My Discussion with VMPS Founder...

Early B.

In preparation for an article in Affordable Audio, I spoke with Brian Cheney today, the founder of VMPS Audio. He had a few very interesting things to say:

-- when asked about where the high end industry is headed in the next few years, he basically said it's going right down the toilet. The industry has lost the concept of advancing the art for the sake of profit. He said the high end audio industry will end up where it was 40 years ago -- a cottage industry run by hobbyists.

-- In discussing "high end," he said none of the speakers that retail for over $40,000 have more than $500 worth of parts in them.

-- He said audiophiles on a budget can do very well by buying Chinese gear and pro amps. (Of course, this gear ought to be powering VMPS speakers.)

-- His reference 2-channel system consists of an Ampzilla (circa 1970's), a Krell transport, Wadia DAC, and Audience and Kimber cables. He does not use a preamp.

-- soon VMPS will be unveiling an open baffle system

Brian is a very interesting guy. He has spent his entire life in audio and VMPS is celebrating its 30th anniversary.

It's fun to learn about audio, and as Joey V. has indicated, it's great to get your learnin' directly from the pioneers in the industry.

Joey_V

Awesome Brad.... awesome! I wanna give your VMPS a listen.. some day, some day.

Joey

schwarcw

Early B. wrote:

-- In discussing "high end," he said none of the speakers that retail for over $40,000 have more than $500 worth of parts in them.

I'm not buying this Early, I've seen some factory crossovers with more than $500 worth of caps in them.

dkg999

I'm a little skeptical on the $500 in parts comment also. Some of the veneers used on the high-end speakers could easily hit that amount even at wholesale. The Ampzilla in his system was interesting. I sold about a year or so ago a pair of the original GAS Ampzilla's built from the kits offered through Popular Electronics in the mid to late 70's. They were in great shape and I about pee'd myself when I found out what they were worth! Paid for the Magnepans! I still have one of the kit-built Paper Tiger amps from the same series of projects.

Early B.

schwarcw wrote:

I'm not buying this Early, I've seen some factory crossovers with more than $500 worth of caps in them.

I don't necessarily agree with the precise $500 figure, but I don't believe he wanted us take it literally. I think the point he was trying to make was that there's little correlation between price and quality at the extreme high end spectrum.

You'll have to read this to get a better understanding of what he means:

http://www.vmpsaudio.com/d-money.htm

You also have to realize that, as a manufacturer, he is looking at the cost of parts quite differently from you and me. A $5 capacitor at retail may cost a manufacturer $2 or less, depending on purchase quantity. Therefore, that $500 figure could easily translate into something like $1,200 in parts at retail. Nevertheless, $1,200 in parts with a final price tag of $50 - $100K for the speakers represents a huge profit margin.

pearsall001

Nice write up Early. I think Brian hit the nail on the head about the future of hi-end audio. His statement about $500 worth of parts seems to have gotten under ths skin of a few. I doubt if Brian meant it literally. It was more of a generic statement to open our eyes to the price/performance ratio of a lot of hi-end gear & how it's really gotten well out of hand. There will always be people out there that cost is not an issue with them. Let's just hope that it doesn't play out that way.

Joey_V

Parts may be one thing, but dont forget the research and money put into building the components. Take for instance the Diamond tweeter of BW. They use a multimillion $ machine to fabricate the D tweeter in-house. Add up R/D costs and the salaries of all the engineers and the parts used is only the tip of the iceberg.

$500 isnt meant to be taken literally, but it goes to show that there is some gouging going on in the ultra hifi. But that doesnt mean that one should discount the greatness of a well done ultra hifi speaker.

BTW, we can blame David Wilson for this overcharging.... he single-handedly created the esoteric $$$$$ market when he started overcharging for his Wilsons about 10-15 years ago.

Damn you Wilson!

Joey

Joey_V

BTW, talking with MLS, he told me the innerworkings of the audio industry. Some he told me not to share, but this is one I can.

