Where does the money come from?

[olddog]

As I have been out shopping for new speakers I have had one great question nagging me.
Why do High end speakers cost so much more 3000.00 each on up than mid range 500.00 to 2500.00? It would seem that once you get into those type of price ranges the quality of the parts would not be a factor and once a company has the cabnit design the tooling pattern is set. Is it all in R&D?

 

[TLS Guy]

As I have been out shopping for new speakers I have had one great question nagging me.
Why do High end speakers cost so much more 3000.00 each on up than mid range 500.00 to 2500.00? It would seem that once you get into those type of price ranges the quality of the parts would not be a factor and once a company has the cabnit design the tooling pattern is set. Is it all in R&D?

You have asked a good question! Developing a really fine loudspeaker is costly and a lot of work.

Having said that however, you have to be very careful in speakers in the high end. There is probably a higher percentage of problem speakers at the higher price range, than among the more modest offerings.

Obviously there is the rip off, where a speaker is put together, not very well, from modest parts. They are hyped and manage to get that good review, and it is all in the spin after that.

The next and probably more common problem, is that some enthusiast will put huge money, time and effort into a unique driver, but at the end of the day come up short. This is either being forced to product because they run out of money, or the unexpected problem, they can't really solve

I had an example of both the week before last.

I went shopping with a friend for speakers.

At a high end dealer, in this room we were in there were three speakers on offer.

First this one from Vienna speakers.


I would put this in the rip off category. It was selling at a deep discount for $7000 per pair.

It sounded just awful. A boomy dreadful tubby base and crossover problems in spades, with a dreadful mid range. Both me and my friend were appalled. We both thought a portable radio, and a lot of boom boxed would give a more pleasant listening experience. They were driven by Classe electronics by the way. The salesman also admitted they were dreadful, and was at a loss to know how he would ever off load them. Selling them for firewood would probably fetch the most money.

The next speaker was from the Swiss Firm of Piega.

We listened to the TP5s, again with Classe. These speakers use a slim aluminum cabinet (expensive). I recognized the mid/woofers to have been sourced from the expensive Scanspeak Reveltor series.

These speakers though far from the level of the Viennas, were far from a pleasant listen. The speaker uses a novel mid/HF coaxial ribbon driver. I'm sure this cost a fortune to develop and get built. However the sound of the horn hash and resonance from the mid ribbon was terrible. Either because the horn is not right, or because the crossover is driving it down to too law a frequency. The salesman was at his wits end to know what to do with this one also, and the US importer has dropped the line. They won't sell despite discounting from $14,000 to $7000.00. I told him to take heart because aluminum has a higher market value than firewood!

The other speakers in the room were the B & W 802Ds. Priced at $14,000 per pair and not discounted.

They sounded absolutely superb and were worth their money and everybody knew it. The others were barely delivering 1 to 10% of the value. There were superbly balanced and threw a convincing sound stage.

These speaker if you look into it are very costly to produce.

To conclude, take a look at the cost to a speaker manufacturer of these very high quality OEM drivers. Just because a manufacturer may use one of these is no endorsement, as you have to know how to get the best from them.

Scanspeak

Seas Excel.

These latter can lead you on!

 

[AcuDefTechGuy]

The other speakers in the room were the B & W 802Ds. Priced at $14,000 per pair and not discounted.

They sounded absolutely superb and were worth their money and everybody knew it. The others were barely delivering 1 to 10% of the value. There were superbly balanced and threw a convincing sound stage.

What do you think about the B&W subwoofers?

 

[highfigh]

I told him to take heart because aluminum has a higher market value than firewood!

It was, but the prices of scrap metals dropped drastically.

It almost sounds like the sales people at that dealer don't spend much (if any) time in finding out how to make their speakers sound best and once they find this, come up with a way to replicate it when they need to. I don't understand this, especially when the speakers are supposed to sell for these prices.

