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Hi-Fi companies ripping off consumers with high prices?

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cyrus

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Hi-Fi companies ripping off consumers with high prices?

Hi-fi boss slams 'rip-off' industry
Reveals the dark secrets of 'deceitful' hi-fi companies

Most hi-fi systems on sale worldwide are so heavily marked up that the majority of customers are being scandalously ripped off. That's what AVI hi-fi chief Ashley James said in an interview conducted with Tech.co.uk last Friday at the Bristol Sound & Vision Show .

He also said that companies are selling inferior products for extortionate prices, and that the magazine industry is supplying unhelpful and inaccurate reviews which allow the hi-fi manufacturers to get away with it.

"I'm not going to mention the name of a company which sells an AV processor for several thousand quid. You boys with computers will know perfectly well that if you want Dolby 5.1 you can get a PC card for 7.50 with the same chipset in it," he said.

"We had a customer who came to see us last week, [who paid] 4,000 for a power supply from this company, but it hummed like buggery and it drove him up the wall so he took the lid off of it. And what was in it? One transformer, two capacitors and a regulator! Forty quid's worth of bits in a box that cost 4,000."

Rampant rip-offs

James said that this practice is rife in the industry, and that the rip-off hardware includes many types of loudspeaker as well as CD players, amplifiers, tuners and power supplies.

He said: "If you go to [major player in the hi-fi industry; name removed] to buy a 50 watts per channel amplifier - bearing in mind that you would need 500 watt peaks for most modern recordings at normal listening levels - you would be asked to pay around 750. A CD player could be 850. If you want a radio then that's more money, and if you wanted a pair of speakers that could be an additional 850."

"So for 3,000 you've got a pretty mediocre system and I think it would be difficult to argue that they were in anyway superior to a [much cheaper] system you might buy from Richer Sounds - Cambridge Audio or something like that.

"That's the truth, and I think the fact is that there are lots of companies who do the same sort of thing - and behind the scenes most people realise that. And I think that most of the public at large feel the same way."

James said that the failure of the major hi-fi magazines to point out these massive price discrepancies is leading to buyers being severely ripped off.

Poor journalism

"The magazines have not been very discerning. And as a result they haven't been able to tell people if things are very good value for money."

"The fact of the matter is that loudspeakers can be sold in sufficiently large quantities to certain shops, for the discounts to be up to 80 per cent. Now I've never seen a review in a magazine which says [that the retail price] isn't very good value for money. And yet I bet the manufacturers are still making a profit out of the 1,000 pair of speakers they sold discounted for 200.

"So we've got a load of crap loudspeakers out there, the reviews of which help nobody. We've got no attempt being made as to whether something is value for money or not. We've got an 850 50 watt per channel amplifier, and another one from Cambridge Audio for 200 which was better specified."

James said later in the interview that some of the top-end hi-fi equipment that is sold for many thousands of pounds is worth nowhere near that amount, and isn't great quality in the first place.

"It's no good and it's ridiculously priced. They're very nice people in a room down the hall [at the Bristol hi-fi show] but their amplifier for 4,500 [he shakes his head in disdain]... I don't know how much the rest of it is, but it's utterly ridiculous."

According to James, hi-fi magazines in the UK and US, with one or two exceptions, have had every opportunity to change the tide; intelligent readers have written in and pointed out the "obscene" quality-to-price ratios.

Never-ending

But instead of taking heed, the magazines have apparently only responded by inviting replies from the "lunatic fringe" manufacturers in order to stir up controversy. And that's as far as it goes, which means the hi-fi companies can continue charging whatever they like, unchecked.

"I just think that [listening to music and buying hi-fi gear] is an intelligent pursuit. And I think at the moment large numbers of people are being denied hi-fi by shops that are reluctant to accept that [these intelligent people] exist, and by magazines that haven't even considered that they might exist," James said.

"You've got some hi-fi systems with 80 worth of components inside being sold for 2,750. And the magazine reviewers are just not good enough to tell the difference."