The average retail:cost ratio of a speaker is about 5:1.

This makes sense because I know that my Summits, at $10K are worth about $1500 total in parts (not counting labor and R/D). The Strata Mini is probably worth about $350 in parts vs $1999 retail. The LSi7 is probably worth about $125 vs retail of $700.... which makes sense if you remember the huge Fry's sale of $199 a pair a few years back when I got into the LSi bandwagon.

Joey

cfrizz

I think that he is right on target. Our own little community here is a perfect example of it!

When I joined 2 yrs ago, everyone was into HT & maximizing the most out of their systems. then all of a sudden, the main core of this group veered off into only 2 channel systems & tubes this & that. Some doing a complete about face & basically saying that everything else was more or less evil.

They have distanced themselves so much from the rest of us commoners that they rarely particapate anymore. They probably feel that the rest of us are beneath them in some way since they now think they have gear that is far superior to what the rest of us have that Polks just aren't good enough since God Forbid they are sold in the likes of Tweeter & Circuit City. And the retail price of their gear is more than some peoples yearly salary.

The difference between me & them is I don't see Polks as part of the regular pack! They never were, whether sold in small independent hi fi shops or in Tweeter. They represent a well made, high quality brand that everyone who chooses to can afford to buy.

I don't consider myself a member of "Joe six pack" But at the same time, I don't consider myself being superior to anyone that can only afford a HTIB or who simply doesn't have the ear & appreciation for well reproduced high quality sound!

I will always remember my start in this audio adventure & I will always try to assist & educate others to achieve their level of audio nirvana without pushing equipment on them that is way beyond what they have stated that they are looking for.

pearsall001 wrote:

Nice write up Early. I think Brian hit the nail on the head about the future of hi-end audio. His statement about $500 worth of parts seems to have gotten under ths skin of a few. I doubt if Brian meant it literally. It was more of a generic statement to open our eyes to the price/performance ratio of a lot of hi-end gear & how it's really gotten well out of hand. There will always be people out there that cost is not an issue with them. Let's just hope that it doesn't play out that way.

Early B.

Joey_V wrote:

BTW, talking with MLS, he told me the innerworkings of the audio industry. Some he told me not to share, but this is one I can.

The average retail:cost ratio of a speaker is about 5:1.

This ratio seems fairly consistent with what I've heard -- double the cost every time the product changes hands. For instance, if a speaker costs $100 to make, it'll cost $200 from the distributor to the retailer, and $400 from the retailer to the consumer.

Since items are almost always made overseas, you're likely gonna have a couple of middlemen in the mix who make their profit long before the consumer reaches for his wallet. In addition, competition is very fierce, so add extra costs for marketing.

BTW -- I think some speaker manufacturers over hype R&D costs. The pharmaceutical industry notoriously uses R&D as an excuse for excessively high drug pricing, but we all know they're making shitloads of money.

schwarcw

Early B. wrote:

I don't necessarily agree with the precise $500 figure, but I don't believe he wanted us take it literally. I think the point he was trying to make was that there's little correlation between price and quality at the extreme high end spectrum.

I figured that is what his point was. Sorry, I wasn't trying to be flip. The big price tag for botique speakers comes from the large overhead that's required to be spread over a small number of units sold. They are selling their technology, that's where the value is. A lot of product development (R&D, testing, advertising, etc.) goes into these high end products. The target audience for these products is people with plenty of money to burn. Most audiophiles are hobbyists who study what goes into these products and make a value based purchase, or is a DIY hobbyist. I think this reinforces his point that high end audio is going to be where it was 40 or so years ago.

Carl

dkg999

Nothing secret about the 5 to 1 ratio, it's pretty standardly used in a lot of industries. Works for washing machines as well as speakers.

Early B.

cfrizz wrote:

I think that he is right on target. Our own little community here is a perfect example of it!

When I joined 2 yrs ago, everyone was into HT & maximizing the most out of their systems. then all of a sudden, the main core of this group veered off into only 2 channel systems & tubes this & that. Some doing a complete about face & basically saying that everything else was more or less evil.

