Many New Audiophile Companies Target "One Percenter" Clients At CES 2012

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Many New Audiophile Companies Target

CES-2012-1-percent-logo.jpgWhen the lines for the elevators taking you to the top floors of the Venetian Hotel were packed 200 deep, I should have known something was up. What could be the draw on those "specialty audio" floors? Could it be a new tube amp technology? Affordable, groundbreaking new audiophile speaker drivers? Somebody playing master tape from some label's archives? Sadly, in most of the rooms that I visited, this wasn't the case.

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What we saw was a trend among a number of up-and-coming and established audiophile companies, which was to target their products exclusively to "one percenters." That's right, you would've thought we were living in the pre-economic collapse economy, for $175,000-per-pair speakers from brands that you've never heard of could be found easily. $10,000 analog interconnects that are so rigid that there is no physical way you could bend them to accommodate installation in a rack were proudly displayed, or how about a pair of monaural amplifiers for $200,000?

Is there room in the world for ultimate-level audiophile products with a price to match? Absolutely yes, and there was plenty of that on display at CES 2012. Wisdom Audio's LS4s sounded absolutely fantastic, but more impressive were their $1,300 audiophile grade in-wall speakers in the next room running off of an Integra receiver. Krell makes $59,000 monoblock amps that I've had the chance to audition in my own room and still think might be the best-sounding power amps that I have heard to date. However, their soon-to-be-released $5,000 preamp shows that they are also bringing their components more to the masses with pricey but somewhat more attainable components. Revel and Mark Levinson know the high-end market as well as any brand, which they proved with the debut of products including $25,000 two-chassis stereo preamp, but they also showed an active display of a smokin' pair of $4,500 a pair Revel speakers that sounded fantastic. They also had a whole new lineup of Mark Levinson preamp-DACs-players that cost a fraction of the price of the last year's lineup from Levinson. Bowers & Wilkins' tiny sub-sat system was on display off-site at the Mirage on Classe's groundbreaking $5,000 DAC-preamp, which made wonderful and somewhat affordable sound. Focal was showing affordable computer speakers and nicely-done headphones, along with their pricey Utopia line speakers and Devailiet electronics. Paradigm showed that they are all-in with their Shift speakers, even if they are one of the least expensive speakers in the line. Wharfedale showed off their stunning new Jade series $1,500 bookshelf speakers on dirt-cheap electronics that sounded simply wonderful. Golden Ear's new Aon3 bookshelf speakers were being powered by an entry-level Peachtree Audio integrated that sounded "hot, hot, hot," as Buster Poindexter would say. Meridian's Sooloos system is now iPad-controllable and their M6 speakers with the Sooloos controller are as affordable as ever while still very high end. The big boys were getting it, but then again they've earned the right to do so.

In my career selling audiophile products, much of my effort went into moving big-ticket products like Wilson Audio WATT Puppies, Mark Levinson electronics, Cello gear and more. At a time when $20,000 components were almost unheard-of, I was fortunate enough to find clients well-heeled enough to be able to afford them. With that said, I sold far more Aragon 4004 amps, MartinLogan speakers and Rotel CD players with entry-level Transparent cables than I did full blown Cello or Wilson-Levinson systems. The simple fact is that there are only so many clients who have a) the interest in hobbyist audio systems and b) the money to spend deep six figures on their system.

To the new brands, I don't mean to be "a hater," as specialty AV needs new blood, not to mention customers who actually buy the products. At the same time, as sales guru and author Tom Hopkins says, "You have to earn the right to the sale," and at these prices, I just don't see how many of these brands have earned the astronomical prices that they ask, as compared to the more established audiophile brands. Consumers in this recession have made it clear that when they buy, they are looking for value products, even if they are spending what non-hobbyists would consider big money on an audio or video component.

Maybe the rest of the world can support this level of uber-high-end from obscure brands but I ask you this question - if your stockbroker asked you to invest $500,000 in a stock and it was worth $5,000 in just a few weeks, how would you feel? You'd want to sue, have him or her fired and then possibly killed, right? Well, this is the type of investment many of these new brands are asking you to make with a completely unproven track record. A Cello system that was sold in 1995 is still worth a good percentage of its original cost after providing nearly 20 years of audio enjoyment. The same goes for many of the elite audiophile brands' components and systems. This is exactly why they get to charge what the do for their statement products. At the same time, they are learning that the sweet spot in the market isn't in $50,000 or $100,000-plus components, speakers or cables. The money is made in more attainable products that still retain the cache, the allure and the lust-worthiness of a true high-end component. When Joe Audiophile gets his $4,500 tax return in March or April, he can pop for something nice for his audio system, but unless he is a "one percenter" making $1,000,000 or more per year, how the heck can he justify $100,000 amps or $250,000 speakers? Those are for such a small group of clients that you might be able to narrow their numbers down to 1,000 or 2,000 of the world's 6,800,000,000 people. There are millions more who love music more today than ever and are willing to invest to get the best, most enjoyable experience they can, but it must be at a price that they possibly can afford.

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• Read more industry trade news from Home Theater Review.
• See more original commentary in our Feature News Stories section.

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