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What Happened to Independent Audio Companies?

Azriel

Azriel

Active Member
Okay, I'm sure this is old news to many of you, but to me, it's new. I just found out that Audio Research, Sumiko, Wadia, and Sonus Faber are all owned by an Italian outfit called "Fine Sounds". Am I the only one who is depressed by this? What happened to the days of an audio company operating on it's own, in charge of it's own product development, doing what they want to do?

For the longest time, I sung the praises of Conrad-Johnson and Audio Research as great classic American companies turning out quality products at competitive prices. Now, my faith has been half eroded. It's just kind of devastating to have your ground dissolve under you. Next thing, we'll turn an ARC product around and see "Made in China".

Nothing sells me on a product more than knowing it was made by a company that operated on it's own, with it's own ideas, it's own resources, and it's own materials.

What's happened to audio? I feel like I was born about 30 years too late. I guess I'll keep on enjoying my classic Conrad-Johnson and Dynaco gear. At least they're American and independent.

-Jon
 
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My guess is that Audio Research is probably being independently operated, even though part of a conglomerate, much like McIntosh.

If I were starting over today, I'd look first at restoring, redesigning, and rebuilding vintage equipment. Sort of like a modern engine and transmission in the restored 1957 Chevy.
 
Very old news.....Profits. That is what drives companies. The bigger the profit the better for the bottom line. That is where China, Mexico the middle east come in to the picture. It is where life has taken us. No reason to be depressed
 
At least these companies were probably not purchased with the intent of shutting them down or milking them dry, which is more than I can say for several I have worked for...
 
Fine Sounds is there for capital for new products. They have a reputation for not so far ruining companies and keeping their core values intact. With McIntosh, I feel better with their owning it than Clarion or D&M Holdings for example.
 
One has to question how good China actually is at producing things on average.
And just because a speaker is made in Germany doesn't mean its made by people who care about their job.
But... China manufactures cheap, but who's to say other countries don't do that too?

Arent the companies you listed still doing well? Atleast for the most part.

Now if you will excuse me. Im going to go hunt down a good Kim Possible avatar.
 
fred soop said:
My guess is that Audio Research is probably being independently operated, even though part of a conglomerate, much like McIntosh.

If I were starting over today, I'd look first at restoring, redesigning, and rebuilding vintage equipment. Sort of like a modern engine and transmission in the restored 1957 Chevy.
Click to expand...

I'm becoming more and more convinced that this is the way. Of course resto is expensive, but it's difficult to form opinions on new gear when there are so few audition opportunities.

Why not rebuild a familiar piece? :thmbsp:
 
My system consist of McIntosh, SOTA and SME for the main components. I do have Sumiko Blackbirds & EVO III and speakers are vintage JBL L250 and Sansui SP-5000.

Most will complain about the availability and distribution of McIntosh, SOTA and even SME. Marketing and global distribution are expensive so smaller companies need to look for a company set up for that if they want to reach more markets.

I'm I depressed nope. I tend to buy American and from local distributors.:music:
 
Azriel said:
Okay, I'm sure this is old news to many of you, but to me, it's new. I just found out that Audio Research, Sumiko, Wadia, and Sonus Faber are all owned by an Italian outfit called "Fine Sounds". Am I the only one who is depressed by this? What happened to the days of an audio company operating on it's own, in charge of it's own product development, doing what they want to do?
Click to expand...

The original owners get worn out, or run out of money, or retire, or die. So the company gets sold to a conglomerate. The conglomerate either does things right, which keeps the company running, or burns it to the ground, either intentionally or through mismanagement.

No matter what the result, there will always be another startup company out there making new gear.
 
BayouTiger said:
Yep old news. Fine Sounds also owns McIntosh. They were just sold by the Italian holding company to a couple individuals. All the companies in the group are doing fine. The Sky hasn't fallen just yet!!!

http://www.stereophile.com/content/grange-and-randall-lead-management-buyout-fine-sounds-group
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I didn't know that but this article adds value to my comment.

