During my usual sunday morning web browsing I checked my email and found Crutchfield to be advertising that they now are selling JL Audio products. I thought at first that is a good thing supposedly. Then after pondering I figured it may be a bad thing for those that originally own small shops that are actually authorized to carry the exclusive line. Afterall, that was part of their sole protection for making the investment.
At one time I could remember that only authorized dealers were allowed to sell and install the products in order to get the full warranty and am sure it's still that way in those shops. The dealers are supposedly trained on how to work with the JL line. At least that is the way it works here. Being as such JL has always carried a high price tag for it's name, quality, and consistent install performance.
A long term & extensive local shop that is/was like the described above switched locations for growth a few years ago. Later they all but lost business until about a few weeks ago. They ended up moving back to a very small shop and giving up any other selling domain rights of other high brand names except JL. Left to survive on just one line, one has to wonder what will happen to them now, especially that Crutchfield can now offer the same.
Does this mean that JL could be on a sales decline and are resorting to desperate measures to move product; extending past specialized shops to online marketing? Wasn't that once taboo for JL?
Not that I am a loyal fan as I have never owned nor believe that all of their products are that far superior to be worth a whole month's pay, but one has to wonder why the sudden "change of heart".
What's your take?
Replies (32)
swez on 10/28/2007 16:31:18
Market share and profitability are the main concern for any top-notch supplier. In JL's case, the market has shifted downward due to economics and adding a retail price franchise like Crutch makes sense. (Most of what Crutch sells is pretty much full retail, with a few exceptions)
We are in a declining market, (Read... economy in rapid decline) and have been for some time) It would be sensible for JL to take on a few high volume Disty's and market their wares that way for now. Since this type of product is a a non-essential purchase, any big name would want to be added to the Crutchfield sales and help a "Big Ticket" vendor sell more products.
If my hunch is correct, we'll see a big drop in prices from many big name makers in the near-term. They know we can live w/o them, but they cannot survive w/o sales volume. Just wait and see... there are many top tier vendors that are not getting the sales volume/market share they want. The only way to turn this around, are price drops and adding more selling outlets.
Keep a keen eye on this one. It will shift in many ways for JL and other high end vendors to survive.
Swez
Ash on 10/28/2007 20:37:49
Hmmmm... That will be quite interesting even though it's sort of messed up.
Then another aspect is you can't always be on top. Perhaps they have reached a peak and maintained it long enough. With prices like theirs in a declining market, I wouldn't doubt that they would resort to black/grey market tactics like Victor noticed in India with Kenwood (if I'm recalling it correctly). High overhead, a thin share of consumers, and high priced entry level products can't be very helpful in times like these.
One question in which we both probably know the answer:
With big price drops ahead, I would assume quality would be right behind?
swez on 10/28/2007 21:17:40
Quality of the product is designed in at the front end of a product launch. Most companies cannot afford a bad reputation if they are 1st tier and want to remain as such.
To cut cost w/o losing profit margins often means automation, chopping overhead, (non-essential personnel) or changing where the manufacturing is done. All these things take time to implement and transitions are often very rough in the beginning.
The easiest way to increase sales volume is to add more bonified outlets that are willing to keep the market price at profit-making levels. Crutch does this very well and their customer service is also first rate as well.
That won't stop deep discounters from selling off the internet, but it will help JL, Crutch and consumers who are willing to pay the pricetag, to continue buying at good profit margins. Keep in mind that JL makes their profits upfront. They may sell large lots to some Disty's at discounted unit prices, but the profit margins are still good for JL and if the Disty's cut the prices to make a sale, that's eats into their profits too. (Also erodes JL's market price to the lucky buyers, but the buyer may lose service and warranty rights too)
In JL's case, I would not think they will compromize quality on present products. If they needed to sell more products, they might consider new product designs later that have less frills, cheaper to make and still have above average quality, but a slimmer pricetag. (Basically, don't mess with "A" line products as these are their bread, butter and reputation)
Swez
cplkittle on 10/28/2007 22:55:08
We spoke with JL once to discuss becoming an authorized dealer. I don't have enough time or cuss words to describe the representative for our area. After that one conversation we vowed never to associate ourselves with them. Now that most of the local shops are out of business, they are knocking on our door trying to get us to sell their product. We still won't do it reguardless of the incentives they keep offering.
I think JL is sticking it to the smaller shops that are not able to keep up with the quotas. They are looking out for theirselves, and I wouldn't expect anything less from those selfish @#^*%!. They have a good product, but it's not that good.
All ill feelings aside I was honestly surprised to see the full line of JL products on crutchfield. Most of the time you will see crutchfield carry the lower lines only. In my opinion, I think this was a horrible move by JL. The few shops that still carry their line will soon drop them due to internet sales and now crutchfield. This will probably result in the down fall of the company if they don't go strictly to internet sales.
Very few people shop around and plan a stereo system. I have seen this hundreds of time right after Christmas and right around tax time. Kids get a chunk of money and they want boom and they want it now. They don't have time to wait for an ebay shipment, they want it NOW. Removing JL from that market will eventually hurt them more than I think they anticipate.
I'm not a huge fan of JL, but I hate to see one of the last good brands sell out. Pioneer had a good thing going with their TS-SPL subs, but they quit making them. Kenwood has gone weak, Diamond hit a big speedbump when they lost some of their better part suppliers a few years back. All the powerhitters are losing to the cheaper overrated chineese companies that have flooded the internet market. It's sad.
trunkisloud on 10/28/2007 23:22:50
luckily we have resources and can find the good stuff online or in the classifieds...(if we know what were lookin at) ..for instance...i found a pair of 16kv2's brand new on craigslist for 300 ...a little steep for me so i had to decline..but to the untrained consumer it looks like a no-name cheapie so they pass it on in hopes to find some kicker or fosgate products..leaving that good stuff for guys who know how to use it...i never buy in retail (nothin against the guys who work the retail end)..but if i can get a good product cheaper online then thats the way ill go..and take a chance on the warranty...gotta pay to play.
trunkisloud on 10/28/2007 23:22:54
luckily we have resources and can find the good stuff online or in the classifieds...(if we know what were lookin at) ..for instance...i found a pair of 16kv2's brand new on craigslist for 300 ...a little steep for me so i had to decline..but to the untrained consumer it looks like a no-name cheapie so they pass it on in hopes to find some kicker or fosgate products..leaving that good stuff for guys who know how to use it...i never buy in retail (nothin against the guys who work the retail end)..but if i can get a good product cheaper online then thats the way ill go..and take a chance on the warranty...gotta pay to play.
swez on 10/29/2007 01:10:14
Any branded name that is "too arrogant to flex", will eventually suffer in a tight economy. If they insist on the present stance, they will crash and burn like an Albatross of their own doings. (Look at how many big names have now sold out to one key player)
Have seen other companies take this stance and wind up falling apart at the seams. Sadly, JL seems/may be... too proud to accept the fact that things they sell are not madatory. These are lux items that most cannot afford now. Many would like to have this brand, but market condition demand is low and they are not the Kings they'd like to be.
