"Ego, greed and poor management can only result in one thing!"
It appears those businesses may not have acknowledged their situations soon enough and were not nimble enough to adjust to changes in their markets before costs got out of control. However, I would not assume ego and greed. Engineers and artists are often poor business people and the higher pricing may have come out of desperation to keep the ship afloat. Businesses that do not practice effective strategic planning, including activities like SWOT analyses, situational awareness, and risk management, can more easily find themselves in deep water as their clients and market demands change.
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I wondered how an amp (dartzeel) could possibly cost so much ($145,000+). The power output was good, but other amps have that much power and more. So, what is inside those amps that cost so much?
I mean, the internal components, even of the best quality should not have elevated the price so much.
They (darTzeel) probably tried to market to the ultra-rich, but most of the audiophiles are not in that category.
At least I am not.
ozzy
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Check out the new top dog DAC from MSB, the Sentinel. A cool $375K. Hopefully it makes all music files (ok at least 16 bit 44.1K floor res) sound insanely good!
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@mitch2 ..."It appears those businesses may not have acknowledged their situations soon enough and were not nimble enough to adjust to changes in their markets before costs got out of control."
+1 Exactly.
Ego & greed very very unlikely. You just don’t get into the high end audio business with these attributes / goal. You go to Wall Street, investment, crime or all of the above.
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Here's another thought... Those brands were trying to market to the 'cost is no object' segment of the market. I think we can all agree that is niche at best.
Unfortunately when companies like that try to go down market, consumers are worried that the products will be greatly cheapened and stay away. Look at Marantz, Harmon Kardon, etc. They tried to go 'mid-fi' to get a broader market share but still wound up on the ropes and fodder for raiders.
It's a tough game! There's a few names have have managed to keep afloat, like ARC, MacIntosh, VPI, etc but even they have had to acknowledge the realities of the market. Look at ARC's new line of down-mid market components. Not everyone, or even many, can afford $90k for their new flagship amp...
Happy listening.
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Some of these companies have been around a long time, long enough that the people who made them successful are long gone, and it's essentially a different company that is closing down...
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@jl35
That's what she said.
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Companies Cease Trading for numerous reasons.
As for many where a product is a design to produce a very particular service, a strong communication with a Customer Base is paramount, as there are others ensuring there own products are extremely well exposed.
Lose exposure, is losing vital influencing, losing vital influencing is losing closed won sales and then the overhead is in trouble.
Blaming the pricing of the products for sale as being the detriment is only one portion of the overall pie, a Customer Base needs their own reassurances, that are beyond what is written sales spiel for a product.
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Is Dartzeel out of business? I hadn't heard that and their website seems current?
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@fuzztone What I was trying to say is that some of these companies are trying to continue business as before, not changing their business model, but are no longer good enough at it to make it still work without their founders…not necessarily greed or ego...
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This can be a chosen business model, firms can sell to a larger market at relatively lower price vs a much more exclusive market at high prices. Capitalization costs are generally going to be lower for the firm serving the exclusive market which means higher profit margin per item sold. Assuming we don't see parts and assembly costs that substantiate these extremely high prices, perhaps a firm could cite R&D as a reason for the high price. This may or may not be true. Do we see some actual new technology in all these products?
I suppose one could research the personal financials of top management at these companies in order to to gain some insight into where money is going.
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we really don’t know why these companies ran aground, and there could be different reasons for each of them, marketing, inability to control costs, poor financial management, any number of things could be at play. It’s also not just the truly high-end manufacturers that have encountered trouble. ARC had to find a white knoght to bail out of financial problems, and although their gear is certainly not cheap, it’s not in the range of the top of the line MBL stuff.
the truth is that all of these companies, even those not selling six figure gear, are chasing a very thin, likely diminishing market. The great majority of people who enjoy listening to music think that people who pay even 10 or $15,000 for an audio component are extravagant, foolish, or just showing off. So there are always going to be winners and losers in the business world, and I’m not sure it’s that much different in Audio than a lot of other businesses, other than the fact that the demographic shopping at the high end is very thin and for the most part pretty old and exiting the market. I hope both of these companies survive, but creative destruction has always been a part of the business world.
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Ego, greed and poor management can only result in one thing!
-1 not supported by any evidence. Covid created supply chain problems, and inflation created another
we really don’t know why these companies ran aground, and there could be different reasons for each of them, marketing, inability to control costs, poor financial management, any number of things could be at play.
