What happened to the entry-level in hi-fi?

I know this isn’t something in which a high-end magazine like the one wot I edit [Hi-Fi+] has any significant interest, but it wasn’t so long ago that people bought products costing a few hundred quid a unit from a number of manufacturers. They were the life-blood of many hi-fi retailers. And now, this market’s all but vanished. Why?

OK, so ‘vanished’ is stretching things somewhat. The product category is still there, but it’s lost all its energy and vitality. New and exciting products are still being launched at all prices, but those products under £500 (perhaps even under £1,000) are being met with little more than ‘meh’ by the (non) buying public. Cambridge Audio is one of the rare exceptions to this rule, as the product line is still vibrant and popular. But there has been a shift.

The highest of the high-end is - in contrast - relatively buoyant. The word ‘relatively’ is key, here. People who spend £20,000 or more on a system are not common; they were not common a few years ago and they are just as uncommon today. If you sold one pair of £50,000 loudspeakers a year ago and sold another pair this year, you are seeing precisely zero downturn in the high-end speaker market.

That leaves what’s in the middle; the four-figure products that represent the bulk of today’s separates hi-fi sales. In some places (£1,000+ turntables and loudspeakers for example) there has been a small increase in sales, both sales volume and value. Even GfK statistics reflect that sales uptick, despite the GfK rarely analysing the sales from most of our specialist retailers. In others, sales are unchanged or down, but not as down as the lower end of the market.

I suspect the reason for this is the recession, at least in part. Recession generally hurts those with the least, the most. Yes, there are upper middle class types who downshifted from Waitrose to Tescos and decided not to upgrade their Chelsea Tractor for another year or two, but for many of these people, their mortgage is lower than ever and they have more disposable cash than they might have had in years. They can afford to spend several grand on a hi-fi system. They are just too frightened to spend it. However, those who don’t have as much are struggling, and no-one wants to extend a line of credit for a discretionary purchase in times of financial turmoil. So, suddenly £300 is a lot harder to come buy for that new amplifier.

Then there’s the ‘yoof’ problem, a generation to whom separates audio is something dad did before there were iPods. This is the audience that might well buy an entry-level product, and we are singularly failing to reach them.

The combination of these two factors alone can make the entry-level audio world a very sad and lonely place.

We’ve all noticed this, almost unconsciously. The magazines are all converging on that four-figure sweet spot, dealers see it in their sales figures and manufacturers see it in their order books. It’s a pity no-one told the public, as the forums have more than their fair share of disgruntled budget buyers finding their beloved magazines entirely free from products they could actually buy.

The worry is that without that entry-level, hi-fi quickly becomes an elitist hobby. Nothing intrinsically wrong with that, but to make an elite, first you need a mainstream. If all you have is an elite, the hobby quickly dies in a fit of pique. You couldn’t have a Ferrari without a Fiat. Not simply because in this case Fiat owns Ferrari, but because of those hundreds of people driving round in red Fiats, dreaming of the day when their car sports a prancing pony on the bonnet.

I started out with a Dual deck, but I wanted a Linn. I started out with a NAD and wanted a Naim. I started off with Wharfedale Diamonds, but wanted Linn Kans. Eventually, I got my Linn/Naim/Kan system… and still wanted more. Thing is, without that Dual/NAD/Wharfedale system, I would have never even considered the next step, and certainly not considered a Linn/Naim/Kan system as the first rung on that same ladder.

Of course, highlighting the problem is easy. Coming up with solutions… now that’s the real problem.

Alan Sircom was HCD’s launch Editor and now edits Hi-Fi+ as well as writing audio columns for HCD