"Pride leads to a big fall". Is there a buy out in the wind? Time will tell.
Swez
cplkittle on 10/29/2007 11:50:16
Look at DEI. Here are a few companies that DEI owns:
Viper, Python, Clifford, Avital, Hornet, Trilogix, Ready Remote, Auto Command, Astroflex, Automate, Autostart, Polk Audio, Definitive Technology, a/d/s, Orion, WCC-orion, Precision Power, Directed Audio, Xtreme Audio, Directed Video.....just to name a few.
Then there is Audiovox who owns:
Jensen, code alarm, advent, acoustic research, phase linear, terk, home decor, prestige, spikemaster, vogel, recoton, ambico...
These two companies are here to stay. They not only produce their own brand products, but have bought out many other brands to diversify themselves enough to make it through the hard times. If JL sells out completely, I believe it will be to DEI.
Ash on 10/29/2007 18:16:59
Wow! Now that's something I didn't have a clue on. Didn't know DEI was that powerful. Definitely not Polk...
That still must have work out in each others favor as those companies haven't seem to lost much control of their engineering. That is what counts the most. They are still seperate enough to be able to produce more than decent gear.
Lanzar is a perfect opposite example of that. I had a lot of respect for Lanzar back when "The Punch" was in very high demand (late 80's to early 90's). Then Pyramid took over, cut budgets, and obviously engineering as well. Bam! Down they went with a drastic fall. I was very disappointed with that one.
The budget cuts is what I think JL will have to fear most as that can lead to other things. I'm quite sure a lot of their designs depend upon extensive research and manufacturing. Scaling down might lockout important overlooked people and aspects critical to their past success.
swez on 10/29/2007 22:30:09
Yes, the landscape of the Consumer Electronics playing field has been changing a lot over the past 6 years or so. Look at all the BIG NAMES that have been acquired by DEI in the past 4 years.
As for JL, am thinking they'll stay in the game as long as profits and sales remain in the black. Some of the designs used in their Slash series and W7 series subs will always keep them in the top tier, if the market is willing to pay the price. Making a few lower cost products might help their bottom line sales volume, but adding more sales outlets should fill the pipeline too. In the meantime, we'll just wait and see.
Swez
ttocs on 10/31/2007 00:36:22
the market is changing, what can you say. JL did alot to keep them selfs off of the e-tailers as long as they could. There was a heck of a discussion among the audio insiders with this move and of course most people are not really happy about it.
Now cardomain is shutting down the sales shop as well it seems....
Ash on 10/31/2007 19:30:43
I wondered why cardomain & sounddomain were acting screwy. No matter what links to the store I tried to use, it kept leading to dead ends about "how to choose" whatever.
What's up with that? I don't see how they were hurting,,,,
ttocs on 10/31/2007 22:48:15
the industry is changing....
They have not announced anything official yet, I know one person that will be effected by it and I am waiting to get the inside scoop.
MrBrownstone on 11/1/2007 12:26:47
With the advent of Auto manufacturers getting in to 'premium' audio systems, navigations, security and mobile video, it's either get a mass outlet or face obsolescence.
Look at
PPI
ORION
Phoenix Gold
A/D/S
Planet Audio
Hifonics
Soundstream
and a bazillion other brands. This market is retracting because a natural predator, the auto manufacturers, have needed another profit center to compete in the global market.
It's either that or OEM
PPS Before you guys go slandering DEI's good name, don't forget they also own Banana Boat sunscreen.
Thank you
Ash on 11/1/2007 17:35:52
I don't see why anyone would slander DEI, what they are doing is helping some good companies stay alive and in the process making money.
There definitely is nothing wrong making good financial decisions that happens to benefit others. Without companies like that our hobbies, and to some careers, would spiral down to next to nothing.
ttocs on 11/1/2007 21:18:29
the only bad thing I would say about dei is they killed orion but it was already on the chopping block.
MrBrownstone on 11/2/2007 13:28:19
DEI killed all the brands,...they just swallowed the name and marketshare. Of course, in 2001, noone wanted to hear that...
http://audioforum.termpro.com/cgi-bin/ubb/ultimatebb.cgi?ubb=get_topic;f=31;t=000110;p=0
MrBrownstone on 11/2/2007 13:30:39
PS the guy predicted that Phoenix would get a resurgence...they died off 2 yrs ago :-)
I officially know more about marketing in car audio than all the overpaid schlums!!!
of course knowledge & success are 2 different things.
Ash on 11/2/2007 17:38:39
Before DEI acquired these companies, they were kinda on the way down anyway right? Without someone bailing them out, they kinda would have disappeared eventually.....
Now a quality company falling into the hands of another company like Pyramid is straight brutal. Seems like Pyramid would have at least tried to keep Lanzar pure as possible and learned a thing or two about quality. Especially since other high end companies were losing steam. That would have been a good time to steal some of the forefront.
I guess theres just too many people willing to buy cheap gear and suffer later. I don't even see how they can still carry the same name when the gear doesn't even compare to what it used to be..... That's like marrying a person that winds up dragging you down to where no one else wants you and you don't even have enough pride in yourself to get back up anymore. SAD
MrBrownstone on 11/2/2007 19:30:37
I don't think the quality slipped on any of the brands...just that they didn't innovate or improve.
PPI didn't come out with a class D amp til 5 yrs after EVERYONE had one. Same with Hooked on Phoenix.
