Sign of The Times: Stereophile's Parent Company Declares Bankruptcy
According to Bloomberg.com (see http://www.bloomberg.com/apps/news?pid=20601103&sid=aDmRedq9AdQo&refer=us), Source Interlink--the parent company of 5.0 Mustang & Super Fords, Lowrider, Street Chopper, Soap Opera Digest, and Stereophile (among others)--"sought bankruptcy protection as it moves to become a private company." Bloomberg says that Interlink "hasn't reported a profit since the second quarter of 2007...Under an agreement with lenders, about $1 billion of existing debt will be canceled and about $100 million additional liquidity will be provided, Source Interlink said. The company said a lender-approved plan of reorganization will be filed."
What, if anything, this means for the future of Stereophile is unclear. In response to a question on the Web site "Audio Asylum" (see http://www.audioasylum.com/forums/critics/messages/4/42778.html) about whether the bankruptcy might impact the mag, editor John Atkinson said; "No. It is business as usual and perhaps better than usual as with the parent company's debt burden significantly reduced, there may well now be increased investment in its properties, like Stereophile."
Home Theater Review.com reports (see http://www.hometheaterreview.com/av-news/parent_company_of_stereophile_home_theater_mag_files_chapter_11003672.php) that "according the New York Post, [Citibank] will own upwards of 80 percent of the company's stock which is priced at about 15 cents per share on Tuesday morning." It also speculates that "while its doubtful that Stereophile and Home Theater will just go away, some of the associated costs, additional web sites and many of the writers on staff could become victim of today's brutal economy."
From bitter experience at Fi, I know that financial woes are particularly difficult for low-liquidity enterprises like magazines to weather. I guess we will see what we will see. But that times are hard for every part of this industry--and likely to get harder before they get better--is today plainer than ever.
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Comments
Though the parent company is not going bankrupt because of Stereophile alone and is not the only publishing company to be experiencing financial troubles, I dare say that this is a wake-up call to publications like Stereophile to cater a little more towards the bargain hi-fi shopper and a little less to the cost-no-object hi-fi shopper. Note I did not advocate the abandonment of the high-end, but rather the moderate shift of focus to the other end of the spectrum. At the age of 36, I am fairly young for someone in this hobby/industry, and I am reminded of this fact every time I walk into a hi-fi boutique shop. While there are many reasons for this age disparity (disposable income, preferences, needs, etc.), the result is the alienation of the masses of young men...and their money. Though this might sound like the problem, I believe it is more the symptom. Instead, I believe that the problem is lack of awareness. While I am not very successful in convincing my friends and family members to purchase a piece of hi-fi gear that is superior in sound quality vice quantity to the cheaper mass-market receivers available in BestBuy, they are always highly surprised that reasonably priced hi-fi gear is available. This lack of education/information lies in part with the hi-fi review publications. For example, when the typical issue of said review publication includes reviews on roughly 6 pieces of hi-fi equipment with only one of them costing less than $2,000, it is hard for the new hi-fi enthusiast to learn how to get into the hobby for under $5k. I hope that those of you who are reading this are not thinking, "Well, that's because you can't get into hi-fi for under $5k". While I someday may purchase a pair of $12,000 loudspeakers or $4,000 monoblock amps that are reviewed in Stereophile, they were not my "gateway drug" purchase, if you will. So how did I learn about this quality, but less expensive gear that would eventually become my first purchases? Certaintly not though Stereophile, though I have been buying it off and on for several years. Instead, I became aware of quality & less expensive equipment through the internet review sites, discussion forums, and ultimately my local hi-fi shop, none of which contribute to review publications' revenues. I am suspecting that many of you who are veterans of this industry are put off by the idea of watering down the publications by reviewing fewer $12,000/pair loudspeakers (or $107,000/pair loudspeakers) and reviewing more $2,000/pair loudspeakers (with the same amount of effort and write-up), but my guess is that kind of thinking is partially responsible for why Stereophile's future could be in jeopardy.
Agreed. I've subscribed to Stereophile for over 12 years, and look forward to each issue less and less. Sure, it's occassionally nice to oggle "fantasy" gear, but when the vast majority of the coverage is made of unobtanium, it's no longer fun, it's annoying. To most people, a $3,000 amp is "high end." And a $30,000 amp? Yeah, that's called a car. And in this economy, continuing to cover the latter instead of more of the former is not only embarassing, it's insulting.
Stereophile has fewer pages than ever, caters too much to vinyl, tubesand exotic gear and their music review section is pathetic.
I happened to go through many editions published 8-10 years ago, it's not the same mag it used to be, quality-wise.
