Is now the right time for "Extreme Week"?

[bluesman]

This thread is really about a lot more than the wisdom, advisability and societal consequences of buying luxury goods (and I can only define a 5 figure piece of audio gear as a luxury - it’s neither a necessity nor mainstream entertainment).

 

First, it’s about personal codes of behavior.  Many who could afford high end living are comfortable and happy being down a rung or two.  One of my mentors when I was a resident and junior attending physician was a descendant of the founders of the Pennsylvania Railroad.  The family name is on everything from roads to skyscrapers.  He was a very nice and humble man (and a world class surgeon) who drove a Chevy, wore OTR suits, and never let a medical student or resident suffer because of a problem with which he could assist.  He and many of his colleagues (of whom he was not the only offspring of old money) were charitable because they were raised to be and thought it was the right thing to do.  Most were nice to everybody - they truly defined “gentleman” and “gentlewoman” (yes, I was educated by world class female physicians too).  Many of my friends and colleagues today are the same way.

 

There are many who feel that they earned their money and have a right to spend it however they wish, and for whatever reason they embrace.  They’re not wrong.  And many of those artists who design state of the art audio equipment that sells for 5 or 6 figures are just following their passions to an extreme.  There’s nothing wrong with that, either.
 

The cost of a pair of big Magicos would provide school lunches for much of the world’s starving children for days to weeks.  The excess caloric content ingested by the world’s obese population would cure those kids’ hunger permanently if redistributed to them.  But we also have the freedom to buy those speakers and eat twice as much as we need biologically.
 

This thread already demonstrates the difficulty of reconciling differences like these and assimilating them into a broad cultural context with which we could all live happily (even if not quite as satisfied in some aspects).  The closest we’re going to get to this is probably a balanced menu that has something for each “culture”.  We just have to be willing to let a few posted statements that may violate our personal code go unanswered.  
 

High end reviews are very interesting to me, even though I wouldn’t personally buy a $100,00+ component (or car).  I’ve bought many high end items used, just to experience them.  I later resold them with little or no loss (& not infrequently a bit of profit). But (as many of you know), value is my middle name - praise be to the Raspberry Pi!  So I’m lovin’ it all.  In the end, it shouldn’t be about any of us.  It’s about music and art and creativity and fun and adventure and learning.  
 

I think it should also be about the world in which we live and are leaving for our children.  But a healthy balance should be part of that, which to me means letting neither children nor artists go hungry.  If some of us help one group and some the other, it’s OK with me.  Stay the course, Chris.

[bluesman]

28 minutes ago, firedog said:

Audiophile nervosa can be limited if articles are published showing how less expensive equipment can also give great results. 

And I'm one of those trying to help Chris fill that gap.  He already has the next installment of The Value Proposition in Audio (an in depth evaluation and comparison of operating systems for SBCs for audiophiles) queued up.  And I'm on the last page of the following one about hot rodding SBCs for audio, with sequential performance data as I built up my cooled SuperPi4 to run at 2.2GHz with great mods like zram/zswap, reduced GPU memory etc.  The one after that is underway as well - it's on audio things you can build with a Pi, including a multitrack DAW, a portable music recorder, a CD/vinyl ripper, and a 3 way active crossover.

 

Ain't we got fun!!!

[bluesman]

5 minutes ago, firedog said:

Right now I'm using a RPi4 as a Roon endpoint in a $20k system- and I think it sounds fine. I will probably replace it at some point with something more "audiophile" that gives me some additional HW or SW feature, but in the meantime I'm enjoying my music and have no complaints.

I'm with you!  Our living room system contains a bone stock 4 gig Pi 4 (running Roon Bridge) in a Flirc case driving an SMSL SU-8 into my trusty old Prima Luna Prologue+ (KT88s) making music through Focal 726 towers that flank our Yamaha grand ("we don't need no stinkin' Steinway").  I will probably not replace anything that doesn't fail or age out of its specs, except for technical breakthroughs, e.,g. my Emotiva Stealth was my main DAC until pushed to the test bench so I could listen to high res files in the living room.

[bluesman]

58 minutes ago, AudioDoctor said:

I guarantee that there are people out there to whom $27,000 is chump change.

Sadly, I guarantee you that there are more people out there who spend it when they shouldn't than there are who can spend it with impunity.  I'm especially amazed at the number who carry permanently high credit card balances or take out loans to buy audio, cameras, cars, clothes, travel, and even cosmetic surgery.  This is one reason for the active secondary market in everything from Pateks to Porsches - when the first big service is needed (or the roof has to be replaced), they're out of the game.

 

I've gotten more than a few great buys on "like new" items over the years from people who overextended themselves (or the dealers who bought back the items at a huge discount).  These are big boys and girls who are free to do as they wish, as long as they accept the consequences.  But many learn nothing from these experiences and do it over and over through the years. I know more than a few families that have suffered because one or both parents dug them into a deep hole.  Unfortunately, some are my relatives.

 

It's a tough world out there, and we each soften it for ourselves as best we can.  Reading about $100k speakers is one of the many balms available, but such remedies are not universally effective.  It's time to sip a wee dram and turn up the volume! 

[bluesman]

1 hour ago, daverich4 said:

When you compare it’s price to less expensive products that are available you are talking about value, not affordability. 

Value is often defined as worth / cost.  But worth is subjective and individually determined.  And there is no single unit of measurement for worth, which makes inverse dollars the default unit of measurement for value.
 

The old saw “What’s it worth to you?” is not just for pawn shop owners to ask.  It’s the question most of us ask ourselves (or, at least, should ask ourselves) when contemplating a purchase because it’s how we determine its value.  I suggest that the substitutes we’d buy with the same money are our personal units of worth for that purchase.  If the buy in question requires no sacrifice or compromise at all and the money would not be missed, we’re left with the default metric - the inverse of its cost (inverse because we no longer have that money; we have what we bought instead).  In essence, it’s worth exactly and only what it cost someone to whom the money is entirely discretionary.
 

