John DeVore rants on capitalism and the weird HiFi industry, Triggered by news from Audio Research. 

I'm happy to see you made a video like this!

Excellent video John. My wife and I owned a restaurant for five years and the average person has no idea what a small business owner has to endure in order to just survive. Best of luck to DeVore Fidelity.

You hit the nail on the head, John! We spoke briefly at Munich High-End in 2019. I cover both the high-end automobile and high-end audio industries and totally relate to what you say here. Over the last 40 years I have witnessed exactly the same phenomenon with 'investors' in specialist car companies who see an opportunity to make money but do not understand the business or its customers. They make strategic decisions based on what they think it should be rather than what it is. Because they let the business plan become the business, nine times out of ten it ends in tears. See you in Munich!

In most cases, you need to look no further than the closest mirror to find the blame for business failures. I owned and ran a successful business for 24 years. I can't begin to count how many companies failed due to expansion and owners treating the businesses like a personal money vending machine. The HiFi business is a tough one. Overcoming the snobbery in this industry is a major hurdle for new customers. The difference between a mid level, mass-produced system, and a high-end system is pretty small. That small difference is very important to many, not so much to many more. The industry should go out of their way to make new customers comfortable, but they don't. In most cases, they do the opposite. Good video.

Great video. You might also include Harman-Kardon. When Sidney passed things went sideways and of course now that Samsung owns them the Harman-Kardon brand is reduced to making bluetooth speakers. I worked for Sidney back in the day and we had this monster home theater receiver, the AVR7000. We all wanted to brand as a "Citation" and Sidney refused because he wanted to keep Citation as the premium HK brand. Now Citation is on bluetooth speakers what a waste.

High end audio is a very niche market..... very small, very specialized, very low volume cottage industry if you will.

Well tempered and reasoned perspective. Kudos to you John.

Adding to the list of defunct companies, I own a Cary SLP-03 preamp; a Counterpoint SA-2000 preamp; and a California Audio Labs ICON Mk II CD player that I still listen to today.

There’s two kinds if businesses (capitalism). 1) Organic private owned. 2) Wall Street publicly traded. Never get them confused. Part of my buying process is biased for organic privately owned companies. PS. Thank you for mentioning Meadowlark speakers.

High end audio cannot be put neatly into a mass-production, cookie-cutter, maximum profit box. It is an artisan cottage industry that values craftsmanship, aesthetics, and the pursuit of perfection... Oftentimes at the expense of maximum profits. Customers tend to be brand loyal once they understand the quality of their company, its designer, and their preferred house sound. Marketing is more about brand awareness than anything else. The dealers do alot to properly demo the gear and make the sale too. You are wise to grow slowly, build up the conpany's reputation, and ensure strong financials to weather inevitable and unpredictable storms.

The good news is you operate a business in a country in which you don't need to worry that the government will swoop in and take your business when it suits it's needs.

i remember loving sonic frontiers and then was surprised to see it go away... not sure what happened, but i have always felt that looking at the company business model is important as the product

Madrigal Audio Labs era of Mark Levinson Electronics was one of those really good sounding stuff that’s now gone.. I just saw Zu upload a video a few days ago for a new line of stand mount type loudspeakers..

Thanks for sharing the interesting commentary John. Fascinating little insight into the small business side of hifi.

Wow, thanks for bringing up meadowlark. I always wondered what happened to them. I did audition their “kestrel” speakers ; liked them a lot… and then couldn’t find them a year later. Another mercurial speaker brand from that era was Hales. They disappeared overnight. what happened to them?

They wanted Zu audio in stores, then realized there were not many stores.

I have been in the hi-fi audio hobby for 30 years. As far as I know, most hi-fi product designers/owners are very passionate about their design and work, and also love music. I would say that most investors are after money and fame and don't know much about the audio industry. In a youtube interview, Parasound new CEO sounded like streamlining the operation and ensuring efficiency is the priority. I get it. It makes sense. But as a proud owner of their Halo top of the line amps, I would be interested in R&D in sound improvement. Well, we will find out.