They have distanced themselves so much from the rest of us commoners that they rarely particapate anymore. They probably feel that the rest of us are beneath them in some way since they now think they have gear that is far superior to what the rest of us have that Polks just aren't good enough since God Forbid they are sold in the likes of Tweeter & Circuit City. And the retail price of their gear is more than some peoples yearly salary.

The difference between me & them is I don't see Polks as part of the regular pack! They never were, whether sold in small independent hi fi shops or in Tweeter. They represent a well made, high quality brand that everyone who chooses to can afford to buy.

I don't consider myself a member of "Joe six pack" But at the same time, I don't consider myself being superior to anyone that can only afford a HTIB or who simply doesn't have the ear & appreciation for well reproduced high quality sound!

I will always remember my start in this audio adventure & I will always try to assist & educate others to achieve their level of audio nirvana without pushing equipment on them that is way beyond what they have stated that they are looking for.

Wow.

One of the great things I've learned on this forum is that, with the same coin (or less) that I'd spend at Best Buy or Circuit City or Tweeter, even for Polk speakers, I can build a better sounding system by buying used or shopping on the Internet. It's simply a matter of becoming a more informed consumer.

The other thing to keep in mind is that over the past couple of years, we've witnessed an explosion of new companies, relatively low prices, due, in part, to high quality Chinese gear flooding the market. IMO, the Polk Forum has simply responded to these changes, and this is what you have described as a greater focus on 2-channel gear. Hell, for only about $1,200, you can build an impressive 2-channel system (with tubes!). This probably would have been tougher to do a few years ago.

It simply doesn't make sense to be brand oriented anymore. There's too much good stuff out there. Go get it. Demo it. Flip it. To a large extent, that's what makes this hobby a hobby.

Joey_V

dkg999 wrote:

Nothing secret about the 5 to 1 ratio, it's pretty standardly used in a lot of industries. Works for washing machines as well as speakers.

It's good to get confirmation though. And also the wire industry, the amp industry, etc... have different ratios.

Joey

Joey_V

cfrizz wrote:

When I joined 2 yrs ago, everyone was into HT & maximizing the most out of their systems. then all of a sudden, the main core of this group veered off into only 2 channel systems & tubes this & that. Some doing a complete about face & basically saying that everything else was more or less evil.

They have distanced themselves so much from the rest of us commoners that they rarely particapate anymore. They probably feel that the rest of us are beneath them in some way since they now think they have gear that is far superior to what the rest of us have that Polks just aren't good enough since God Forbid they are sold in the likes of Tweeter & Circuit City. And the retail price of their gear is more than some peoples yearly salary.

Who are these people? Maybe I joined after this "chiasm" happened?

Joey

Early B.

schwarcw wrote:

I figured that is what his point was. Sorry, I wasn't trying to be flip. The big price tag for botique speakers comes from the large overhead that's required to be spread over a small number of units sold. They are selling their technology, that's where the value is. A lot of product development (R&D, testing, advertising, etc.) goes into these high end products. The target audience for these products is people with plenty of money to burn. Most audiophiles are hobbyists who study what goes into these products and make a value based purchase, or is a DIY hobbyist. I think this reinforces his point that high end audio is going to be where it was 40 or so years ago.

Carl

The price for extrmeme high end goods are not solely based on R&D, advertising, etc. It's based almost entirely on vanity. The question becomes -- "How much are these rich guys willing to pay for this product?" So the envelope is constantly being pushed to the limit.

As you mentioned, if the target audience is people with plenty of money to burn, then offer them a high price because it's a win-win situation -- the consumer gets bragging rights for his newly acquired $100,000 speakers, and the manufacturer makes killer profits.

Early B.

Joey_V wrote:

Who are these people? Maybe I joined after this "chiasm" happened?

The main core of this group has always been hard core to the bone. It's where most of my learnin' has come from over the past three years.