+1
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A lot of these companies were on shaky ground to begin with and Covid was the final straw.
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One problem I feel exists within the high end industry is that the manufacturer's have to potentially supply a very wide world wide market. As such, they get fooled into thinking that because their goods can sell into one market at a highly inflated price, that they can sell into all markets at this same price! As such, we have examples of one distributor/rep claiming the goods are under-priced for his or her market, while another knows that said pricing will simply be unattainable in their area. Since manufacturer's have to maintain consistency in pricing throughout their distribution areas, this leads to a number of mistakes in the pricing strategy for certain locations. Instead of setting a more level ( and in most cases lower price point) they set the highest price point advised by their one distributor, who happens to be right in their area----only!
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Focal just released $70k speakers that look like a litter box.
They are thriving
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Is MBL gone? Close but still out there. DarTzeel the same but deeper into the grave. Both great companies.
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As Jerry Seinfeld would say, "Yah, that's a shame."
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I want a French litterbox.my can would love it.i member the transistors radio we had fun with it and enjoyed the distorted static music.enjoy music
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It’s one thing to think about a particular luxury industry in isolation, but I do think it is important to look at some in parallel as well. Watches, fashion, automobiles, etc. Each is distinctive, but are there are any similarities over time? Every Axpona (and other shows) we see in forums about new folks in the crowd. Curious to see what others think about how high end audio compares in this regard compare to other very high end luxury goods. I know that this is a broad line of inquiry, but why is high end audio at the brink (not saying it actually is) and other luxury industries are not (let’s not get into tariffs).
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I'm sure there is no single answer, but I think traditional high end audio faces difficult challenges based on generational differences. We baby boomers grew up with big stereo cabinets in our homes, and audio stores on every corner where you could experience high end audio and see what you aspired to own someday. Our youth was a time when music was at the center of, and was the voice for huge societal changes. Music was front and center-not wallpaper.
I suspect baby boomers have been the backbone of the high end market for some time. The baby boom generation was huge in terms of raw numbers compared to those that came before. Unfortunately, we boomers are old now-more and more of us are trading our multi box systems for harp music, or downsizing our living situation.
In contrast, my kids grew up with ipods and mp3 players and all their music in a device they can carry. Audio stores had largely disappeared, lots of that generation have never actually experienced what we call a high end system. They see headphones and iems, not amps, preamps, 200 pound speakers and endless cables when they shop for music. Consequently, most younger folks don't aspire to complex systems with 10 boxes and miles of cables for what is mostly a solitary pursuit- they want simple and/or portable. There are exceptions, but if high end audio is to thrive it will be forced to adapt to different demands as the generational changing of the guard occurs. You can see some companies starting to grasp this and you see more and more simpler, one or two box solutions, or no box all in one systems. The companies that can adapt to changing consumer tastes will be ok and those that don't will find themselves competing for the business of an ever dwindling group of geezers.
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Being an ex audio dealer ,I have seen cables marked up 10 x the actual cost .
these Big name companies charge up to $500 an hour for their Ego in R&D
I have seen inside $80k amps literally under 10k in parts $25-$30k
I can see in markup not $80k,
look at, Wivac, DCS , these Waay over priced companies will find they
will be far and few between in sales Audio research got cheaper in quality ,more fancy badging faceplates, in all honesty it’s under the hood That count most .
look at some of these speakers ,an extra $10 k for roasted wood , or slate cabinets
most people want to be practical , these $10 k power cords , and $30 k speaker cables that are worth maybe $10 k Are losing now most people can no longer afford these vastly inflated prices. And just want high quality and value for their $$ monies .an end of an Era to all but the wealthy . Just like the other day in TAS a $300k turntable. A bargain really , insanity . I love music but not at That cost .
I could own 3 excellent Audio systems for that cost !!
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I recall in the late '80s, decent money in my pocket for 30-something, standing at a magazine rack in a bookstore, a copy in hand of Absolute Sound in its original small format with minimal advertising, browsing a review of ARC's latest $10K VT monoblocks, William Z. Johnson remarking in that review that although he could build a better amplifier there was no market for a more expensive amplifier, a stranger approaching who recognized the magazine and striking up a conversation about our systems...
All gone. Now it's a queue at the Apple store and when the buds come off, CarPlay and podcasts.
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I'm always curious about who purchases audio at this price level. I presume a certain percentage are 'true' audiophiles, therefore, longer term journey with incremental system upgrades. I also presume many not really audiophiles, audio systems just another show piece for displaying status and wealth.