In any case, the names are really not worth proliferating. A/D/S is great quality, but no need in the car as there's nothing to differentiate themselves.
Take the model of GM.
Buick, grandpa's old white guys luxury car
Cadillac, younger old guy's Beemer
Pontiac, young exciting brand
Chevy, General population
Oldslowmobile, a waste of effort
Saturn, a girls car
Geo, a ripoff of Toyota
Aurora
Notice how they got rid of Oldslowmobile & Geo. They should just have
Cadillac
Pontiac
Chevy
Caddy covers everything refined and old
Pontiac covers everything sporty
Chevy covers everything cheap
It's having 9 brands that was the demise of GM...not to mention the fall apart nature of their cars since the early 80s.
PPI, Orion, Phoenix, A/D/S, Diamond, MB Quart were all competing for the same $.....mine. The difference was that none of them was doing it for a reaonable cost.
Nothing like being the highest priced product on the market.
MrBrownstone on 11/2/2007 19:31:18
PS look what happened to Chrysler, Daimler, Dodge, Plymouth...
cplkittle on 11/2/2007 19:47:01
Mercedes killed Chrysler shortly after they merged.
Phoenix started to die out when their 3 top engineers started their own company - Exile. They started it on the basis that Phoenix was relentless in their pursuit of cheaper and cheaper parts regardless of quality.
Ash on 11/2/2007 20:48:22
Interesting....
So with the history of things, where do you guys think the industry will wind up in the next few years? Do you expect some new companies to emerge or is it a sort of deadlock for a while?
swez on 11/3/2007 06:03:18
Good question... the answer is more likely to be found by innovation and doing it cheap enough for the masses, (Average Joe) to buy and use.
A current example, look at Apple and the I-pod and now I-phone. The integration of a phone, I-Pod, photo/video and internet access have been a real boom to their business.
People buy them because they are trendy, have many cool features and says something about the user. ("I am cool 'cause I have one of these cool widgets".) That's what marketeers try to exploit. The "you ain't all that if you don't have one of my widgets". They have done a good job at marketing this concept. It's a lie, but people buy into it in mass. (Look at Bowflex commercials too)
If you really wanted to make a killing, the largest market to exploit are single men/women that make good money, have average to below average "curb appeal" and willing to spent lots of money in hopes of upgrading their potential to attract a mate they really cannot afford to maintain.
Take a closer look at an up scale merchant like Macy's. When we walk into these stores, we find that 70% of their floor space and merchandise are targeted toward who? (Women with image issues and plenty of $$ to spend) They grew their market share and presents by "selling an image" and acquired other declining store names like Marshall Fields, JL Hudson and a few others too.
Retail merchants have figured out where the money is and who is most willing to part with it in large chunks. Most guys don't like to shop for clothes and could care less about the brand lable on their slacks, shirts, shoes and such.
Men only buy this stuff when what they need is worn out, does not fit anymore or want to "enhance their preceived image". Women are different in this area... they buy all the time to remain in style, trendy and keeping up with fashion. (And go deep into credit card debt in the process?)
Men are more into gadgets, expensive Plasma/LCD TV's, (Sorry... A/V monitors) computers, cars and tools. They spend moderate amounts of $$ on clothes, but lots of $$$$ on gizzmos. (This is the trap they get snared into)
In short, it's better to turn off the "Boob Tube", forget the over-priced gizzmos and just enjoy being a semi-slob. Life can be very easily simplified for the average guy if...
1. We have decent food to eat
2. A quiet, "well equipped cave" to tinker in
3. A reliable form of transportation to drive (Honda, Toyota or Subaru)
4. Affordable clothing that fits
5. A mate that we can trust, afford and get along with
6. A "drama free" zone
The rest is all a bunch of marketing BS that most can ill-afford anyway. We don't "need" the Boob Tube to dictate what is cool and what is not. THINK about that a bit and see if it fits or not?
End rant,
Swez
PS Have BTDT and in many cases, see that most men are really about the basics. We don't need all the frills. But like the gadgets and gizzmos when we can afford them. Above that, the rest is just piling up in the garage and taking up valuable "Cave Space".
Ash on 11/3/2007 21:22:26
You guys are a very bright bunch to learn from. Believe it or not, there is a lot of insight being given on this thread which also has become a pretty hot topic. It is obvious there are some concerns within the hobby.
Swez & Mr.B, I'm wondering is this a sign of a disguisingly good thing. If the industry is forced to come up with newer and better "widgets" to keep alive, then older (but still good) technologies still in use should come down considerably in cost to the consumer. That's if following other market trends...
It's also funny that all these premium companies have taken a toll in one way or another, yet ones like Boss, Legacy (Pyramid), and a few other inferior brands have survived throughout. What is it that they are doing right despite the negative reputation? For instance, look at the lines within these lower companies that still remain even from the late 80's to early 90's. How is that? Could it be that the majority of ears can't really discern quality from lesser?
Excuse all the questions because "interviewing" you guys is kinda fun. I'ts just very interesting to see how you view what could be a major change in something we all love.
MrBrownstone on 11/3/2007 22:32:37
Where the Industry is Going by Mr. Brownstone
Where is any industry going -Plato (well not really)
Essentially, just like the stock market of 85-87, like he stock market of 96-99, just like the mortgage market of 2002-4, like the poker boom of 2002-08, all good things must come to an end...like the car audio market of 96-2002.
What happens in any market is that there is a surge of newbies getting in to the game. Picture this, in 1992, my 1kW system cost $2500!!!! in 2002, my 1kW amp cost $499!!!
Essentially, the car audio BOOM, literally, was fueled by great economic times, a 50% reduction in consumer costs, and this new fangled thing called the internet. Couple this by the simple fact that nearly EVERYBODY uses the same parts assembled by the same hands overseas and you have the most level playing field ever assembled in any market.
After about 1998, you could tell if a car audio shop was jacking you around because your friends and others around the world would be able to debunk all the nonsense that salespeople create to get you to buy something. Also, retail prices are set by the store, not the manufacturer...so if you were getting robbed blind all because you were 200 miles from the nearest MB Quart or Focal dealer, you had an alternative--buying online.