I think the whole home theater thing has run its course anyways. It's not a novel concept anymore. The hot topic is tubes. Tomorrow it may be digital music. I dunno, but rest assured, the Polk Forum will be on top of it.

Holydoc

Early B. wrote:

I think the whole home theater thing has run its course anyways. It's not a novel concept anymore.

I have to disagree completely on this one. With the advent of affordable flat panel large TV displays, more and more people will be pushing for a HT system to complement these displays. I was in Best Buy today purchasing a CD for a friend where I overheard no less than 3 separate couples asking the salesmen what the best surround sound system for their new TV should be. Two of the couples asking mentioned Bose by name (i.e. the commercials on TV are paying off for Bose).

Also you have HD-DVD and BlueRay getting close to affordable for the common man. Both of these offer extraordinary surround sound that will further envelope the audience.

To tell you the truth, Early, I think surround around systems are on the verge of a big resurgence. In my workplace of 60 employees, not one of them was asking about purchasing a 2-channel system. Most were looking for HT systems with a huge WAF factor to complement their new Plasma or LCD purchase.

univera

Holydoc wrote:

I have to disagree completely on this one. With the advent of affordable flat panel large TV displays, more and more people will be pushing for a HT system to complement these displays. I was in Best Buy today purchasing a CD for a friend where I overheard no less than 3 separate couples asking the salesmen what the best surround sound system for their new TV should be. Two of the couples asking mentioned Bose by name (i.e. the commercials on TV are paying off for Bose).

Also you have HD-DVD and BlueRay getting close to affordable for the common man. Both of these offer extraordinary surround sound that will further envelope the audience.

To tell you the truth, Early, I think surround around systems are on the verge of a big resurgence. In my workplace of 60 employees, not one of them was asking about purchasing a 2-channel system. Most were looking for HT systems with a huge WAF factor to complement their new Plasma or LCD purchase.

NOVEL: "Strikingly different, unusual, or new" Websters, 1984

Yes, I agree with your comments. But Brad stated that HT isn't "novel" anymore. He wasn't implying that demand is going down. In fact, he is stating the opposite.

"Novel" meaning not the next thing, or something esoteric that only a minority have. Like you mentioned, even wives now want HT systems. My girlfriend is a movie fanatic and wants a built in system for her home under construction. So it has actually become more mainstream as oppossed to a "novel" concept.

The point alluded to by Cfrizz and confirmed by Early is that there are those out there who want to be different and on the cutting edge. I would think many on this forum fit into this group. There is some "gamesmanship" on wanting to have the biggest and baddest system. Inducing **** envy of sorts.....It's no different than neighbors outdoing each other with cars.

I've always loved HT, but I would take high end two channel over HT anyday if given the choice. I feel its an evolution of sorts. Most who have been around a bit started out with 2 channel, went with HT, got bored with it or had to prioritize out of necessity, and went back to 2 channel. Thus, that would be my guess on why some have gotten 2 channel heavy. I only use HT 10% of the time, but I like knowing its there when I want it.

Blu-Ray/HD-DVD certainly applies as a novel concept, but it will be mainstream in the next few years. I remember when I had my Pro-Logic system. Hardly anyone I knew had a real deal setup like mine. Everyone that heard it was blown away. Now, as you mentioned, HT is commonplace and anyone building a ground up home will incorporate integrated wiring and HT if they are properly advised.

I personally feel that flat panel displays are directly responsible for taking HT mainstream since they don't take up much space and have a high WAF. Yes, HTIB has helped as well, but one still needed a large T.V. that took up floor space. When these sets become even cheaper and hit critical mass, HT systems will be in even more homes for sure.

cfrizz

Joey, I'm happy to say that you are one of the exceptions! You have grown your system tremendously, but you are still easy going, down to earth & more than willing to help out newbies establish a good baseline system in which to grow with.

You still see the tremendous value & quality that Polk offers & don't hesitate to recommend it to others.

