What makes an expensive speaker expensive


When one plunks down $10,000 $50,000 and more for a speaker you’re paying for awesome sound, perhaps an elegant or outlandish style, some prestige ... but what makes the price what it is?

Are the materials in a $95,000 set of speakers really that expensive? Or are you paying a designer who has determined he can make more by selling a few at a really high price as compared to a lot at a low price?

And at what point do you stop using price as a gauge to the quality? Would you be surprised to see $30,000 speakers "outperform" $150,000 speakers?

Too much time on my hands today I guess.
128x128jimspov

Hi All,

    Tubes 444,  while I agree with your assessment,  right off the top of my head, I can think of 10 or 12 quality  current driver manufactures.

Tim

 One factor I haven't seen mentioned in the price debate, is a piece of kit being to cheap. I know the stories are apocryphal, but I have spoken to dealers who have had customers say face to face, that they like a product, but it doesn't cost enough. The reason, 1) it's cheap so it can't be any good. 2), it's cheap so they can't impress their friends.

 The rich variety of human stupidity, still surprises me from time to time.

Marty, not sure why the 2k ones do it for you over the 10k ones.  Maybe there is something major missing in the more expensive three you have or you have the smaller system in an area where you listen more often.  Personally, I've owned and still do a few different systems in different rooms in my house.  Whenever I can listen to my major system with the Vandy Treo's, I"m all in.  It's the one that I connect with and love to listen to for hours and hours.  That's just me.

When I say reverse snobbery, it really is when folks make blanket statements that spending over X amount isn't worth it or it's  a waste etc..  The bottom line is that if folks want to spend that and feel that it is worth it, then it is if they can afford it.  I can't afford speakers over 15k and even then it's a STRETCH.  That doesn't mean that I feel anything over that is a waste.  My favorite speakers I've ever heard in a system are the Vandersteen 7 mk2's.  I've heard a lot of the 100k plus speakers set up the way the dealer or manufacturer wanted them set up.  They just haven't done it for me, but there are thousands who love them or they wouldn't be produced.  Conversely, it is snobbery when someone says you can't get great sound unless you spend X amount.  I fell in love with a system that consisted of a Rotel integrated amp with a Vandersteen 2 that was set up properly.  It was running with an Ayre Codex DAC/headphone amp.  

I'm also into personal audio and have a few pair of IEM's as well as headphones.  They all give me different things and are easy to collect.   I can say that in personal audio, you can get dynamic and wonderfully sounding music for very little if you want to.  You can also get unbelievable sound if you want to spend more money just like in speakers.  I do feel snobbery goes both ways just like it can in anything else.  That's not a negative as we are just passionate folks (as long as we are still respectful.  I try to be, but probably don't always succeed).

I just realized that I did not answer the last question from the op...

No,  I would not be surprised to find that a $10,000 speaker could outperform a few $100,000 to $150,000 speakers, much less a $30,000 speaker.  Its all taste.... the Accuton ceramic drivers are very detailed, but not at all everyone's cup of tea,  just as the Raal ribbon,  again very detailed,  but many people prefer a good ole soft dome. Quality of parts is radically important, but in the end, its all in the execution. 

Ctsooner,

The less expensive speakers are Ohm 100s with a pair of Rythmik 12" subs. This set-up features full bass extension for every recording I own, plus omnidirectional dispersion for 8 octaves. That combination of benefits outweighs the strengths of my SF Cremona M, Verity Parsifal/Encore, and Merlin VSM speakers for me these days. Those speakers will IMO outperform the Ohm/Rythmik in certain other areas, however, and I still love the particular strength of each system.

For the last five years (or so) I’ve had the Ohm/Rythmik as my main system (listening room). The other are located elsewhere in my home. This raises another issue mentioned in this thread (aesthetics). The SFs are beautiful in my living room, the Ohm/Rythmik wouldn’t work there (WAF), even if I wanted to try it. It’s just a matter of personal priorities - which may change over time.

