What makes a $20,000 cd player cost 20,000?

Gamut CD1R, CD1S, CD1 MkII - Give it a listen it will amaze you for the price! Probably the cheapest component in my system! including cables!

APL Hi Fi Denon 3910. The end of our upgrade path.

To go along with Boa2's statement, I've heard from a very reliable source that there currently is none better than the APL. And apparently it's rather inexpensive in comparison.

Oh - all these "reliable sources" - give me a break. Your question about the price is easy to answer. Part of it is research, part of it is development, part of it is cost no object design, which means material, hand selected electronical parts etc.. Part of it is man power i.e. hand work and part of it is exclusivity and/or hype. But - hey, that all applies to ANY high end stuff, or do you really think that a 5er BMW f.e. is "worth" the money they ask? I'm driving one at the moment because my MINI has electronic ailment. The Beamer is a WONDERFUL car, but not worth 65.000! Ok, and here is my "reliable source": WADIA 270/27ix upgraded by Great Northern - forget anything else.
Happy listening!

Incredibly wealthy people who don't mind spending that much money on one component of their system!

the marketplace...when they don't sell enough they won't be made, or the same player will sell for far less. such is the consumer electronics industry. redbook cd software is still improving more dramatically than hardware.

More than perhaps anything else, willing buyers make a cd player cost $20K. I personally don't believe that material, production, design and marketing costs warrant such a price to the consumer.

Buy a Toshiba DVD-4960 for about $100, then have Ric Schultz at EVS (www.tweakaudio.com) modify it for $350. This may very well be the end of your upgrade path.

A cost no object design - typically meaning a grossly over-spec'ed power supply, herculean efforts at jitter reduction, and the best available parts regardless of price in the analog output stage. Throw in a really pompous audio jewelry facade, plus the lack of abaility to take advantage of economies of scale, and the pirce to manufacture these devices skyrockets. That being said, I can honestly say that my enjoyment of redbook cds has never been better than with my current Simaudio Moon Eclipse, which retails for about $6k, and employs all of the tactics I listed above - I'm glad it comes in well under $20k!

Regards,

Oh - all these "reliable sources" - give me a break. Your question about the price is easy to answer. Part of it is research, part of it is development, part of it is cost no object design, which means material, hand selected electronical parts etc.. Part of it is man power i.e. hand work and part of it is exclusivity and/or hype. But - hey, that all applies to ANY high end stuff, or do you really think that a 5er BMW f.e. is "worth" the money they ask? I'm driving one at the moment because my MINI has electronic ailment. The Beamer is a WONDERFUL car, but not worth 65.000! Ok, and here is my "reliable source": WADIA 270/27ix upgraded by Great Northern - forget anything else.
Happy listening!

Anyone engaged in this hobby has already overstepped the limits of the price/value relationship. Just ask any of your neighbors. They will shake their heads in disbelief when you tell them how much you spent on your system.

Flip the argument around, and suddenly I'm the one claiming they're nuts for spending $500K on a 1400 sq. ft. bungalow in need of work. Value has nothing to do with reality, regardless of the price. It's just a story that we repeat to ourselves until we buy it as the truth.
Enjoy the music!

I have a hard time believing materials, labor, intellectual properties, R&D and what not could ever add up to a $20,000 PRODUCTION CDP. One off designs sure, thats pretty believable. Now holding this price, incorporating economies of scale to reduce internal costs and then finding willing buyers...thats an excellent business case.

There's an unfortunate trend in this country to equate value with cost. Because a component cost a mint, audiophiles believe it must be far better than one more reasonably priced. I believe many manufacturers capitalize on this belief. They know audiophiles will turn up their collective noses if they were to offer their units at lower prices, so they soak us for all we're worth. They can do this because we let them. As the saying goes: "I've met the enemy and it's us!"

The fact that somebody will pay 20,000 for it.

Does a $20.00 quartz Timex keep better time than a $ 5,000 ''manual'' Rolex ? The answer is ''yes''. Is a Louis Vutton handbag worth $ 1,000.00 ? Can you really tell the diffence between a $ 20.00 wine and one that cost $ 200.00 a bottle (some do, most cannot). DOES A 1" THICK FACEPLATE ON AN AMP IMPROVES ON THE SOUND ? .Well maybe a bit (because of the sheer mass and resulting isolation from vibrations), but maybe not to the extent that it warrants paying for it. Is a $ 300,000 Ferrari faster than a Viper?

High-end audio is really a high-end hobby. As such, we pay for PERCEPTION OF EXCELLENCE and TRADITION, EXCLUSIVITY, AND SUPERLATIVE PRESTIGE.