Ashley James got his first job in the audio industry in the 1950s. He later became an instrument engineer, a watch and clock maker and a restorer of automobile engines. He eventually receiving formal training and becoming a manager before settling at AVI.

Source: http://www.tech.co.uk/home-entertai...-rip-off-industry?articleid=1092983459&page=1
 

Aryan

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thanks for posting this article cyrus.

I am sure it will serve as an eye opener for lot of us out there but I wonder how we can save ourselves from this rep-off ?
I guess we need not go for expensive stuff as proof of its good quality, all of us should listen to inexpensive stuff of same caliberation and then take the final decision on buying such stuff. EXPENSIVE is NOT NECESSARILY good quality.

Going by your disclosure, I think I did good by buying onkyo's cheapest HT on offer.

Thanks,
Cheers,
Aryan.
 
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unleash_me

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Cyrus,

Hard truth. That is what it was.

Thanks a lot man, very informative post indeed.
 

ranjeetrain

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"We had a customer who came to see us last week, [who paid] 4,000 for a power supply from this company, but it hummed like buggery and it drove him up the wall so he took the lid off of it. And what was in it? One transformer, two capacitors and a regulator! Forty quid's worth of bits in a box that cost 4,000."

Its very easy for people specially those new to audio to fall prey to snake-oil industry. More aware people like us need to guide them.
 

awedeophile

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Price should not be the sole factor in buying audio equipment, though it is important. Fix a budget and then go audition whatever you possibly can within that budget. Buy what you think sounds good. Expensive does not necessarily mean better but more often than not, it is true.

There may be company's that probably sell products highly overpriced and probably not worth it. But then name one industry where there are no conmen. As a buyer it's your choice to make an informed decision and buy what YOU think is worth it.

Repeating what I have posted on another thread.. Why is it that when someone spends $20000 on a watch which gives the time no better than a $100 Casio or Timex, you don't hear big arguments, discussions and magazine articles with people saying that the parts cost in the $20000 watch are worth $20 and that people are being conned, etc. etc. The same holds true for many products. But in the case of audio, everyone becomes very analytical and self righteous and feel that company's are 'ripping people off' and selling 'snake oil'.

This hobby like any is about passion and it takes time to understand it. If everything in life had a "value', M F Husain would be doing caricatures on Colaba Causeway for the "cost of paper, paint and reasonable margin'.
 

ranjeetrain

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Why is it that when someone spends $20000 on a watch which gives the time no better than a $100 Casio or Timex, you don't hear big arguments, discussions and magazine articles with people saying that the parts cost in the $20000 watch are worth $20 and that people are being conned, etc. etc. The same holds true for many products. But in the case of audio, everyone becomes very analytical and self righteous and feel that company's are 'ripping people off' and selling 'snake oil'.

IMO, a company selling $20000 watch doesn't claim they tell the time better. They don't claim something their watches don't do. They charge a premium for the brand name, not by fooling people. Snake oil industry in audio world works differently. They make money by fooling people by making insane claim.

A person wearing a $20000 watch doens't go on a forum asking whether he should but it. He simply goes to the store and buys it, fully aware what he is paying for. A lot better than audio snake oil industry, isn't it :)
 

awedeophile

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They do claim to be more rugged or reliable or accurate (keep time better) or capable of going deeper or higher, etc. etc.

Anyways, which industry have you seen where some people do not make tall claims to sell their products? It is the same in audio. That doesn't mean that everyone in the industry is out to con you.

People on this forum make claims like "cables don't matter", etc. without actually even experiencing it.. I guess they're happy in their little cocoon's so who am I to say anything... Have fun!
 

ranjeetrain

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The simple reason people ask question about something means they have an interest. I feel it is *better* to tell them the truth about the performance, rather than re-advertise the products.

Part of the purpose why I participate on these forums is - to spread awareness, awareness of facts - I would be being unfair to the unsuspecting newbies if I was bought into the gimmicks of snake oil industry.

