A Cynical Introduction to Speaker Pricing

Building a well designed kit with good parts is a large cost saving measure. You can have speakers better than commercial speakers costing many times more.  This is particularly true at the top range of the speaker markets.

To understand why a kit will often sound much better, and cost so much less I'd like to use the modest $500 DIY price for the LM-1 kit. In the introduction I mentioned that if you bought them in a store you'd have to pay around $1,500 for similar parts quality. Let's go over the math a little bit. Of course, Ginsu sells knives the same way. "This $3,000 40 piece knife set can be yours for only $19.95" so you have no reason to trust me except that the design for the LM-1 is free. I make no money whether you build a pair of LM-1's or not. So at the very least I lack the financial interests reviewers, manufacturers and salespeople have when comparing them.

So-called High End speakers manufacturers end price speakers based on the cost of the drivers. If you know the speaker's Manufacturer's Suggested Retail Price (MSRP) you can pretty much figure out the driver cost. Of course, in reality it's a closely guarded secret, and brands will add a dot with a Sharpie here and there to claim exclusivity of drivers.

The ratio between MSRP / pair to driver cost for one speaker is between 20:1 and 30:1 in the audiophile market. It may be significantly higher if the manufacturer makes their own drivers like Focal, B&W or Dynaudio do or if it's a feature or lifestyle speaker like Bose. With $5 parts and $1,500 price tags their 5.1 speakers are a manufacturer's dream.

So, let's take the LM-1. Total driver cost is around $65 per speaker. 65 * 20 = $1,300. At 30:1 the price would be $1950. A budget floor standing speaker by a designer the current popular press is raving about, retails for $1,999 a pair. Within our estimation range. Maybe we should compare a pair of the LM-1C's instead, but I don't have as good measurements for those. Let's stick to the LM-1.

To be fair, frequency response of speakers is only the first thing to look at. There are many other factors, especially your ears. However, for a bit let's take flatness as a measure of quality and compare the LM-1 to the Stereophile measurements:

The commercial $1,999 speaker is in Red, the LM-1 in blue.  Mind you the LM-1 data is incomplete in the bass. The effects of the port have not been added in so the true -3 dB point is actually going to be very similar, within 10 Hz or so. The commercial speaker is also about 3dB more efficient than the LM-1. It will need half the power to reach the same volume. Not a bad thing, but also not an overwhelming plus.

Forget the bass though, look at the response above 1 kHz. See that 6 dB bump at around 10-15kHz? Ouch! That has to hurt. By comparison the LM-1 kit produces a very smooth and extended response that slopes downwards at a perfect angle to produce a very neutral and musical in-room response. Of course, this is my personal preferences talking.  My point is, if the speaker reviewed by Stereophile merits a $2,000 price then the LM-1 deserves an even higher price tag. I have heard the speakers Stereophile reviewed by the way, they sound exactly as you would expect that red curve to sound, which in a word was "terrible." I thought the dealer didn't like how I dressed and was deliberately trying to torture me. As bad as the uptilted treble was, the AMT seemed to also suffer from severe compression artifacts, an indicator of a very cheaply made AMT. Good AMT's are amazing.

Interestingly Troels Gravesen makes more good points about commercial speakers and just how bad they really can be despite good reviews here.

Unseen Components

Manufacturers are really under no obligation to factor in high quality parts, so they often don't. They find the cheapest provider of film caps and have them wrap custom plastic around them to appear unique. A couple of rare exception to this is Magico, and Lawrence Audio. 

Sometimes it's the cabinetry itself that's hidden.  It's unbelievable to me that you can paint press board tubes and charge more than $20 for them, which brings us to the next topic in this discussion.

The Value Curve

Over at Part Time Audiophile there's an absolutely great slide with Focal Vice President Gerard Cretchien explaining why the Focal Sopra is his idea of the best speaker in the world. What's most interesting is that from the point of view of a manufacturer, sound quality and performance is only one of many different measurement aspects that need to be optimized. Gerard is doing exactly what he should be doing, creating products with as much perceived value as possible. Good for Focal for having such a dedicated ally who is able to communicate to the dealers so well. As he explains, items such as modernity, technology (perceived advancement), brand recognition, etc. all combine to produce the final "perceived value" equation.  These speakers aren't just music reproduction devices, they are lifestyle emblems, and he knows it.

At the same time that this slide is text-book product development 101, for the inexperienced DIY builder it explains why it is possible for us sawdust covered, wannabe engineers (OK, some of you are real engineers) to build amazing sounding speakers for pennies on the dollar. Focal is charging money for "brand" and "modernity." Imagine if you could get the same quality parts and not have to pay for either. To look at Gerard's chart, each dot is worth about $2,000, so every feature you go "meh" to is another $2,000 less on those $14,000 Sopra's. Do the rest of the math yourself.

Shenanigans

• The most highly rated speakers at Stereophile follow a particular "Stereophile Curve." Great for those with hearing loss, despite their terrible sound for everyone else. See more here.
• One famous British company actually makes two identical speaker models but one costs $300/pair more. The only mechanical difference is that a single $1 tweeter capacitor is replaced with an $8 Mundorf caps to make their higher end speakers sound better. In this case, $16 in parts becomes a $300 up sell. 
• Another equally famous American company buys tweeters for $18 each, puts a custom back on them then puts them into speakers costing over $100,000.  Of course, they argue that money isn't everything, which is true, but it's a real shame that for $100k you still can't afford to buy a speaker with the absolute best tweeters in the world. You get one that is not bad, but not the best. 
• One famous French speaker maker adds parts to the crossover to make it more "discerning." The parts do almost nothing to the response of the speaker, but makes it a much more difficult load. Reviewers and audiophiles swoon and say "oh these speakers are able to tell the difference between all of my amplifiers." Well, of course they do, if a 4 Ohm speaker becomes a 2 Ohm speaker only the heftiest of amps will be able to deliver good bass. UGH!  I'm very happy to say that the LM-1 is NOT discerning, it is not a needy speaker. It will play well with every amplifier.  If you need lessons in snobbery, go to the French (speaker makers that is).
• Diamond drivers: Most expensive, but no guarantee of being the best sounding. AMT, ribbon and beryllium technology easily surpass the most popular diamond tweeters out there.  However, the type of driver is only part of the equation. The motor structure, suspension, crossover and application to a particular need are equally big factors, so don't be impressed just by a technology.
• Dipping the frequency response around 2.4 kHz to create an exaggerated sense of imaging. Used on both sides of the Atlantic.

Buying Great Sounding Speakers

As I've written before, the "High End" speaker industry consists mostly of the cynical selling to the gullible. How do you avoid these traps? Turn to my custom speaker making page, here.  It's far better to buy from custom makers or DIY speakers yourself than to follow the trends in vogue today.