The Audio High-End Has a Cadillac Problem

[nicoff]

The Audio High-End Has a Cadillac Problem
Over a decade ago, the folks at Cadillac realized that the average age of their customers kept rising. They soon determined that for many of their customers, that was the last new vehicle that they would purchase. They were doomed, the company figured, unless they changed their design to attract a younger group of buyers. Cadillac revamped their line and updated the design and sales improved for a few years (although they are heading downward again).

The audio high-end has a similar problem from the demographic point of view. The majority of the guys that you see at audio shows are older folks. Judging from the posts of participants on this site, I would guesstimate that that the average age is likely close to 60 years old. And I venture to say that many will likely be downsizing the size of their homes and may be looking to downsize or at least simplify their audio systems as well.

The good thing is that there is a much better understanding of digital audio and it is now possible to get high-end sound from a reasonably-priced digital system. And that is also a plus for the younger generation of audiophiles who feel perfectly happy getting all of their music via streaming and listening to it via headphones.

I am still surprised at the number of manufacturers in this niche market. With older folks retiring, downsizing, or abandoning the hobby, I am not sure how many small manufacturers will survive the trend. There will always be room for the likes of Magico and a few other players (brands that have gained name recognition or have become a status symbols).

 

[puroagave]

I see it the other way, Cadillac wishes they had High End audio's audience. You are using one brand in a sea of brands to generalize about an entire industry. The upside for audio is people will always want music in their lives, what is constantly evolving is the means by which they get their music (streaming vs tangible media). Whether they spend $500, 5000 or 500,000 on hardware to playback it back on is academic, there will always be a market for audio hardware at all price points.

To use your car analogy, who would ever have dreamt 30 years ago we'd have multiple brands and models of hyper cars costing in the millions of dollars. To top that, their entire production run sells out before the first production car is delivered.

 

[nicoff]

The Cadillac problem that I am referring to is demographics.

 

[mep]

The Cadillac problem that I am referring to is demographics.

Rob’s comments are valid. Not all people that retire downsize their home. I lost count of how many people at work asked me if I was downsizing my house after I retired. My answer was always the same: If you downsize your house, you upsize your wife.

 

[nicoff]

Rob’s comments are valid. Not all people that retire downsize their home. I lost count of how many people at work asked me if I was downsizing my house after I retired. My answer was always the same: If you downsize your house, you upsize your wife.

[emoji16] expensive upsize!

Downsizing the house is just one of the issues and quite frankly not the biggest one in my view. (In fact, I am not downsizing either).

The most ardent followers of this hobby are older folks. And when the older folks who are buying the product go away and the younger folks do not have the same inclination to the hobby, attrition takes place. (That was Cadillac’s dilemma: no young guys want to buy your product).

 

[TheOctopus]

Nicoff, I agree with your observations.

I see the future of high end audio being more about "value driven" and "lifestyle" products.

Every generation faces a different set of circumstances in life and so The Millennials and Gen Z are/will be carving their own path in life which will be "a bit to a lot" different than baby boomers and even Gen X.

The generations behind us are very happy with their headphones. That's a lot of youngsters, much more than there were of us "audiophiles" at that age!

The Millenials and Gen Z are very much aware of high end audio. All the internet forums give exposure to not only headphones, headphone amps and DACs but inevitably spills out into 2 channel high end.

There is also a trend to start setting up the more modest but higher value, good sounding 2 channel when the budget allows.

So what's different?

I see the Millennials being very, very, technical. They are dissecting, examining, discussing, all that makes those music making boxes tick and produce music. The youtube platform has elevated and simply exploded the amount of information, reviews, scrutiny of brands and their products. A good product will quickly find its place among the consumers and a bad one will crash and burn.

How long do you think a Tice Clock would last with today's forums and youtube?

No doubt they have budget constraints at this point of their lives. Disposable income is quite different than baby boomers. Guess how much of the US wealth the Millenials hands? Only 3%.... Baby Boomers are holding over 80% of accumulated wealth.

So for the younger generations, making audio related purchases is a very much about "perceived value". That completely rules out cables, power conditioners, accessories in the thousands of dollars range.

I'm not talking about the handful of very successful entrepreneurs that have succeeded beyond the wildest dreams of what our generations could accomplish before the invention of internet and its potential.

Perhaps someday and I hope they are able to but for the majority, components breaking the $10k mark are a pipe dream for them at this point of their lives.

The best case scenario would be lifestyle products that offer good sound and solid value.

I see some manufacturers waking up to that reality and catering to the youngsters. The headphone industry and everything related to decoding the bits of the streaming platforms and amplifying the signal to the headphones from the desktop is simply booming.

I also see the active speakers doing really well for those catering to the high end client who is not a typical audiophile purist but wants good sound without the clutter and visible python sized cables on the floor trying to swallow the speakers as their wives would put it.

As baby boomers themselves are downsizing, many find the condo life is just much simpler with integrated components and smaller, elegant looking speakers.