No great loss.
Since vinyl is a growing segment, your point is?
sorry, that was meant for repdetect.
Well growing from virtually nothing to next to nothing signifies what?
Look at the sales for vinyl, insignificant in the scheme of things, It's a trend that will not last. When this new vinyl generation gets tired of easily scratched media and all the pops and clicks, it'll fall by the wayside again. It looks to me that Blu-ray is the future for hi-res music. If not that then streaming.. maybe, but not vinyl.
Sadly, the resurgance in vinyl is merely a fad among today's youth looking for something different than their parent's CDs or mass-market iPod tunes. As evidenced by a recent survey, they care nothing about sound quality, so the fad of being audio "rebels" will eventualy go away, and the vinyl resurgance with it. As an owner of a decent turntable (over $1k) and dozens upon dozens of records, I say that not in hate, but in hopes that Stereophile will realize this and turn more attention to audio downloads, servers, DACs, etc. The future, in other words, not the past.
I agree wholeheartedly, Paul. Years ago I worked at a place in Cincinnati called 'Stereo Lab', whose mission was to introduce as many people as possible to affordable quality audio...and it worked, until mismanagement brought it to an untimely end. The present and future of audio source material is via download. There is at least one source of HD audio on the internet, and possibly more. The bit rate of these files is higher than that of CD. With a quality D/A converter you end up with sound that's noticeably better than CD...perhaps not approaching the 'minimum sampling rate' Mark Levinson claimed would satisfy him, but certainly better than any other digital possibilty available to the unwashed masses. And what could be more convenient than digital download? With digital download high quality source material becomes available to everyone and anyone with access to a internet device cum broadband. Vinyl is a fad. Fads die out. Digital, and more specifically 'digital done right' is the wave of the future...and the present.
Perhaps that "growing" does not equal "big enough to sustain sales"?
Before we start claiming that this bankruptcy is a wake up call for Stereophile, we need to determine if Stereophile is indeed one of the failing mags that caused the problems (which based on recent discussions on the Stereophile website, the mag appears to be doing very well financially)...
I doubt anything will change at Stereophile based on this, the mag is likely still profitable and will continue to cater to the same market....
My take is - worst case scenario - Stereophile is spun off as a property to some other company or holding group, as it seems fairly stable on its own.
Chris
The Signal Collection, LLC
North American Distributors for: Continuum Audio Labs, German Physiks, Lansche, Gemme, Digital Do Main, Stereovox,
Perhaps Larry Archibald can buy it back for a fraction of what he sold it for...
Hey, that worked Syd Harman - he sold Harman Industries and then bought it back at a discount more than once.
Steven Stone
Contributor to The Absolute Sound, EnjoytheMusic.com, Vintage Guitar Magazine, and other fine publications
I subscribed a couple of weeks ago, so it isn't my fault.
<< I subscribed a couple of weeks ago, so it isn't my fault.>>
Wha'd you get? The trip to Hawaii or the free set of flatware?
At this point, as I said in my original post, none of us knows what condition Stereophile's condition is really in. Those who do are--quite naturally--spinning the situation favorably, which may be the truth or may be propaganda or may be something in between. However, even if you were solvent, to claim that everything is just hunky-dory in the face of the bankruptcy of the company that owns you or that that bankruptcy could be a "good thing" strikes me as a mighty upbeat interpretation of what has to be a distressing turn of events.
Stereophile may indeed get sold off (again), as Chris surmises, or it could keep toodling along as part of the Interlink group, but I'd honestly be surprised and dismayed (and, yeah, okay, a little pleased) if it just up and folded. Politics and personalities aside, I can't think that having only one U.S. print magazine devoted to high-end audio left standing (and we ain't going anywhere, folks) would be an an entirely healthy sign for this industry--or any industry.
Mr. Valin:
I've either subscribed to or purchased virtually every issue of both magazines since the early 1980s, although I stopped with regard to TAS about ten years ago because of its increasing flights of fancy, a revolving door of reviewers I'd never heard of, and what seemed to me to be a huge gulf between your editorial policy and the real world. Chris Martens, Robert Greene and others certainly do fine work, but Mr. Martens seems to be the only one who consistently makes an effort to connect with people interested in good sound at a fair price, versus bragging rights to this week's most expensive pair of interconnects. (And for every one of him there is a Steve Stone mocking readers who ask why hearing tests aren't part of your curriculum. I don't necessarily think they should be, but verbally sticking it to readers is an old Michael Fremer trick, one that has done nothing to endear him to anyone.)
