Business News Today - Bain Capital * D&M Holdings

[cpp]

What will this mean for long time audio brands Denon and Marantz?

Bain Capital Fails in Its Bid to Restructure D&M Holdings Buyout Financing - Strata-gee.com

 

[TLS Guy]

What will this mean for long time audio brands Denon and Marantz?

Bain Capital Fails in Its Bid to Restructure D&M Holdings Buyout Financing - Strata-gee.com

My guess is that D & M will be sliced and diced and sold off in parts.

I did a survey of the industry about a year ago. Home audio sales are tiny and falling. There is no longer economy of scale.

I think the market will become boutique. Look for receivers to either disappear or start at the $2000 to $5000 range quite soon.

I think this will drive a DIY trend. It will be like gaming with enthusiasts building their own rigs. In other words custom built HTPCs and external amps will replace pre pros and receivers.

This may be a good trend in the end, and reinvigorate an industry that has become stale and shuns innovation. The whole industry has failed to provide achievable worthwhile increase in performance.

Electronics is dominated by mobile, and it continues.

Standardization has been shunned for perceived proprietary gain.

Equipment is hard to set up and remotes a nightmare.

Equipment should be plug and play like it used to be. If you plug in BD player the units should recognize each other. You should not have to assign inputs.

Why is there still such a thing as a remote? Your smart phone should be able to control your whole system with the screen showing all interconnects and which ones are active. None of this is rocket science and could have come about with sensible agreements about standards.

This stale industry has only itself to blame. It will now go into the furnace cauldron and be remade. We will be in for a rough patch. In the meantime everyone needs to brush up their DIY skills. We may be in for the era, if you can't build it, you won't have it. As happened in my youth, smart DIYs will rise to the top and found innovative companies and music and video in the home will be reborn.

 

[Adam]

Look for receivers to either disappear or start at the $2000 to $5000 range quite soon.

Whatever you're on, I want some.

Define "soon," and then we can agree on a bet.

 

[MidnightSensi2]

My guess is that D & M will be sliced and diced and sold off in parts.

I did a survey of the industry about a year ago. Home audio sales are tiny and falling. There is no longer economy of scale.

I think the market will become boutique. Look for receivers to either disappear or start at the $2000 to $5000 range quite soon.

I think this will drive a DIY trend. It will be like gaming with enthusiasts building their own rigs. In other words custom built HTPCs and external amps will replace pre pros and receivers.

This may be a good trend in the end, and reinvigorate an industry that has become stale and shuns innovation. The whole industry has failed to provide achievable worthwhile increase in performance.

Electronics is dominated by mobile, and it continues.

Standardization has been shunned for perceived proprietary gain.

Equipment is hard to set up and remotes a nightmare.

Equipment should be plug and play like it used to be. If you plug in BD player the units should recognize each other. You should not have to assign inputs.

Why is there still such a thing as a remote? Your smart phone should be able to control your whole system with the screen showing all interconnects and which ones are active. None of this is rocket science and could have come about with sensible agreements about standards.

This stale industry has only itself to blame. It will now go into the furnace cauldron and be remade. We will be in for a rough patch. In the meantime everyone needs to brush up their DIY skills. We may be in for the era, if you can't build it, you won't have it. As happened in my youth, smart DIYs will rise to the top and found innovative companies and music and video in the home will be reborn.

I am so with you. I agree completely, thank you for writing it.

*edit*
K, I gotta be a bit of a prick:
http://www.dmglobal.com/Pages/Home.aspx <-- Watch the video

Besides the video looking like it was made on a 500 dollar budget, I've never heard so much marketing bullshit in a single roll. Congradulations DM Group, or whatever.

 

[cpp]

I am so with you. I agree completely, thank you for writing it.

*edit*
K, I gotta be a bit of a prick:
DM Group + Performance is everything <-- Watch the video

Besides the video looking like it was made on a 500 dollar budget, I've never heard so much marketing bullshit in a single roll. Congradulations DM Group, or whatever.

Makes you wonder what happen with their plan,

 

[TLS Guy]

Whatever you're on, I want some.