I am a recent subscriber and am grateful to have stumbled across your published thoughts. Also loved the neighborhood photos. The start of one of your videos with a fellow record collector that began with shots of racks of records prompted me to think that we took a wrong turn and wound up at Guttenberg's "Audiophiliac's clinic". I have to be grateful that many of those elderly buildings, straining to support the many many tons of record collections, were so over-engineered that even the foundation straining enlargements of output trannies added to these massive collections have not over taxed these elderly buildings even as they may be sinking into mother Earth's embrace, they are far from crumbling and will likely endure long past current occupants, perhaps even into another century, climate change be damned. I embrace your narratives outlining the expanding then contracting audio scene and note that the late Audio zine also documented these phenomena, in their annual listing of products, with the largest area of expansion and contraction was oftentimes the listing of loudspeaker manufacturers, here and then gone. Having come very close to pulling the trigger on a pair of Meadowlarks, your mention immediately caught my attention, as does the eternal listing of well respected brands that have changed and continue to change ownership. Dynaco A 25s resurrection anyone?

This was such an enlightening video! I enjoyed hearing the history of some of those brands.

I can't afford any of devore fidelity's products but have huge respect for any small manufactor or hifi company that has any long term success. I remember all them brands. I remember those brands were strong when I started really getting into this hobby in the mid nineties (even before that with mid fi best buy stuff and hand me down receivers and speakers). It's a real head scratcher with wadia. They were the dcs of digital back in the day with those ppwer dacs and modified built like a tank CD players (modified by great northern sound I belive?) Great northern sound still around ? Or another hifi casualty. What happened to wadia is what happened to one of my favorite digital brands of the nineties, enlightened audio designs here locally in the Midwest. They were bought up by alpha digital aka Tara labs ). I belive they showed off something new a the show after they were bought. All I think they showed was a prototype of a processor that never saw the light of day. All that brushed silver Jeff lowland style beautiful faceplate. They may have churned at a few amps and other unit under new name but they disappeared as well. Meanwhile I have turned into a collector of ead dacs and prepros and their huge amps. Brand ambassador of a long defunct great brand. I was happy to receive a complement from the old head designer and one of the founders. Nothing like picking up new equipment local that you love and assembled by a team of musicians and rocket scientists ( not a joke as they had guys on the design team at ead that worked on spacecraft at jpl (jet propulsion laboratory)). Unfortunately our nitch hobby is littered with so many companies that had great products and didn't make it. It's tough for any business out there, especially now. I honestly wouldn't want to be a high end company now looking for credit with how things are tightening up on the blending front and the high interest rates. Folks no days want to see a return on their $$$. I hope audio research can get together the capital or investment to continue on. It's an American icon of hifi I rank up their with klipshe and ,Macintosh. Be another interesting video or subject on the companies of the past that have come and gone. Thanks and sorry for long rant myself!

Excellent video John. Thank you for discussing this very important topic. You mentioned Talon Audio ... I heard several of their models (even some prototypes thru a friend of Thiery Budge, who like you is a great speaker designer), anyway ... Talon made one of most musical speakers I have heard, even today. Talon had some capital and came out with some great models but once Stereophile gave a very unfavorable reviewed of the Freemont measurements (not the sound) that was the beginning of the end. It is really sad.

Keep going John! You are a creator of beautiful things that seemingly enjoys resistance to all things mass production/audience. I hope to be able to own a pair of your Gibbon X before the Borg assimilate us all. Blessings and thanks for your great content and opinings.

High-end audio is, indeed, a peculiar business. The competition is brutal, so companies must either sell out to Asian investors to survive or become boutiques charging fantastic prices. I sympathize, particularly because Peter Snell's company suffered a similar arc when he died. My understanding is that to some extent your speakers are a descendant of Snell's Type E, so his ideas survive through you.

back in the 1970s, Audio Research made what many people still today consider to be one of the best pre-amplifiers ever made; the SP-3. It's sad that a legendary company that made the SP-3 might be going bankrupt.