I've stuck with Stereophile because they have Art Dudley and John Marks (both of whom used to grace your pages iirc), and even the insufferable Sam Telllig and what's-his-name, the phono guy who thinks he's a comedian, have at least been around long enough for me to know their listening prejudices. John Atkinson puts a great deal of effort into measuring new gear, a process your magazine is incapable of doing. (I know, I know, measurements are meaningless, and it is just a coincidence that they are time-consuming and expensive to perform, not to mention requiring technical knowledge that may not be available at TAS).
In short, your smugness lacks class, particularly coming from the editor of a magazine that has had its own economic disasters, hostile ownership changes, bitter fights and a steady stream of departing reviewers. The loss of Stereophile will not be of great significance outside the tiny circle of people who share our interests, but the exact same is true with TAS. You have made a smart choice imo to focus online in an environment where even the New York Times finds itself on the rocks, but Stereophile tried that too, and it remains to be seen whether it will save them.
Meanwhile, I doubt you will see a significant uptick in TAS subscriptions if Stereophile in fact folds its tent. You may see a temporary increase in ad dollars from manufacturers of expensive equipment, but I doubt that will hold once subscription numbers don't follow. I guess maybe you should gloat while you can, knowing you and your staff could be there yourselves in six months.
I enjoy the AV Guide format, and still buy the print copy when it has something that interests me, but the days of devouring it cover to cover are long past. there are just too many sources of information now, much of it from sources that focus much more on getting value for money, a concept that often seems lost to both your magazine and Stereophile. No one expects this hobby (for that's what it is, really) to be cheap, but many of us expect value in return for the prices demanded by many of the manufacturers adnvertising in your pages. Even Bill Gates would feel like a chump if he bought a Volkswagen for $90,000 and got the equivalent of $5000 worth of parts. Look at, say, the $100K-plus SE amps from Lamm, ponder the cost of the parts involved, and wonder what is missing from your value judgements on products like that. I could name a dozen products with similar, apallingly low value/cost ratios
OK, lecture over; thanks for listening
Tom Sylvester
Kailua, Hawaii
"...Those who do are--quite naturally--spinning the situation favorably, which may be the truth or may be propaganda or may be something in between."
JA statement is "business as usual, or better than usual".
Seems he turned into a amateur spin-doctor. Going bankrupt is not better business than usual, and if it really is, please wake him up. Subscriptions are down year after year, just like interest rates. You just can't pay people to buy subscription and rates won't fall below zero. Anyway, content is free on internet, so why pay for it?
Median age of attendance at CES, Denver and Montreal shows was probably around 55-60 years old. In a couple of years, all those old farts (me included) will be on the market for motorised wheel chairs, "comfort" seats and hearing aids. The whole economic model is shifting and I'm both surprised and sad that people like JA didn't catch up earlier.
Audio dealers are fighting against Audiogon direct sales (you know so-called demos and open boxes), when manufacturers are not simply selling direct on internet. In reaction to this, dealers retract themselves from real life by concentrating on big and expensive gear, hoping to make it out of the crisis.
The thing is, they'll never be able to catch up because they refuse to face reality.
My two teenage daughters have bigger music collections than I had at their age. They never - ever - went into a record store and when they buy music, it's on iTunes, with dad's credit card. People still listen to music. People always will. People do not relate to $10000 CD players. High end has become a vanity business.
Hey guys,
it may not be a problem for JA, it, may be, in all probabilty, be an opportunity, let's hope so, you know it's not absolutely necessary to dislike Stereophile if you like TAS, try both together you might like it, I do.
For those of you in business you will understand there's no shame in seeking creditor protection in these times of shrinking discretionary expenditure, predatory banks and nervous creditors, consider -' Stereophile's parent even outlasted Lehmans!! (Yes I know they are different businesses!)
Can one forgive JV's mini bout of schadenfreude, I think so, he knows it's healthy to have good competition and to be part of a community of like minded people so I think his tongue may be slightly inserted in his squirelly little cheek.
Monopolies serve neither the customer nor the monopoly, I am rooting for Stereophile and who knows it may come back better and stronger, after all look at JV post Fi !!!
I subscribed to Stereophile for many years and looked forward to each issue. Then it sold and coverage of everything got smaller and smaller. It went from what I thought was good coverage (compared to Stereo Review, etc) to minimal coverage very quickly. Should have saved enough money to have saved the whole bunch I would have thought.