What killed this market is that the product was going out of the shelves (and via UPS) faster than the market was growing. People aged 17 to 21 were all buying the big ticket items online, and those items are good for 3 or 4 years.
Previously, when you got a car, you got a stereo. After 6 months, you improved on the system. After 2 years, you had a frickin behemoth system. After 4 yrs, you grew up, graduated from college, cut your hair and got a job. Car Audio is a lot like many things you outgrow.
In any case, what happened is that EVERYBODY got a system, and after that, there wasn't much need for the market for several years.
What happened to manufacturers is that they either:
1) over grew their product line (Soundstream), or
2) didn't sell the freshed thing--class D amps (PPI, Phoenix, A/D/S)
Many brands, like Audiobahn & MA Audio (anaba group) essentially overpopulated the market with low end to midgrade products that were nearly as good as the high end gear. Although their 200Wx2 amplifier put out 150x2 @ 12.5V, does a college schlum using a factory head unit even know the difference? After all, everybody is using the same little manufacturing plants in China & Korea to put similar products together...Abahn & Anaba were just capitalizing on the market.
At the apex of car audio's biggest boom, every 'manufacturer' had:
1) Their own Wire & Cable brand
2) Capacitor line
3) Soundproofing material
4) DB Drag Car
5) IASCA/Drag/USAC team
6) Built their products with the same parts by the same little hands overseas.
After most of the market cut back, many manufacturers thought it'd be a good idea to continue to spend (compete in Drag & other comps) as if they were the only brand out there. Many, with every last dime they had, just to keep in front of the consumer's eye.
What these Mfrs forgot was that when the market retracts 50%, they need to either grow 100% (unlikely) or adjust to the market share.
What also kills car audio companies is the fact that they don't have other product lines. For instance
DEI has Banana Boat sunscreen
MMATS still has washing machines
Audiovox still has everything that runs on batteries
What does MB Quart have? PPI? see what I mean?
In the future, what you'll find is more brand consolidation. Many names will just become another brand manufacturered by another company. After all, basically 15 brands of speakers are really the same thing...just marketed differently.
The last thing to consider is the profit in the industry. When margins are continually thinned, noone makes any money. As mentioned, a $2500 system got you a 1kW total system in the past, now $500 will get you a 1kW amplifier...and $2500 some damn nice sounding speakers to go with it.
PREDICTION
I predict that the top end of the market will continue to consolidate til there's noone left to swallow up. The low end, well, they'll just make few crappier amps in lower quantities.
Will there ever be another boom? Sure, in like 8 years.
MrBrownstone on 11/3/2007 22:35:31
PS Mercedes (Daimler) didn't kill off Chrysler, they vacated a ship that was taking on water. Chrysler & it's mismanagement killed Chrysler. Same with Furd & Chuvit. Honda & Toyota aren't swallowing the marketshare because they make inferior cars.
cplkittle on 11/3/2007 23:06:32
My opinion of the car audio market is that since it is much more complicated now (quad voice coils, no governing standards on ratings, and marketing techniques) the average buyer is left only with the decision of spending $1000 or $150 on a "1000" watt amplifer. They will learn eventually, but it will take time and alot of wasted money before they get there. Once they have been burned by the lack of quality, they are a little more timid - especially when they are going to spend alot more for the quality.
I believe that the car audio nut of yesterday still has the bug, but is refocusing his/her enthusiasm toward home theater. In my teen years and most of my 20's I was all about the car stereo. Now that I have a family and a house, I would rather have a nice home theater setup than a 5000 watt back massager in my car.
I predict that car audio will go through a dying off period (already started). The new companies that caught the boom a little late and flooded the market with crap will die off. There will be a rebirth of quality in new name brands. I think the bigger companies that adjusted to the changes(Diamond audio) will stay around, but in the background. Diamond audio slowly crept into the car audio scene with quality products. At first there was the D5 and D7 line
Then they introduced the D3 line of more affordable products comparitively priced with sony, pioneer and alpine. The D5 line improved and was moved up to the D6 line. D7's disappeared and there was the TDX line. Later TDX graduated into the D9 line of products. Then, earlier this year they came out with an even more affordable line called the D1 line.
I believe companies like Powerbass and Exile will be the newest front runners. The quality exceeds the price tag - comparitively speaking.
The top brands of today will take a back seat, like Cerwin Vega.
swez on 11/4/2007 11:47:10
Would have to agree w/ ya Kit. Things are a changing and there will be a lot of shake ups in the future. There are many reasons too.
Frankly, guys that have invested in cheap ghetto boomer gear have given this market/hobby a black eye. Now, we have many new laws in most communities that try to clamp down on "noise pollution". They had to because too many self-centered idiots lacked self-control and really ticked a lot of normal people off.
Heck ya... give em a fat ticket, impound their cars and maybe suspend their driving freedoms for a short while. That is how to get their attention and get peace back in the streets again.
Now that I am on the roads a lot in this new job, it's very annoying to be stuck in a traffic jam, listening to something to relax, inform and kill time while crawling down the grid locked streets and highways. It really ticks me off when some knuckle head is 4-6 cars fore/aft and booming his bass. Maybe he's having a good time of it all, but his actions are bothering 25-30 other drivers who also wish to hear thier music, talk radio, news or just chill out and get home for a hot meal.
I drive a 2500 series cargo van and its got plenty of pep and weight as well. In my darkest moments, I want to find that idiot, push him into a ditch and drive over his car. Yes, that is drastic and radical, but at the end of a long, hard day, the last thing most folks need is more aggitation invading our quiet space. (No, I don't want to hurt the idiot physically... I just want to put his noise maker out of commission and go home in peace)
Does anyone else ever feel like that or is it just my problem?
Comments?
Swez
cplkittle on 11/4/2007 11:59:28
Believe it or not I do too. 10 years ago I would have had a little 'sound off' with him right there on the spot. Now I pray for a cop to be in the area.
It is funny that you should mention talk radio. My wife tells me that I wasted thousands on my stereo because all I listen to is Fox news and Opie & Anthony on XM. Audiophile equiptment for talk radio.
MrBrownstone on 11/5/2007 16:03:58
Are you kidding me, last week I would have had a Sound Off if I had my druthers :-P Unlike Swez, I don't age.
