Business News Today - Bain Capital * D&M Holdings

[lsiberian]

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...

Just like I still contend the electric car is the future. I will say he has an excellent sound system though and if you want to know how design a kitchen he's got an amazing one of those too. Sorry I just don't see the receiver going away.

 

[PENG]

You guys keep forgetting Bose!! Bose will save the day..

 

[AcuDefTechGuy]

You guys keep forgetting Bose!! Bose will save the day..

There you go. Make it clean and simple and advertise the heck out of it and people will buy!

Now who's going to predict that Bose will go away? I'm not betting against them.

 

[RichB]

There you go. Make it clean and simple and advertise the heck out of it and people will buy!

Now who's going to predict that Bose will go away? I'm not betting against them.

They make two products I like.
Their noise cancelling headphones are pretty good, I do not fly, cut the grass, or snow-blow without them.
Their in-ear iPhone buds with mic are great for phone calls and Facetime. They don't block-sound which is perfect for this function.

- Rich

 

[PENG]

They make two products I like.
Their noise cancelling headphones are pretty good, I do not fly, cut the grass, or snow-blow without them.
Their in-ear iPhone buds with mic are great for phone calls and Facetime. They don't block-sound which is perfect for this function.

- Rich

Everyone I know who do not frequent AV forums thought if they want a nice sounding system Bose will be their choice.

 

[RichB]

Everyone I know who do not frequent AV forums thought if they want a nice sounding system Bose will be their choice.

The Bose store near me is pretty empty

Really, though their ear-buds are great for phone calls because they do not block your own voice and work well for workouts.
Noise cancellers are pretty-good, although recently there is some competition.

Bose audio products really do suck, though. I heard their $4k TV a couple of years back and it sounded as bad as it looked.

- Rich

 

[walter duque]

Whatever you're on, I want some.

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

I don't think that's far fetched, I paid $1250.00 for a Marantz 4400 in 1974, that was 40 years ago.

 

[sharkman]

Interesting. I'm curious as to why Audioholics seems to have become a doom and gloomy type of forum regarding the future. Atmos sucks, the HT industry is in free fall, etc. I guess time will tell.

 

[Irvrobinson]

Business News Today - Bain Capital * D&amp;M Holdings

I don't think that's far fetched, I paid $1250.00 for a Marantz 4400 in 1974, that was 40 years ago.

The 4400 was a very high end product in 1974. In 1981 I remember buying a moderately nice Japanese receiver for $99 as a birthday present for my girlfriend. It was low power as I remember (20w/ch?), but last I heard it still works.

 

[FirstReflection]

What I'm seeing is a polarization of the AV marketplace.


There will always be a market for expensive, custom installation home theaters. It's not like movies are going away any time soon, nor people's desires to watch movies. And a custom home theater for the wealthy crowd is practically a given at this point - even if they barely ever use it, just like a pool and a chef-quality kitchen. So expensive AV Processors will always have a market. In fact, that market is growing. But a lot of it is just ridiculous "more money than sense" type of gear. If some rich person says they have $2 million to spend on their home theater, you better believe their custom installer is going to find a way to meet and exceed that budget!

On the low end of the price scale, if people are buying anything beyond the speakers that are built into their TV (and frankly, thank God for how awful flat panel TV speakers are, because they're SO bad that at least even people who are completely uninterested in AV decide that they need something better!), they're buying SoundBars.

Mass market AV Receiver manufacturers used to have us - the middle class AV enthusiasts - and the entry level crowd. But now they only have the middle-class enthusiasts. The entry-level is almost entirely seeded to SoundBars now. And since their only customers are now enthusiasts, we're not the sort of people who buy an AV Receiver on impulse or because a big box store salesman said it was good. We do our research, and we price compare.

So if you're not selling to the custom installation crowd, and you're not selling to the mass market, how are you going to survive? Particularly when your only remaining customers are a very demanding bunch who want top level features for zero margin prices.

Fact is, we are a niche. AV Receivers that DON'T start at $20,000 are now a niche item. Our absolute best bet is going to be a brand like Integra or Anthem that sells to the custom installer market, but at somewhat more reasonable price points.

There IS a market. So someone will continue to fill it. But if you're the sort of person who's living in the under-$500 bracket for an AV Receiver, I really don't think the future holds good news. At the $1000 - $5000 price point, some AV Receiver brands will survive to service the enthusiast and "low-end" custom installer market. Having those two customer bases overlap will be enough to keep AV Receivers within that price bracket viable. But I really see everything below that just becoming SoundBars. And maybe that's fine. We love the sort of 5.1 speaker system we can currently put together for less than $1000 all in. But a decent quality SoundBar with a wireless subwoofer and two wireless surround speakers for the same price or less doesn't actually have to sound a whole lot worse.