I am actually in the High-End audio industry and Manage a High end store. I can tell you that both mags have their biases. Chris in VA has a very good point and that is one of education and connection with yourger generations. I Myself actually am in my twenties, which is a virtual anathema in my industry. Much of the problem is that most of the people running magazines and High End companies aren't really designing gear to play or appeal to a yonger listener, What does that really mean? Well for starters, if one listens to any type of rock music especially that of the harder or more progressive variety there is really very little audio gear that will play this music with linearity and conviction. I am sorry, but all fo the 60 and up demographic aren't really buying expensive gear right now and appealing to those who just like jazz or classical music is a death nell for an industry that will be put to rest if it doesn't get it's act together. Also, whoever said vinyl will be replaced by BD is a moron, vinyl appeals to the old and young hipster groups and is probably helping sales, Blu-Ray audio will not happen at this point and Blu-Ray itself is not doing anything special. Right now it is all about High Rez Downloads, Vinyl, SACD, and CD in the High End world.
I personally like TAS in terms of its diversity of music reviews (They actually will reveiw heavy metal albums) They seem to be trying to pull in the younger generation. If Audiophiles would just stop complaining the the "young'ens" don't get it then maybe they might reach some of them, but it will take meeting them on their terms. High Rez downloads and USB DAC's will help this to be sure and vinyl will also have a cache to certain yougner people. It would be great if the mags actually had bands holding gear or somehow combined them so it wasn't just about the gearotica of it all. While that is nice most of the reviews don't really tell you jack about how something sounds and they sure don't tell you if and how an amp will saturate if it is playing Progessive death metal and if you think a piece of electronics doesn't need to play that because that music is just "noise" then you sir are part of the problem and are more than likely not a buyer and not a music lover. If you are those two things then you need to realize times are changing fast and the GenX and GenY Punk Kids of yesterday are now the money demographic of today. To be blunt, in this heavily comoditised, "I want it now", ipod generation, We of the industry need to sell the Experience and Emotional connection of music as an event to the youth because they do not get it. Gone of the Days when Marrantz and McIntosh were reviewed in Playboy and seen as a must have for the swinging male bachelor. We need to, try as we might, revive our industry and the Mags and companies need to step up to the plate and try to stop acting like everyone should give a Damn that they are so special, because they aren't and to young poeple it is out of sight and out of mind.
WOW, get rid of the crusty old gits, or maybe keep a few, and get some young reviewers in, bring back the relevancy of high end audio mags, couldn't agree more!!
Having said that the Rite of Spring or Mahlers 2nd played at concert levels may give just as much trouble to a system as Megadeath or Billy Corgan at full stretch and subtlety has its merits as well.
Personally I wouldn't hold Stereophile entirely responsible for its' parents' reported demise but the comments made by Zdoering apply to every organisation and if the implication is that TAS and Stereophile have become ossified and locked into a wierd time trap bubble I couldn't agree more, no business can survive looking backwards.
Cast out some of the worst offenders, you know the smug self styled experts in a field where nobody can be proved wrong, and get back to basics.
Would I want to read an equipment review by the Z man, you bet!!
Hey, jek, how come you left the "r" out of your name?
Your comment is what they call a "tell" in poker in terms of your view of readers who don't buy the editorial party line, Mr. Valin.
There is no "editorial party line," tomsyl. This was a blog post. I'm speaking solely for myself.
Hey JV probably the same reason you put the "l" in yours. ;)
I've often said kick the "l" out of Valin.
I too wondered if my parents knew what they were doing to me back in 1950 in England when they blessed me with the middle names Ernest Ronald!
Heh-heh!
It's time for J Gordon Holt and Larry Archibald to buy Stereophile again!
The two reasons I stopped subscribing to Stereophile some time back and now just buy a copy from a stand every now and then was first I got tired of reading endless Musical Fidelity andTriangle reviews by Sam Tellig and second, JA endlessly printing behind the scenes articles of his latest recording project which sadly makes him look like he was rejected numerous times by Mix Magazine.
The reason I still buy Stereophile occasionally is because Art Dudley is a hoot! I mean that in a GOOD way!
I became interested in "HiFi" in the late 50's , thru the 60's & 70's. Remember going into the "Stereo Shops" and looking at and listening to affordable equipment ?
The high end was expensive but not totally out of reach.
Having subscribed now for several years to the "high end" magazines, I almost cringe when the new issue is sent.
There is little content in the lower and middle levels. There is advertising for $120,000 speakers, $2000+ wires, etc.
They have painted themselves into a corner. Well, perhaps not, there's always the Japanese & Germans. Perhaps they will buy the stuff.
I still use my TD 125. I can't afford the $20,000 turntable & $4,000 tonearm much less the $3500 cartridge.
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