OK, here is an idea that some smart guy presented to us during the show.

The high-end audio marketplace is splintering into two main product delivery categories.

In the bottom tier, the product (brand) is sold on the internet or through second tier dealers at a discount. Service and support is minimal, and there is lots of used cheap product on the net at an even steeper discount.

In the upper tier, the product (brand) is sold through first tier dealers at little or no discount. Service and support is extremely high, and there is rarely used product on the net and when there is, is at high enough of a percentage of the new price that it tempts people to pay extra to buy new to get the service and support.

Of course, we see this happening all over the place.

A corollary to all this is that brands rarely straddle the two tiers and dealers who carry brands from both tiers will be forced to choose between carrying either exclusively top or exclusively bottom tier products.

It is unclear where music direct and acoustic sounds fits into all this. They offer high price and minimal service. A profitable business model if it is sustainable.

Orthogonal to this is brands moving rapidly through new versions as the manufacturer struggles to stay alive by encouraging people to ‘upgrade’.

One can certainly point to a number of brands that do this all the time, and bottom tier brands with so much product available on the net at such large discounts, what else can they do. [ignoring digital, where the optimal cycle is like two weeks these days of rapid innovation].

Transitioning from the bottom tier to the upper tier takes several years, several years of little or no sales as the supply of cheap product drys up and people stop expecting to being able to buy it at steep discounts.

Anyway, if it isn’t obvious, we are very much a top tier dealer. It will be interesting to see how this all plays out.

We heard, and are hearing, a lot about how bad the high-end market is these days.

Audio Federation is growing faster than Google, so we are thankfully we are only seeing this second hand. (A big thank you to all you out there, customers, manufactures and people keeping the flame alive)

But we hear concerns about Krell’s health, the deal for Harmon being terminated because there “were material changes that had hurt the company’s business”.

Many, many dealerships are hurting, or just closing their doors altogether.

And there are the explanations: age demographics this, home theater that.

And then there are all the new products hurried to market as people continue to add to the glut of non-selling product out there.

Sounds pretty bad, huh?

Well, I’m here to remind people about cycles. Stock market cycles, real estate cycles, fad cycles, etc. and that stupid and vacuously untrue cliche: it is always darkest before the dawn [seems like it is darkest at midnight, several hours before dawn, but let’s not digress just yet].

Let’s take something most of us are not heavily invested in, like office space. Most cities go through cycles, at at one point they will overbuild office space until there is so much they can’t give it away.

Smart people then go in and buy office buildings at that time. When it looks like the most stupid thing to do ever because there will never be a need for this much office space, ever.

Ever in the foreseeable (aka IMMEDIATE) future.

OK, that is the crux of my argument that It Will Get Better.

But not before it gets worse.

Based on this model, one might expect it to be ‘popular’ knowledge that this industry is not a place to make money and the new products rushed to market are mostly focused to the home theater installer market [designer in-wall speakers, expensive cable tuned specifically for home theater, luxury-class amps designed to be installed in the walls, etc]. We are of course seeing some of that now, for example this post - and almost every speaker and electronics manufacturer, some very recently, offering in-wall and multi-channel versions of their product line.

If our fellow audiophiles in Europe and the Far East weren’t keeping most of these companies going, we’d have seen a mass extinction already.

Now the fun part (for me)

How will the industry come back? Why?

My wild-eyed guess is that the iPod / computer / DVD generation will eventually want good sound.

So in this scenario, the system of the Mary and Joe of the future will be computer (media server) based with a docking station so people can upload and download music into a portable device, and it will be integrated with their video device.

But, a word of caution.

There also exists the ‘buggy whip’ scenario. In this scenario, new homes come with built in systems, with in-wall speakers which are ‘good enough’ for 90% of the population, just like cars come with stereos that are good enough for most people. And when the 10% people upgrade, they just replace these system with other better built-in systems. People will upgrade their home electronics systems like they do their dishwashing machines and cooktops.

Of course, at the bottom of every cycle, in every industry, there is always a ‘buggy whip’ scenario… So who can tell.

OK. I think we’ve finally got this figured out.

You call in a problem.

They send a crew out if it is not raining, dark or Sunday.

They work on the problem.

They go home.

The next day, Comcast updates your account to say everything is A-OK.

Things are not OK.

The crew knew it was not OK when they left. They say that they are going to put in another ticket, or come out again. Yeah. Right.

But, you cannot call them until the next day AFTER they update your account to say it is fixed. Because no matter what, they WILL mark your account as fixed.

OK, you do this.

They send out another crew.

This crew, or guy, has no clue that 5 other crews have been out here working on the problem. That there are several houses that have a problem here. They all start from zero each time.

This is the 7th day Comcast has been down. One of our neighbors uses Comcast VOIP as their phone service, poor chaps.

Hopefully today is THE day….

… or 42.6 Kbps on the dialup connection… whoo hoo!

Well, we got hit by lightning late yesterday afternoon. Well, not us, thankfully, but our house.

It came and smacked the front of the house, about 20 feet from the window I was sitting at, at one of the corners of our hexagon-ish walls, came in and attacked a light fixture in our hallway and ran down the ground into listening room two, melting the ground and ‘hot’ wires together, and blew out the light switches across the room so that 30 feet away the Kharmas now have light-switch-pieces in front of them.

It looks like we lost 4 TVs, the ovens, Neli’s computer , my computer’s networking, the Nordost Vidar cable burner, ….

We also lost cable and phone, though the phone is now working (the 4 wires just melted at the box outside so it was an easy fix).

The Coltrane Supreme system works, the small Audio Note system was unplugged, the rack with the Walker and M10 was unplugged. The rest - well, I am a little trepidatious about testing it all out - but Neli is game…

We were lucky. In a lot of ways.

