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No. 158 July 2017

A FEW SIMPLE WORDS ABOUT… THE FUTURE OF AUDIO
MUNICH | HIGH END 2017

eople keep on learning that this year I skipped this or that room, missed one or another presentation, or did not manage to come to some appointments. I justify myself, giving lack of time as an excuse (which is true), but it does not absolve me from the fact that I simply did not manage to see everything and be everywhere this year – I do apologize! The only explanation is that the High End 2017 exhibition at the M.O.C. exhibition centre in Munich was the largest edition of the event in history.

It is one of few occasions when I can meet all my friends and acquaintances at one place. I decided to make use of that fact and ask the people that I like, trust and value about a few things that have recently been the topic of discussions for people from our industry. I asked the same questions to everyone, so that “High Fidelity” readers could compare various approaches to the issues and different people’s opinions. I let my interlocutors choose which of the questions they wanted to answer – they did not have to answer all. As you will learn in a moment, these people often have completely different views on the same topic, which shows that the audio industry is not a monolith, but a collection of equally important trends. What all the answers have in common is my interlocutors’ passion for music and the devices that are used to reproduce it. I think this can be felt.

I talked to Mr Heinz Lichtenegger, the founder and CEO of the Audiotuning company which owns the Pro-Ject Audio brand, Mr Maurizio Aterini – the founder and owner of the Gold Note company (that I talked to many years ago using a similar formula), Mr Gerhard Hirt – the founder and owner of Ayon Audio, co-owner of Lumen White, as well as a member of the Krakow Sonic Society; Mr Ole and Mads Klifoth who rule the Audiovector company, Mr Rumen Atarski – the owner of Thrax Audio, Mr René Laflamme – the owner of the Fidelio company who manages the 2 x HD company and distributes Nagra brand products in North America, as well as Mr. Dirk Sommer, our friend from the hifistatement.net magazine and a memeber of the Krakow Sonic Society, who (accompanied by his wife Birgit) I spent a fantastic evening with at a real Bavarian pub on the outskirts of Munich. Thank you all!

HEINZ LICHTENEGGER 
Audiotuning | Pro-Ject Audio Systems
AUSTRIA

WOJCIECH PACUŁA: Is high-end dead?
HEINZ LICHTENEGGER: Definitely not yet. However, stereo is in danger, as today we are living in a “mono” world again. About 95% of audio devices sold today have nothing to do with hi-fi stereo as the drivers of all soundbars and streaming speakers are so close to one another that the result is mono sound, and you need processors to differentiate between channels. It has nothing to do with quality. If that goes on, it will kill high-end sooner or later. I will fight against it.

Is high-end overpriced?
Yes, because the sales volume has been going down, so companies need higher margins and prices become ridiculously high. I will fight against it.

How about young people – have we managed to attract them to our hobby?
No, because high-end has become too expensive and esoteric. High-end can be a high-end turntable in a perfect room, with good speakers and a good amp. Real high-end is connected with attention paid to details and not with the price. Perhaps PC audio will attract more young people to us. I will fight for it.

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
Files have never been a problem – music and the quality of a recording are the problem. I will fight.... you know already :)

Are there any new technologies worth of interest?
There is NOT A SINGLE important technology, as they are ALL important and they will slowly make sound better and better.

Is room correction an important technology?
On the one hand, it may be. However, my way is different – find equipment which fits your room and your taste with your own ears.

Is MQA the future of streaming audio files?
We will see, but surely there is a new option, especially designed to make sound really better.

Streaming or downloading?
Streaming and analog.

What is going to be the most important for your company in 2017?
Three essential flexible series. You choose and buy only what you really need!!! We must learn again only to buy what we need but of better quality. Why buy a turntable with a phonostage, a USB, electronic speed change 33/45, a ‎stroboscope, a detachable head shell and Bluetooth, etc. when you really only need good sound… The industry again starts to sell features and functionality, not sound quality.

If I could recommend something to a person starting their adventure with audio, that would be affordable high-end in the form of the Pro-Ject Pre Box S2 Digital preamp/DAC/headphone amplifier.

audiotuning.com
project-audio.com


MAURIZIO ATERINI
Gold Note
ITALY

WOJCIECH PACUŁA: Is high-end dead?
MAURIZIO ATERINI: No, the luxury industry in the market is dead. However, high-end audio is having problems because younger generations are not interested in music in the same way as older generations. Perhaps we should talk more about who is killing high-end audio, even without fully understanding why this is happening?