Excellent analysis. A lot of those you mentioned, were some of my favorites also. I remember wanting those Meadowlark speakers so bad, then poof!

Loved the talk. I had a Wadia S7i back in the day. John good luck at Munich.

Well done! As expected, the most polite “rant” I have ever heard. The sheer number of quality high end audio products and companies continues to amaze. Btw, Wadia seems to be going strong now, right?

This was a brilliant conversation and valuable to any interested audiophile. One of the things that I noticed about you John is that you have not succumbed to going away from your business model and as a comparison Richard Vandersteen who operates in a somewhat similar model to you has allowed his lower end stuff to be sold through Music Direct to crack into that Chicago market and others like it. I wish you all of the success in the world in a very hard market to crack!!! As a result of this, somehow, Music Direct got a hold of their highend Model 7 speakers, and they were never able to set them up right, and they sounded like trash. The excuse that I was given is they were going to get someone from Vandersteen to come out and set them up, which for almost 3 years never happened, but the speaker mysteriously disappeared. My local dealer is a Vandersteen dealer, and he has set the model 7 up more than once, and he has even done so better than Richard. If you remember Axpona 2019, it was either the room or something, but the speakers demonstrated badly. If it weren't for my local dealer, I would have thought that they were trash. This experience gives credibility to your argument of a dealer network with people knowing the product. We have an event scheduled for his store tomorrow at 9:00 am and I will be bringing your name up because I think your speakers would be an excellent fit for the store.

I wish Wadia can escape that investment group, instead of being shelved 😢

Trent Suggs of NC, USA bought the Audio Research Company from McIntosh Group in 2020

Thanks for the history lesson,,,,terrific information.

I just came across a Pass Labs INT-25 integrated and can't help but think this would pair nicely with a O/96. You thoughts? As an aside . . . have you tried listening to Buckethead on your speakers? Yeah, sure, he's a bit strange, but a phenomenal virtuoso. I welcome your thoughts.

I loved my Thiel's. Wadia made the best CD players only bested, maybe, by Classe.

This is also true in other industries. I'm an academic and have a marketable theory with products and books. But I'm not very good at the business side of things. So I get experts to help me.

Audio by Caruso in Miami loved Meadowlark speakers. I listened to them many times and would've ended up owning some. Socialism is not a dirty word. Sometimes humans need help and they should get it.

Important takeaways: Your not only buying a product but it's support ie.support aka Dealers, Distribution and the Company itself. I have to remember that the audio product but it's ethos.

All companies will fail eventually that is how capitalism works regrettably. Look at the top 100 companies on Wall St over 30, 40 years or so and it's all change.

Love this channel...top bloke. HiFi, manual watches and fountain pens...superb, surely you must have a soft spot for handmade steel bicycles.

The best in the business.... I agree about the historical. I always wanted a Threshold AMP. Different but in that same time set.

Love my ARC REF 160M. Beautiful just as John described. Not selling.

5:09 The "Coveted" product's name is what? ...... Come again? Goodnight AR. 🔈🔉🔊

Few specialized firms have the funds to make too many mistakes. The issue of companies expanding too quickly or over-expanding is very common. Better to grow slowly and steadily, that is also very difficult as when demand is high, there is a belief that it will always be as such.

Meadowlark and Talon both have websites...they look like they are doing custom builds to order

Hovland were a great company that went under.

Nothing is perfect. No system anywhere.

Thank you for your passion and soulful rants. Beautiful speakers. Love their names ... Gibbon, Orangutan. Hope to someday sit in the sweet spot and hear a pair. Re. capitalism ... please provide a rant on how your business model would differ if built on a non-capitalist system.

Great video. Capitalism is imperfect but is is also the only game in town … full stop. I love your insights.

First of all- I really enjoy your speakers and am glad you became an entrepreneur. Secondly, just like an entrepreneur can mismanage their company and go out of business so can a company with financial backers. Sonus faber is doing excellent and so is McIntosh. Audio Research Corporation isn’t and has an opportunity to turn things around. I hope they do but capitalism is providing the opportunity for some investors to create a plan to realize its potential.