There is absolutely nothing wrong with growing beyond what you start with. The problem arises when you start putting down or totally ignoring the very systems you started out with just because you've moved onto something that you consider better. (Costs considerably more money & has a so called name)

I figured out years ago that it wasn't worth it or wise to pay so much money for something by people who slap their name on it & claim it is superior to all others. When others also make said item using the same or similar materials & only charge half.

All you are really paying for is the name & for having a "Status Symbol". But that doesn't necessarily mean what you paid so much for is superior to what you used to have. It just means it is different.

Joey_V wrote:

Who are these people? Maybe I joined after this "chiasm" happened?

Joey

cfrizz

Well stated HD & Uni!

Gaara

Isn't that called the snob effect? People would wonder what was wrong with the speakers if they sold for only $20,000, but at $100,000 they are great.

Works well with paintings and cars to.

Jared

Joey_V

Cathy,

You made my day... thank you for the kind comments!

Joey

hearingimpared

Early B. wrote:

-- when asked about where the high end industry is headed in the next few years, he basically said it's going right down the toilet. The industry has lost the concept of advancing the art for the sake of profit. He said the high end audio industry will end up where it was 40 years ago -- a cottage industry run by hobbyists.

I've read every post on this thread, great dialog going. EB great questions and observations.

This statement, "He said the high end audio industry will end up where it was 40 years ago -- a cottage industry run by hobbyists" really struck a chord with me.

Back in the early to mid 80s I was really into getting the best audio system I could afford which at that time, I could afford some really esoteric stuff. Anyhow, I had found a great turntable, tonearm, cartridge, preamp, amps, speakers and cabling. All the pieces were in my mind the best at reproducing the music the way I prefered. However there were a couple of things that I felt I needed to address, for the sake of briefity I'm only going to talk here of one.

I had found that in order for LPs to sound really, really good AND transparent, they needed to be firmly coupled to the platter with some type of damping of the airborn vibrations/motor noise and vibrations as well as damping the nasty vibrations caused by the the stylus running through the grooves. At that time there were all kinds of clamps and vacuum systems available. The clamps that were interchangeable with any turntable simply didn't work. The clamps that came with high end turntables (mine included) either didn't work or were not interchangeable or both (as was the case in 99%). The vacuum systems that were available were only available for the tables they were designed for and were extremely noisy.

I was so into this hobby that I started my own business if nothing else to make better accessory products than what was available, making money really wasn't the priority and that shows the naivety of my thinking at the time.

I was hell bent on making a record clamp that really did work on any turntable made from the least expensive to the most expensive. I spent two years researching materials, designs, audio engineering, etc, impedance matching of metals brass, stainless steel, bronze, etc and vinyls, acrylics, delrin, etc. After two years, I came up with a reflex clamp design that worked extremely well with higher end tables with dished or concave delrin platters but still worked very well with even the least expensive rubber/cork matted turntables.

Of course my financial resources were being used up and because I couldn't afford an injection mold $15k to $20K for the delrin base, tapered collet and cap of the clamp, I had to have each of the components (internal gizmos also) machined individually.

This product worked exceptionally well, and was received better than I had ever dreamed of. Of course the look of the clamp didn't reflect the crudeness of the design.

The cost to me per clamp made was $250. That wasn't just the materials for each clamp, that included everything going back to the R & D and company starting part of the process.

To be competative the most most I could sell the clamps to distributers was $80 a pop. I was loosing $170 per clamp but thought that once it caught on, I would be able to start making them for under $20 once the money and interest started to increase. I didn't know it at the time but they were being retailed for $210 to $250 a pop.

As I said I really hadn't intended to make a killing just a better clamp than what was available and hopefully some other well thought out and well made products. Being a technical person I was great at designing and fixing things but really sucked as a business man.

Anyhow as I said the clamp was well received but I couldn't keep going loosing the amount of money I was loosing so I never really was able to move forward with the plan. To add insult to injury the digital explosion in the later 80s just buried any dreams I had. If I had some business experience or training I may have been able to move forward.

