Article: Magico LLC December 2013

[Priaptor]

"Alon and I discussed industry product markups and the quality of parts manufacturers place in products. Everyone agrees manufacturers need to make money to stay alive. Marking up one's product from the Bill of Materials cost to the MSRP is how businesses make money. However, when manufacturers use incredibly cheap parts and mark the price up ten times (or more) the BoM cost it frustrates both Alon and myself. Magico's markup isn't nearly as high as many of its competitors"

 

Chris,

 

First, Magico has indeed done much to advance speaker design, no doubt. Most discuss the pluses and minuses of a speaker and/or design having never owned them or having heard them in the suboptimal conditions of a show. Likewise I would say listening to a speaker in the unrealistic situation of a sound room such as that available at the Magico factory is "unrealistic" for most of us, even those willing to shell out the kind of bucks a Magico sells for.

 

I have owned what many consider the best of the Magico line, namely the Q1 with a Constellation Centaur Stereo amp and all the MIT Matrix cables recommended with my MSB DIamond signature as my source. First, they are very accurate speakers with an amazing ability in the lower octaves particularly given the size of the speaker. However, from my perch, they were not very engaging and in fact, I found them somewhat sterile. I had them for 4 months with free reign (thank you Mrs.) to place them wherever I wanted to optimize sonics. I consider my room pretty good. I tried them with my ARC gear, which is IMO a lousy match and they did indeed perform much more accurately with the Constellation. After four months I sold them. They just weren't my cup of tea.

 

Where I take some issue is in the above quote. "Value". I am not sure you are comparing apples to apples when you and Alon compare "value" to his competitors. Kudos to Alon for doing what few have the gonads to do, namely fabricate his own enclosures with what HE believes is the best material for the same having purchased very expensive and accurate aluminum carving factory gear. Similarly with his own driver fabrication.

 

However, all of this has huge overhead, which knowing Alon, like any successful businessman, which he surely qualifies as, is marking up his products not strictly based on cost of materials and time of labor, but also based on ROI given the huge $$ invested in his factory and should he stay successful and when his investment becomes fully amortized his margins will significantly increase and the net sum game is that he too will be providing a product with not only much higher margins but in quantities others can't. All great business moves, but hardly "good value" to the end user as most of that "value" is going to Alon both in the short term and especially in the long term.

 

As to the resale market, his speakers, with the exception of his "less expensive" equipment, sell at similar discounts to other brands such as Wilson, TAD, etc. In fact, like all expensive speakers like Magico, the more expensive the speaker the bigger the discount the end user must offer to resell the speaker should the end user decide to do so and since more Magicos fall at the higher end of the price spectrum, I could make an argument that the value of a Magico is worse not better.

 

Just my opinion. Not debating the quality of his speaker or performance, the former surely there the latter the end user's preference. Value, another thing altogether.

[Priaptor]

Excellent article. I do believe Magico is creating great value for the price. More importantly, Mr. Wolf is saving me time and money since I am no longer cycling through speakers...buying, selling, auditioning. I have had the S5 speakers for over a year and am happier with them today than the day I bought them. Previously I owned monitors, floorstanders, Maggies and various other speakers...always appreciating the one or two strengths each brought to the party (e.g., wall of sound and speed of a Maggie, dynamics and imaging of a box speaker), but never really getting lost in the music. The Magico S5 speakers paired with Constellation Centaur amp, with ARC reference preamps fed with good vinyl upstream, makes for listening sessions where I am focused on the music and not the gear. And always a little startled by the sheer degree of the S5's finesse, detail, engagement, extension, power, dynamics, spaciousness, etc. The S5s are only fully brought to life with the right ancillary gear feeding into them - I've tried 4-5 different tube and solid state amps and preamps, and the Constellation amp paired with ARC tube preamps is the ticket for me. Recently I tried the little Air Tight ATM-2 80 wpc tube amp paired with the matching ATC-2 preamp, and was blown away with the quality of that sound as well. #2 best sounding pairing behind the Constellation/ARC combo. So, I was pleased to know tube gear could also bring the mighty Magicos to potential. I have nothing but gratitude and admiration for Mr. Wolf and the rest of the Magico crew. Well done. One day I hope to have the Q7s...something to aspire to. BTW, I have no affiliation to anyone or any company...just to my ears and my wallet.

