Denon AVR-X4400H & AVR-X6400H AV Receivers Add Alexa Integration

[panteragstk]

One would think that if you pay one royalty from Dolby, you'd get all the codecs. Then again they could be priced individually, but wouldn't the royalty cost be much lower purchased in bulk vs one at a time?

 

[M Code]

Regardless, for such scheme to work, manufacturers would have to make the upgrade price affordable. As it is now, D&M charges $199 for the Auro-upgrade for the 2016 model just as an example. So for those who need that feature, that's the additional cost for not waiting for the 2017 models.

As of now an AVR includes all of the royalties..
So the price of the basic AVR should drop significantly..
I won't divulge the royalty cost for each but it is significant especially the HD codecs... For example, the royalties for a basic 7.1 AVR with Dolby, DD+ Dolby True Audio, DTS, DTS MA, Apple MFI, HDMI, video scaling, Audyssey can total up to as much 30% of FOB for an AVR selling for $999 SRP.
Note that per unit royalty cost will vary depending upon what codec, # of channels and unit projected sales quantity.

In order for this biz $ model to work, the AVR needs flexible software and adequate CPU resources(Mips, memory) to support the possible download combinations..

Just my $0.02...

 

[M Code]

One would think that if you pay one royalty from Dolby, you'd get all the codecs. Then again they could be priced individually, but wouldn't the royalty cost be much lower purchased in bulk vs one at a time?

Nope...
Royalty is based upon protocol type, # of units sold and # of processing channels...
As now done by the AVR brands they choose what protocols & respective royalties to load in, downside is how many users actually require all of them..

Just my $0.02...

 

[PENG]

As of now an AVR includes all of the royalties..
So the price of the basic AVR should drop significantly..
I won't divulge the royalty cost for each but it is significant especially the HD codecs... For example, the royalties for a basic 7.1 AVR with Dolby, DD+ Dolby True Audio, DTS, DTS MA, Apple MFI, HDMI, video scaling, Audyssey can total up to as much 30% of FOB for an AVR selling for $999 SRP.
Note that per unit royalty cost will vary depending upon what codec, # of channels and unit projected sales quantity.

In order for this biz $ model to work, the AVR needs flexible software and adequate CPU resources(Mips, memory) to support the possible download combinations..

Just my $0.02...

So it may benefit those who only want the most basic features, but those who wants everything or even half of the extras, will likely have to pay much more than they do now right?

 

[M Code]

Regardless, for such scheme to work, manufacturers would have to make the upgrade price affordable. As it is now, D&M charges $199 for the Auro-upgrade for the 2016 model just as an example. So for those who need that feature, that's the additional cost for not waiting for the 2017 models.

As I posted previously...
Royalty cost is based upon protocol, # of units sold and # of processing channels. Regarding the actual cost, for Audyssey its royalty cost depends upon which version was downloaded. But the cost mounts up quickly, thats the primary reason Onkyo/Integra dropped Audyssey to save $... Their royalty payments to Audyssey were >$1 million a year.. So now they get the AccuEQ software royalty-free from TI as it is their proprietary room EQ software since they use TI DSPs....

Just my $0.02...

 

[M Code]

So it may benefit those who only want the most basic features, but those who wants everything or even half of the extras, will likely have to pay much more than they do now right?

IMHO..
If my suggested scheme was adopted...
The lower priced entry-level AVRs could decrease in cost.. But the higher-end products with more channels, more advanced protocols that sell in lower quantities their respective royalty cost would increase and cost more....

Just my $0.02...

 

[PENG]

IMHO..
If my suggested scheme was adopted...
The lower priced entry-level AVRs could decrease in cost.. But the higher-end products with more channels, more advanced protocols that sell in lower quantities their respective royalty cost would increase and cost more....

Just my $0.02...

Thank you, that sounds logical.

 

[sholling]

A possible solution for all the various, audio, video, connectivity, room EQ SW protocols can easily be addressed by the major brands...
Make each 1 a download option, include the subject royalty in the download so then the user can select what he wants depending upon his requirements. If he wants Dolby Digital and Dolby HD Audio but not Atmos, why pay for 1 that he doesn't want. So now the user can customize his AVR to address his own preferences..

Just my $0.02...