Ash on 11/13/2007 13:57:44
Here is a sign of things to come:
http://www.audiojunkies.com/blog/783/jbl-ms8-the-future-of-car-audio
At one time I could remember that only authorized dealers were allowed to sell and install the products in order to get the full warranty and am sure it's still that way in those shops. The dealers are supposedly trained on how to work with the JL line. At least that is the way it works here. Being as such JL has always carried a high price tag for it's name, quality, and consistent install performance.
A long term & extensive local shop that is/was like the described above switched locations for growth a few years ago. Later they all but lost business until about a few weeks ago. They ended up moving back to a very small shop and giving up any other selling domain rights of other high brand names except JL. Left to survive on just one line, one has to wonder what will happen to them now, especially that Crutchfield can now offer the same.
Does this mean that JL could be on a sales decline and are resorting to desperate measures to move product; extending past specialized shops to online marketing? Wasn't that once taboo for JL?
Not that I am a loyal fan as I have never owned nor believe that all of their products are that far superior to be worth a whole month's pay, but one has to wonder why the sudden "change of heart".
What's your take?
Replies (32)
swez on 10/28/2007 16:31:18
Market share and profitability are the main concern for any top-notch supplier. In JL's case, the market has shifted downward due to economics and adding a retail price franchise like Crutch makes sense. (Most of what Crutch sells is pretty much full retail, with a few exceptions)
We are in a declining market, (Read... economy in rapid decline) and have been for some time) It would be sensible for JL to take on a few high volume Disty's and market their wares that way for now. Since this type of product is a a non-essential purchase, any big name would want to be added to the Crutchfield sales and help a "Big Ticket" vendor sell more products.
If my hunch is correct, we'll see a big drop in prices from many big name makers in the near-term. They know we can live w/o them, but they cannot survive w/o sales volume. Just wait and see... there are many top tier vendors that are not getting the sales volume/market share they want. The only way to turn this around, are price drops and adding more selling outlets.
Keep a keen eye on this one. It will shift in many ways for JL and other high end vendors to survive.
Swez
Ash on 10/28/2007 20:37:49
Hmmmm... That will be quite interesting even though it's sort of messed up.
Then another aspect is you can't always be on top. Perhaps they have reached a peak and maintained it long enough. With prices like theirs in a declining market, I wouldn't doubt that they would resort to black/grey market tactics like Victor noticed in India with Kenwood (if I'm recalling it correctly). High overhead, a thin share of consumers, and high priced entry level products can't be very helpful in times like these.
One question in which we both probably know the answer:
With big price drops ahead, I would assume quality would be right behind?
swez on 10/28/2007 21:17:40
Quality of the product is designed in at the front end of a product launch. Most companies cannot afford a bad reputation if they are 1st tier and want to remain as such.
To cut cost w/o losing profit margins often means automation, chopping overhead, (non-essential personnel) or changing where the manufacturing is done. All these things take time to implement and transitions are often very rough in the beginning.
The easiest way to increase sales volume is to add more bonified outlets that are willing to keep the market price at profit-making levels. Crutch does this very well and their customer service is also first rate as well.
That won't stop deep discounters from selling off the internet, but it will help JL, Crutch and consumers who are willing to pay the pricetag, to continue buying at good profit margins. Keep in mind that JL makes their profits upfront. They may sell large lots to some Disty's at discounted unit prices, but the profit margins are still good for JL and if the Disty's cut the prices to make a sale, that's eats into their profits too. (Also erodes JL's market price to the lucky buyers, but the buyer may lose service and warranty rights too)
In JL's case, I would not think they will compromize quality on present products. If they needed to sell more products, they might consider new product designs later that have less frills, cheaper to make and still have above average quality, but a slimmer pricetag. (Basically, don't mess with "A" line products as these are their bread, butter and reputation)
Swez
cplkittle on 10/28/2007 22:55:08
We spoke with JL once to discuss becoming an authorized dealer. I don't have enough time or cuss words to describe the representative for our area. After that one conversation we vowed never to associate ourselves with them. Now that most of the local shops are out of business, they are knocking on our door trying to get us to sell their product. We still won't do it reguardless of the incentives they keep offering.
I think JL is sticking it to the smaller shops that are not able to keep up with the quotas. They are looking out for theirselves, and I wouldn't expect anything less from those selfish @#^*%!. They have a good product, but it's not that good.
All ill feelings aside I was honestly surprised to see the full line of JL products on crutchfield. Most of the time you will see crutchfield carry the lower lines only. In my opinion, I think this was a horrible move by JL. The few shops that still carry their line will soon drop them due to internet sales and now crutchfield. This will probably result in the down fall of the company if they don't go strictly to internet sales.
Very few people shop around and plan a stereo system. I have seen this hundreds of time right after Christmas and right around tax time. Kids get a chunk of money and they want boom and they want it now. They don't have time to wait for an ebay shipment, they want it NOW. Removing JL from that market will eventually hurt them more than I think they anticipate.
I'm not a huge fan of JL, but I hate to see one of the last good brands sell out. Pioneer had a good thing going with their TS-SPL subs, but they quit making them. Kenwood has gone weak, Diamond hit a big speedbump when they lost some of their better part suppliers a few years back. All the powerhitters are losing to the cheaper overrated chineese companies that have flooded the internet market. It's sad.
trunkisloud on 10/28/2007 23:22:50
luckily we have resources and can find the good stuff online or in the classifieds...(if we know what were lookin at) ..for instance...i found a pair of 16kv2's brand new on craigslist for 300 ...a little steep for me so i had to decline..but to the untrained consumer it looks like a no-name cheapie so they pass it on in hopes to find some kicker or fosgate products..leaving that good stuff for guys who know how to use it...i never buy in retail (nothin against the guys who work the retail end)..but if i can get a good product cheaper online then thats the way ill go..and take a chance on the warranty...gotta pay to play.
trunkisloud on 10/28/2007 23:22:54
luckily we have resources and can find the good stuff online or in the classifieds...(if we know what were lookin at) ..for instance...i found a pair of 16kv2's brand new on craigslist for 300 ...a little steep for me so i had to decline..but to the untrained consumer it looks like a no-name cheapie so they pass it on in hopes to find some kicker or fosgate products..leaving that good stuff for guys who know how to use it...i never buy in retail (nothin against the guys who work the retail end)..but if i can get a good product cheaper online then thats the way ill go..and take a chance on the warranty...gotta pay to play.
swez on 10/29/2007 01:10:14
Any branded name that is "too arrogant to flex", will eventually suffer in a tight economy. If they insist on the present stance, they will crash and burn like an Albatross of their own doings. (Look at how many big names have now sold out to one key player)
Have seen other companies take this stance and wind up falling apart at the seams. Sadly, JL seems/may be... too proud to accept the fact that things they sell are not madatory. These are lux items that most cannot afford now. Many would like to have this brand, but market condition demand is low and they are not the Kings they'd like to be.