If High-End audio was merely based on performance, no way many products would command such insanely high prices.

This is why we will NEVER see true blind testing of audio gear anytime soon, from professionnal reviewers, it would be just too risky and dangerous to admit that some ''budget'' gear sound as good and often much better, than much higher-priced, ''established'' big name gear. (Listen the small Cayin TA-30...a shocking example of this)

And this is why someone who spends $ 5,000.00 on a Rolex watch pretty much couldn't care less if it kept good time or not.

Marketing is much more about perception over product. And the ''high-end'' does not escape this fact. Of course there are true deserving high-pricer out there, but many do not justify their worth sonically speaking...but ahhh...that 2 foot thick CNC-machined faceplate sure looks good right? And don't get me started on $ 3,000.00 interconnects and $ 7,000.00 speaker cables. One last thing, is there any room left for the artist and his or her music in this madness, or are we just too busy showing how good-looking our Rolex is?

The cost of a product is basically determined by labor, material and overhead. Top-notch players will use parts that are more expensive (i.e., you can get caps at Radio Shack for 49 cents but an audio quality equivalent cap can cost 20 dollars let's say.) Then you have to add the cost of R&D, insurance, sales and marketing, distribution, cost of money (borrowing to get the factory ready), and company human resources (health care, bennies, perks, etc.) On top of that there are taxes. Once all that is figured, then the question becomes profit margin, which is the toughest to figure since you have to take in factors such as demand and competition. All in all, it's way more involved but the bottom line is the cost of the parts required usually plays the biggest role.

It is rare that a product will be priced in the stratosphere for no other reason than just to make audiophiles take it seriously. Some do put bells and whistles on products such as exotic wood, lacquer finishes, overbuilt casings, hand-made components, etc, to make them appear better than others for those more interested in appearances - but may do nothing for the sound quality. But then again, some people can't get past the fact that they're listening to a $500 cdp (like the Marantz CD-63SE) instead of excellent quality sound for the money and then some.

Would the answer to the original post change if the price was, say, $8,000? Still not an insignificant amount of money...

John (Stehno), my friend, the SHOOTOUT WE DID, will tell
you very clearly the SonyMdwright 9000es,is way much
more musical or equally better than the APL own by
a friend 711.I am willing to invite 711 in my place
this time with His upgrade APL 3910, this early summer.
This will be fun.IMO

There are 4 factors at play that make top-end audio gear very expensive.

1. Some fixed costs are higher in absolute terms, e.g. more extensive R&D to get the voicing right and achieve the desired balance of musical virtues... the last 10% of tweaking can take an infinite amount of time.

2. Fixed costs are spread out over a production run measured in the tens or hundreds.... as opposed to hundreds of thousands for mass market gear

2. Some variable costs are higher, e.g. high end capacitors vs generic stuff; more complex circuit designs may require more parts; small production runs may require manual assembly rather than machines

4. And, in some cases, because some people equate price with quality and some manufacturers find that they can afford to be less diligent while still charge more.

A high end manufacturer make several hundred or thousand dollars from selling a single item, but how many items to do they sell? I'd like to know about their total profits or, as a proxy, their lifestyle. I expect many are comfortable, but not extravagant, and that many are struggling.

I am not implying that all high end gear represents fair prices. Some items provide much better value than others. The burden is on us to listen and decide for ourselves. Don't get caught up in hype.

The cost of a $20,000 CD player is directly related to the $500 apple.

A man on a street corner has one apple, and a sign that says "Apple...$500". A passerby asks, "Do you really think you can sell an apple for $500?". To which the appleseller replies, "It only takes one!"

In the case of the $20,000 CD player, its high price being blamed on the cost of parts or R&D is nonsense, IMO. It only takes one...or twelve...

So the price is arbitrary, Grant?
Or are we presuming that no one who pays $20K for a CDP actually listens to it first?

Just how do we conclude that a $2000 CDP is worth the money? Or that a $5000 player is reasonable? More than 90% of the people in this world don't earn in a year what most of us have spent on a single component. Or cable! Value is entirely fictitious, and personal.

Some people will pay $400-600 to go see a concert, or an NBA game. And I cannot for the life of me figure out the value in that move. But there is no truth in this. Remember, not even money itself is absolute.

I had the opportunity to hear a 47 labs flatfish transport about $4k back to back against a pi tracer (maybe the most expensive transport made) $25k through the same 47labs system and yes there was a surprisingly meaningful improvement for someone with the $$$.