Is high-end overpriced?
Like in every kind of business, some products are overpriced and some are not. Besides, we should consider that very small companies have higher production costs because they cannot afford to do everything in-house and cannot calculate production costs based on production volume – only large quantities make it possible to lower prices.

How about young people – have we managed to attract them to our hobby?
It depends who. The older generation of people aged up to 55/60 (above that age things get even more difficult) is pretty easy to reach because they are aware how important the relationship between music and sound quality is. Younger generations should be completely reconsidered in many respects. They need to be attracted with new technologies and convenience, e.g. through Wi-Fi transfer and integrated streaming products. Though young people constantly “use” music, they most often do it in the company of video. If we focus our attention on high quality audio products only, it probably will not be enough to attract them.

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
The technology only lacks the knowledge of the high-end audio industry because it is not something natural for older people. The companies that stay away from computer music will shortly be gone from the market, in my opinion.

Are there any new technologies worth of interest?
As above.

Is room correction an important technology?
It may become important when it is integrated in a larger number of products and if it is easy to use; otherwise, as it happens in the whole accessory industry, it will have a limited range – restricted only to accessories.

Is MQA the future of streaming audio files?
It is difficult to predict what formats will become the audio standard in the future but sound quality will not be the main reason for success for sure. A limitation for MQA is the need to decode signal in the end device, using an algorithm that has not been created by a big corporation but released by a small high-end audio company that will probably not have the power to make the technology really popular. It is again something for an older generation of users who, on the other hand, do not use computer audio too much because they lack knowledge of it.

Streaming or downloading?
Streaming.

What is going to be the most important for your company in 2017?
Under the GOLD NOTE brand, we are launching really innovative products onto the high quality market. However, I think we need a new generation of speakers, even in the lower price range first.  

goldnote.it


GERHARD HIRT
Ayon Audio | Lumen White
AUSTRIA

WOJCIECH PACUŁA: Is high-end dead?
GERHARD HIRT: That is a good question. What we see is that the audio market over €100,000 per product is dead (of course, you will always find some crazy Chinese people or Russians, but this is not real business) and this kills the market. How can you explain to the customer that an amplifier or speaker costs more than a Ferrari? Even when you see a unit like that, honestly, how much would you pay for it? How many units do you have for sale? Only after answering these questions, customers are able to pay for the given product. High-end policy is nonsensical now. High-end for a fair price value is still working out.

Is high-end overpriced?
Yes – and if we do not change it (we are all sitting in the same boat) soon, customers with money who are interested in sports cars, watches, etc., will ignore us and always ask why this costs so much. Also dealers and distributors who give very huge discounts are another big problem – this spoils the market and creates a false opinion that we all want to exploit our clients.

How about young people – have we managed to attract them to our hobby?
No, we have not. It was enough for them to see how we act and what our prices are and, in a moment, they will see how much discount they can get – add to it bad rumors spread by our competitors. So, young people are not interested in such silly actions taken by some of our “friends”. This is what I hear almost every day!

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
I do not think it is a source problem, we can all live with CD, LP, streaming, etc. But the problem is that streaming sources are too complicated and almost “every day” we have a new feature, crazy! Some examples would be a higher and higher sampling frequency (useless) or, earlier, Spotify and Tidal, now Qobuz, Google or Apple – who needs them all ?

Are there any new technologies worth of interest?
Not really!

Is room correction an important technology?
Not at all! It is another problem, complicated, with a thousand of options and set-up possibilities and, at the end of the day, everything sounds worse than before. It also kills the true idea of top class high-end audio.

Is MQA the future of streaming audio files?
The mega nonsense! A company that is almost dead, Meridian, creates such useless things. Who needs another format, when we already have CD, LP, SACD, DSD-A, HR from 24-44 up to 24-192, DXD and DSD! Moreover, all MQA titles are also available in the abovementioned formats. The market is already so confusing that fewer and fewer people are interested in it, which kills our industry step by step.

A good example is home theatre. Every 3 months a new feature is added – it started with 5.1, 6.12, 7.1, 7.2, etc. I remember when a good customer a long time ago bought a €10,000 processor and 3 months later he gave up and sold out all his home theatre stuff. By that time, a newer processor version had already been released. He got €2,000 back by selling his.