"Pride leads to a big fall". Is there a buy out in the wind? Time will tell.
Swez
cplkittle on 10/29/2007 11:50:16
Look at DEI. Here are a few companies that DEI owns:
Viper, Python, Clifford, Avital, Hornet, Trilogix, Ready Remote, Auto Command, Astroflex, Automate, Autostart, Polk Audio, Definitive Technology, a/d/s, Orion, WCC-orion, Precision Power, Directed Audio, Xtreme Audio, Directed Video.....just to name a few.
Then there is Audiovox who owns:
Jensen, code alarm, advent, acoustic research, phase linear, terk, home decor, prestige, spikemaster, vogel, recoton, ambico...
These two companies are here to stay. They not only produce their own brand products, but have bought out many other brands to diversify themselves enough to make it through the hard times. If JL sells out completely, I believe it will be to DEI.
Ash on 10/29/2007 18:16:59
Wow! Now that's something I didn't have a clue on. Didn't know DEI was that powerful. Definitely not Polk...
That still must have work out in each others favor as those companies haven't seem to lost much control of their engineering. That is what counts the most. They are still seperate enough to be able to produce more than decent gear.
Lanzar is a perfect opposite example of that. I had a lot of respect for Lanzar back when "The Punch" was in very high demand (late 80's to early 90's). Then Pyramid took over, cut budgets, and obviously engineering as well. Bam! Down they went with a drastic fall. I was very disappointed with that one.
The budget cuts is what I think JL will have to fear most as that can lead to other things. I'm quite sure a lot of their designs depend upon extensive research and manufacturing. Scaling down might lockout important overlooked people and aspects critical to their past success.
swez on 10/29/2007 22:30:09
Yes, the landscape of the Consumer Electronics playing field has been changing a lot over the past 6 years or so. Look at all the BIG NAMES that have been acquired by DEI in the past 4 years.
As for JL, am thinking they'll stay in the game as long as profits and sales remain in the black. Some of the designs used in their Slash series and W7 series subs will always keep them in the top tier, if the market is willing to pay the price. Making a few lower cost products might help their bottom line sales volume, but adding more sales outlets should fill the pipeline too. In the meantime, we'll just wait and see.
Swez
ttocs on 10/31/2007 00:36:22
the market is changing, what can you say. JL did alot to keep them selfs off of the e-tailers as long as they could. There was a heck of a discussion among the audio insiders with this move and of course most people are not really happy about it.
Now cardomain is shutting down the sales shop as well it seems....
Ash on 10/31/2007 19:30:43
I wondered why cardomain & sounddomain were acting screwy. No matter what links to the store I tried to use, it kept leading to dead ends about "how to choose" whatever.
What's up with that? I don't see how they were hurting,,,,
ttocs on 10/31/2007 22:48:15
the industry is changing....
They have not announced anything official yet, I know one person that will be effected by it and I am waiting to get the inside scoop.
MrBrownstone on 11/1/2007 12:26:47
With the advent of Auto manufacturers getting in to 'premium' audio systems, navigations, security and mobile video, it's either get a mass outlet or face obsolescence.
Look at
PPI
ORION
Phoenix Gold
A/D/S
Planet Audio
Hifonics
Soundstream
and a bazillion other brands. This market is retracting because a natural predator, the auto manufacturers, have needed another profit center to compete in the global market.
It's either that or OEM
PPS Before you guys go slandering DEI's good name, don't forget they also own Banana Boat sunscreen.
Thank you
Ash on 11/1/2007 17:35:52
I don't see why anyone would slander DEI, what they are doing is helping some good companies stay alive and in the process making money.
There definitely is nothing wrong making good financial decisions that happens to benefit others. Without companies like that our hobbies, and to some careers, would spiral down to next to nothing.
ttocs on 11/1/2007 21:18:29
the only bad thing I would say about dei is they killed orion but it was already on the chopping block.
MrBrownstone on 11/2/2007 13:28:19
DEI killed all the brands,...they just swallowed the name and marketshare. Of course, in 2001, noone wanted to hear that...
http://audioforum.termpro.com/cgi-bin/ubb/ultimatebb.cgi?ubb=get_topic;f=31;t=000110;p=0
MrBrownstone on 11/2/2007 13:30:39
PS the guy predicted that Phoenix would get a resurgence...they died off 2 yrs ago :-)
I officially know more about marketing in car audio than all the overpaid schlums!!!
of course knowledge & success are 2 different things.
Ash on 11/2/2007 17:38:39
Before DEI acquired these companies, they were kinda on the way down anyway right? Without someone bailing them out, they kinda would have disappeared eventually.....
Now a quality company falling into the hands of another company like Pyramid is straight brutal. Seems like Pyramid would have at least tried to keep Lanzar pure as possible and learned a thing or two about quality. Especially since other high end companies were losing steam. That would have been a good time to steal some of the forefront.
I guess theres just too many people willing to buy cheap gear and suffer later. I don't even see how they can still carry the same name when the gear doesn't even compare to what it used to be..... That's like marrying a person that winds up dragging you down to where no one else wants you and you don't even have enough pride in yourself to get back up anymore. SAD
MrBrownstone on 11/2/2007 19:30:37
I don't think the quality slipped on any of the brands...just that they didn't innovate or improve.
PPI didn't come out with a class D amp til 5 yrs after EVERYONE had one. Same with Hooked on Phoenix.
In any case, the names are really not worth proliferating. A/D/S is great quality, but no need in the car as there's nothing to differentiate themselves.
Take the model of GM.