Tvad,

Your comment implies that high end companies are in the business of finding fools and getting them to part with their money. While some companies provide better value than others, you can't base selling price purely on the cost of the parts used to manufacture. The time it takes to do the R&d and marketing and administrative tasks must be accounted for.

Let's look at an extreme scenario. Assume that I am a 1 man shop and I only spend $1000 in parts for my $20k cd player. Assume that I sell 2 in a year and spend $10k/yr for marketing and rent and admin costs. Assume that I do R&D myself (say 20 hours per week). Am I really making a lot of money even if I sell my cd player for $20k each and pocket $19k for each one that sells?

What I can tell you from a buyer's perspective is that you would want killer R&D and extensive attention to the voicing of the cd player if you're going to pay $20k. Whether or not you get it depends on how fanatical the manufacturer is.

I like Boa2's point. A $2k cd player may just be a $500 model with a nice case and a few upgraded op amps and capacitors. Price alone tells you nothing.

Howard, I believe the price of a $20,000 CD player is arbitrary to a large extent. Are there some esoteric electronic parts in the $20,000 player that are only available to the manufacturer and are not available to the manufacturer of a $5,000 player? Does it take more labor to assemble than a $4900 APL Denon 3910 that has nearly all its parts hand soldered? I don't think so.

Yes, the price of a $20,000 player is arbitrary...just like the retail price of some well-known power cords. :)

05-25-05: Tgrisham
Incredibly wealthy people who don't mind spending that much money on one component of their system!

And then have to brag about it, don't forget that.

I suppose that to answer the question, Grant, we would have to open up the player and note the difference in parts, if any. But to deem it arbitrary is really just a guess, isn't it? My suspicion is that we could trace the money trail of all of its ingredients, R&D, advertising expenses, etc. and find a similar gross margin percentage as say, a Sony SCD-1. Of course, I could be wrong, but I don't think so.

However, more to the point, it seems to me that this is once again a mirror of the vast majority of the conversations that take place in these threads. And that is, we each stand for our choices based upon a justification of what we personally deem to be reasonable and worthy. If we set our limit on power cords at $300 apiece, those at $600 look like diminishing returns, and those at $2000 look like a fool's playground. On the other hand, we might conclude that the audiophile who is still messing around with the $50 cord has not quite heard the potential of his/her system. It's all a game, one in which the rules are malleable. Most of the cars I've owned cost less than our current CD player. Imagine what kind of mental gymnastics I had to go through to come to the conclusion that to spend $5K on a CD player made sense, and that I could sleep at night having made such a decision. Well, it didn't take that much effort actually, because I was after the best sound I could get. If the price is arbitrary, it must only be so to the point that we are willing to embrace it.

Honestly, and I don't want to divert this thread, but the issue that continues to nag at me throughout this discussion is how little value we place on life itself. I can't help reading the headlines each day and wondering why dozens of Iraqis, hundreds of Sudanese, and hosts of Americans are lost each day, and it's almost as if they don't even represent the number 1, let alone the loss of a life. Again, I don't want to derail this excellent conversation. I just felt like saying what came to mind, and right now I have the vision of a $20K CD player as well as the picture of a fallen soldier occupying that pea brain of mine. Weird.

Jsala, I can extrapolate Howard's point to the extreme, i.e. the $20,000 CD player may just be a $500 CD player with a fancy case, some upgraded parts and $10,000 in marketing and overhead.

Perhaps my use of the word "arbitrary" was not correct. I'm sure the manufacturer of a $20,000 CD player has valid reasons for justifying the retail cost. But, I don't believe half the cost goes into marketing and overhead. And, if we're talking about a one man operation, then R&D should be included in the "salary". Anyway, this is not a business course. The only way the price of a $20,000 CD player can be justified is if, as you say, the manufacturer sells only a handful of players a year...and if that's the case, I'd recommend a new business model, because the current one is doomed.

Its simple the 20k product is designed as a statement! They will never generate the high profit margin large quanity sales of this product.. it's used as a design exercise that typically some of this technology becomes less expensive to produce and ends up in lower level products that make for a good value (and more importantly larger volumn for the manufacture)

Look at the Ford GT40, compared to the Mass produced Mustang... you can mod the mustang to be as fast if not faster for less but it will never have the finesse of a product originally designed to excel! A lot of modded mustangs perform worse, break things, etc... as they exceed specs..