The loss was enormous, and the client is lost for us forever. MQA is only being promoted at the moment by some American magazines, because they do not really have any other interesting news from the industry and they must somehow attract their readers. In reality, it will become a boomerang.

Streaming or downloading?
Streaming, e.g. from Spotify, Apple or from other providers, offers really bad sound quality. It is OK for surfing through the music world and gaining more knowledge of music, but for serious high-end listening it is not helpful. Downloading is mostly connected with better quality, but it is not cheap, so this can work out step by step. The question is how the industry will deal with it.

ayonaudio.com


OLE & MADS KLIFOTH
Audiovector
DANIA

WOJCIECH PACUŁA: Is high-end dead?
OLE & MADS: High end is not dead at all. At Audiovector we experience that more and more people are interested in the high-end products we offer. I am sure that it is very important to have great sounding products that also look good and it is extremely important for speakers to be as flexible as possible when it comes to pairing them with amplifiers.

Is high-end overpriced?
Not for our part. All our products are made in Copenhagen by Danish craftsmen using very high quality parts and high quality engineering.

How about young people – have we managed to attract them to our hobby?
Yes, Tidal & other services have made it easy for young people to find and discover new and old music faster and easier. This is a momentum that we have to use as a high-end manufacturer. Our QR series is bought by people of all ages, but the younger segment is dominating.

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
No, it is not matured fully yet, but if you make an effort with the best software, decoupling and a good USB cable, the sound can be very decent. At Munich 2017 we used the Audirvana Plus player with a Macbook Pro, Ansuz Diamond decoupling devices and the Ansuz Diamond DTC USB cable with The Gryphon Diablo 300 DAC. Everyone liked it – even the team from The Gryphon.

Are there any new technologies worth of interest?
MQA maybe, but it is not fully matured regarding sound quality. 

Is room correction an important technology?
No, we think that with our speakers you can always achieve a better result by system matching and speaker placement. Room correction can work as the last way out with digital, but not with analogue equipment!

Is MQA the future of streaming audio files?
We need to learn more about MQA but we like the idea and we think that MQA is another step towards high-end streaming. When it comes to sound, it needs more time to become 100% great.

Streaming or downloading?
Downloading! Streaming still tends to take love, warmth and analogue sound away from music.

What is going to be the most important for your company in 2017?
Presenting amazing sounding products with great musicality to our beloved listeners. We are very grateful that many people like our products and this encourages us to be even better at what we do. THANK YOU FOR THAT.

audiovector.com


RUMEN ATARSKI
Thrax Audio
BULGARIA

WOJCIECH PACUŁA: Is high-end dead?
RUMEN ATARSKI: Not at all, but there is confusion in the market. For most people, high-end is high price. A luxury finish on a mediocre product does not make it high-end. It just makes it highly priced. 

Is high-end overpriced?
Overpricing puts people off as you no longer see value in the products. If you want a pound of silver, you can go to a jeweler’s shop and get it, it does not have to be in the form of a cable. You will get a better deal on it, too.  There has to be a reason for something to be done in a particular way or for a particular material to be used. Precious metals are used as an excuse for high prices, just like multilayer lacquer, etc. Consider that good leather costs less than good anodizing, yet people are ready to pay 3-4 times more for the leather.

How about young people – have we managed to attract them to our hobby?
Young people have access to information and they are not “formatted” so much (due to lack of “experience”). If they do not see the value in something, they will not part with spare cash for no reason.

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
Files are fine and streaming services are getting better. Now you can get high-res streaming and it is good enough for me. You need a proper network player to get it right, but those are available now. Technology has matured and is usable now.

Are there any new technologies worth of interest?
New devices like the Silicon Carbide JFET transistors and Galium Nitride transistors. They have properties that are yet to be exploited in audio.

Is room correction an important technology?
This is a big misunderstanding. Most approaches are flawed by default and should be banned!! That said, there are some that work very well if applied by a professional installer in a purpose-designed room. The problem is that you correct what you measure, so when you measure a wrong thing, then you get a wrong correction. We lack knowledge, not technology.

Is MQA the future of streaming audio files?
Cash cow, no value to industry. Aggressive marketing in the style of Dolby. Absolutely no need for it. 