 

Well "great value for the price" I would take issue with. You state you are no longer "cycling through speakers" yet then go on to state "one day I hope to have Q7s"

 

Look I know Magicos are wonderful speakers, not everyone's cup of tea and they weren't mine, BUT "value" is not a term in the dictionary to describe a Magico speaker.

 

In any case enjoy. It is a great thing when you can truly enjoy your music which is what it is all about.

[Priaptor]

As we have often remarked on this forum. What is the business model for companies that produce such expensive gear? How can Wilson and Magico et al stay in business?

 

There must be container ships full of Magico speakers heading to China (I hope so).

 

If there are a million citizens in....say.....Ubonia, with a net worth of over $10 Million US, how may of these citizens are interested in uber high end music reproduction? We spend a lot of time complaining that our hobby is dying off faster than WW2 vets, I mean the number of potential customers for dual 18 inch subwoofers at $36K EACH must be limited to a fraction of these wealthy Ubonian residents.

 

I would love to see a Harvard Business study of these companies.

 

Bless them, and I hope they are successful and once my retirement plan (AKA: The Power Ball Plan) kicks into action, I will certainly purchase some new gear.

 

They are actually a very successful company. Alon is no dope, has found a fantastic niche in this absurd hobby of ours, despite my preferences to the contrary regarding his products. I personally prefer other speaker designs and can speak from experience as I owned them. I also don't fall for the hype regarding his aluminium enclosures and bracing as the "best" and most "inert" there is. But that is a subject for another time.

 

Your point is dead on. It is amazing that people can talk value and Magico in the same sentence. That gives me a good laugh.

[Priaptor]

We each have different ears and listening preferences, and the S5s are certainly appealing to a very wide range of listeners, so they are the cup of tea for many. Being happy with my S5s and knowing I have an aspirational speaker of the same DNA is completely different than cycling thru speakers. Seems you have an axe to grind even with those who are happy with Magico sound.

 

Axe to grind? Why because I question the veracity of the claim of value when it applies to Magico? Sorry, I am not a sycophant of any equipment manufacturer, so if I question the use of value in describing Magicos then I guess I do have an axe to grind in that regard.

 

Few products at this end of the spectrum can be described as "value" products, including the products I own and enjoy. I haven't lost touch with reality as it seems some have. But that's me.

[Priaptor]

We each have different ears and listening preferences, and the S5s are certainly appealing to a very wide range of listeners, so they are the cup of tea for many. Being happy with my S5s and knowing I have an aspirational speaker of the same DNA is completely different than cycling thru speakers. Seems you have an axe to grind even with those who are happy with Magico sound.

 

What "axe to grind" If you read my post in it's entirety you would have seen "Look I know Magicos are wonderful speakers, not everyone's cup of tea and they weren't mine, BUT "value" is not a term in the dictionary to describe a Magico speaker". The "axe I have to grind" is the absurdity of qualifying Magico (or any of the absurdly expensive equipment in this crazy hobby of ours) as "value".

 

To the contrary it seems you have an "axe to grind" with anyone remotely casting ANY aspersions on any aspect of the Magico Lore. All that matters is that you love them, they move you like no speaker before and you are happy. That is a great thing. Enjoy. I wish you luck in achieving your Q7 goal

[Priaptor]

value |ˈvalyo͞o|

noun1 the regard that something is held to deserve; the importance, worth, or usefulness of something:your support is of great value.• the material or monetary worth of something: prints seldom rise in value | equipment is included up to a total value of $500.• the worth of something compared to the price paid or asked for it: at $12.50 the book is a good value.

ORIGIN Middle English: from Old French, feminine past participle of valoir ‘be worth,’ from Latinvalere .

 

 

 

Value is relative. The price of a good or service is often quoted when discussing value, but it really doesn't have much do with value. I think percentage is a better marker. If I purchase a $300,000 Bentley Mulsanne for $200,000 and the BoM cost is $180,000 I'd say that is a value. Some people might suggest paying $200,000 for a car is preposterous but again, the price is irrelevant. Even if I paid full price for a Bentley Mulsanne I could still say it was a value. The number of zeros before the decimal point shouldn't cloud our judgement of value.

 

Chris,

 

I am glad you chose to use exotic cars in your analogy as that may be the only product that loses more "value" than high end audio equipment once it leaves the showroom.

[Priaptor]

Ha! I like the sense of humor :~)

 

Chris,

 

The sadder fact is that during the financial crash stereo equipment and cars turned out have better "value" than my investments.