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.