It is impossible to predict the future very accurately but if one pays attention to the trends, at the very least, the direction becomes clearer.

I see the market being very much flooded by Chinese audio products. Hate to say it but the value and bang for the buck will once again be next to impossible to match. The bulk of the old school audiophiles may not go for it but the younger generation has no such loyalty baked into them. They could care less where a value product that turns them on comes from.

 

[mep]

Serge, I don’t find much to agree with from your above post. The market is already flooded with Chinese audio products and products manufactured in China by global brands under their names.

I for one have zero plans to downsize and move into a condo which is really an apartment with a mortgage and no real freedom as an audiophile unless your wife has already regulated your listening to headphones.

 

[brad225]

My only plans for downsizing, and that is no time soon, would by to an 8' x 3' x 3' box.

I have nieces and nephews that are in their early 30's and drive Cadillacs.

Mep, have you told you wife if you down size the house she will be larger. If so, have the bruises gone away yet.

 

[Audio 1]

I purchased my first Cadillac earlier this year and prior to now that probably would have not been the case.
My prior two vehicles were both Mercedes and I like the Cadillac more than either of the MB's, so they must be doing something right with their new strategy.

 

[mep]

My only plans for downsizing, and that is no time soon, would by to an 8' x 3' x 3' box.

I have nieces and nephews that are in their early 30's and drive Cadillacs.

Mep, have you told you wife if you down size the house she will be larger. If so, have the bruises gone away yet.

Yes, I told her and she gets it. You have to have some private space IMO and mine is my dedicated sound room. I built an addition to my house I owned in Indiana before we retired and moved to TN just so I could have my own dedicated stereo room. My wife had a dedicated room in our house in Indiana and she has one here in TN also.

I also used to tell guys that when they get married and buy their first house to try and buy a house with a basement and a garage so they will have some space they can call theirs.

 

[TheOctopus]

Serge, I don’t find much to agree with from your above post. The market is already flooded with Chinese audio products and products manufactured in China by global brands under their names.

I for one have zero plans to downsize and move into a condo which is really an apartment with a mortgage and no real freedom as an audiophile unless your wife has already regulated your listening to headphones.

I fail to see a connection about your own situation and decisions about your retirement residence with the reality of the younger generations who have decades of work ahead of them to get to the same point.

 

[Mike]

Old guys in the 70’s bought high end audio gear.

Old guys in the 80’s bought high end audio gear.

Old guys in the 90’s bought high end audio gear. This is when the “we are going to run out of old guys, find the kids!!!” began.

Old guys in the 2000’s bought high end audio gear.

Today, more people are purchasing high end audio gear perhaps more than ever and its spread out over a wider variety of manufacturers and a wider world wide audience. That’s why you’re seeing so many more brands.

Unless 40 somethings fail to become 50 somethings and 50 somethings fail to become 60 somethings, the pending decline of high end audio is greatly exaggerated.

There are many challenges facing high end audio which warrant discussion, but we constantly see 30 somethings and 40 somethings entering the world of high end. We are also seeing 60 and 70 something buying their first dream system too.


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[mep]

Serge, most people who weren’t born with a silver spoon in their mouth had to work hard to get to where we currently are. I don’t think I knew anyone in their twenties when I was in my twenties that had really expensive stereo systems. We all have to start somewhere and it won’t be any different for younger generations.

 

[W9TR]

The Audio High-End Has a Cadillac Problem
Over a decade ago, the folks at Cadillac realized that the average age of their customers kept rising. They soon determined that for many of their customers, that was the last new vehicle that they would purchase. They were doomed, the company figured, unless they changed their design to attract a younger group of buyers. Cadillac revamped their line and updated the design and sales improved for a few years (although they are heading downward again).

The audio high-end has a similar problem from the demographic point of view. The majority of the guys that you see at audio shows are older folks. Judging from the posts of participants on this site, I would guesstimate that that the average age is likely close to 60 years old. And I venture to say that many will likely be downsizing the size of their homes and may be looking to downsize or at least simplify their audio systems as well.

The good thing is that there is a much better understanding of digital audio and it is now possible to get high-end sound from a reasonably-priced digital system. And that is also a plus for the younger generation of audiophiles who feel perfectly happy getting all of their music via streaming and listening to it via headphones.

I am still surprised at the number of manufacturers in this niche market. With older folks retiring, downsizing, or abandoning the hobby, I am not sure how many small manufacturers will survive the trend. There will always be room for the likes of Magico and a few other players (brands that have gained name recognition or have become a status symbols).

I think this is pretty spot on for 2 channel audio. These are the good old days - all the gear is better than it ever was at every price point. Yet the people I know who enjoy 2 channel audio as a hobby are all older.

But there is a younger and very vibrant community focused on personal listening. They are very technical, yet are focused on deep listening. They balance measurements with active listening impressions like few 2 channel people ever do. They don’t give a rip about who makes the gear (Schiit may be an exception) and they are focused on value and not bling.