It gets more involved than even that. The $70k MBL 101 will go louder than the Ohm/Rythmik and images more impressively (to my ear), but I don’t necessarily prefer it. I considered buying a (used) pair, but in the end didn’t pull the trigger. The band-pass woofer's bass response in that system is hard to tame IME.

Performance and price don’t remotely track - for me. Performance isn’t everything and people’s hearing, taste, and priorities differ. Even comparing (essentially) full-range, omnidirectional apples to apples, I preferred the Ohm/Rythmik to the MBL 101 (admittedly not in every way, but overall). I expect that for many listeners YMMV.
Having access to a place like this saved audio enthusiasts over the years. Some big Canadian brands may not of reached certain levels of success had it not been for the NRC up here     http://www.nrc-cnrc.gc.ca/eng/solutions/facilities/indoor_environment.html
R&D is a big one, metals semi precious and otherwise, designing all aspects of a speaker, tooling, designing and milling of all the tooling and components, exotic natural material and master craftsman that know how to form it, some of its painstaking detailed work depending on the speaker. None of this comes cheap it all adds up. Then as mentioned low production will further send up cost.  
Marty, great response, thanks.  I assumed that it was something like that where you felt it did somethings you LOVED.  It's all about the emotion to me also.  That's what the Vandersteen line does for me and why I keep listening for other speakers to beat them and they just don't.  It's funny as I was reading John Atkinson's review on www.stereophile.com on the Vandersteen 7 mk2 along with Vandersteen's new high pass amp that matches.  He said that even at that price they give you more than you expect, but that he has to go back to listening to systems he can afford, but hated to give them up.  Kind of sums up all of audio for 99% of us.  We are fortunate to find manufacturers who know what trade offs they can go with at the various price points.  For me it's Vandersteen and nothing that my older systems have done can come close to bringing me into the music and for once I can finally just sit and listen all day and not realize how much time has passed.  I have always loved listening, but it hasn't been like this since I first started with my first system (although even at 9 yo, I was upgrading that system within the month).  It's what we do and why we post on forums with strangers and meet new friends while doing it.  

Meer, that's dead on IRT Canadian companies.  That's why I respect so many of the other brands for doing what they've done without all of that free R&D help.  just shows what great minds are into audio.

The hi-fi market is broken; its broken because its niche. It should not have to be so entwined in the hi-end; but it is. I deal with it because it’s important to me; but its a bit ridiculous.

Imagine if jeans weren’t popular. (Unreal, I know, but remember we live in a world where good sound isn’t popular--you can do this.). Let’s say you wanted a good pair, but all you could find at your local Target (or competitors) were cheap, thin & made in a sweatshop (see, this isn’t difficult to imagine at all). They’re available in the two shades of blue & all the three sizes (S,M,L). You’d quickly realize the best there might rip if you eat an extra slice or two of cake--and still not fit right if you don’t.

So maybe you go to Macy’s (Nordstrom’s, whatever) only to find they haven’t carried jeans since the 80s.

Still, there’s probably an Old Navy not too far away. In larger towns you know they even have a dedicated room inside called "The Gap" but your area is not so lucky. You do find a pair that aren’t really that uncomfortable as long as you don’t have to wear them for very long--but why do they have so many pockets! You’re certain--jeans have to get better than this.

So you find a specialty boutique, and upon entering are confronted by products in every shade & size--many of them bedazzled & wildly stitched. Look, there’s Gucci. You’ve heard of them before & surreptitiously glance at the price--$5k for the pair. With a frown you wonder if the buttons are really gold. Thankfully a friendly & perceptive sales person greets you.

"Over here we have a pair just your size, hand-stitched in Japan with raw denim using a pure silver needle; no one else does anything like that for under $1k." He holds them up to you, but can tell you’re immediately underwhelmed, so explains, "Capri’s allow the manufacturer to focus on the quality of the seams & details; they also fit better in small dressers. These matching sandals keep your ankle at the appropriate angle."

