Musings on Price, Value & Performance

[philipbarrett]

I was flicking through the Audio Advisor catalog today, they're not so bad and at least somewhat avoid the hyperbole of other catalog/online audio retailers. Many of their photo shoots include the products with the lids off & it's interesting to peer inside and see exactly what has been used & where. This lead me to some general (and subjective) musings on the price/value equation at both the mid and ultra high end audiophile equipment market.

If I put my engineering cap on and open the AA catalog at the Benchmark DAC page (for example) I see a very well laid out circuit board using nice components housed in a solid case. Retailing at $1,600, there probably isn't a huge mark-up considering the IP & physical property involved in a product like this. Likewise the Vincent Chinese made pre & power amps; less care & attention paid to the PCB & component layout but again, not bad considering the price. If you compare these products to similar items in the professional market they are priced quite competatively, a good Firewire interface will run well over $1,200 and a Crown XTi amplifier will be in the $4,000+ range. Even if you remove the digital processing in the Crown a Parasound domestic unti priced at $2,700 still looks to be a pretty good value.

If we move to speakers we reach similar conclusions. Good professional drivers from JBL & TAD run from the mid-$300s up to the $1,500s, a speaker cabinet containing 4 - 6 drivers of similar quality can legitimately sell for $5K - $8K. As Klipsch fans will attest, there are many great designs in that price range.

My point being is that, at this sector of the market, (the same sector that I believe most of the Klipsch range sells into) there is a direct correlation between the selling price and quality of the components, the quality of the construction and the intellectual property involved.

So where does that leave us once we move into the realm of $60K amplifiers and $100K speakers? Is there a level of componentry & design that the mid range manufacturers are not party too? Is there another level of designer and engineer available? My answer is no, certainly there are military spec components that meet higher production tolerances and often have a better resistance to external environments but they are not actually priced much beyond the commercial stuff you can buy at Mouser. In digital processing designers do not have a vast range of chips to chose from & no boutique audio manufacturer has the resources to design and fabricate their own, therefore, it's the same old ICs repeated over & over.

So if we can establish a somewhat consistent basis for the component specifications then surely the arguement supporting value in the super-high end audio marketplace must be one of superior intellectual property. The designs must be so revolutionary and advanced that they support such prices. Once again, I have my doubts. So much esoteric equipment is tube based & frankly most of those circuit topologies originated with the RCA Radiotron Design Handbook in the late 1920s. Yes there are tube designers pushing new boundries and I'd be amiss not to mention both Bruce Rozenblit & Manley Labs here (interestingly both belong in the "affordable" catagory) but most of what I see are new varients on existing, albeit excellent, designs. Again in the digital realm, the ICs are fairly ubiquitous and so are the circuits to drive them. Certainly audible gains can be wrung out of the clock and A/D-D/A circuitry but not at the magnitudes reflected in the upscale prices.

Even speaker design is a long established art. In fact, one could argue that the venerable Klipschorn should be one of the most expensive models available because its' wood working is one of the most complex. Yet even at full retail, it doesn't begin to touch the prices asked by the "audiophile" brands.

So what's my point? I'm not arguing that the high-end audiophile market does not produce products with excellent sonic properties. What I am arguing is that the prices charged for this equipment have no basis in either component or design costs are are completely based upon "what the market will bear." Perhaps with the added incentive that some purchasers may equate that higher price with higher value. Conversely, there seems to be an area of the market where component costs, design & packaging meet to form a perfect storm (sorry, not a term I love) of value. I find it interesting that in my experience, most members of this forum tend to exist in, or aspire to this level and not to the ultra market.

We know return you to our regularly scheduled programming.

[Mallette]

I am also a fan of Audio Advisor. I didn't buy often enough to stay on their list, so I haven't had one in a while. We're pretty much in line on price/performance. You didn't mention vintage. A 2 Channel system that will perform to 95% of what is attainable can be put together for 500.00 within a couple of weeks or less of haunting Ebay and Craigslist, IMHO. At 1k you are probably at 98%. after that, the price per bit of performance improvement turns up so steeply as to threaten the bank barons.

At least, that's the way I see it.

It's another reason I don't really want to learn to hear things not related to accuracy. I can afford "accurate." I might not be able to afford certain things I could learn to hear, and I do not want to be stuck in the distinctly disagreeable situation of lusting after something I could never afford that had nothing to do with "accuracy."

It's about the music, and while the instruments and skills to make it do not come cheap, the equipment to enjoy the fruits of those labors need not present a barrier to the raptures of great music.

Dave

[Hifi jim]