I've heard upgraded components that were suppose to sound better because all the cheap parts were replaced with more expensive parts and guess what... it wasn't musical!!!! You can buy on the theory or you can listen and make up your own mind! Some designers actually listen when they design and build things... Case in point (internal silver wiring YUK! or maybe perfect for that dark, rolled off system that has other problems!!!)...

Why is it that Modded players are worth nothing on the used market (especially after 6-12months? Because people are worried about service and reliability for something that was tweaked! Do you look for a stock car when you buy your everyday transportation or for a 4cylinder with a bottle of NOS strapped on?

The bottom line- If you don't understand it, don't buy it! it's america and you have a choice...

I personally can't justify the difference between the 4k player I have and a 10k or 20k player, but that's the value and limits I have set for myself for a digital front end because technology marches on... on the other hand I value and can hear the difference over my 20k Lamm amps versus a pair of digital hand built amps that people rave about on these forums.. What's the difference? Next year a cheaper better digital chip will make the $1000 player better than the $5000 player (DVD players have been doing this about every 6 months), Amplifiers haven't changed much.. I listened to the digital stuff but still perfer Class A sound even with the Heat!

I love the choices we have here in America!

Cytocycle, I buy the concept of the statement piece, but I don't buy the trickle-down-technology theory in the case of the CD player. I maintain all parts installed into CD players are sourced from common electronics suppliers. Yes, some of the parts are more esoteric than others, but a manufacturer selling a handful of $20,000 players simply doesn't have the economy of scale to have proprietary parts manufactured. Now, I would agree with the trickle down theory if Sony was making such a player...and I suppose that the uber expensive Esoteric players fall into this category since they are made by Teac (yes?).

Boa2-

Your sentiments are well appreciated.
The daily needless loss of human life going on in the world right now is of much more import than all of our crazy perseverating over digital front ends.

Maybe we do this at times as a harmless escape from the realities of the world. There are certainly worse things we could be doing and I am not one to feel guilty over these small enjoyments-but I did not want your comments to go unacknowledged.

Now back to mindless perseverating everybody!

Tvad: I agree that proprietary parts aren't manufactured but the processor you see in a high end player this year you might see in a lower end player next year.. Most of the high end products spend their money building multiple powersupplies and trying to isolate the digital from the analog ...
Economy of scale would also dictate that the high end players are hand assembled due to the limited quantity sold (wouldn't make sense to tool up a factory to kick out 100-500 units..)

Yup...on all accounts.

Boa & Lkdog are the most clearsghted of us, of course. Returning to the senseless entertainment:)

What makes the price of a 20k player? Here's one calculation method:
Per UNIT Total: (direct cost+ indirect cost + financial cost)=
$ 3,5-5k for SMALL company
$ <2,2 for LARGE company

Pertaining largely to the question of who would buy such a cd player, read "The Millionaire Next Door"; most persons with net worth wealth (not just high income coupled with high expenses and low net worth) would never dream of spending so much on electronics. There are exceptions, but typically the truly wealthy live very conservatively. That would put the majority of our systems, and even many individual components, beyond what they would spend.

In some ways, I'm sure there are audio junkies who can be compared to the person living in an apartment, who has no savings or retirement plan, yet is driving on lease an expensive automobile. The appearance of wealth, without wealth. So, many audiophiles probably have high end systems but are not net worth wealthy. They are the one's more likely to buy the $20,000 player. High income coupled with a high cash burn rate.

I'm sure there is a discernable difference in sound between a 4k and 20k player, but net worth millionaires as a group wouldn't care - they would state that even a 4k player is too expensive for what is obtained from it. It's something they don't need. It's one of the reasons they became wealthy.

I'm waiting for someone to write "The Multi-Millionaire Next Door," because I know quite a few of them, and they all have VERY expensive watches, cars, HT, and audio systems. They put making money first, but they do spend crazy amounts of money on toys. Crazy money to us, not to them.

Douglas and Boa2, Interesting comments..not without some foundation I think.

IMHO, only a fool hordes his money and only a boor makes a display of it. Once you have provided for a secure future for yourself and your family, spend the damm stuff on what ever gives you pleasure!

Envy or second guessing what those with means do with their money is like stereotypical Chinese food. You can eat a lot of it, but you'll be hungry again a few hours later. :-)

Who cares whether someone, other than the owner, can appreciate a 20K component! Its really unimportant to anyone else and, personally, I'm glad they find some satisfaction. It would be really sad if they didn't. I can find no good reason that I would want, or any one else should want, to make this owner sad. Life is too short.

Dear Jeff Jones: +++++ " What makes a $20,000 cd player cost 20,000? " +++++

Well, all of us have an answer, I like ( especially ) the ones from: Ledward, SonicBeauty,Boa2 and Jsala.