For 50 years the Budd Company was the king of passenger railcars. Always leading the field technologically and their stainless steel cars are almost indestructible. They manufactured a fleet of cars for Canadian Pacific in 1955 that are still in regular use by Via Rail, hauling tourists across the prairies. Today, the Budd Company only exists as a formality to fulfill pension benefits for their former employees. Why? Their cars never had to be replaced. The contracts stopped coming because everyone who needed an unkillable railcar had one. I wouldn't be surprised if the hi-fi industry has generated dozens of Budds over the years. Many of these companies are the project of obsessive designers and engineers who can't stand the idea of putting out an inferior product. Their products sit in positions of esteem in people's living rooms, and often the only reason they'd need replacing is if the owner can be convinced that they're missing out on The New Big Thing.

Engineering is so important. And also expensive. Humans have the capability for BOTH

John, so ya, equity companies are typically led by finance folks, but they can't bring a vision for the market and product in a lot of cases. I have seen this several times. Great products sometimes get canceled because of a one or two year dip in the market. Sometimes it makes sense to invest heavily in products when there is a market slump but "Money" is typically too short sighted to bring vision, patience and endurance to niche companies. This is one of the weaknesses of capitalism - my opinion. Just to add - humans make miserable decisions because we are so entangled in this transactional paradigm we all live in.

The major problem is you can now buy equally top class sounding hifi for very cheap prices. The way it has progressed over the last ten years is mad. You now have forums that measure all these new products, and it gives a great insight into what is actually good, and if its worth your money. Most people would buy on reviews only, its not a wise way. Its only going to get tougher as there is very little that hifi manufacturers can improve, in an audible way.

Another thing is well John, Pat McGinty is back with meadowlark as far as I'm aware, I'm not sure the whole story because I'm unfamiliar with it, but he has an online presence and website where he's still listing loudspeakers, but it looks like he's moved into doing active designs. No I don't know your particular thoughts on active speakers however I've heard some good ones and perhaps his offerings are equally good.

Shouldn’t have been forced to close down…it wasn’t necessary.

The issue is not so much capitalism versus communism, but which capitalist business strategy you apply. The "Lean" approach may work for a Walmart or Amazon, but for high end audio you need to focus in "Innovation". A Lean strategy will bankrupt you every time unless you are selling a cheap mass market product. If an MBA graduate does not understand that distinction, they need to go back to grad school.

I don’t believe Capitalism is bad. I would say that humans can be deeply flawed… greed, envy, no moral core. We have definitely veered off track as a species. It’s terrifying to say the least.

Interestingly, Wadia still has a website full of digital products, and has the same address as McIntosh.

From what I understand John they're in a type of receivership under Minnesota law and they're actively seeking buyers. So what I think you should do is liquidate Devore Fidelity and sell off its assets as quickly as possible for the most amount of money and couple that with whatever money you already have in terms of capital or otherwise and buy it. It sounds crazy right but think about it you would be the new owner of audio research, and then later on after your solvent again and the companies doing well you could reintroduce Devore loudspeakers under the audio research umbrella. Perhaps you could even rebrand them as an audio research product and then use the opportunity to do some potential design or functional upgrades that you've been thinking about over the years and there you go. Another cool idea is through the power that audio research production and manufacturing affords you could, and it would be awesome, make an active o/96 with a tube-based amplifier on board.

I own Zu speakers. Interesting info about the company.

Good thoughts. Everything you said about capitalism is also true about socialism (make good products that sell). This difference is only what happens when things don't work out- you and your employees shouldn't have to live on the street, go through bankruptcy, etc. Safety nets are something that should be a basic human right. Has anyone ever told you your voice is similar to Alan Alda?