Define "soon," and then we can agree on a bet.

Well lets take a look about. You can't buy a decent TV screen at the moment.

Onkyo descended to trash and was bought by a pop musical instrument company. I don't see them doing anything useful with it.

Marantz/Denon are not making money and they probably sell most.

They will almost certainly be sliced and diced and descend into the abyss.

There is talk of Pioneer leaving the receiver market.

HK receivers are a joke.

That leaves Yamaha, who make instruments, motor bikes, outboard motors etc, and can afford to subsidize the loss for a while. However as the above scene plays out they will either not devote much resources to it, or price them to the point where they turn a hansom profit.

So this could all unravel quite fast within the next 24 months, more likely a slow death between now and 2020.

I'm not counting on being able to replace my pre/pro.

I'm already planning that my next pre/pro will have the Carter label on it.

DIY I think will expand in the interim. In the fifties the best gear around was made in the home on the whole. As a kid I read the opinion of Cecil E. Watts and Percy Wilson, especially the former, that a tracking force for LP replay of 3 GM or less was required to prevent LP groove defamation. The best you could buy tracked at 7 to 10 GM. So I set about and built a pickup that tracked at 3 GM before any such thing was marketed. I showed it to Stan Kelly and instead of being moving coil, it became variable reluctance. But the nylon suspension was the same, and the Decca ffss was born a few years later.

I use my HTPC more than any other front end. You can't buy anything like it. It is built from the best components I can find.

My speakers use techniques not found in any commercial speaker I'm aware of.

The point of all this is that necessity will spark invention. And Heavens at this time the need of invention is dire. That does not mean pointing speakers at the ceiling and expecting to get height perspective, that is daft.

What is required is ease of use and compatibility. Home AV will not become mainstream until that happens.

We have thread going about some chap saying this site and the rest of us should become sycophants for this failing industry. Over my dead body!

 

[Irvrobinson]

I think the market will become boutique. Look for receivers to either disappear or start at the $2000 to $5000 range quite soon.

I'll bet heavily against this prediction, where I'll assume "quite soon" means less than 5 years.

 

[rojo]

You know, I'd be interested in seeing receivers sold with a barebones firmware, with value-added apps available for additional cost. I'd like the hardware of the Marantz SR7009 for the price of the SR6009, for example, without the extra cost paid to third-party companies for licensing features that might not be needed. Audyssey XT (or even manual EQ) as a base install, and XT32 and SubEQ HT available as online upgrades. Dolby TrueHD as a base, and Atmos as an upgrade. Basic audio UPnP streaming in the stock firmware, with full DLNA compliant A/V streaming for additional purchase. Netflix / YouTube / Spotify / Hulu / other standard streaming services could be made available to people who don't have a smart TV or Internet-enabled Blu-ray player. The benefits would be many. The best hardware would be available at the lowest cost to consumers. Manufacturers wouldn't have to cut corners to try to meet a certain price point. And users wouldn't have to pay for features they don't use. Don't make users pay for DTS Neo:X if they don't use height / wide channels. In a way, it'd be a return to home AV's roots. Remember the trading amplifier quality for features article? At the same time, it would embrace our iOS and Android culture of value-added apps.

And THX certification can just go away for all I care. It seems to me that the net purpose of THX certification is only to make consumers pay a premium for a buzz word. As long as it's UL listed, I'm fine, really.

 

[Adam]

I'll bet heavily against this prediction, where I'll assume "quite soon" means less than 5 years.

Hey, now. I've got first dibs on taking his money. A low-end receiver being $2000? No way. Noooo way.

Mark, you're a good guy, but man - you go overboard sometimes. I still remember when a new person asked if they could split an HDMI signal to two TVs. You said that it was difficult and would require a piece of equipment that cost more than his house (your words). You said it plain simply couldn't be done by a normal person. I recommended a <$20 HDMI splitter, which the person bought and then reported worked great. Granted, I don't know if his house cost less than $20, but...