In the last two years I think that the music/sound digital reproduction ( redbook ) grow-up more than ever before and with this digital technology grow-up the prices goes truly high for a CDP.

Before the late two years I really don't like the digital music/sound reproduction, was really poor, but today is really great. I already heard some of the big names: Wadia, dSc, Meridian, Linn, EMM Labs, etc...

The best CDP ( top digital high end ) are in the 15K to infinite price range. I don't have that kind of money for a CDP, but I always want the best in any audio area for the music/sound reproduction. So, my alternative was to build a CDP and that's was what José and I do it.

In the process of research/design/test/etc, I learn a lot about many things including retail price and I can tell you: our CDP it is at least at dSc performance level and hands down the DSc or EMM labs in many areas for a fraction of the price of these great CDP. So, for José and I nothing justified 20K for a CDP: but José and I have other business to survive and many of the manufacturer owners of CDP is their " way of life " and they need that kind of money to do it. It's fair for we " customers " ?, well not always but that's how it works.

Regards and enjoy the music.
Raul.

All in my opinion of course .....

"What makes a $20,000 cd player COST 20,000 TO PRODUCE ? "
A brute-force-and-ignorance design approach coupled with very low production volumes.

"What makes a $20,000 cd player COST 20,000 TO BUY?"
Someone willing to spend the money.

Sanity checked.
Thanks folks, a couple or three options to check out and some interesting philosophical input to boot. Can't beat that at K-mart!

Thanks for the thread, Jeff. You definitely sparked some great conversation.
Regards,
Howard

collusion?

RAUL -- did you use the daisy-lazer kit for yr cdp?

Dear Greg: Why don't take a look to my " system ", there are some info about: A/V Station.

Regards and enjoy the music.

Raul.

Dear Greg: Please take a look to my " system ", there are some info about: A/V Station.

Regards and enjoy the music.

Raul.

Douglas_schroeder,

You hit it right on the head, most people do not realize it, but it is true, the truly wealthy people like to hold on to their money, especially old money wealthy, like you said, it's how they stay rich. The posers are the ones buying beyond their means, to have the appearance.

the fact that they know somone will be dumb enough to buy it.

The market they are trying to hit is the "new is always better and i gotta have the best" market. They wont sell many, but with that price tag they wont need to.

think of it like this, why manufacturer 200CDp's and ship them all for 100 bucks each, if you can just sell 1 CDP for 20k and save on all the hassle?

Slappy, you've just restated the story of the $500 apple! :)

What i get from this discusssion is that having a decent player modded with top quality parts for what? $350-1000 should come close to anything out there. I guess they could be using all gold wiring and diamonds for the laser, Ha!

Ausjoe brings up an interesting thought; modded cd players. I at one time tried the Ah! Njoe Tjoeb 4000 (highly modded Marantz turned into tube cd player) and thought it very nifty. I had read much about it, and about the fact that it was supposed to outperform $3k units.
I found a stock Rega Planet 2000 to be superior, to my ears. It seemed that the modding of the Ah! did not produce such a superior player. Sometimes it seems all the modding is similar to taking an economical car, such as a Honda CRX, and putting $15,000 of mods on it. It may stand out, but it's not truly a classy car (I'll add IMHO, lest I offend someone who feels such mods make a car classy).
Sometimes I wonder if the modded cd players, amps, etc. get noticed, but a quality, higher priced production unit will produce a more pleasing presentation. With some frustration, I've learned the only way to truly know is to purchase the contender and compare it side by side to the reigning champ.
However, having gone through the modded test once and ending up with a stock player, I'm in no hurry to go that route again. I'd probably look to a higher level of stock player which has garnished positive reviews from professional reviewers as well as enthusiasts.

The best sound comes from the high end players but only marginally so as stated above. For the money "budget" players do an incredible job. I own 3 budget players 2 are in the under 1k mark the Music Hall cd 25 is a giant killer, I get amore relaxed sound from my Jolida, but I must admit that my most expensive player an Audio Aero Prima provides the most enjoyable sound and it retails for about $2-3K. I bought mine used otherwise I wouldn't afford it. Between that and a DCS elgar system and other $20,000+ units are the exclusive factors and yes some better sound but its incremental. I have to agree with the others who say its mostly just a prestige factor. If I had the money I might go for the better AA but thats about as far as I think it makes any sense. I have no idea what really cost the manfacturer so much make those players other than very small production runs and R+D.

Thank you, Raul.