This issue of how Covid affected many companies and their sales is not a problem of capitalism, but a problem of governments around the world not bring suit VS. the CCP who caused nearly 9,000,000 deaths world wide and not being held accountable for any of it. It is now known that it originated in the Wuhan Lab, sadly with some financing coming from the U.S. , but that should not exonerate the CCP from their financial obligation to countries around the globe and their citizens who lost their lives, loved ones, businesses, and employment and careers, many of which will never be recovered. Yet, we have no supposedly crack Law Firm or our own DOJ, willing to take on the task of holding the CCP accountable for their actions. Not unlike with 9/11 where the compensation came from the U.S. Government. How does some country get away with no accountability for the death of 8-9 million people? HIFi is discretionary spending and comes last in terms of need. Any bump in the economy this is where the pain is felt unless you are part of the Davos crowd and unaffected by it all. Once the cycle of consumer spending stops there will be trouble for most audio companies. I am sure the music industry is feeling it as well.

Read "These are the plunderers: How private equity runs and ruins America".But why should audio be any different than all other sectors of the economy?While interest rates are run up because the BS being slung about high wages being responsible for high inflation (it's not keeping pace) but for the first time since 1956 American corporate profits have exceeded 15%.Hi-Fi is so far down the food chain of oil,transport,chips,etc etc it only makes sense that costs have gone up.That said a hobby for everyone has been overwhelmed by price increases that that in some cases make you scratch your head when you think "Where are they going to get customers?"

I still feel sad about the fate that befell Thiel. Following Jim's death everything was so badly handled. Such a fine legacy to just disappear...

Mr. DeVore: I hope you'll continue to let DeVore Fidelity live on prosperously with you and, if the unfortunate occasion should present itself, die with your decision as well. We've seen quite a few companies turn into something not them when being taken over by new investors, and it's just sad. Not unlike seeing a person you know suddenly, or over time slowly being transformed into someone or mostly a nothing else. I guess it's about people still wanting to be able to spread butter on their bread, even if it means their company-child being left to other hands who're mostly about following the monetary rationale - seeing an entity potentially evaporate into thin air. So, it would seem making a deal for others to take over (and likely corrupt) what one has created is also being infused in capitalism; just trying to live on with a sell out. I hope you'll be the non-capitalist should DeVore Fidelity meet dire ends, or at least let it die by your hands and instead find new ways to live by.

I can't accept people sell Class A or Class A/B amps in big heavy massive aluminum boxes and sell $2,000 worth of electronics and aluminum for $25,000 or more. Same with speakers. Since when is a 3-Way speaker with a 10" woofer worth $100,000?

Ironically, I was watching porn and eating candy all day long before seeing this video.

Socialism doesn't stop the customer/producer relationship. In fact it can enhance it as you're no longer chained to profit. Even in Stalinist East Germany 25% of the economy was private and companies like Me Geithain loudspeakers thrived. It's the big boy imperialists we have a problem with.

Maybe you could be an investing partner.

"watch porn and eat candy 12-hours a day" 😂

When we name Hi-Fi equipment "Properties".... 😅

Everything he said has been major set backs to Millennials those 3 events....... really 4, but them did a number on us financially....... that and Boomers still gate keeping.

Hey John, do you plan or have in mind to someday pass down your company to your son? Audio companies run by generation of family seems like very reliable for customers in the long run.

OCD Mikey is NOT a fan of Audio Research! Anywho, nice rant Jonny Dee!

What many of these "money people" don't get is that you can't sell high-end, highly specialized, special purpose goods the same way, like soap, or sugar water or toilet paper. If someone had the awesome idea to sell your product over a huge electronic retail chain like Target, then your product would basically be dead. There is a natural end to the growth of companies like yours, but these guys are living in this fantasy world of endless growth. And this has all nothing to do with HIFI in particular, you can sell one million Toyota Camrys but you can't sell one million Ariel Atoms, the product is not designed for a mass market. DeVore is not Bose, no offence to neither DeVore nor Bose.

Quit yelling at me John!

The key danger in running your business would be to expand too fast. Working hard to keep up with demand is a nice problem to have. But trying to get the unwashed public to notice your amazing product in time to make payroll is hell. Be financially conservative and artistically innovative.