None of the systems were ‘on’ - because we’ve been getting so many lightning storms this week, we got tired of turning things off and on and off and on. But we had grown lax, just turning things off, not unplugging them like we usually do. Oops.

Funny, this lightning storm gave little or no warning. Usually the thunder gets louder and Louder and LOUDER until we can’t stand the suspense and turn everything off and unplug it.

This time, it was like nothing… distant rumbles… BLAM! and then it was over.

So anyway, cable is out (i.e. broadband network connectivity). Neither of our main computers can talk to the net anymore, even if the cable was working. I am typing this on our ‘out-of-town show reporting laptop’, which is OK but not sufficient for a whole show report. We got a Mac somewhere - but that’ll be worse (no photoshop on it, for one, and an even smaller keyboard).

And guess what? We have a show tomorrow. CEDIA 2007.

So, the plan is to transfer photos to my main computer, process them, the put them on DVD and transfer them to this laptop, which hopefully will upload them over the cable, that will be working sometime soon, we hope.

Well, I guess that there will be fewer pictures during the show and until we get computers that are both capable of processing several gigabytes of JPEGs …and … connecting to the net.

Maybe we’ll also post a few photos of the smoked switches and boards hanging off the side of the house - but I think you all understand now why there aren’t any in THIS post.

But seriously, we were lucky. Especially me, who was sitting in the symetrical location in the window across from the strike. And the house did not catch fire. And the circuit breaker blew after the first leg of the circuit melted, trapping the major damage to the hallway circuit. All of the equipment was off, (except the Vidar) and lots unplugged.

So, fingers crossed, hopefully the rest of the gear is AOK.

Kind of messes with your head, this stuff does…

Anway, next post: CEDIA 2007!

Looks diff, huh?

You can tell an audiophile passed through here… there are two mains outlets on each wall, one dedicated Hubble outlet, and one lamp outlet.

First up is putting the Audio Note system back where it does not have to contend with the horn speakers behind it… Then the Coltrane Supremes

… a great thing for those of you who register and then later forget your user name and password….

… and we’ll see if this works. Still need to login, for now.

For those that are interested, the way the spammers work is that…well…

… there are 10s of millions of blogs out there that use Wordpress software, like this one, and each of them has the same functions (webpages) with the same names.

If someone finds a way around having to login in order to post, by calling a specific function that the writers of Wordpress did not expect outsiders to call, then they have a way into each and every one of the 10s of millions of blogs.

I.E. a way to post their message about erectile disfunction to millions of blogs and even more people, some numbers of which must actually want to hear about this problem that seems rampant amoung American males.

A custom site, like Romy’s The GoodSoundClub, and some of the more unique forums, do not have to worry about spammers - their software has functions with uncommon names and even if the spammers get in they will not be reaching those 10s of millions of eyeballs - it just isn’t worth their time.

The amount of spam we were getting went from about 10 per day to 200 per day. Kind of depressing.

After hacking Wordpress we are back down to 50. When we get it down to zero we will re-enable comments - hopefully no longer requiring people to register and login to comment any more.

What people do who do not know how to code - I do not know. This is the depressing part.

Been spending my blogging time in this fight. This is the other depressing part.

But I’ll try to slip in a few updates here and there. The Triolons are supposed to get lugged down to the garage tomorrow morning - but it is starting to snow now, so we’ll see how that goes.

It is with great pleasure that we accept the honor of being the U.S. distributor for not only one of the best lines of high-end home audio equipment in the world, bar none - but one of the largest as well.

The Audio Note product line comprises several hundred products and stretches from excellent price /performance for the frugal audiophile to excellent price / PERFORMANCE for the extremely ambitious audiophile, along with lots of juicy stuff for everybody in between.

Audio Federation carries only product lines that have proven themselves to be of unusually high quality - based on application of our well-published methodologies - and Audio Note U.K. has proven themsevles several times over here at the ‘Audio Federation Proving Grounds’.

As the Audio Note importer, we will be able to help put even more, higher quality, better sounding [aka ‘more better’] equipment into the hands of more people. This has been and always will be Audio Federation’s raison d’être

As we continue to expand our repertoire here with respect to Audio Note we will continue to fully support and work closely with each of our product lines. All of the product lines we carry bring something to the party, and are fully able to compete side-by-side in any fair competition.

[Not quite STAY TUNED FOR AN OFFICIAL ANNOUNCEMENT-speak, and I just couldn’t bring myself to write in that oh so common PRESS RELEASE-speak. BO-ring. So what we have here is perfect Audio Federation Blog-speak… and I should know …you got your soto voice and smiley faces and … everything.

Anyway, we are really psyched and look forward to supporting the Audio Note dealer network, Audio Note owners, and all ya audiophiles-at-large so that as many people as possible get to hear what this stuff can do. WE are impressed, and we think most of you will be too.

We haven’t mentioned this to anyone in the industry… until now - so all you out there are getting the news at the same time. This neatly solves / sidesteps our problem of in what order we were going to have to let everyone in on the news. ]

.. and I quote:

“A new Yahoo Group - Audio Note UK Answers - has been started to provide current information and answers to questions regarding Audio Note UK products. The hope is that a global community of Audio Note customers, potential customers and the merely curious will wander through as if it were a coffee shop, asking and answering questions, checking on upcoming shows where they may hear Audio Note systems or special events, etc . . .”

It is very new.

But I expect it to be a nice quiet place where people can ask questions without feeling theatened by the often ‘unfriendly behavior’ that we see on that ‘crazy’ forum. Many (most) people we know were once patients of this institution but eventually checked themselves out of and are now permanent escapees.