names, compared to hi-fi’s few giants. Instead, ask yourselves why they can sell luxury products for the same prices as yours, in great quantities, and they never have to apologize for them.
Or beg for customers.
In May 2011, the Richemont Group – owner of Cartier, Montblanc, Van Cleef & Arpels and other luxury houses – posted an increase in sales of 33%. [http://www.businesslive.co.za/incoming/2011/05/19/richemont-sales-up-33] Is there a single manufacturer in audio that can claim as much? Besides someone selling capacitors and resistors? Richemont did it selling luxury goods, which are by definition things that nobody really needs: wristwatches and jewellery. We can’t even do it with something as life-affirming as music machines.
[*To avoid confusion, I’m talking only about makers and vendors of “quality separates,” “real hi-fi” – call it what you will – not mass market dreck]