I read a review that said DeVore's were great for large orchestral music, which is 90% of what I love to listen to. I'm all for an economy that rewards great ideas and superb craftmanship, but boy does it suck to have to live with the fact that I can't even go and listen to AR or DeVore because it's so out of reach for me that it's a waste of time. I get it that successful people have earned a higher class of living, but, with music? On top of that, I don't believe there is value in audio. It has become over bloated in price to take advantage of a minimum payment/credit based economy... which in no way is "capitalism". I can't hear the textures of a Mahler symphony because of egregious greed, so it suits me fine if you all go tits up. The consumers in this market don't even understand music to begin with, it's all just decorative trinkets to impress colleagues. That kind of consumer stupidity supports over bloated, snake oil junk that makes good kit totally out of reach for music lovers. Barney O'Hara

Equity capitalism is the worst form of capitalism because firms purchase other firms and assets and the objective is to squeeze as much ROI out of them without regards to the firms overall vision. Capitalism does not work as well as people are led to believe, but the mess that capitalism is we do not discuss. The fact that Harmon owns so many audio companies is really a mixed bag. Some get more TLC than others and yet some may not exist at all except for Harmon. It's always a mixed bag and to survive and be able to expand and contract your business on a dime without investor capital is very difficult. It seems like several of their brands are mothballed, Revel comes to mind. They're still around but no marketing dollars are being spent. Maintaining total control and giving up opportunities for infusions of capital is worth it imo.

Capitalism isn't about making and buying products, it's about the fact that capital's (investors) needs are the primary consideration in the rules and priorities of the system. This means investors are more important under the law than the employees, customers, community and everyone else involved.

Wow. Unbelievable. A rich man, lecturing me on the virtues of socialism vs. capitalism. Socialism never works.

I think you are a capitalist. You certainly would not wish for our government to fund or control Devore. In fact, the more control/regulation the government has, the harder it is for small businesses like yours, and mine, to survive

Geez, John, that was so sadly uninformed. People tend to "just naturally want to eat candy and watch porn"? Really? Make an effort to learn about all the historically brutally impoverished nations around the world that have even recently been lifted out of that poverty by capitalism and the creativity and intellectual growth that success demands. If the audio designer only has their right brain firing, then they need help from someone who has both left and right active.

Some companies price their self out of business

I did not find this to be a rant against capitalism at all. However, John, you did get one thing very wrong: Capitalism is not about humans making "good" decisions. Capitalism is about the freedom for people to buy and sell what they want, not about morality judgment. And sorry for the upcoming short rant, but I have to add that it works as well as it does because it allows people their freedom to decide what they want for themselves, and many times, we do indeed all want the same things, so companies can thrive. But being forced into those choices is always wrong. This is corporatism (a partnership between government and corporations) which is what we have a lot of in this country and is NOT capitalism, although people conflate the two because they are being intentionally deceived into thinking they have freedom of choice (capitalism) when they don't.

🥰

Stick to speakers John you know nothing about this subject.

Lmfao 😅

Socialism always leads to communism

Dear John; since you’re passionate about your magnificent loudspeakers; capitalism has nothing to do with you and your company. Usually capitalism has many things to do with people who want to become rich in a short period of time which in the case of high end audio is nearly impossible. I’m an Iranian and my wife is an interior designer and she also has her wood workshop with 12 workers and 3 employees. She pays rents. One for the wood workshop, one rent for the wood warehouse, one for her gallery and one for our house. The total sum of the rents reaches around U$10,000.00 Her business model is to sell directly to the customers through the rented gallery and her Instagram account. Sometimes it gets tough but the “string” never fails. An interior design project comes up to our rescue 🛟. Just add all the salaries, insurance and the political and economic upheaval to the mix and one can imagine it’s really tough and we get cornered sometimes but we keep going and as the Stoicism says: Amor Fati. The love of fate. We do our jobs passionately and we do thank our wonderful clients. I personally admire your loudspeakers and your RU-vid channel and your contribution to music 🎶 Last but not least; as an audiophile and high end audio businessman for more than four decades; I really wish to work with Devore Fidelity under an exclusive agreement and handshakes as your agent for the Iranian market. Take care and keep up 🆙 the excellent work. 🫵💎🎶♾️