Interesting thing you mention - "cables don't matter". Who said that? And about which cable? About mains? Or the speaker cable? Or the interconnets? What was their rest of the system? Were they saying they added a 50k interconnect to their 20k CDP and 20k amp? Or were they saying they are using 50000 Rs worth of cable to connect their 20k amp and 30k speakers? Funny, how these discussions degenerate into mindless arguments. There are so many factors. And there is no one sweeping statement that is going to hold true everywhere. We can have world wars on it without heading anywhere.
 

awedeophile

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" And about which cable? About mains? Or the speaker cable? Or the interconnets? What was their rest of the system? Were they saying they added a 50k interconnect to their 20k CDP and 20k amp? Or were they saying they are using 50000 Rs worth of cable to connect their 20k amp and 30k speakers?"

That's the problem.. they have no clue, but make general statements!
 

suniil

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the least, we are lucky enough not to trust on any magazines! consumers are getting brave these days, resulting huge number of new members to forums these days seeking advice & price guidance [not IMO, that's the truth].

the whole w*****i / h*** / etc magazines are jokes, well behind the technology and biased to advertisers and equipment with high price tags.


"The magazines have not been very discerning. And as a result they haven't been able to tell people if things are very good value for money."
 

awedeophile

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Reviews are mostly biased towards advertisers.. that is a fact. If magazines give bad reviews, they lose advertising.. it's as simple as that.

Hence, reviews should only be used as a guideline and the product should be heard before buying. Unfortunately there are very few dealers who can offer proper demo's in India. Most of them are order collector's with little knowledge of the products they sell.. some haven't even heard them!

This leaves ppl to fend for themselves and rely on online forums. The drawback with online forums is that most ppl will regard their equipment as 'great' since very few people will spend 100K+ on a product and then admit it's not good.
 

ranjeetrain

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Reviews are mostly biased towards advertisers.. that is a fact. If magazines give bad reviews, they lose advertising.. it's as simple as that.

Hence, reviews should only be used as a guideline and the product should be heard before buying. Unfortunately there are very few dealers who can offer proper demo's in India. Most of them are order collector's with little knowledge of the products they sell.. some haven't even heard them!

This leaves ppl to fend for themselves and rely on online forums. The drawback with online forums is that most ppl will regard their equipment as 'great' since very few people will spend 100K+ on a product and then admit it's not good.

Bitter truth!
 

gibikote

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wow....!
thanks for sharing the article.

but I guess this would be true for any specialty industry.

Automobile... how many of the million owners know whats under the bonnet worth?
Food products..... is the biscuit really more nutritious than chana and worth x10 the cost?
Health.... did she really need that hysterectomy?!

and so on.

I guess I am a pessimist :)
 

awedeophile

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"but I guess this would be true for any specialty industry."

Exactly my point.. But when it comes to Audio many people have something to say!
 

anm

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Ripping off is much higher in India.
Companies sell the same products would cost upto three times more in India than in the US.
 

psychotropic

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Very interesting article. There will always be rip-off companies in every luxury category. Unfortunately, in a category like audio, they actually tout the characteristics of their product as justification for their price, whereas with watches or shoes or shirts, it's mostly the brand value, so people are actually thinking they are paying for a superior system. The hi-fi world very obviously seems full of snake-oil of all sorts, which I won't go into now so as not to upset the die-hard fans of such snake oil. But then if there are people stupid enough to spend ridiculous amounts of money on such snake-oil, can you blame manufacturers for producing it?
 

anm

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Discrimination in ripping off as well?
Indian customers are charged much more.
Oppo is made in China. It gets shipped to the US and still cost $170 (as in a oppo post somewhere) - and someone claiming to be Oppo representative says $100 extra for shipping it back to India!! Most stupid thing I ever heard. Shipping it to India from China should cost way less than what it costs to ship to the US.

Similarly, most equipments are made in China, Taiwan, MY.
 
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