Buick, grandpa's old white guys luxury car
Cadillac, younger old guy's Beemer
Pontiac, young exciting brand
Chevy, General population
Oldslowmobile, a waste of effort
Saturn, a girls car
Geo, a ripoff of Toyota
Aurora
Notice how they got rid of Oldslowmobile & Geo. They should just have
Cadillac
Pontiac
Chevy
Caddy covers everything refined and old
Pontiac covers everything sporty
Chevy covers everything cheap
It's having 9 brands that was the demise of GM...not to mention the fall apart nature of their cars since the early 80s.
PPI, Orion, Phoenix, A/D/S, Diamond, MB Quart were all competing for the same $.....mine. The difference was that none of them was doing it for a reaonable cost.
Nothing like being the highest priced product on the market.
MrBrownstone on 11/2/2007 19:31:18
PS look what happened to Chrysler, Daimler, Dodge, Plymouth...
cplkittle on 11/2/2007 19:47:01
Mercedes killed Chrysler shortly after they merged.
Phoenix started to die out when their 3 top engineers started their own company - Exile. They started it on the basis that Phoenix was relentless in their pursuit of cheaper and cheaper parts regardless of quality.
Ash on 11/2/2007 20:48:22
Interesting....
So with the history of things, where do you guys think the industry will wind up in the next few years? Do you expect some new companies to emerge or is it a sort of deadlock for a while?
swez on 11/3/2007 06:03:18
Good question... the answer is more likely to be found by innovation and doing it cheap enough for the masses, (Average Joe) to buy and use.
A current example, look at Apple and the I-pod and now I-phone. The integration of a phone, I-Pod, photo/video and internet access have been a real boom to their business.
People buy them because they are trendy, have many cool features and says something about the user. ("I am cool 'cause I have one of these cool widgets".) That's what marketeers try to exploit. The "you ain't all that if you don't have one of my widgets". They have done a good job at marketing this concept. It's a lie, but people buy into it in mass. (Look at Bowflex commercials too)
If you really wanted to make a killing, the largest market to exploit are single men/women that make good money, have average to below average "curb appeal" and willing to spent lots of money in hopes of upgrading their potential to attract a mate they really cannot afford to maintain.
Take a closer look at an up scale merchant like Macy's. When we walk into these stores, we find that 70% of their floor space and merchandise are targeted toward who? (Women with image issues and plenty of $$ to spend) They grew their market share and presents by "selling an image" and acquired other declining store names like Marshall Fields, JL Hudson and a few others too.
Retail merchants have figured out where the money is and who is most willing to part with it in large chunks. Most guys don't like to shop for clothes and could care less about the brand lable on their slacks, shirts, shoes and such.
Men only buy this stuff when what they need is worn out, does not fit anymore or want to "enhance their preceived image". Women are different in this area... they buy all the time to remain in style, trendy and keeping up with fashion. (And go deep into credit card debt in the process?)
Men are more into gadgets, expensive Plasma/LCD TV's, (Sorry... A/V monitors) computers, cars and tools. They spend moderate amounts of $$ on clothes, but lots of $$$$ on gizzmos. (This is the trap they get snared into)
In short, it's better to turn off the "Boob Tube", forget the over-priced gizzmos and just enjoy being a semi-slob. Life can be very easily simplified for the average guy if...
1. We have decent food to eat
2. A quiet, "well equipped cave" to tinker in
3. A reliable form of transportation to drive (Honda, Toyota or Subaru)
4. Affordable clothing that fits
5. A mate that we can trust, afford and get along with
6. A "drama free" zone
The rest is all a bunch of marketing BS that most can ill-afford anyway. We don't "need" the Boob Tube to dictate what is cool and what is not. THINK about that a bit and see if it fits or not?
End rant,
Swez
PS Have BTDT and in many cases, see that most men are really about the basics. We don't need all the frills. But like the gadgets and gizzmos when we can afford them. Above that, the rest is just piling up in the garage and taking up valuable "Cave Space".
Ash on 11/3/2007 21:22:26
You guys are a very bright bunch to learn from. Believe it or not, there is a lot of insight being given on this thread which also has become a pretty hot topic. It is obvious there are some concerns within the hobby.
Swez & Mr.B, I'm wondering is this a sign of a disguisingly good thing. If the industry is forced to come up with newer and better "widgets" to keep alive, then older (but still good) technologies still in use should come down considerably in cost to the consumer. That's if following other market trends...
It's also funny that all these premium companies have taken a toll in one way or another, yet ones like Boss, Legacy (Pyramid), and a few other inferior brands have survived throughout. What is it that they are doing right despite the negative reputation? For instance, look at the lines within these lower companies that still remain even from the late 80's to early 90's. How is that? Could it be that the majority of ears can't really discern quality from lesser?
Excuse all the questions because "interviewing" you guys is kinda fun. I'ts just very interesting to see how you view what could be a major change in something we all love.
MrBrownstone on 11/3/2007 22:32:37
Where the Industry is Going by Mr. Brownstone
Where is any industry going -Plato (well not really)
Essentially, just like the stock market of 85-87, like he stock market of 96-99, just like the mortgage market of 2002-4, like the poker boom of 2002-08, all good things must come to an end...like the car audio market of 96-2002.
What happens in any market is that there is a surge of newbies getting in to the game. Picture this, in 1992, my 1kW system cost $2500!!!! in 2002, my 1kW amp cost $499!!!
Essentially, the car audio BOOM, literally, was fueled by great economic times, a 50% reduction in consumer costs, and this new fangled thing called the internet. Couple this by the simple fact that nearly EVERYBODY uses the same parts assembled by the same hands overseas and you have the most level playing field ever assembled in any market.
After about 1998, you could tell if a car audio shop was jacking you around because your friends and others around the world would be able to debunk all the nonsense that salespeople create to get you to buy something. Also, retail prices are set by the store, not the manufacturer...so if you were getting robbed blind all because you were 200 miles from the nearest MB Quart or Focal dealer, you had an alternative--buying online.
What killed this market is that the product was going out of the shelves (and via UPS) faster than the market was growing. People aged 17 to 21 were all buying the big ticket items online, and those items are good for 3 or 4 years.