It's a fun subject to muse about and I'm sure that if there is enough demand then someone will offer featureless products that are firmware upgradeable ($$$) to semi-full featured products, but I doubt that the demand for such products is significant or that making an upgradable entry priced receiver is any cheaper. A big part of the reason that people bother to upgrade their receivers is for new features such as 4K pass through and the latest audio and video processing and feature competition keeps the price of those features low and drives up sales. Second, the cost of post manufacture feature upgrades would be so prohibitive that new technologies would never be implemented. Each upgrade would have to have its own software or firmware package written and marketed and each upgrade risks additional support costs. All of that costs a lot of money. By wrapping everything up as a package deal the consumer benefits from economies of scale and support costs are kept low.

The answer to not having to pay for new technologies is to buy used gear (which is cheaper anyway) or buy brands without the latest features. If there is a demand for featureless receivers then someone will build them, if there is enough demand they may even get their prices low enough to equal that of full featured AVRs. Or someone could just buy featureless separates.

On the other hand, if you want to do something that will really drive down prices then get governments to ban minimum advertised prices (MAP). Based on some of the retailer MAP workarounds it's pretty obvious that manufacturer mandated minimum advertised prices are keeping consumer costs artificially high. I saved about 40% by taking advantage of one of those workaround sales.

 

[M Code]

On the other hand, if you want to do something that will really drive down prices then get governments to ban minimum advertised prices (MAP). Based on some of the retailer MAP workarounds it's pretty obvious that manufacturer mandated minimum advertised prices are keeping consumer costs artificially high. I saved about 40% by taking advantage of one of those workaround sales.

Not realistic...
The AVR brands and their selling dealers need to make a minimum % profit margin.. As this margin decreases the consumer starts to get shortchanged..

• Product's overbuild is reduced
• Brand's technical support is cut back, and/or outsourced out of North America
• Product's warranty is decreased

Bottom line...
Today's AVRs (and other CE products) are getting more complex and require more technical support not less....
Especially if HDMI and includes any type of wifi or internet connectivity, or remote control programming. Without more capable, technical support @ the brand and dealer, final product returns are simply higher....
This where all of the B stock and refurbished products come from sold by Accessories for Less or NewEgg.. Products are returned not because they are defective.. But because they are too complex for the consumer to set up/configure properly and he/she fails to find a solution from either the seller or brand. Just puts it back in the box and returns it for exchange or refund...

Knowing the inside story...
Few consumers realize how high the product return costs actually are, freight costs, handling costs and then once a returned unit is checked out and boxed for sale as being refurbished its value is decreased by 50%....

Just my $0.02...

 

[sholling]

Not realistic...
The AVR brands and their selling dealers need to make a minimum % profit margin.. As this margin decreases the consumer starts to get shortchanged..

• Product's overbuild is reduced
• Brand's technical support is cut back, and/or outsourced out of North America
• Product's warranty is decreased

I disagree, dealers like Newegg and Amazon provide no support yet are required to use full MAP prices and these days few brick and mortars provide support - they just don't have staffs capable of doing much. All MAP pricing does is give the manufacturers' products a premium cache. There is no reason that consumers should have to pay a high volume dealer a 100% markup.

 

[M Code]

I disagree, dealers like Newegg and Amazon provide no support yet are required to use full MAP prices and these days few brick and mortars provide support - they just don't have staffs capable of doing much. All MAP pricing does is give the manufacturers' products a premium cache. There is no reason that consumers should have to pay a high volume dealer a 100% markup.

Where are U getting ur information??
A high volume brick & mortar dealer does not have a 100% markup on CE hardware....
But...
They do have up to 400-500% markup on accessories like cables..
Here is a real world example for U...
Take Best Buy...
They sell a Samsung Blu-Ray player(BD-J5100ZA) for $59.99, their net buying cost is $46.35, so they make a 23% profit margin on just the player.
But then to connect the Samsung player U need an HDMI cable.
They sell an Insignia 12' HDMI cable (NS-HG04508) for $39.99, note that Insignia is Best Buy's house brand and they source this directly from the China cable factory for $5.85..