You're right- R&D cost a lot and it usually takes a lot of this, which has to be built into the selling price. Materials and construction methods add quite a bit, too and I'd like to see some input from customers regarding how important real wood, vinyl covering and exotic materials matter to them. There's always a percentage who only care about performance and don't care what is on the outside of the cabinets and some who are exactly the opposite. Less expensive exteriors hit price points, and I understand that but it usually won't affect performance. The three manufacturers all make very attractive speakers and from this, I have to think the majority want their speakers to look great, whatever their preference in materials. That said, it seems that too many put too much into looks and not enough into performance, from your impression of the first two.

What did hew salesperson do to make the first two sound better?

 

[TLS Guy]

What do you think about the B&W subwoofers?

It's funny you should ask that question, because that is what my friend was shopping for!

We auditioned this one.

I have to say that I was less than impressed. I played with it for a considerable period of time, but could not get it to make a good blend with the 802Ds. I noted significant cabinet resonance, even when not pushing it, especially on the top.

My friend has the 800Ds. He has a big space with a lot of bass leakage. On some music, in that space the 800Ds do need a little help.

I advised going to the Velodyne dealer. However my friend is a good talker and ended up getting that one for just under $1000. Probably worth that money.

My friend phoned last night and says with the sub cutting in at 45 Hz, and at a low level, it is doing what he wants.

I'm going to the twin cities on Thursday, and will take instruments.

My friend is trying to duplicate the bass of my rig. He won't unless I design them for him, and get them built.

 

[TLS Guy]

It was, but the prices of scrap metals dropped drastically.

It almost sounds like the sales people at that dealer don't spend much (if any) time in finding out how to make their speakers sound best and once they find this, come up with a way to replicate it when they need to. I don't understand this, especially when the speakers are supposed to sell for these prices.

You're right- R&D cost a lot and it usually takes a lot of this, which has to be built into the selling price. Materials and construction methods add quite a bit, too and I'd like to see some input from customers regarding how important real wood, vinyl covering and exotic materials matter to them. There's always a percentage who only care about performance and don't care what is on the outside of the cabinets and some who are exactly the opposite. Less expensive exteriors hit price points, and I understand that but it usually won't affect performance. The three manufacturers all make very attractive speakers and from this, I have to think the majority want their speakers to look great, whatever their preference in materials. That said, it seems that too many put too much into looks and not enough into performance, from your impression of the first two.

What did hew salesperson do to make the first two sound better?

I don't think you can make a speaker sound better. The room was nice and well set up with acoustic treatments. If a speaker is a dog and has a major flaw, and often several, you won't disguise it. It is an absolute fallacy that you can equalize away loudspeaker ills, you can't. A couple of hopeless cases, I'm afraid.

 

[highfigh]

I don't think you can make a speaker sound better. The room was nice and well set up with acoustic treatments. If a speaker is a dog and has a major flaw, and often several, you won't disguise it. It is an absolute fallacy that you can equalize away loudspeaker ills, you can't. A couple of hopeless cases, I'm afraid.

"I don't think you can make a speaker sound better."

I think it's possible, but it involves changing from the original design. In those cases, it would probably involve the cabinet, port and crossover. Might as well start from scratch.

I was only wondering is they moved them into their best location, re: reflections, modes, etc. If the room is well treated and doesn't favor one kind of speaker, you're right- they're dogs. I say the Vienna photo and noticed that the drivers looked like "off the shelf" pieces. Not bad stuff but if the cabinet design is wrong, there's no hope.

I don't know how many times I dealt with people who thought they could EQ their speaker shortcomings away. Most came back soon after with toasted speakers because they thought the sliders were made to be pushed to +12dB or +16dB. Another speaker killer is sub-bass enhancers, like the Audio Control Epicenter. I saw a lot of dead woofers when they were in the wrong box.

Any interest in a little informal member's contest to see who can make the best speaker at the lowest price (with agreed upon design criteria, to be tested by a third, dis-interested party, like Audioholics people)? Maybe a separate category for bookshelf, small tower and sub, with parts from any source, but with the retail price used to determine cost? That way, someone who buys at wholesale doesn't have a built-in advantage.