Undeterred, you ask "Do you have any Levi’s?" your grandfather had a pair that seemed to last for years. "Calvin Klein?" recalling those being popular in the 80s. Still smiling, he guides you towards another rack. "These are from Guess. They’ve been designed in America since 1981." He pulls on the sides. "Though some prefer all-cotton, the 2% spandex design allows a thinner weave to stretch without fatigue. And this exclusive 144 tooth silver-plated zipper still provides ample airiness & sparkle--without ever having to worry about replacing a button."

The price tag dangles: $399. You can never let any of your friends know you paid that much for a pair of jeans. Still they don’t really draw attention to themselves. Probably no one will even ask--and you wonder, why doesn’t anyone one care about jeans anymore. Perhaps, if these fit, you’ll go home and find an online group that will accept you--after all, there’s one for every fetish these days.

Once glance from you at the fitting room is all it takes for the sales person to say, "Great, now try them out with this Diana Krall t-shirt on!"

Kirk

P.S. Belts matter. Don’t worry about the theories of braided vs solid straps of leather; copper vs silver buckles--only ever trust your waist.

gnostalgick "The hi-fi market is broken; its broken because its niche ..."


The hi-fi market doesn't seem broken to me at all, and it's been pretty much a niche market all along. I'm not sure why you think it should be otherwise. Merchandise is widely manufactured, sold, re-sold and traded at prices set by the market. Why does that trouble you?

The hi-fi market doesn't seem broken to me at all, and it's been pretty much a niche market all along. I'm not sure why you think it should be otherwise... Why does that trouble you?
I wasn't expecting a serious question to my satirical story.  I ran with it simply in hopes someone else would also be amused.  The jeans analogy is way too silly to really make a point, but car analogies are quite popular--so I'll try again, same idea, different angle, no attempts at humor.

   Many years ago, when shopping for a slightly sporty but mostly cheap & fuel efficient car, no one at the dealership--or even online--suggested I test drive a Ferrari so I could understand what driving was really like. There weren't even Ferraris in the lot to test drive, simply slightly nicer, newer Hondas.

  Shopping for stereo at anywhere other than BB, you're presented with those Ferraris in person, and as an ideal to aspire to, if not attain. After all things aren't that bad once you've saved up for the Boxter. Perhaps I'm just too cynical to realize that people are just being friendly, sharing their passion, realizing I'll likely never get to experience the same at home. Regardless, the marketing in hi-fi certainly reinforces the idea that you're not getting truly close to the recording without a serious investment. Perhaps I'm too gullible that way.

  In real life Hondas & Toyotas are exceedingly common and well-regarded.  But what would be the audio equivalent of a Honda? Bryston maybe? No one I know in has anything like that--they have the stereo equivalents of old beat up Yugos, SmartCars, scooters & bicycles. Perhaps I need better friends.

  I don't begrudge the well off; but outside of this hobby I don't exactly mingle in the same circles. Perhaps I'm just too socially isolated--yet I've never found the need to go to an exclusive restaurant just get a better burger than McDonald's.  

  Conversely, I do remember a time, when I tip-toed past $1000 bottles of wine to the sad back aisle of an upscale wine shop just to get something better than a Budweiser. Now, thankfully, its not difficult at all to find a good craft beer.

   I think that's it: I'm troubled because I feel like there could be more of a market. Yes, the audiophilia merry-go-round of gear changing will always be niche; old-fashioned room-filling multi-component monolith based systems will always be niche.  But does that really mean an investment in a good stereo has to also be niche?

  If properly priced (complete system under $10k) & marketed (think Beats/Tidal) couldn't something along the lines of the wireless Goldmund speakers or the Avant-Garde Zeros be successful? They're both a bit more, of course, but with a few tweaks & enough sales, the profit would be there. Or perhaps something like a Spatial M3S with built-in dac/amp, optimized for corner placement like an AudioNote for under $5k (maybe not exactly possible as open baffle, but hopefully you get the idea--I'm just trying to stick with products I've recently heard).  