 

[RichB]

You know, I'd be interested in seeing receivers sold with a barebones firmware, with value-added apps available for additional cost. I'd like the hardware of the Marantz SR7009 for the price of the SR6009, for example, without the extra cost paid to third-party companies for licensing features that might not be needed. Audyssey XT (or even manual EQ) as a base install, and XT32 and SubEQ HT available as online upgrades. Dolby TrueHD as a base, and Atmos as an upgrade. Basic audio UPnP streaming in the stock firmware, with full DLNA compliant A/V streaming for additional purchase. Netflix / YouTube / Spotify / Hulu / other standard streaming services could be made available to people who don't have a smart TV or Internet-enabled Blu-ray player. The benefits would be many. The best hardware would be available at the lowest cost to consumers. Manufacturers wouldn't have to cut corners to try to meet a certain price point. And users wouldn't have to pay for features they don't use. Don't make users pay for DTS Neo:X if they don't use height / wide channels. In a way, it'd be a return to home AV's roots. Remember the trading amplifier quality for features article? At the same time, it would embrace our iOS and Android culture of value-added apps.

I get where you're coming from but I am not sure how much of the price comes from these craptastic features. Anthem has receivers with good room correction and limited channels, with more added as you go up the line. Cramming all these channels into receivers cannot be improving sound quality and resulting in products with far more hardware than the vast majority required. You can't even turn off the hardware you are not using.

Receiver still have Zone support which is senseless in a world with wireless Ethernet and streaming devices. There is no attempt to create an open standard.

I would be interested in a product with basic features like an Anthem without amps and not have the price raised as a result.

I sold my AV8801 and for the time being am using the BDP-105 without a preamp. There are limitations, no volume control, limited HDMI inputs without HD audio support, and it is not easily automated with a remote. I had intended to get another preamp but no-one in my family is complaining and it sounds great. It's not broken so I am having a hard time justifying fixing it.

Streaming devices and the ability to access ripped music with apps and media servers like J River represent gigantic improvement in usability. The receiver companies have ignored this trend. Meanwhile, there youngsters are listening to ripped/digital music on high quality DACs and headphones.

Unfortunately, the current receivers are development seems to be 95% of the previous crap and the industries latest big thing. The market research seems to be "Hey what are you adding next year"

No wonder the next generation has little interest in these products.

That's my rant

- Rich

 

[cpp]

I get where you're coming from but I am not sure how much of the price comes from these craptastic features. Anthem has receivers with good room correction and limited channels, with more added as you go up the line. Cramming all these channels into receivers cannot be improving sound quality and resulting in products with far more hardware than the vast majority required. You can't even turn off the hardware you are not using.

Receiver still have Zone support which is senseless in a world with wireless Ethernet and streaming devices. There is no attempt to create an open standard.

I would be interested in a product with basic features like an Anthem without amps and not have the price raised as a result.

I sold my AV8801 and for the time being am using the BDP-105 without a preamp. There are limitations, no volume control, limited HDMI inputs without HD audio support, and it is not easily automated with a remote. I had intended to get another preamp but no-one in my family is complaining and it sounds great. It's not broken so I am having a hard time justifying fixing it.

Streaming devices and the ability to access ripped music with apps and media servers like J River represent gigantic improvement in usability. The receiver companies have ignored this trend. Meanwhile, there youngsters are listening to ripped/digital music on high quality DACs and headphones.

Unfortunately, the current receivers are development seems to be 95% of the previous crap and the industries latest big thing. The market research seems to be "Hey what are you adding next year"

No wonder the next generation has little interest in these products.

That's my rant

- Rich

Dam Rich you nailed it , great rant

 

[MidnightSensi2]

Makes you wonder what happen with their plan,

Heh, it died with their 500 dollar budget video and lying CEO lol. A mere 2 years later according to the video post date lol.

I'll bet heavily against this prediction, where I'll assume "quite soon" means less than 5 years.

I don't completely agree with his course of events, but I do completely agree with the general direction. It's already happening. We're buying more and more from what I call 'cottage industry' suppliers and niche types. More DIY is being done. With the internet there is much more audio scientific literacy available, and lots of people willing to help - this really reminds me of open source software in that respect.