Previously, when you got a car, you got a stereo. After 6 months, you improved on the system. After 2 years, you had a frickin behemoth system. After 4 yrs, you grew up, graduated from college, cut your hair and got a job. Car Audio is a lot like many things you outgrow.
In any case, what happened is that EVERYBODY got a system, and after that, there wasn't much need for the market for several years.
What happened to manufacturers is that they either:
1) over grew their product line (Soundstream), or
2) didn't sell the freshed thing--class D amps (PPI, Phoenix, A/D/S)
Many brands, like Audiobahn & MA Audio (anaba group) essentially overpopulated the market with low end to midgrade products that were nearly as good as the high end gear. Although their 200Wx2 amplifier put out 150x2 @ 12.5V, does a college schlum using a factory head unit even know the difference? After all, everybody is using the same little manufacturing plants in China & Korea to put similar products together...Abahn & Anaba were just capitalizing on the market.
At the apex of car audio's biggest boom, every 'manufacturer' had:
1) Their own Wire & Cable brand
2) Capacitor line
3) Soundproofing material
4) DB Drag Car
5) IASCA/Drag/USAC team
6) Built their products with the same parts by the same little hands overseas.
After most of the market cut back, many manufacturers thought it'd be a good idea to continue to spend (compete in Drag & other comps) as if they were the only brand out there. Many, with every last dime they had, just to keep in front of the consumer's eye.
What these Mfrs forgot was that when the market retracts 50%, they need to either grow 100% (unlikely) or adjust to the market share.
What also kills car audio companies is the fact that they don't have other product lines. For instance
DEI has Banana Boat sunscreen
MMATS still has washing machines
Audiovox still has everything that runs on batteries
What does MB Quart have? PPI? see what I mean?
In the future, what you'll find is more brand consolidation. Many names will just become another brand manufacturered by another company. After all, basically 15 brands of speakers are really the same thing...just marketed differently.
The last thing to consider is the profit in the industry. When margins are continually thinned, noone makes any money. As mentioned, a $2500 system got you a 1kW total system in the past, now $500 will get you a 1kW amplifier...and $2500 some damn nice sounding speakers to go with it.
PREDICTION
I predict that the top end of the market will continue to consolidate til there's noone left to swallow up. The low end, well, they'll just make few crappier amps in lower quantities.
Will there ever be another boom? Sure, in like 8 years.
MrBrownstone on 11/3/2007 22:35:31
PS Mercedes (Daimler) didn't kill off Chrysler, they vacated a ship that was taking on water. Chrysler & it's mismanagement killed Chrysler. Same with Furd & Chuvit. Honda & Toyota aren't swallowing the marketshare because they make inferior cars.
cplkittle on 11/3/2007 23:06:32
My opinion of the car audio market is that since it is much more complicated now (quad voice coils, no governing standards on ratings, and marketing techniques) the average buyer is left only with the decision of spending $1000 or $150 on a "1000" watt amplifer. They will learn eventually, but it will take time and alot of wasted money before they get there. Once they have been burned by the lack of quality, they are a little more timid - especially when they are going to spend alot more for the quality.
I believe that the car audio nut of yesterday still has the bug, but is refocusing his/her enthusiasm toward home theater. In my teen years and most of my 20's I was all about the car stereo. Now that I have a family and a house, I would rather have a nice home theater setup than a 5000 watt back massager in my car.
I predict that car audio will go through a dying off period (already started). The new companies that caught the boom a little late and flooded the market with crap will die off. There will be a rebirth of quality in new name brands. I think the bigger companies that adjusted to the changes(Diamond audio) will stay around, but in the background. Diamond audio slowly crept into the car audio scene with quality products. At first there was the D5 and D7 line
Then they introduced the D3 line of more affordable products comparitively priced with sony, pioneer and alpine. The D5 line improved and was moved up to the D6 line. D7's disappeared and there was the TDX line. Later TDX graduated into the D9 line of products. Then, earlier this year they came out with an even more affordable line called the D1 line.
I believe companies like Powerbass and Exile will be the newest front runners. The quality exceeds the price tag - comparitively speaking.
The top brands of today will take a back seat, like Cerwin Vega.
swez on 11/4/2007 11:47:10
Would have to agree w/ ya Kit. Things are a changing and there will be a lot of shake ups in the future. There are many reasons too.
Frankly, guys that have invested in cheap ghetto boomer gear have given this market/hobby a black eye. Now, we have many new laws in most communities that try to clamp down on "noise pollution". They had to because too many self-centered idiots lacked self-control and really ticked a lot of normal people off.
Heck ya... give em a fat ticket, impound their cars and maybe suspend their driving freedoms for a short while. That is how to get their attention and get peace back in the streets again.
Now that I am on the roads a lot in this new job, it's very annoying to be stuck in a traffic jam, listening to something to relax, inform and kill time while crawling down the grid locked streets and highways. It really ticks me off when some knuckle head is 4-6 cars fore/aft and booming his bass. Maybe he's having a good time of it all, but his actions are bothering 25-30 other drivers who also wish to hear thier music, talk radio, news or just chill out and get home for a hot meal.
I drive a 2500 series cargo van and its got plenty of pep and weight as well. In my darkest moments, I want to find that idiot, push him into a ditch and drive over his car. Yes, that is drastic and radical, but at the end of a long, hard day, the last thing most folks need is more aggitation invading our quiet space. (No, I don't want to hurt the idiot physically... I just want to put his noise maker out of commission and go home in peace)
Does anyone else ever feel like that or is it just my problem?
Comments?
Swez
cplkittle on 11/4/2007 11:59:28
Believe it or not I do too. 10 years ago I would have had a little 'sound off' with him right there on the spot. Now I pray for a cop to be in the area.
It is funny that you should mention talk radio. My wife tells me that I wasted thousands on my stereo because all I listen to is Fox news and Opie & Anthony on XM. Audiophile equiptment for talk radio.
MrBrownstone on 11/5/2007 16:03:58
Are you kidding me, last week I would have had a Sound Off if I had my druthers :-P Unlike Swez, I don't age.
Ash on 11/13/2007 13:57:44
Here is a sign of things to come:
http://www.audiojunkies.com/blog/783/jbl-ms8-the-future-of-car-audio
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