Kids Enthusiastically Upgrade Their Computers - Why Not Their Audio?

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Today's kids love to download. Be it a hot new app, a funny YouTube video or even a software update from one of their beloved handheld devices - they will enthusiastically download it. They are looking for the next best thing. The next best buzz. Or the inside angle on what is really cool. This on top of the latest and greatest in technology, information and entertainment literally defines Generation Y - a generation that is statically bigger than the Baby Boomers - and is changing the way we work, play and live.

Does this always-looking-for-the-next-best-thing behavior remind you of anybody? For me, its audiophiles. As a "recovering" audiophile myself, I can tell you that from age 14 I was looking for ways to take my starter system (NAD integrated amp, Nakamichi CD player, Polk speakers and AudioQuest cable) to the next level. As a Generation Xer, my upgrade experience was more analog, having gone through the CD Stop-light pen phase, the Audio Alchemy DAC phase and then into the world of separate components thanks to a B&K ST140 power amp. I savored each change. I cycled through my favorite music over and over. It was great fun and reason for me to work harder and harder so that I could afford my next fix. Despite the knock on Generation Y, I think they aren't that different in terms of seeking the next buzz - it's just that their buzz is different (more digital) and comes in a world that is economically much more challenging.

Generation Y is in college or recently graduated and facing a U.S. job market that is downright evil. The concept of buying high end, luxury items has been scratched off nearly everyone's list these days, yet the urge to upgrade hasn't. Case in point: right before this Christmas holiday season, Apple's stock price is a record level of over $205 per share. Against the projections of many experts, Apple has beaten the street by being the conduit for the up-and-coming Generation Y'ers to channel their enthusiasm for upgrades to their audio and video experience. A $300 iPod can be tweaked, modified, powered and upgraded via its software much in the same way back in the day when you could have parked your Rotel 855 CD player on top of a bicycle tire inner tube with a few amp bricks stacked on top in order to cut down on jitter. If you think about it, the behavior isn't all that different.

Kids today have the powerful urge to upgrade their gear and that's very good news. They enthusiastically upgrade their computers with RAM, sound cards, speakers and beyond. They customize their Scion vans with interior fabrics, audio systems, lights, fancy wheels and much more. They put skins on their hand-held devices. They put wrappers on their laptops. Some of them even modify (some could call it an upgrade) with earrings, nose rings and, well - you get the idea.

More young adults love music today, more than perhaps any other generation before them. The idea of carrying 4,000 albums around in the palm of your hand would freak a Baby Boomer out of his mind if you told him that back in the old days. I thought I was cool carrying around a Case Logic portfolio stuffed with 200 Compact Discs back in the early 1990s, as I went to work selling Wilsons, Mark Levinson, Transparent, MartinLogan and Cello. Today, thanks to huge digital advances - you can have 25 times more music at your disposal any time you want it along with a phone, a limited browser and so much more. This enables Generation Y to have more access to more music (and movies) to enjoy at times and in ways that past generations could never have dreamed.

The question is when will Generation Y get into buying luxury goods en masse? Boomers bought into the luxury market with enthusiasm in the 1970's as they bought homes, and this included killer stereos that played back excellent music of the day. I was early in my addiction with a NAIM Nait and some Celestion bookshelf speakers packed away for my dorm system, but as Generation X graduated from college in the 1990's complete with signing bonuses and a hot, dotcom economy - so came the luxury goods. Foreign cars, flat HDTVs and DVD players were only starters. Today, despite Generation Y's sheer numbers, the deep reaching recession and their lack of meaningful employment and/or under-employment makes it hard to justify a $2,000 receiver or a $3,000 pair of speakers when all you know is ear buds and an iPod, your bank account is a little on the low side and nobody is handing out credit cards like they used to (in front of Tommy Trojan at USC with the 27 percent compounding interest rates). But that doesn't mean that Generation Y won't catch up. In fact, when the economy recovers over time there might even be pent up demand for (digital) luxury goods, especially as Generation Y buys into this re-priced real estate market.

What could really inspire the next generation to buy into specialty audio video sooner rather than later? An organic resurgence of local audio-video stores that offer a more coffee shop-like experience than the big-box retailer way of buying commodity AV gear might help. Best Buy is fine if you are shopping for a cheaper HDTV just as Ralph's is OK for a place to pick up a 12 pack of Diet Cokes on the way home from work, but if you are looking for something a little more special from your shopping you might want a different experience. Generation Y is starting to go to Whole Foods and the Farmers markets. They love Amoeba Records (often for kitschy vinyl). They love to congregate at Starbucks, The Coffee Bean and elsewhere. A quality demonstration of quality audio video products from an educated, commissioned salesperson might inspire Generation Y to buy more AV gear as compared to getting a pitch from a clerk who was working in video games two days ago and appliances the day before that. The art of the demo is sadly missing in today's retail marketplace.

Another key factor to getting Generation Y into upgrading their audio would be the advent of actual HD audio files. Video games (that Gen Y loves and pays $50-plus for) are in HD. Blu-rays are in HD - audio and video. Television is in HD. Laptops have HD monitors. Everything but audio is in HD. Selling Generation Y on 25 year old audio technology will leave them rightfully wondering why they need better speaker than those white ear buds that come with their iPods. If Steven Jobs leaned on the record labels to sell HD music files at 24/192 resolution - kids would tell the difference. There is more noticeable difference between "Sgt. Pepper" (kids love The Beatles, thankfully) in 24/192 than changing from a G5 processor to an Intel processor; yet kids rush to upgrade to the latest and greatest. Why shouldn't it also be music files? Beyond music files, HD music fits easily on Blu-ray and players at $150 a pop easily fit in a Gen Yer's budget, yet the four major labels fail to find a way to sell them music in HD in any meaningful way. If the majors put out no less than 1,000 significant back catalog titles of A-list albums, genres and best-of collections - kids would pay attention and they would buy.

Generation Y on the surface looks like a waste of time, but the only thing that is wrong is timing. The economy dealt them a bitch slap back to the Great Depression right as they were riding the transition between an industrial (analog) economy into an informational economy. In 2010 the global economy will continue to heal (likely modestly) but with more people saving and hopefully some relief from unemployment - there is no reason not to expect some growth coming, thanks to kids who love to download, upgrade and who seek the latest and greatest. In the end, they are not all that different than the Boomers and Xers in front of them. They just haven't had a chance to get established enough to buy into the world of high end.


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