  But almost no one is designing products at that level of quality & refinement with the accessibility required for a new audience (though Devialet comes to mind). That's what keeps it niche.* And the lack of mainstream adoption of anything related to good stereo sound is what keeps the pricing--if not broken--too often far too inflated. At least for me.

Kirk

*Not the only thing of course.
Good question. I believe most of the cost is attributable to the time involved with getting the speaker to sound 'right' to the designer. This 'sound' is a product of the drivers, crossovers (if any,) cabinet materials, internal cabinet bracing, baffling, shapes to reduce cabinet resonances, etc.  In short, it's a helluva lot more than building a box and mounting some speakers. But don't take my word for it, build a box, get a crossover, mount some speakers and listen to it...nothing like walking a mile is somebody else's shoes to get an idea of what they go thru.
This is a very interesting thread.  I don't know much about expensive speakers but I do know about low to mid cost speakers and how lucrative sales can be.  

My wife used to work at Fry's Electronics where they sold low to mid grade speakers and carry brands like Klipsch and Velodyne subs.  There is about a 70 to 80% profit margin on them for Fry's.  Any employee can look them up because of their employee discount.  Now if those companies can sell a $1000 speaker to Frys for $200 and still make good profits after covering their expenses, then you can imagine what goes into the materials, design, etc.

I actually stopped buying expensive audio gear at MSRP when I found out that a high end cd player which I was about to purchase and cost $4000 - well the online authorized retailer was going to pocket $1200 for running my credit card, printing a label, and pulling the box from storage for Fedex to ship.  If my money was getting back to the manufacturer it would mean one thing, but for the store to make $1200 for less than 10 minutes of work was the ultimate deal breaker.  

Now with more expensive speakers and any other expensive gear, the market is even smaller that can make the purchase so there is much more of a risk involved.  Higher risks warrant a higher rate of return of investment. Companies are started every day and fail everyday and lose lots of money but those that do make it are making considerable profits. They wouldn't be in business if the rate of return wasn't high enough for them in the first place. 

What most folks don't realize is that the mark up on high end speakers will range from 50% for a Wilson to only 33% for some other top brands.  Folks don't always realize how much money some of these folks have to pay for their components since they aren't buying huge numbers at a time.  Some of the caps alone can cost these guys over$100 each (or more).  That adds a lot of money to a speaker when you figure they need at least one or more per speaker and they will use the business model of marking it up 100%.  That alone has just added $400 to the cost of a speaker.  That's why you often see 'special' 'signature' additions costing so much.  When I found out what Vandersteen is putting into his crossovers, I then realized who much we don't see in a speaker.  In a really good speaker there are so many 'hidden' costs that we don't see and that's in addition to the overhead a company has to go along with the R&D we've all been talking about.  

Yes, these folks can make a nice living, but only if they are smart business people who give you more than you expect for the money as each of their price points.  Very few companies have been able to pull that off.  That's why you only have a handful of companies who have been around since the 80's or earlier who are still around and most of those don't even have the same owner and have changed their sound so greatly that their loyal customers don't even like the new offerings. 
I have been searching and researching speakers for the last few months to replace my Paradigm 5Se's, which I've had for something like 25 years.

I probably don't watch my dollars as closely as I should, and when I was looking at some Triton's in the $2,000 (CDN) range, it didn't take long for the salesman to start talking "deal".

Price is important, but I like to think of price as a flexible range and understand what my options are within that range.

I also find that "marketing" encompasses many different things. Sure there's the hyperbole but the information presented can sometimes be helpful. What I find most frustrating are speaker companies that have so many different products, all priced very close together, and provide no clear idea of how they differ except for their price point.
Speaking of crossover parts, it is easy to take an inexpensive low and mid grade speaker to a much higher level by just replacing the caps, resistors, and inductors to higher quality ones.  I've done this to 4 sets of speakers over the years and have had wow reactions afterwards.  