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@kerrybh
You have summed it up perfectly! My cable guy, a young man in his 20's, installed my TV stuff one day. Upon exiting he passed my audio system and remarked, "What is all this stuff?" Upon explaining that it was my stereo that I had been ever changing since I was a kid (now 65), he laughed at me. He showed me his phone and told me his stereo was right here. Fewer and fewer people want this stuff, and more and more people are dying off who have it. Supply and demand, and the insanely priced companies are the first to go, but there will be more.
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I agree on the baby boomer and young people thing. But how hard could it be to stay in business if lets say you have $200K item with $50k built in costs which leaves $150K profit. I admit this may be an extreme, but a firm doesn't have to sell many units with the huge profit margins possible with ultra high end products.
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Any business can fail if it’s sufficiently mismanaged, and unfortunately high-end audio companies are typically started by audio engineers or audiophiles with little business background who wouldn’t know a SWOT analysis if it bit them in the ass much less actually bothering to conduct one. But as others have mentioned this is a declining market as boomers age/die out — in fact I don’t have any friends or acquaintances from GenX on down who own or care about having even a halfway decent stereo system. At best, even the wealthy ones have mediocre home theaters that are horribly set up and calibrated. Younger generations’ attention is so diluted what with social media and portable/convenient audio that the thought of sitting down in front of a dedicated audio system to just listen intently to music isn’t even on the radar and may well never be. My only faint — and it is very faint — hope is that GenY and Zers who seem intrigued by and are buying turntables might eventually look to upgrade their listening experience, but my guess is that they’re more into it for the nostalgia and the cool factor than ultimately upping their sound quality, so a $1500 entry-level system is about as far as they’ll likely end up going. What with a declining customer base and now tariffs on top of it I don’t envy even well managed high-end audio companies (although cable manufacturers with their insane profit margins will likely fare better than most). My guess is this may play out in a similar fashion as it might in the college arena in that the uber high-end and very low-cost institutions will be fine but the relatively expensive mid-level schools will struggle as their pool of potential students shrinks, their already nosebleed tuitions continue to rise, and they struggle to justify the ROI on a multi $100k tuition bill. Likewise bespoke audio companies like Wavac, TIDAL (speakers), Berning, etc. will likely always have a niche with well-heeled audiophiles as well as being luxury goods that attract the wealthy who just want and will pay for the best the best so will do fine because they don’t need all that many customers to thrive. On the other end of the spectrum the cheaper mass market/ChiFi brands will also do ok as they cater to the “I just want cheap and good enough” crowd that will thrive on continued high volume for their earbuds, headphones, all-in-one sub-$1000 audio systems and speakers, etc. (again assuming they’re well managed). Getting younger generations to spend more than a couple thousand dollars on a dedicated stereo system is likely and realistically largely a pipe dream so audio companies who cater to those more mid- and even higher-level hifi systems are the ones I envy least as their market base continues to dry up and tariffs eat into their already relatively thin profit margins and/or force them to raise prices in the face of shrinking demand. That’s just a sinking lose-lose proposition that will only get worse given demographic and market trends that will not only continue but likely accelerate going forward. Anyway, just my take on the situation FWIW.
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I had a manufacturer tell me once its way easier to market to the supper rich and sell 50 pieces at $50k profit then 50000 pieces at $500 profit. Just the logistics and service requirements can be daunting as the quantity sold increases. So, they chose to sell expensive systems to the few to avoid the other huge logistic costs, servicing (post and presale) of selling to the masses. I think this may get some into hot water as the markets slow due to other issues going on i.e COVID, tariffs, slowing markets etc.
Also, the over pricing of gear is getting obvious to most of us, especially if you have a technical background. Looking inside an expensive piece and seeing similar parts quality as much less expensive pieces gets you thinking what am I paying for. I don’t think the cost to design etc, statement is holding up anymore. There really aren’t much for new designs in the audio market other then maybe some digital systems, and some newer amp designs like class d.
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It may not even be financials that brings about the end. Could be ownership is extremely wealthy, goes into audio just for the kick, interest wanes, ages out, company ceases to be.
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IMO I think you are paying a LOT for the casework ie: Boulder comes to mind. Yes beautiful to some but is 1.5 inches of aluminum worth an extra 20 - 30k?
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Purchase a new Boulder 866 for < $20k. You will receive a true Audiophile amp with the $20k-$30k casework included for free!
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