Meanwhile, if you're mostly looking at $1000 and up AV Receivers, I think we'll still have a fair amount of choice. Maybe Denon and Marantz won't be a part of that. But I really don't see there being absolutely nothing in between SoundBars and $20,000 Processors. The middle is definitely undergoing shrinkage, though. So us middle-class enthusiasts? We just need to buddy up with the "low end" custom installation crowd is all

 

[cpp]

What I'm seeing is a polarization of the AV marketplace.


There will always be a market for expensive, custom installation home theaters. It's not like movies are going away any time soon, nor people's desires to watch movies. And a custom home theater for the wealthy crowd is practically a given at this point - even if they barely ever use it, just like a pool and a chef-quality kitchen. So expensive AV Processors will always have a market. In fact, that market is growing. But a lot of it is just ridiculous "more money than sense" type of gear. If some rich person says they have $2 million to spend on their home theater, you better believe their custom installer is going to find a way to meet and exceed that budget!

On the low end of the price scale, if people are buying anything beyond the speakers that are built into their TV (and frankly, thank God for how awful flat panel TV speakers are, because they're SO bad that at least even people who are completely uninterested in AV decide that they need something better!), they're buying SoundBars.

Mass market AV Receiver manufacturers used to have us - the middle class AV enthusiasts - and the entry level crowd. But now they only have the middle-class enthusiasts. The entry-level is almost entirely seeded to SoundBars now. And since their only customers are now enthusiasts, we're not the sort of people who buy an AV Receiver on impulse or because a big box store salesman said it was good. We do our research, and we price compare.

So if you're not selling to the custom installation crowd, and you're not selling to the mass market, how are you going to survive? Particularly when your only remaining customers are a very demanding bunch who want top level features for zero margin prices.

Fact is, we are a niche. AV Receivers that DON'T start at $20,000 are now a niche item. Our absolute best bet is going to be a brand like Integra or Anthem that sells to the custom installer market, but at somewhat more reasonable price points.

There IS a market. So someone will continue to fill it. But if you're the sort of person who's living in the under-$500 bracket for an AV Receiver, I really don't think the future holds good news. At the $1000 - $5000 price point, some AV Receiver brands will survive to service the enthusiast and "low-end" custom installer market. Having those two customer bases overlap will be enough to keep AV Receivers within that price bracket viable. But I really see everything below that just becoming SoundBars. And maybe that's fine. We love the sort of 5.1 speaker system we can currently put together for less than $1000 all in. But a decent quality SoundBar with a wireless subwoofer and two wireless surround speakers for the same price or less doesn't actually have to sound a whole lot worse.

Meanwhile, if you're mostly looking at $1000 and up AV Receivers, I think we'll still have a fair amount of choice. Maybe Denon and Marantz won't be a part of that. But I really don't see there being absolutely nothing in between SoundBars and $20,000 Processors. The middle is definitely undergoing shrinkage, though. So us middle-class enthusiasts? We just need to buddy up with the "low end" custom installation crowd is all

Agree, and something I have been observing is the market seems to be moving towards mobility or the take it with you crowd investing in Hi-Rez players and head phones not to mention using their Smart phones for audio processing and all they need is dock station or a USB connection and maybe an amp and some speakers or just "headphones" . If the bigger companies done' get on board with reasonable pricing to support this mobility the high end $$$$$ AVR's will go down the doomed path. Sure the old folks will buy the "audiophile" products but for a business to survive I just don't see it as a long term business solution to make gear that's outrageously priced for a "few' with deep pockets as there is a lot of decent/excellent gear on the used market these days in lieu of spending huge sums for the same or like gear.

 

[AcuDefTechGuy]

...I just don't see it as a long term business solution to make gear that's outrageously priced for a "few' with deep pockets...

Simple economics to me.

1,000,000 people x $200 vs. 1,000 people x $2,000?

 

[TLS Guy]

Agree, and something I have been observing is the market seems to be moving towards mobility or the take it with you crowd investing in Hi-Rez players and head phones not to mention using their Smart phones for audio processing and all they need is dock station or a USB connection and maybe an amp and some speakers or just "headphones" . If the bigger companies done' get on board with reasonable pricing to support this mobility the high end $$$$$ AVR's will go down the doomed path. Sure the old folks will buy the "audiophile" products but for a business to survive I just don't see it as a long term business solution to make gear that's outrageously priced for a "few' with deep pockets as there is a lot of decent/excellent gear on the used market these days in lieu of spending huge sums for the same or like gear.

This is exactly what I was telling you in my first post in this thread.

If D & M can't make enough money selling their range, the it is a fair bet the others aren't either.

Yes, it is going mobile and integration of home system with mobile devices should have happened by now. A remote as we know it should pretty much be a thing of the past.