Speaker companies have relationships with capacitor manufacturers for their supply chain.  For example a high end capacitor manufacturer such as Mundorf supplies all the caps for their entire line. The top product could use their oil/silver/gold caps that would cost a normal person like you and me $100 each but are sold to the speaker manufacturer for a little over cost at $20 each but the manufacturer also buys the cheapest Mundorf without any branding for their lower products in much larger volumes.  These relationships are made over years and even decades.
"Speaking of crossover parts, it is easy to take an inexpensive low and mid grade speaker to a much higher level by just replacing the caps, resistors, and inductors to higher quality ones"
While I agree 100% with audioman2015,  I want to caution anyone about replacing Inductors.... Each inductor, yes has a inductance rating in henry or millihenry, they also have a resistance rating... For those that don't know,  a speaker may be crossed at 6db per octave at 2500hz,  but when you change the inductor,  if you do not compensate for the impedance change in the inductor itself,  you have effectively changed the crossover slope or point or both.  So for those that want upgrade,  that's fine, but unless you are capable of these measurements, I would recommend against inductor changes..... ESPECIALLY going from a cheap steel, iron or ferrite core to an air core... these resistive values can be dramatically different. I hope that this is helpful. 
Tim
timlub - I completely agree!!  Resistances need to be compensated for the inductors.  There are plenty of crossover calculators online and measurements are always useful if changing the inductors.  If there is a drastic change in the crossover point, it could damage the drivers.  

A friend of mine has a pair of some vintage Sonus Faber's and the tweeter was using an electrolytic cap for filtering!!!!  We changed it out to a low end and inexpensive  film ClairtyCap (~$5 each) and his eyes nearly popped out of his head and realized the full capability of the tweeters.  It was like a switch was finally turned on!


Hi audioman2015, yep, recently recapped some old Kef's for a buddy,  same scenario,  he fell over.
Tim
More times yhen not the cabinet can cost more then the drivers
And Xover which it should not. Companies like Harbeths 
Not much to the cabinet, or that expensive of drivers.they have a excellent patented midrange material  ,that being said the xover vs 
The big names that use premium parts like Mundorf silver gold oil 
And top resiryors,inductors top quality wiring  harbeths uses nothing even close but charges a high premium vs actual build cost like a garage build,with quality veneer. Open baffles if using Top drivers ard a Superb bsrgsin, as is new Martin logan,Maggi
Even Electric with engineer Jones forgot first name builds great
Speaker for thd money .most big $$ speakers are a hyped up scam
I have worked with loudspeaker design and cost they add all $$ Per hour in what they want maybe $200 a hour in R &D time plus 5x in cost for material s thrn overhead. There is the price  
Look at Magico, Wilson Radho, YG Acoustics. Sure they sound excellent  $100 -to $200 k for s pair of speakers give me a break .
Evrn 50k. $20'k should bd absolute max plus 20% off.
TheRe are a lot of quality speakers even under $3 listen first z,!😆
Replacing x/o parts for higher quality ones is a high-return-for-money-spent tactic. But there’s a further step that can be taken: Danny Richie of GR Research, well known for his x/o designs, not only makes cross-overs with improved parts, but offers x/o corrections for basically well designed but budget-compromised speakers such as the new line from Elac, to improve frequency and waterfall plot (time domain)performance. The simple addition of one part corrects the falling high frequency output of the Elac tweeter, and another simple change to the x/o frequency improves the speaker’s midrange. A little bit of money yields large improvements!
Audioman. I agree with much of what you have posted. I have even posted earlier that the Wilson drivers and crossovers are very inexpensive in the scheme of things. They dress is up and spend money on paint and cabinets but so do others like VANDERSTEEN and some others. I was sold on the Vandys a few years ago for the sound but didn't understand why the Treos cost 8k or so. Then I found out what the cost of the drivers was as well as the double cabinets and the crossover parts and all of a sudden when you add r&d, too veneer and overhead plus some profit and I got it. That's why his 1,2&3 are still such great values. The cabinets do add thousands when done properly. Not all manufacturers are marking things up Judy because they can. Richard was working on the 9's as there is a demand for 125k speakers that have large cabinets but he couldn't get the bass to integrate properly and rather than take it to market he dropped the idea at least until better components come out that would make it work the way he wanted them to. I wish others followed suit. For those who have heard some companies 100k plus offerings, you often like the same company's 60k offering much better as there is often better coherency and integration. My buddy just got a lower prices pair of Dynaudios as he didn't even like their 100k pair.   We had a long conversation about this very topic. This has become a fun thread. Thanks for letting me play. 
jafant,