Bottom line...
That by selling the HDMI cable along with the Samsung player their profit margin is now 42%. What drives up the profit margin is the HDMI cable that they make $34 on an item that costs <$6 a markup of almost 6X.
Regarding profit margin % for a seller this does vary significantly...
A brick & mortar store needs at least a 30% margin to cover the costs of rent, wages, benefits, insurance. While an internet seller located in an remote, industrial park location can work on as little as 18% margin because his rent is significantly less, no demo/showroom expenses, wages are lower as the staff are less skilled . They simply take the order via the net and send the product out by UPS or USPS... If technical product support is required, typically the customer is referred back to the CE brand

Just my $0.02...

 

[sholling]

Where are U getting ur information??
A high volume brick & mortar dealer does not have a 100% markup on CE hardware....

I'm basing it on a couple of things. One of those is Fry's famous maker sales where they refuse to name the brand or model in their ads due to MAP pricing but when you get to the store it's a Denon for 40% off. When I showed up to buy my AVR-X4400 they checked their margins and decided that they could give me yet another $100 off the 40% off and still make money. That makes their normal markup roughly 100%. Not for everything but for some things - particularly MAPed products like Denon receivers. But even if it's only 25% they should be allowed to compete on price. You are right that in specialty retail accessory markups are often obscene, as much as 300% or more. That's what's led to Monoprice to be such a disrupting factor in the cables industry.

 

[M Code]

I'm basing it on a couple of things. One of those is Fry's famous maker sales where they refuse to name the brand or model in their ads due to MAP pricing but when you get to the store it's a Denon for 40% off. When I showed up to buy my AVR-X4400 they checked their margins and decided that they could give me yet another $100 off the 40% off and still make money. That makes their normal markup roughly 100%. Not for everything but for some things - particularly MAPed products like Denon receivers. But even if it's only 25% they should be allowed to compete on price. You are right that in specialty retail accessory markups are often obscene, as much as 300% or more. That's what's led to Monoprice to be such a disrupting factor in the cables industry.

Markup % and profit margin % are (2) different calculations...

Markup %
Using the AVR, you sell each AVR for $200. The bicycle costs you $150. First, find the gross profit.

• $200 – $150 = $50 gross profit
• To write the markup as a percentage, divide the gross profit by the cost.
• $50 / $150 = 0.33 markup
• To make the markup a percentage, multiply the result by 100.
• 0.33 X 100 = 33% markup
• The markup% is 33%. That means you sold the AVR for 33% more than the amount(cost) you paid for it.

Profit margin %
Using the AVR example, an AVR sells for $200 each. Each AVR costs $150. First, find your gross profit, or the difference between the revenue ($200) and the cost ($150).

• $200 – $150 = $50 gross profit
• To find the margin, divide gross profit by the revenue.
• $50 / $200 = 0.25 margin
• To make the margin a percentage, multiply the result by 100.
• 0.25 X 100 = 25% margin The margin% is 25%.
• That means you keep 25% of your total revenue. You spent the other 75% of your revenue on buying the AVR.

Since we sell/install Denon AVRs(as well as Marantz, Integra, Yamaha) we know quite well their respective profit margins %. Also when a model such as the 4400 is on closeout making room for newly introduced models soon to be delivered, the brand decreases the dealer cost accordingly allowing the dealer too sell the AVRs @ a lower price. Also if dealer has physical inventory of the closeout model, the brand will issue credit $ for each units in the dealer's inventory. How much the AVR is discounted really depends upon how much inventory is in the distribution channels for the subject brand.

Just my $0.02...

 

[DigitalD]

Will the Denon X4400H disconnect from the power amps if you re-assign the preamp outs to the rear in the amp assign settings? Also, can you do a 5.1.4 set up while Re-assigning preamps or do I need to add another 2 speakers to take advantage of this feature? Anybody know?

 

[PENG]

Will the Denon X4400H disconnect from the power amps if you re-assign the preamp outs to the rear in the amp assign settings?

Yes if you re-assign the front L and R to the rear height/or top, then obviously the front L and R pre outs have to be disconnected to the internal power amps.

Also, can you do a 5.1.4 set up while Re-assigning preamps or do I need to add another 2 speakers to take advantage of this feature? Anybody know?

If you re-assign the FL/FR amps, and connect the FL/FR pre outs to an external amp, you can do 7.1.4 with 11 speakers. You can still choose 5.1.4, and in that case you only need 9 speakers. So I don't know what you meant by "do I need to add another 2 speakers to take advantage of this feature? "