You know, I'd be interested in seeing receivers sold with a barebones firmware, with value-added apps available for additional cost.

I agree most receivers have lots of extra bullshit, but, this reminds me of 'in-game' purchases of video games, which a 14 year old recently explained to me. Basically, they now sell video games that aren't complete, making you buy more crap just to have it not suck. So, you first buy the game for 50 bucks or whatever, then in the game they screw you again. One game he showed me, you had to pay to see the ending.

If I ever buy a receiver, and then to 'enable streaming' they want more money... I'll go find the CEO of that company and beat him/her with the receiver.

A low-end receiver being $2000? No way. Noooo way.

We're already on the way. It reminds me of pre-amplifiers. A pre-amplifiers should cost less, right? But, the volume is less, so they actually cost about the same as a receiver. Maybe they make some extra profit, but, probably not much - they still have to design it, write a manual, support it, etc. etc. As the industry goes more niche, the volume will go down, and the prices will go up.

I'd argue that once the manufacturers are making niche products rather than mass consumer electronics, the quality might also go up. Look at Emotiva, yeah, they've had problems - but, look at the internals, the care, and how they appeal directly to buyers like us.

I think more than DIY, it will go cottage industry, or some mixture.

Mark, you're a good guy, but man - you go overboard sometimes. I still remember when a new person asked if they could split an HDMI signal to two TVs. You said that it was difficult and would require a piece of equipment that cost more than his house (your words). You said it plain simply couldn't be done by a normal person. I recommended a <$20 HDMI splitter, which the person bought and then reported worked great. Granted, I don't know if his house cost less than $20, but...

Yeah, he does (Mark, you do lol). But, if they're weren't people like Mark on this forum, it would suck. He challenges and debates, much more interesting than the group-think I see so often.

Also, I know the HDMI distributors he was probably referring too, and, while they don't cost as much as a house... they are damn expensive. But, they keep the HDMI signal negotiated, which, is a huge deal in large distributed video systems. Now, for some guy just trying to split two... not needed, I agree.

 

[herbu]

I'm already planning that my next pre/pro will have the Carter label on it.

I use my HTPC more than any other front end. You can't buy anything like it. It is built from the best components I can find.

My speakers use techniques not found in any commercial speaker I'm aware of.

What is required is ease of use and compatibility.

AND Availability. There are not many people who can do what you do. So people who want high quality home theater or music must look at what is available. If all the currently available products start to disappear, people like you will begin to make their products available. And these people will target customers from low price to exclusive expensive custom. So if the big brands fade away, more small ID brands will emerge... perhaps like speakers.

You said it... "necessity will spark invention". If my necessity is HT, I will find/invent ways to get it. And I suspect, like most people, it is easier for me to pay for it than learn how to make it. Indeed, that necessity drove me to this forum.

Your points are interesting about the demise of big HT/Audio companies. Perhaps you're on to something. But I'll bet the farm that DIY will not take its place. Especially in these days of immediate gratification. Maybe I'll put my order in now for a Carter Pre/Pro.

 

[RichB]

Your points are interesting about the demise of big HT/Audio companies. Perhaps you're on to something. But I'll bet the farm that DIY will not take its place. Especially in these days of immediate gratification. Maybe I'll put my order in now for a Carter Pre/Pro.

The crowd funding began here

- Rich

 

[AcuDefTechGuy]

AVRs will never disappear and they sure won't start at $2K.

AVRs will be around forever and they will start at about $200.

The more things change, the more they remain the same.

 

[Adam]

AVRs will be around forever and they will start at about $200.

Nah, not forever - but they're not going to become unaffordable to the general population in the near future. Something will replace them, no doubt, but I don't think it'll be because people have become happy with the current state of TV speakers. Someone will come out with a less obtrusive way to get a great audio experience than the current "boxes of drivers connected to boxes of electronics" approach, and that will eventually take over.

 

[AcuDefTechGuy]

...Someone will come out with a less obtrusive way to get a great audio experience...