 

[corey]

Getting back to the OP's question:
"Where does the money come from?" - In a word: Marketing.

My take is that "bang for the buck" declines as you go up the price scale, and at some point it becomes irrelevant. Everyone picks their "happy point".

Best Buy has a 6.5" bookshelf for $88/pair. Infinity has a 6.5" bookshelf for $200. I haven't done listening tests on these, but I'd make a small wager that the Infinity sounds somewhat better, but not twice as good, and the brand ? at $400/pair will most likely be better than the Infinity, but not nearly twice as good. Some $800/pair speakers might be a bit better than the $400 ones.

When you get up to $1600, then you're interfering with my sailing budget. , so I won't comment.

 

[allargon]

Getting back to the OP's question:
"Where does the money come from?" - In a word: Marketing.

My take is that "bang for the buck" declines as you go up the price scale, and at some point it becomes irrelevant. Everyone picks their "happy point".

Best Buy has a 6.5" bookshelf for $88/pair. Infinity has a 6.5" bookshelf for $200. I haven't done listening tests on these, but I'd make a small wager that the Infinity sounds somewhat better, but not twice as good, and the brand ? at $400/pair will most likely be better than the Infinity, but not nearly twice as good. Some $800/pair speakers might be a bit better than the $400 ones.

When you get up to $1600, then you're interfering with my sailing budget. , so I won't comment.

Aaah, but when you get to $1600, you're in the range of Dali's and several other speakers Tom, Clint and other Audioholics staff will be examining in their 4 speaker shoot-out *HOPEFULLY* (Hint! Hint!) before the end of the year.

What do you think about the B&W subwoofers?

I just went to Modia this weekend with my gf's and asked about the B&W subs. I told them I needed a 15". They gave me the nearly $4k price. I didn't bat. (My budget doesn't even allow for a $1k sub.) I saw a pair of those 802D's flanking a projector in one of their rooms. I told my gf they were KEF's.

 

[fredk]

"Where does the money come from?" - In a word: Marketing.

I would say this is partially correct. It would be a combination of engineering cost, speaker build complexity (I suspect the cabinets in the 802D are condsiderably more expensive to build), volume sold (you make money either on volume or on margin), marketing costs, company/product reputation and distribution costs (dealer costs cut significantly into margin).

One of the reasons I think that lower end stuff from companies like Paradigm and B&W are over priced is because of the company reputation and marketing costs. Add to that distribution costs, and ID companies have a viable business model producing decent sounding speakers costing less than comparable products from the big boys.

 

[TLS Guy]

Getting back to the OP's question:
"Where does the money come from?" - In a word: Marketing.

My take is that "bang for the buck" declines as you go up the price scale, and at some point it becomes irrelevant. Everyone picks their "happy point".

Best Buy has a 6.5" bookshelf for $88/pair. Infinity has a 6.5" bookshelf for $200. I haven't done listening tests on these, but I'd make a small wager that the Infinity sounds somewhat better, but not twice as good, and the brand ? at $400/pair will most likely be better than the Infinity, but not nearly twice as good. Some $800/pair speakers might be a bit better than the $400 ones.

When you get up to $1600, then you're interfering with my sailing budget. , so I won't comment.

Obviously there is some marketing hype, but mainly at the lower end of the market.

Increasing price correlates relatively poorly with increases in performance, so you have to be very careful

Contrary to what you might think, the expensive high end speakers seldom make money, and very often a loss for the manufacturer. The exotic offerings are more often than not subsidized by the more humble bread and butter models.

 

[fredk]

Contrary to what you might think, the expensive high end speakers seldom make money, and very often a loss for the manufacturer.

I suppose thats possible. I would suspect that it depends on how much a high end speaker shares manufacturing processes and components with its lower cost bretheren.

Geesh. Who would have thought that B&W 802Ds are a real bargain at $14,000 (or whatever they are worth) a pop!