It's an excellent, although age old question Philip. Most audio types will end this conversation quickly by saying "diminishing returns". This phrase can be applied to just about any product, the further up you go in price, the less you get in return. A new Corvette Z06, or ZR1 is a stunning sports car at any price, and it can compare on the track with just about any supercar. However, let an experienced driver take a Corvette and say a Ferrari F430 down a twisty road and then the differences become more clear. The Ferrari is mid-engine and therefore will behave differently though the turns than the front engine Vette will. The Ferrari is largely hand built of the finest components and each model has incredible quality control and is road tested before being shipped out. Now, to look at these cars side by side on paper, the Vette seems the sure victor based on price and performance numbers, but it's those small nuances that wins over drivers and has made Ferrari a household name. You could also compare Rolex with Timex, both will last forever and keep accurate time, so what's the difference? Back on point, lets compare a Parasound Halo C2 processor with a Meridian G68 processor. The Parasound is about $2k and the Meridian $8k. Both use the same Motorola Symphony 56367 DSP, but the Parasound uses 1 and the Meridian employs 6. Meridian uses 48 bit arithmetic and the Parasound 24 bit. Having seen and heard both, I can say the Meridian is the better built unit, the Meridian also comes with a beautiful learning remote, the MSR+. Still not worth the cost difference? Well, you wouldn't be alone and thus the many, almost infinite choices we audiophiles have. Compare the Chinese built Parasound amps to an American made McIntosh amp. The McIntosh uses output transformers which are hand wound, then potted in tar (how many manufacturers do this?) The Mac has the beautiful glass face, the long history, the incredible resale value and tremendous service and product support. And the Parasound? Well, no, no, and no. But does this mean the Mac will necessarily sound better? Nope. You mentioned the Klipschorn with its complicated cabinet. Yes, but its drivers are relatively inexpensive compared to B&Ws diamond tweeter, Kevlar midrange, Rohacell woofers and crossovers using fancy parts. And then of course there is the rather complicated cabinet that the 800 series uses. So the more expensive B&Ws must sound better right? Of course not, it's a matter of personal choice. Is the price of these high end components worth it then? That's up to the buyer. Do high end products have a larger profit margin? I can only guess but I'd say probably. In the end, you pick your poison and pay your price. Philip, you've recently purchased some beautiful used Klipschorns. Having never owned them, but a strong desire to, I can only guess that these must be the epitome of the price/performance ratio... and they look gorgeous!

[philipbarrett]

Thanks for everyone's contributions so far. Please remember, my point is that there are absolutely great "values" to be had at the Meridian & Mcintosh price points (and the Klipsch and a whole host of other manufacturers) and the pieces you mention are excellent examples of a price being consistent with the cost of production, engineering and IP. No one minds paying a fair price (even a big one) for a fair product. Bear in mind I'm comparing these value equations with the super high-end, 5 & 6+ digit price tickets.

I knew the automobile example would come up soon enough but I don't think it applies here. Ferrari certainly charges a premium for their products but I don't think anyone would disagree that their level of engineering and the advanced componentry used in their products is vastly more costly than those used by GM in the Corvette (no critiscm intended here). In the audio world my assertation is that the 6-figure plus designs are using very similar components, designs and circuit topologies to the so called "lesser" products we love. Imagine finding out that Ferrari sources their brakes from AC Delco and their transmissions from Borg-Warner. Now that F512 price doesn't seem so justified does it?

My comparisons to the professional industry were to illustrate that argueably, in the case that you mention of speaker drivers, the best engineered components are not stratospherically priced and I find it hard to believe that you can produce drivers that are so much of a magnitude more costly that your speaker is now priced in the 6 figures.

[Hifi jim]

Good point Philip. I was thinking of McIntosh because many of their new products are so astronomically priced, i.e. the MC2kW. Nagra, MBL and Lamm are also in the upper atmosphere price wise, but again I think you get even more engineering and quality control. Speaker wise, maybe Wilson is a good example of using off the shelf parts from different driver manufacturers, but Wilson would argue the cost of their cabinet construction, paint finish and custom crossovers. I think it boils down to what a persons budget is, and what they like. I think that's what we all shop for, that ideal price/performance ratio. I'll never afford Wilson Alexandrias, a Ferrari F430 or a Rolex, but I'll be just as happy with my Klipsch (K-horns maybe someday), Ford Mustang, and Tag Heuer. [] I'm sure the high end is making a mint from those who must have the very best, but it doesn't affect me except that some of that technology eventually trickles down into the stuff I can afford. So in that case, let them have at it... it's good for the mid-fi folks like me.

[Mallette]

Jim, you mentioned Nagra. I used a Nagra IVL for several years as sound engineer for film work. That was the finest piece of engineering, craftsmanship, and pure beauty I've ever seen in or out of audio.

No way I can give enough details in this space. Suffice to say it was pretty much perfect and never faltered, much less failed, even under simulated combat conditions (it was a military gig).

If I ever had money to burn I'd get a 4S just for grins, and great listening.

Dave

[Hifi jim]

Jim, you mentioned Nagra.  I used a Nagra IVL for several years as sound engineer for film work.  That was the finest piece of engineering, craftsmanship, and pure beauty I've ever seen in or out of audio. 

No way I can give enough details in this space.  Suffice to say it was pretty much perfect and never faltered, much less failed, even under simulated combat conditions (it was a military gig). 

If I ever had money to burn I'd get a 4S just for grins, and great listening.

Dave 

I'm green with envy Dave. I'd love to have some first hand experience with their gear. It's my understanding that they supplied the CIA, FBI, etc. with various reel to reel and cassette recorders back in the day. Their modern amps, preamps and cd players are considered to be among some of the very best, and they're still built to that high quality. Swiss made! The movie The Good Shepard (based on the early CIA days) has some shots of an old Nagra recorder circa 1961.

[Mallette]

Yezzir, Jim, Swiss made. Kudelski's signature was inside in fountain pen. And I felt then that it looked like a very big watch, with every part an unbelieveably perfect fit. When you'd run your hand across screws you'd feel nothing because the fit was so precise.

I cannot recall the model number of the little ones the CIA used, but I remember precisely what they looked like. With Kudelsk's genius and obsession with build quality I'm sure those little buggers saw some exciting capers and came back with the goods.

Gives me a woodie just thinking about it...

Dave