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Last month, SoundStage! Publisher Doug Schneider wrote an editorial for SoundStage! Hi-Fi titled “Future Sounds -- Sonus Faber’s Sf16 and New Directions in Hi-Fi.” In it, he made some very good points regarding the future of the high-end audio industry, and what it will take for it to thrive into the next generation. In some ways, Doug said, these are bleak times: “Visit as many manufacturers as I do and you’ll hear tale after tale of how sales of traditional hi-fi products -- preamplifiers, amplifiers, standalone speakers (particularly big, boxy ones), etc. -- are way down. These have been -- or were -- the staples of the hi-fi scene for longer than I’ve been part of it; but now, fewer people want them, and no one I’ve talked to seems to think this trend will end. It’s not just a few manufacturers saying this -- it’s almost all of them.”

Jeff Fritz

Doug has perhaps visited more audio manufacturers than just about anyone else in audio journalism, so I know that, on this subject, he’s speaking the truth as he heard it. I don’t in any way doubt that sales of traditional hi-fi products are, on average, down -- I’ve heard as much from manufacturers myself.

Nor, as Doug goes on to explain, is traditional a word that can be applied to Sonus Faber’s new Sf16 all-in-one sound system, which retails for $10,000 USD. This standalone system is up to date with streaming and the latest in connectivity, but also embraces the fine wood craftsmanship that this Italian brand is known for. Although I haven’t heard the Sf16, I’ve found myself admiring it from afar -- like Doug, I can easily see myself having one in my living room. Do I think Sonus Faber was smart for making the Sf16? I sure do. Doug summed it up thusly: “[F]or those who don’t [want] . . . a traditional hi-fi system, with all its complexity and need for space, not to mention cables running here and there . . . Sonus Faber can offer the Sf16 and expand their market share.” And it’s already a success: they’ve already sold 400 Sf16s -- two years’ worth of production.

Doug wasn’t the only one of our staff to attend the Sf16’s unveiling, in Sardinia, Italy. I’ve known Ken Kessler for a while now, and when I read his “High-End Hi-Fi’s Glimmer of Hope,” I knew the article was what Ken had been preaching about for a while. Like Doug, Ken sees the moves that Sonus Faber (part of the McIntosh Group) is making as absolutely necessary for their survival. I think Ken’s point about high-end audio needing a huge dose of professionalism is totally on point. Ken also makes the case that, with 35,000,000 millionaires in the world, high-end audio companies need them to want hi-fi products.

Ken and PaoloKen Kessler with Paolo Tezzon, Sonus Faber’s R&D director

Both Ken and Doug see the need for change: new product types, more professionalism, marketing that transcends the bounds of traditional audiophile institutions, more excitement. I can’t argue with any of that.

But.

First, I don’t see hi-fi’s future as a replay of its hobbyist past. We’re not going to see college kids buying amplifier and speaker kits in any great numbers; new audio stores won’t be popping up on every corner, offering rows of floorstanding speaker models to audition. Those pasts are gone. On this point, I agree with Ken: If you don’t have two nickels to rub together, you aren’t shopping for high-end audio.

Here’s what I think Doug, Ken -- and maybe even some of the manufacturers who say that traditional hi-fi is dying -- are missing: Between the hedge-fund millionaires and the broke college kids is a vast middle ground. These are the people who have -- and who will -- keep high-end audio alive into the next generation.

I’m just not convinced that high-end hi-fi’s future is status-seeking rich guys who buy Bugattis and Patek Philippes. Is there evidence that I’m wrong? For years, I saw Harman International’s ads for its Mark Levinson brand in The Robb Report. They seemed to hit critical mass when Harman began making sound systems for Lexus automobiles. Perusing the Lexus website, I see that you can still get a 2016 LX570 with a premium Mark Levinson audio system. So with exposure in the luxury sector through publications like The Robb Report, and Mark Levinson listed on the options list by a brand with the star power of Lexus, why has Mark Levinson seemed to falter in the past decade? Could it be that the middle ground of audiophiles -- those who bought the 3XX series of amplifiers in high numbers back in the mid-1990s -- abandoned the brand when it seemed to no longer cater to their wants and needs?

Ask yourself these questions: Is Wilson Audio’s most important speaker still the WATT/Puppy-derived Sasha Series-2 ($31,950/pr.)? Apparently so. On their website, Wilson states that the “Sasha, like the WATT/Puppy before it, remains Wilson’s best selling speaker.” Magico’s S-series ($16,500/pr. to $58,000/pr.) has been a big seller for the company, even as their costlier Q-series speakers ($26,500/pr. to $229,000/pr.) are getting on in years. Look at a company like Krell, which, like Mark Levinson, experienced its heyday in the ’90s -- they abandoned the $7k-$18k-per-amp customers who made them great, in favor of home theater and more compact, less-expensive amplifiers. What’s the lesson?

In North America, the average price of a Jet Ski is $12,288. The average price of a week’s vacation at Walt Disney World is about $8000. A 2016 Porsche Cayman has a base price of $52,600. A Rolex Submariner will set you back $7500.

These products are purchased by the vast middle ground of which I speak, and they’re the primary types of products that compete with Mark Levinson amplifiers and Wilson Audio speakers. I’m no millionaire, but with some finagling I could just afford to buy the Porsche (though not a 911). I could more easily afford the Jet Ski. And I do take a vacation a year with my family that sets me back about the same as a trip to Disney World. I also know that if I bought the Jet Ski, then any audio upgrade I’d planned for the year would have to wait. I’m not rich, but neither am I broke.

I am not, however, going to be shopping for a waterfront mansion on Lake Como, in the Italian Alps. Maybe the guy who casually buys Wilson Audio’s XLF ($200,000/pr.) is not burdened with such constraints. But remember that the XLF is not Wilson’s best-selling speaker -- or, I would guess, their most profitable. That would be the model in the middle of their line, the one that costs $31,500/pair -- the Sasha Series-2.

Just as, here in the US, we like to look at the extremes of our political climate, when we talk about the audio market we tend to mention only the hedge-fund guy at one end and the broke college kid at the other. In my opinion, neither will single-handedly determine the survival of high-end audio. It’ll be the guy in the middle -- just as it’s always been. Find new ways to attract and grow that segment, along with expanding the extremes. The next great $25,000/pair loudspeaker is still more relevant than models costing over $200,000/pair.

Like Doug and Ken, I want to see high-end audio expand into new markets. I think all of us see this as necessary to grow the high end. But we need to avoid the mistake that politicians tend to make: We can’t forget that the real action happens in the vast middle ground. Neglect those customers at your peril.

. . . Jeff Fritz
jeff@soundstagenetwork.com