Will they become 2 channel buyers as they become more financially secure?

 

[mep]

Old guys in the 70’s bought high end audio gear.

Old guys in the 80’s bought high end audio gear.

Old guys in the 90’s bought high end audio gear. This is when the “we are going to run out of old guys, find the kids!!!” began.

Old guys in the 2000’s bought high end audio gear.

Today, more people are purchasing high end audio gear perhaps more than ever and its spread out over a wider variety of manufacturers and a wider world wide audience. That’s why you’re seeing so many more brands.

Unless 40 somethings fail to become 50 somethings and 50 somethings fail to become 60 somethings, the pending decline of high end audio is greatly exaggerated.

There are many challenges facing high end audio which warrant discussion, but we constantly see 30 somethings and 40 somethings entering the world of high end. We are also seeing 60 and 70 something buying their first dream system too.


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Mike- I totally agree with your post. I would add that high end audio started long before the 1970s. There were guys who had dream systems in the 1950s. There has always been expensive gear for the well-heeled. Look at the first gear from Marantz which is still sought after and compare that to Dynaco gear which was built for people who didn’t have Marantz money. That’s just one example.

 

[TheOctopus]

Serge, most people who weren’t born with a silver spoon in their mouth had to work hard to get to where we currently are. I don’t think I knew anyone in their twenties when I was in my twenties that had really expensive stereo systems. We all have to start somewhere and it won’t be any different for younger generations.

I do not believe I posted anything above saying to the contrary. It obviously takes time to get situated in life and until disposable income becomes more readily available. I did not have an expensive system in my 20s either but I did build one in my very early 30s, as soon as I was able to scrape up enough to do so and this was with two college grads working full time in the health industry. My two sons are both Millennials. I put them both on the path to earn more than 6 figures a year but... Their lives are not any easier. My first four bedroom, 2400 sq ft house cost $202,000. That SAME house is now $590,000.

My son who is earning over 6 figures a year had to settle for a high end townhouse instead. He is also into music and is an audiophile because he grew up around my own systems and music. Let's just say he is NOT buying $8K power conditioners and $2k USB cables. Most of his friends outside of college and work colleagues are making do with much less in life. It is not easy out there and chances are, it will get even harder.

 

[TheOctopus]

Old guys in the 70’s bought high end audio gear.

Old guys in the 80’s bought high end audio gear.

Old guys in the 90’s bought high end audio gear. This is when the “we are going to run out of old guys, find the kids!!!” began.

Old guys in the 2000’s bought high end audio gear.

Today, more people are purchasing high end audio gear perhaps more than ever and its spread out over a wider variety of manufacturers and a wider world wide audience. That’s why you’re seeing so many more brands.

Unless 40 somethings fail to become 50 somethings and 50 somethings fail to become 60 somethings, the pending decline of high end audio is greatly exaggerated.

There are many challenges facing high end audio which warrant discussion, but we constantly see 30 somethings and 40 somethings entering the world of high end. We are also seeing 60 and 70 something buying their first dream system too.


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Mike, you are also geographically in a very unique place. I found your story of a client who wanted to plunk $100K on a system and then called you the next day to make it $200k very entertaining. While it represents the place where many of the wealthy baby boomers congregate and the attitude of trying to spend their money before their last sunset, it is hardly a reality for the rest of the country.

 

[Mike]

Mike, you are also geographically in a very unique place. I found your story of a client who wanted to plunk $100K on a system and then called you the next day to make it $200k very entertaining. While it represents the place where many of the wealthy baby boomers congregate and the attitude of trying to spend their money before their last sunset but it is hardly a reality for the rest of the country.

Thanks, except he lives in Washington.


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[TheGemState]

Old guys in the 70’s bought high end audio gear.

Old guys in the 80’s bought high end audio gear.

Old guys in the 90’s bought high end audio gear. This is when the “we are going to run out of old guys, find the kids!!!” began.

Old guys in the 2000’s bought high end audio gear.

Today, more people are purchasing high end audio gear perhaps more than ever and its spread out over a wider variety of manufacturers and a wider world wide audience. That’s why you’re seeing so many more brands.

Unless 40 somethings fail to become 50 somethings and 50 somethings fail to become 60 somethings, the pending decline of high end audio is greatly exaggerated.

There are many challenges facing high end audio which warrant discussion, but we constantly see 30 somethings and 40 somethings entering the world of high end. We are also seeing 60 and 70 something buying their first dream system too.


Sent from my iPhone using Tapatalk Pro

Good post. When there where audio shows before Covid, I would see a lot of young people attending. I know many young folks into music/gear but can not afford high end gear...yet. When they are old farts, they will be buying high end. There are so many manufactures that keep popping up there is clearly a market for economical gear and very expensive gear.

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[TheOctopus]

Except he lives in Washington.


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There will be outliers. Florida is still a very unique place. No? You are booming, many of the stores elsewhere have closed long ago.