I do think that DIY will increase. In the computer area DIY is big business, just go on the New Egg site. Someone is buying it.

There is now a mother board with HDMI pass though. All we need is a mother board with HDMI switching and the ability to output to power amps for 7.1. Then a DIY HTPC will pretty much do it all.

I have said for years a receiver is long past its sell by date and has put home HT and audio in a straight jacket causing its downfall. The disappearance of the receiver would be the best inspiration and generator of the true innovation that is so urgently required.

 

[M Code]

Basic problem facing D&M is...
Their financial performance over the last 3 years has been horrible....

Just my $0.02...

 

[TLS Guy]

Basic problem facing D&M is...
Their financial performance over the last 3 years has been horrible....

Just my $0.02...

But so must the others, Pioneer and Yamaha. Yamaha can weather it, the others can't. Onkyo hit the rocks and was sliced and diced.

There is not financial future in Denon and Marantz products, yet in general they are better than the competition.

Take home point: - Major change is coming!

 

[M Code]

Bain Capitol stripped D&M of all their liquid assets while laying off 125 people from their NJ headquarters, now all marekting/product decisions are done off-shore...
Meanwhile the max market share strategy of Denon opening up all of the internet sellers, they lost the support of their profit oriented AV installers and specialists.
Backfired and drove down their slim profit margins to be negative..

Only time will tell if they can recover..

Just my $0.02..

 

[RichB]

^^^
It makes sense that they are predicting larger sales volume than occurs so the fixed costs are not covered by the margins.
HT is tough is a crappy economy. Kids stay home instead of buying houses, so no H and no T

- Rich

 

[sharkman]

^^^
It makes sense that they are predicting larger sales volume than occurs so the fixed costs are not covered by the margins.
HT is tough is a crappy economy. Kids stay home instead of buying houses, so no H and no T

- Rich

This is part of an issue that few people seem aware of. The economy lost millions of jobs, and a large portion of those workers never found work or got very low paying work that has them just scraping by. With so few dollars to spend, people will buy a tv, but not a theater system.

 

[cpp]

But so must the others, Pioneer and Yamaha. Yamaha can weather it, the others can't. Onkyo hit the rocks and was sliced and diced.

There is not financial future in Denon and Marantz products, yet in general they are better than the competition.

Take home point: - Major change is coming!

Yamaha has been doing pretty good, but since it's company is so large in comparison to D&M and Pioneer it would be difficult to compare. The marine division, motorcycles, etc... YAMAHA CORP (7951:Tokyo): Financial Statements - Businessweek



















Financial Statements for yamaha corp (7951)

Year over year, Yamaha Corporation has been able to grow revenues from ¥366.9B JPY to ¥410.3B JPY. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of goods sold, SGA expenses and income tax expenses. All of these improvements led to a bottom line growth from ¥4.1B

 

[highfigh]

I just saw this thread and haven't been here much until recently, but I think this one should keep running.

Some of the things I have seen in the last 4-6 months went without explanation from Denon and, as a dealer of their goods, I think it's BS. Long wait times on hold for their CI tech support, problems with firmware updates taking forever and it looks like their CI channel training is going to be relegated to their website- I'll find out soon enough; they generally send an e-mail about CI training sessions in June.



I hate the way they have been marketing HT for the last ten years. Just a parade of crappy, flashy features that many people don't care about. Like 3d- that lasted for about three minutes and nobody has asked about it in, well, ever.

What I would like, since preamps, tuners and power amps don't usually become obsolete- one box with these three sections with either a space allotment for a processor that's modular and can be changed, as needed, or a separate piece that's about the size of a DVD player that performs all functions pertaining to HDMI switching, conversion, distribution and audio decoding. The audio can enter the main box via one cable, to be separated internally and sent to the channels being used.

This way, the whole setup won't become obsolete just because they want to sell more boxes and we, as dealers, won't be forced to have uncomfortable conversations with people who bought an AVR only a few months ago and upon reading some tech article, found out that it's no longer capable of ding what they want or need. Trust me- it's not enjoyable and many don't believe that we find out about a lot of this stuff about the same time as consumers. Sales reps are generally order takers and have a fraction of the product knowledge the reps of the '70s and early-'80s. They weren't generally all that great, either- but they often had a clue and the equipment was more simple.

The game has changed, drastically. I started selling audio in '78 and it was actually fun. Now that the internet has become the largest dealer for most products, AV is a total PITA. I took on Parasound so I could get back into 2 channel, which is having a resurgence. We'll see how that's going, but I'm installing an amp tonight for someone who's using Zone 2 of an AVR and he needs more coverage for all of his Sonus zones.

I won't be upset if I don't have to deal with video- I was always an audio guy, anyway.