From the press release: Fine Sounds and McIntosh believe the acquisition will deliver important benefits to McIntosh’s customers, sales partners and employees by providing opportunities for building on Fine Sounds Group’s product development capabilities, distribution synergies and financial resources. With Fine Sounds’ support, McIntosh is now poised to elevate its brand to even higher acclaim, expand its distribution as well as its reach into new international markets.
http://www.stereophile.com/content/fine-sounds-acquire-mcintosh
 
This trend is definitely the way of the future. It's happened in the clothing , manufacturing, and audio industries. Components built in China have been used in many North American "built" pieces of equipment for many years. It may surprise you to find Chinese components in high end N.American equipment, but it's being done all the time. Even Harley Davidson has been using parts from Japan for years. Check out the name on their forks. They say Showa. (a Japanese company). It's simply economics. As Kermt Z posted, it's about profits.
 
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If you take as gospel that commerce is about making money period, it is of no great surprise that the people that are good at whatever they do, audio in this case, would want to cash in on their hard work and innovation, so they sell out to a bigger entity good at taking a company and maximizing profits.

Sometimes they go on to start another company, sometimes they have some sort of contractual agreement with the purchaser. Sometimes the company continues to make good products, sometimes the only thing left is the name used for marketing. I too like made in USA audio gear, but the quality level I'm now used to dictates my rebuilding of older gear or more frequently these days going the DIY route.

As an aside, I had a nice conversation with a twenty something who was minding a record store. He was actually interested in audio and had some decent parental hand me down gear. Told him about very basic tube stuff. I also asked him how many of his peers thought MP3s sounded fine, which was most of them. So basic economics is going to dictate that only a very few audio companies will survive as the market will be for low quality cheap product, and you have to admit you can put a listenable system together today for cheap. When it breaks, just throw it away. Not my ethic, but the way it is.
 
Azriel said:
For the longest time, I sung the praises of Conrad-Johnson and Audio Research as great classic American companies turning out quality products at competitive prices. Now, my faith has been half eroded.
Click to expand...
ARC was founded and largely owned by Willam Z. Johnson for most of its life. At a particular age, he wanted to retire and needed an exit strategy. That meant selling the company.

I am a long term ARC customer and plan to buy more product from them in the future. It would make no sense for the current management to run it, McIntosh or any of its other significant labels into the ground. Time will tell, but for now, they continue to produce new and better product. Are you aware of the new Galileo series? The only evidence of *change* I find is seeing Sonus Faber speakers and Ducati bikes in the pics. :)
 
First of all, this has been going on forever. I mean forever. I was doing some research on Stromberg-Carlson and discovered that in 1958, it was acquired by General Dynamics, about the same time my speaker was manufactured. This is only one example, but hardly the only one. In fact, it seems it's more common that uncommon. It's harder to name an audio company that has never been acquired than one that has.

Companies come in two basic sorts. Privately-held, and publicly-held.

If the company is privately owned, the owner(s) can do as they wish. Buy other companies, sell their company to a larger company, whatever. They do not have to have a rhyme or reason to do so, but typically one can guess that profit is involved. How sad, companies trying to make money. You'd think they just went into business to make great products and make employees happy. ;)

When a company is publicly owned, their fiduciary duty is to their shareholders. Not their customers, not their employees, not even to the managers. They owe allegiance to the people who own the company. I know this makes a lot of people angry, but this is how capitalism works. If you were an investor, you'd probably see it differently; you invest your money, you want a return on your investment, not a song and dance about how there's no profit, but hey, they make a great product and treat their employees well.

So private companies, as others have stated, sell when their owners feel like it. Maybe the original owners die or want to retire. Maybe their families or whomever inherits the company doesn't want to run it or wants the money and not the hassles. You never know.

With a public company, if the company can make a large return for shareholders by merging with or being acquired by a larger company, then they owe an actual fiduciary duty to their shareholders to do that. That's how it works.

Does it suck? Yeah, sometimes. Famous brands can be acquired and then their quality can be watered down, trading on a formerly-famous name (example: Nakamichi) until they're selling toy radios at Wal-Mart.

Sometimes, though, it may be the only way to preserve a brand when it would otherwise die. Markets change, tastes change, and some companies can weather the storm; others cannot. Economics rule.

As to the comments about the quality of the items China produces, I'd like to say this. China seems quite capable of producing quite a few items that are of the highest quality. But the nation produces things based on what the people who buy them want. Low price and high quality are not often found together in one product. When a company wishes to produce a high-end item and pay for that item, it seems China is more than capable of doing so. However, you won't find that item at Wal-Mart.

Just my opinion, of course. I realize we all have these idealized notions that companies exist to make us happy and not to make a profit, or that they owe us something after we have come to love and respect them, or that China only makes cheap junk. I'm afraid they're all myths.
 
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