But unless we have no other use for that money, most of us have competing wants & needs for every dollar, from a new refrigerator or car to jewelry to more financial security.  So we apply our own “worth” metric, which is usually a bizarre confluence of arbitrary units of pleasure, satisfaction, security, etc and a willingness to get the old fridge or car fixed & live with it.  And if we can live with it, the purchase is affordable.  Whether or not it’s wise is a different question.
 

Value is an elusive concept that is often impossible to define or to measure with certainty until long after the purchase.

[bluesman]

7 minutes ago, Allan F said:

It depends on the definition of value that you are discussing. Value or worth may be determined by market price, for example, which is not subjective.

The definition I was discussing is worth / value.  It’s far from the only one, but I’ve used it for many years to teach Healthcare Value Analysis.  It works well whether your choice is a new surgical robot for $1.5 million vs renovations to the operating suite or a new $20k amplifier vs an addition to your 2 year old’s college fund.

 

Market price is absolutely subjective for any good or service unless its price is 100% inelastic (ie its price elasticity is zero).  Very few products and services are so essential that demand remains constant regardless of price, and audio equipment is not among them.  One buyer + two sellers = drop in market price.  Two buyers + one seller = rise in market price.

[bluesman]

1 hour ago, AudioDoctor said:

 

I hope the artists themselves are the ones that figure out how to profit from their art the most.

 

Sadly though, the upfront cost for infrastructure to do it will almost guarantee that some other entity will once again be taking the profits for themselves.

The stats on this are readily available.  Here's a summary of the last 2 full years for which data were complete when this was published:

 

"[The data show] that, in 2018, 67.3% of the US record industry’s total $9.8 billion retail revenues – a $6.6 billion sum – was paid out to labels and artists. To flip that round, record stores, download stores and streaming services held on to 32.7% of the money. That was roughly flat versus 2017, but different to 2016, when 68.4% ($5.2 billion) of music’s total retail haul ($7.6 billion) made its way to artists and labels."

 

The percentage of total retail revenues in the recording industry going to labels and artists went down by 1.1% between 2016 and 2017 but was flat from 2017 to 2018.  But revenues were higher in 2017 and 2018, so the total that went to labels and artists was higher ($6.6 billion in 2017 and again in 2018, up from $5.2 billion in 2016).  Streaming is taking a bigger bite out of artists' pockets percentage-wise, but they're all making more each year than they did the year before.  Again from Rolling Stone, "Streaming services might be keeping a higher percentage of music industry money from artists than ever before – but they’re making artists much more cash, too."

 

Of course, streaming services are not graciously giving money to those who make and provide the program material they use.  After crying about how hard it was for a poor little streaming service to make a buck, we now read in Rolling Stone about "...Spotify’s new deals with major and independent labels, struck in the first half of 2017, in which the record companies agreed to lower the share of pro-rated net revenue they received from the platform, down from approximately 55% to 52%. The thinking there: Spotify needed 'margin relief' from the labels in order to become an economically sound company."  Hmmm - I gotta get me some o' that margin relief too!!!

[bluesman]

18 minutes ago, AudioDoctor said:

So you're saying that my assumption was already correct, that someone other than the artists is taking the profits...

It's all in how you interpret the data.  More than half of the total music industry revenues in 2016, 2017, and 2018 went to artists and labels.  An overhead of 30-32% is not too shabby - retailers and restaurants probably pay twice that or more.  But in my experience as a bandleader backing touring acts and locals, it appears that income per artist is going down because there are more artists every year and streaming services are eating more and more of the pie at a rate that may exceed its growth.

 

Streaming has helped the entire music industry grow its revenues.  Hard copy sales are steadily down, and downloads are also dropping.  Streaming and subscription services are the only significant industry segment that's growing (yes, vinyl is growing - but it's such a small slice of the pie that it's immaterial to this discussion).  So credit for bringing more cash to the industry overall goes to streaming. A smaller percentage of all that money is going to the artists than was the case a few years ago, but (at least for now) it's still over half of the total revenues generated by the industry and higher than it was a few years ago. 

 

But technology has made it so easy for people to make and release their own recordings that the number of recording artists is now growing fast.  The denominator is increasing and the percent of total revenues going to the artists (the numerator) is shrinking. This does not bode well for them.

[bluesman]

On 5/22/2020 at 6:52 PM, The Computer Audiophile said:

The split within that number would be interesting.

Here's some of that information, as provided by the Houston Chronicle.  In summary, "Record labels exist to sell music from artists who only receive a small percentage of profits unless they run their own labels. Usually major labels finance manufacturing and distribution costs and are repaid by sales before artists are paid. Major labels pay higher costs and take higher percentages while independent labels pay lower costs and give artists higher percentage points based on gross sales figures negotiated between artist managers and labels".

 

More specifically, songwriters and publishers usually split a combined share of 5 to 25 points.  Major label artists get about 15 points.  Managers who finance the project get about 20 points, and producers get about 3 points.  Most A&R execs (who may be salaried as well) and other talent finders get from 1 to 3 points.  And the label gets what's left from this, minus supply chain and retail costs.

 

Per Maggie Lang, a Professor at Berklee, 95% of artists get no royalty checks.  She does not say why, although I suspect it's probably a combination of poor sales, dumb contracts, and artists' extravagance with other people's money that will be reimbursed first out of revenues, plus a bit of outright deception and theft. 

 

Digital downloads and streaming increase the share available to artists and labels by reducing hard costs (manufacturing, inventory, logistics etc).  But I can't find any such data stratified to that level yet.