The reason I chimed in here with this is that when you do get circumstances that are, "a cottage industry run by hobbyists" you get one hit wonders who have to charge some pretty high prices for their product(s) but they are usually very well made and are right on target. The mortality rate of these companies are extremely high. IMHO paying for a name is usually the price paid for this type of situation.

Holydoc

Uni,

If I misinterpreted what Brad meant, I do apologize. Novel to me is to be on the cutting-edge. The cutting-edge changes you will see in presentation will come from the advent of those HT systems to meet the needs of the consumer. Speakers that no longer look like speakers. Speakers that don't need wires. Speakers that not only blend in with the decor but become a necessary piece of it. All these future changes all due to the take-off of the HT system. In other words I agree that the idea of getting a HT system is no longer Novel but the changes in the physical structure of the systems to meet the needs of the consumers will be nothing more than amazing. Psst... notice I did not say anything about the sound of these systems so not to offend my tube playing 2-channel friends.

************************

Cathy,

You flat amaze me with your honesty and vivacious attitude towards this hobby. I would probably do better just to say "AMEN!" after each of your posts rather than babbling on with my nonsense. LOL.

cfrizz

You're welcome Joey, I just stated the truth as I see it!:)

HD, I think we compliment each other beautifully! You usually take whatever I say & refine it even more & even better than I can!

TEAMWORK Bud! That's what it is all about!!!:D

Thanks!:)

criverajr

I agree with cathy, more and more people are going the way of the HT, I know that if you go to buy a house in certain parts of the coutry a HT/Media room is now common in most new house plans. Say what you want about the low/lower end of the Audio food chain, the higher end is becoming more about esoteric brands and less about the common listener. I think I have seen on this forum 2-3 members tops that have 10,000.00 speakers in their set-ups. For what is worth I was shopping this weekend and happened across 2 Bose stores, the lines were very long, yet I passed buy a Hi-end Audio store and the place looked empty. I have gone into many of these stores and their displays are nice but the inventory may consist of one maybe two piece in stock of what they sell. Their walk sales leave something to be desire. The law of dimenishing retun is always active in these cases.

Early B.

For many of us, HT was our gateway to mid-fi audio. There's a reason why the American market has been flooded recently with good quality Chinese gear at low prices and why speaker companies are popping up like popcorn-- there's a demand for it. I think HT and the Internet have played major roles in fueling this demand. Hell, if it weren't for the Polk Forum, I probably wouldn't have gotten into this hobby.

And once some of us begin to experiment with 2-channel systems, TTs, tubes, DACS, transports, etc., HT usually becomes less significant.

Criverajr -- the high end has always consisted of esoteric brands and does not cater to the common listener. That's why they call it "high end," where the law of diminishing returns is not applicable for the target market.

hearingimpared

Early B. wrote:

Criverajr -- the high end has always consisted of esoteric brands and does not cater to the common listener. That's why they call it "high end," where the law of diminishing returns is not applicable for the target market.

Very well said!!! and it still pisses me off that it is just that way. . . ****!

criverajr

Early B.

I agree 100%, but to think that is all Hi-Fi has come down to is ridiculous. I read an article in Audiophile magazine and the writer stated he felt Hi-Fi was also going downhill fast. Without getting into specifics "Mid Hi-Fi" is where most of us on this forum fall. Just an example if you go on Audiogon and search for Rotel amps if priced right they usually last less than 24-36 hours, just incredible.

CRj

Early B.

Why do some people think hi-fi is going downhill?

It seems to me that there are more "audiophiles" today than ever because prices are great right now and the entry point is low. Now if we define "hi-fi" as the extreme high end, then it may the case that hi-fi is going downhill for those manufacturers, but not for the consumer. It's a buyer's market -- we simpy have more choices than ever before.

As long as there is music, there will be a dedicated group of audio purists, enthusiasts, tweakers, tinkerers, vintage lovers, tube heads, and solid state fanatics.