I believe my previous(Aerial 7T) and current speakers(Monitor Audio PL500) were made in China. I submit both of them are very well made and offer outstanding value.
Guys, some products will be made in China.  As long as the company controls the manufacturing, the quality can be fine.  That said, I personally don't think I have anything in my system that is made outside the US from cables, to all digital to phone and electronics.  TV I can't help.

@swampwalker ...Great question. I can tell you that in January I called the US distributer of a famous tube amp vendor and asked a few questions about a few of their amps.

The distributer quoted me $9000+ for a specific model. ME: I balked and said I was currently on sabbatical. DISTRIBUTER: $7500. ME: Sold.

...Street price way below 15k manufacturer's suggested price.
Is the distributor the only one who sells these amps or does he sell them via B&M and or online stores?  If so, what he's done is back door them and ruined his product for the future.  It's a terrible business practice and one that partly got Dan D let go at Krell.  It's ruined so many top lines in the past.  I only will deal with reputable companies in audio as I concern myself with the future value of my products as I do sell eventually.  Not a slam at you at all, so please don't take it that way.  We customers are always trying to get a great value etc.... The markup on some great lines is only in the 30% range so they don't have that much room to move at all.  Personally I like that as I feel I'm getting value for my money and I know that no one is getting it for less than I am.  

Devaluing someone's product just isn't good business sense on their part.  I just never understood that personally.  Again, not a slam against you, just against any dealer or distributor who devalues their products.  If it's only worth 7,500, then just offer them at 8k if you feel you need to sell them for less.  JMHO and not preaching.  Thanks.

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timlub is correct in that it certainly is possible (paraphrasing) to achieve remarkable value at a $5K price point. This is why Golden Ear Technologies is so successful. It is absolutely true that they have somehow bridged the gap between very high end and pricey speakers with just as good sound - if not better - sound and affordability. Besides the fact that I own the Triton One's so am naturally biased, I have listened to a handful (admittedly only around 10 or so) of other manufacturers that cost WAY more and in my opinion would be more than hard pressed to justify the cost. Case in point, Alta Statement Towers. They retail at $200,000 a pair. In my view the only thing about them that made them superior to my Tritons was the incredible cabinetry material (yes that does improve sound of course). But a $195,000 more? I don't think so. There has to be a realistic trade off. Kind of like diminishing returns. Listen to and/or GET the Golden Ear Triton One's and you'll hear what I mean. Your wallet will thank you. 
You should be biased or it's time for a new pair of speakers, lol.  Once you get to a certain price point, there is not diminishing return.  It become all about what someone is willing and can pay.  This is why the companies can do so much R&D and we are all rewarded with the trickle down tec (if you don't have the TOL from your manufacturer).  

Even if I don't personally love someone's components, I do love hearing folks push what they own are want to own.  That's part of what has always made this fun for me.  Nice post thanks
Hi gdhal,
    The Golden Ear, specifically the Triton line are a perfect example of this entire conversation.... To be fair to The Alta Statements, they appear by my feeble eyes to be Morel and Raal.   The Morel Midrange and the Raal Tweeters alone cost more than most of the entire Titan One to manufacture... But, just as we discussed,  quality parts, in combination with a great design can produce a huge value in comparison. 

TAD to me sounds more like a Studio Speaker. Yes they are brilliant but does it make music? or are you trying to find faults into the recordings?

When I heard tad being paired with MSB Dacs, first thing came to my mind was......this sounds very much like the Quested Studio Speakers Accurate and brutal to the source. How much of this can you stand? 20 mins 1 hour 2 hours. I love the TAD Horns they can be very musical with the right OTL AMPS.