I can agree with that. If they can come out with something even simpler than an AVR, people would want that.

But there is no way everyone is going to buy a pre-pro + amp (more complex), instead of something simpler.

 

[rojo]

I agree most receivers have lots of extra bullshit, but, this reminds me of 'in-game' purchases of video games, which a 14 year old recently explained to me. Basically, they now sell video games that aren't complete, making you buy more crap just to have it not suck. So, you first buy the game for 50 bucks or whatever, then in the game they screw you again. One game he showed me, you had to pay to see the ending.

If I ever buy a receiver, and then to 'enable streaming' they want more money... I'll go find the CEO of that company and beat him/her with the receiver.

Would you rather pay 2 grand for a computer loaded with MS Office, Adobe Creative Suite, Pro Tools, AutoCAD, and a bunch of other programs you'd never need; or $500 for the same hardware with just Windows and no other commercial software? Would you rather the miniDSP cost $250 but entitled you access to every plugin, even if you would only ever use one?

I know what you mean about in-game purchases. I regard IAP games as a bait and switch. It's not always clear before buying a game that you don't have access to all its features.

On the other hand, when you're buying an AVR, you're buying hardware with a basic operating system. These days, AVRs almost always have features the end user doesn't need or use. As long as AVR makers are clear about the base features and the cost to upgrade to premium features, I don't see why it wouldn't work, allowing AVR makers to sell better hardware at lower prices, and allowing end users to end up with the functionality they always wanted without having to pay for unneeded bloat.

I get where you're coming from but I am not sure how much of the price comes from these craptastic features.

Ultimately, I reckon if there is a flaw in my idea, it is this. It could hypothetically be that removing 3rd party licensing fees, but adding the cost to modularize 3rd party features + admin and host an app store-ish service results in a net savings of around $50. Who knows? I'd sooner quit my griping and pony up the extra $50 for full bloat if that was the case.

But if I could have the SR7009 hardware for the current cost of the SR6009, hell yeah I'd do it.

 

[MidnightSensi2]

AND Availability. There are not many people who can do what you do. So people who want high quality home theater or music must look at what is available. If all the currently available products start to disappear, people like you will begin to make their products available. And these people will target customers from low price to exclusive expensive custom. So if the big brands fade away, more small ID brands will emerge... perhaps like speakers.

Agreed.

And I suspect, like most people, it is easier for me to pay for it than learn how to make it.

It's easier to get a hooker than a girlfriend, but, part of it is the journey and community, right? As is, Audioholics is /sort of/ DIY in terms of system integration. Not a whole lot of people talking about hiring installers on here.

Indeed, that necessity drove me to this forum.

For me I wanted a place to talk about audio/community of people with similar interest.

Your points are interesting about the demise of big HT/Audio companies. Perhaps you're on to something. But I'll bet the farm that DIY will not take its place. Especially in these days of immediate gratification. Maybe I'll put my order in now for a Carter Pre/Pro.

Look at niches like head-fi and tubes. Headphones got big, but, the 'audiophile' types were around long before that. A whole micro-economy was made around headphones, from DIY designs made easy through printed circuit boards, to specialized builders (pay a builder to make you a DIY headphone amp thing), to smaller amp manufacturers, etc.

With tubes there is a DIY community, a bunch of suppliers of tube kits and materials... and also more expensive ready-to-go designs.

 

[MidnightSensi2]

I know what you mean about in-game purchases. I regard IAP games as a bait and switch. It's not always clear before buying a game that you don't have access to all its features.

On the other hand, when you're buying an AVR, you're buying hardware with a basic operating system. These days, AVRs almost always have features the end user doesn't need or use. As long as AVR makers are clear about the base features and the cost to upgrade to premium features, I don't see why it wouldn't work, allowing AVR makers to sell better hardware at lower prices, and allowing end users to end up with the functionality they always wanted without having to pay for unneeded bloat.

I agree with you on the concept, but, I don't believe companies will do that. They keep trying to 'trick' people into spending more money than they want to.

Based on all the logos and crap put on receivers today, I see the 'trickery' road as their default rather than a deviation.