Streaming or downloading?
Integrated and user-friendly solutions that could attract new customers are the most important. With our integrated amplifiers offering streaming, Bluetooth and a phono stage along with all legacy audio formats, we make it easier to smuggle these solutions into one's living room without confronting their life partner. It is not about lifestyle, but high sound quality and usability, a bit like an Audi RS.

thrax.bg


RENÉ LAFLAMME
2xHD | Nagra
CANADA

WOJCIECH PACUŁA: Is high-end dead?
RENE LAFLAME: No, based on my experience at Nagra, I can tell you that in the past 12 months we have doubled the sales and we have more and more users among people from the younger generation. At that Munich show it was so busy that some people were not able to enter the room.

Is high-end overpriced?
Building high-end products with the help of many engineers (Nagra employs 11 engineers full-time) costs a lot. So, yes, it is for people who really care about sound quality and lifetime reliability. The HDPreamp that we will release in autumn has taken us 3 years of R&D. 

How about young people – have we managed to attract them to our hobby?
We will work on this challenge with some of our future products.

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
The quality of mastering studios and A/D converters is much better now, thanks to which we are very close to the original master tape. High noise in computer-based severs still constitutes a limitation in the playback mode. However, many companies have made great progress in the field.

Are there any new technologies worth of interest?
Not that I know of, perhaps 3D sound reproduction but with a pair of stereophonic speakers.

Is room correction an important technology?
In affordable audio or home cinema systems, it is a very good way of obtaining better tonal balance. If we talk about high-end, I think real acoustic treatment, great speaker placement and an excellent listening room are better – at least when you want transparency and emotions.

Is MQA the future of streaming audio files?
I will say yes when it comes to streaming audio with better sound. The problem that still needs to be addressed is that streaming is not the best sound source because a lot of information is sent in real time and there is high noise.

Streaming or downloading?
When you download an album, you have it in your collection and you can play it for a lifetime; you can also make a backup copy. When it comes to sound, let me tell you that an SD card read directly by a player will sound more analog than streaming. And streaming does not bring musicians or producers too much money. Downloading gives you the same possibility of being with music as a CD and artists get as much money as from the sales of a CD or LP.

What is going to be the most important for your company in 2017?
Let me just enumerate:

I will also release a Sonny Boy Williamson album that sounds great, a new Holly Cole album made for 2xHD and a new Bill Evans album.

2xhd.com
nagraaudio.com


DIRK SOMMER
hifistatemen.net | Sommelier du Son
GERMANY

WOJCIECH PACUŁA: Is high-end dead?
No, it's kind of recovering (see below)

Is high-end overpriced?
There are a lot of overpriced products, but it has never been cheaper to get a really good sounding digital source than today. Even very affordable DACs sound better than the most expensive ones 15 years ago.

How about young people – have we managed to attract them to our hobby?
There were more of them at the show than in the previous years. Headphones and computer audio help a lot.

THE SOURCE problem – are audio file players a mature technology yet? What do they lack and what has already been accomplished?
No problem at all: there are better turntables, cartridges and tonearms than before and, in my opinion, a NAS with a streaming bridge or a streamer sounds better than a computer or a CD-drive.

Is room correction an important technology?
Not for high-end. You have to work on the room!

Is MQA the future of streaming audio files?
Streaming might be interesting to attract younger people, so MQA is ok.

Streaming or downloading?
I'm too old-fashioned for streaming.

hifistatement.net
sds-rpm.com

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Our reviewers regularly contribute to  “Enjoy the Music.com”, “Positive-Feedback.com”“HiFiStatement.net”  and “Hi-Fi Choice & Home Cinema. Edycja Polska” .

"High Fidelity" is a monthly magazine dedicated to high quality sound. It has been published since May 1st, 2004. Up until October 2008, the magazine was called "High Fidelity OnLine", but since November 2008 it has been registered under the new title.

"High Fidelity" is an online magazine, i.e. it is only published on the web. For the last few years it has been published both in Polish and in English. Thanks to our English section, the magazine has now a worldwide reach - statistics show that we have readers from almost every country in the world.

Once a year, we prepare a printed edition of one of reviews published online. This unique, limited collector's edition is given to the visitors of the Audio Show in Warsaw, Poland, held in November of each year.

For years, "High Fidelity" has been cooperating with other audio magazines, including “Enjoy the Music.com” and “Positive-Feedback.com” in the U.S. and “HiFiStatement.net”  in Germany. Our reviews have also been published by “6moons.com”.

You can contact any of our contributors by clicking his email address on our CONTACT  page.

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