I think most would agree that you can get some great sound for under say 5k or 10k, but you can get better to much better sound if you can afford to. Bass....clean and true is what costs the most.  Once you start adding built in subs and carbon fiber or other exotic materials, plus the labor as well as the R&D, then the price goes up accordingly.  Many companies will just set a price point that is way more than the speaker is worth or costs to make just because they can. They will market the heck out of them until they get a cult following.  Then they just use that to market and grow their base.  Great business if you can get away with it and there are plenty of companies who do this.  I think the real test though are the ones who have been around for ages and ages and have a great rep for giving you more than you expect in whatever your price range is.  There are a handful out there still who continue to do this, even as they hand the keys over to their kids.  I personally love to support those companies be it speakers or electronics.  JMHO

 I believe the real difference in speakers is the crossover design, and the tweeter

 selection.

  A simple crossover design does not account for coils and capacitors putting the voltage out of phase with the current.

  A more accurate crossover will have many parts, like 10 to 20 parts.

 

true, it depends on the speaker and it's design.  I asked Richard Vandersteen about this yesterday and he said that another reason a speaker can go from 600k to 100k is the amount sold.  If you have a speaker that you design and you will only be able to sell a handful, then you have to make up the R&D, overhead and marketing costs on fewer speakers, so the price will go up accordingly.  He had much more to say, but this was one of the big things I took away.

I would have to say the single biggest determinant of speaker price is price the market will pay which maximizes the rate of return on the capital of the speakers builder.  If it is not, it should be. This does not necessarily have any correlation to R&D, distribution or material costs.
Watts, everything is involved.  All the the topics we covered so far are a huge part of it.  Yes, market price matters, however what Richard said about going from 600k to 100k is a huge determinant.  If a manufacturer wants to do R&D that they will trickle down to their other lower lines, then they can make the assumption that at 600k, they'll sell only 3 for the year, but if they go 100k, then they can sell 50 for the year.  That would be what you are talking about I assume?  The market at 600k will relate to 3 sales and that's what the market allows, but at 100k for the same thing (economy of scale) then you sell 50.

That is generally what I am talking about, but more to the point: if the manufacturer is doing the analysis correctly they should estimate the demand across various price points and choose the prices that maximizes ROE. Often this is well in excess of underling costs including development (i.e., they realize a positive fully loaded gross margin).  
Hehe, I just posted about this. Please see my blog entry on a Cynical View of Speaker Pricing as well as the Stereophile Reviews - The Data Doesn't Lie

But to answer your question in two lines:

  • Driver cost * 10
  • Must match the Stereophile Curve, which is far from neutral.

Let me know what you think.

Be well,

Erik
I did a lot of research on this subject. The answer is, roughly, driver prices and gimmicks.

For most high end speakers (and I use the term pejoratively) the final cost is between 20 and 30x the cost of the DRIVERS of one speaker. I know, you’d think it was something else, but it’s usually not. This formula explains about 85% to 95% of these speakers. In addition, to be rated highly at Stereophile at any price-point it usually must follow the "Stereophile Curve."

For more details and some examples, please visit my blog on the subjects:

http://speakermakersjourney.blogspot.com/2016/05/a-cynical-introduction-to-speaker.html

http://speakermakersjourney.blogspot.com/2016/05/stereophile-reviews-data-doesnt-lie.html
I roughly know the cost of the drivers of Vandersteen speakers and I can promise you that it's nowhere near 20X the cost of them. I totally agree on many other of the top manufacturer's.  I've pointed that out about Wilson in earlier posts I'm sure.  The other thing that no one thinks about is speaker matching.  Many top line producers have to find drivers that match within certain specs and then they have all those other drivers that they need to make up the cost of.  There are various ways to do so, however part of it is the cost of making speaker A.  Ton's of reasons and many should cost what they do.  Not saying the sound quality is worth it by any means.  I haven't like most of the TOL speakers from so many makers.  Some just sound bigger, but not better.  There really is no blanket reason as each maker has their own reasons.  I know many manufacturers and have for years and most don't really care about following anyone else's graphs.  They just care to make music the way they feel is best for the majority of buyers out there.  Not saying they don't do what they can to get a great review, but honestly, it's nearly impossible to get a poor one these days.

There are exceptions to the rule. I'm just saying that in general, this is how they seem to line up, the blanket reason being business, marketing and making money. Not that I'm against any of that. I'm against low value, juiced speakers being touted as the best we can have.

As I wrote, making your own drivers is often a way to reduce the costs, and going way past the 30:1 mark.

The real loss in my mind is that the industry tries to promote the idea that only the richest can have good sounding music. This puts a huge barrier to music and culture for most consumers.  The more of the middle class can afford great sounding speakers, the better off our society will be. :) 

I've seen this effect in person. Introduce a person with little musical education to great sounding speaker system and bam, they are suddenly interested in a lot more types of music than they were before.  The entry level for this should not be $20,000.

Best,

Erik

cstooner, you never answered my question about why Michael Fremer, one of the people most obsessed with sound quality in the world, has upgraded his speakers twice and stayed with Wilsons (Maxx2 to Maxx 3 to Alexandria XLF)? 

I'm sure he gets a great deal on them, but why would he keep upgrading up the Wilson line if the speakers aren't that good?  I'm sure Vandersteen would give him a nice discount too.

Here's a couple of things he had to say about the Wilsons and, by chance, the Vandersteen Sevens in his review of the Marten Coltrane 3s:

"The Coltrane 3s also produced holographic, pinpoint images, both in front of and behind the baffles, as appropriate—but as I said of the original Coltranes, the sizes of these aural pictures were "more about bringing the event to you than about bringing you to the event." I wrote that last observation a few years before I heard the largest loudspeaker models from Wilson Audio Specialties in my room, after which that distinction became more obvious. As with the similarly sized (42.5" tall) Vandersteen Model Sevens, the overall width and height of the Martens' soundstages didn't compare with the Wilson Alexandria XLFs' widescreen, floor-to-ceiling presentation.

"However, the driver outputs of the Wilson Alexandrias and, to a lesser extent, the Vandersteen Sevens are physically time-aligned by means of stepped enclosures. In my opinion, in terms of sound, this allows for instrumental layering and an apparent bafflelessness that no "slab" speaker can duplicate, regardless of degree of baffle rake or meticulousness of crossover design."


Read more at http://www.stereophile.com/content/marten-coltrane-3-loudspeaker-page-2#3oZKlDDOtxQcQUCW.99

So, He prefers the Alexandria XLFs to the Vandersteen Sevens.  Does Michael just like to throw money away or can't he hear very well or what?

Tom, sorry forgot to answer.  
1) Wilson margin allows a much better price than Vandersteen could.

2) MF has in many reviews including the Quatro Fabric review mentioned not needing a speaker that images in fact said the Quatro out imaged his Wilsons.

3)Has said he believes a speaker can have TMI so the paper cones being low resolution is not a deal breaker.

4)Speakers with powered sub-woofer are not the best tool for a reviewer especially when reviewing amplifiers.

5) listens very loud and likes a big sound for his love rock and roll.

Hope this answers your questions about why he used Wilson's.  I also know of MANY within the industry from reviewers to other manufacturer's who swear by Vandersteens (Quatro's on up) and pay for them without getting a large discount.  Plenty of people listen and enjoy a huge sound and don't care about things that  time aligned speaker can provide.  If you love Wilson's, then that's awesome.  Plenty of folks love Bose too (not not saying Wilson's sound like Bose).  We are so lucky to have the choices that we have now days.  

OK.  No argument that Vandersteen makes great speakers. 

Can we agree that Wilson also makes great speakers and is not merely the beneficiary of good advertising and stupid buyers?

I'm sure Fremer could come up with a list of reasons why he prefers the Wilsons beyond the items mentioned in his review of the Martens..