Gear price question

Maybe this is a dumb question, but I was just wondering why some gear is so damn expensive.

For example, there's a Telefunken mic that's $10,000+. Preamps that are $2000+ (which doesn't seem too bad actually).

And that's just a couple examples.

What could possibly make a unit like these cost so much? There are cars that are less expensive.

[bigwillz24]

Quality of parts being put into said product. Profit margin hike of said product. Name of said product. Supply vs. Demand of said product. The list goes on and on.

[turtlishous]

i would geuss by your screen name that you would know a little somthing about guitars?

weel i don't think there is much of a difference between a really high ticket guitar as a high ticket mic or gear of any kind......car parts...tools...etc...collecters might pay a higher price for rare gear and some will look for the build of the gear or both but in any case the more labor intensive something is to build generally the price will reflect that...or who hard it is to find...or just how stupid people are......sig, guitars for example....
Clapton's beat-up guitar is about as much as a new car too//and why? see above^

[Massive Master]

Originally Posted by danny.guitar

Maybe this is a dumb question, but I was just wondering why some gear is so damn expensive.

Some gear is freakin' amazing. And "amazing" usually costs twice as much as "awesome" which costs twice as much as "great" which costs three times as much as "very nice" which is three times as much as "reasonable" - which is usually only around 20% more than "absolute crap."

Most of the really pricey stuff is to some extent, made at a bench, by hand at several stages. Then tested and re-tested - individually - sometimes for hours, by a person, before shipping out.

Crane Song - Just as an example - assembles each piece, checks it for function and then puts it in an insulated "oven rack" (for lack of a better term) for at least two weeks with other pieces just to put it through the kind of extreme heat that it will never go through in normal use. This is done before signal even passes through the circuitry - which is painstakingly selected from some of the absolute highest quality parts available.

With most budget-friendly gear, that's the goal - "Let's make a $500 compressor" - and the search goes on for the least expensive acceptable components. With the "top-shelf" stuff, it's "Let's make the *best* compressor we can" - and the search goes on for the best components. Those "best" components add up... Just like the consumer stuff, the components go up in price also. An "off the shelf" resistor might cost a dime. The same value resistor that has incredible tolerances made from superior materials might cost a dollar. $.30 switches on the cheaper units are $6.00 switches on the big boys.

When it all adds up, it's not hard to find see a compressor made to such exacting specifications can cost $6000 when it's done.

[kojdogg]

Definitely agree with the responses so far, but also, these companies need to recoup their advertising costs, administrative/overhead costs and investment cost (R&D) through sales of their products. Think of a brand like BLUE that has awesome graphic design work and extensive marketing. I love the BLUE mics I've used, but I bet that the price of those mics aren't only reflective of the costs of components and labor.
Labor costs are also really high and there is the trend to move more production to countries like China where labor costs are miniscule by comparison. Some companies are doing this and passing the savings on to the customer, while some are still maintaining high prices on their products (I believe the GT Vipre is assembled there? I may be wrong...).
The supply and demand issues play in a big factor in the pricing of course. Skibbe electronics makes a really well regarded clone of the LA-2A called the Red Stripe. They started selling them 5-6 years ago for $1000, and they now sell them for $1800. I don't believe (may be wrong) that they changed their design, upgraded components or anything like that, but still they raised the price by 80% and still people with the $ will line up to buy them.

That said, I want one of those Telefunken ELAM 251's so bad

[SonicAlbert]

Great cars cost a lot of money, great houses cost a lot of money, great wine costs a lot of money, great gear costs a lot of money. Etc., etc., etc.

You always pay for quality. There a so many factors involved you could write a book about it.

[kojdogg]

Originally Posted by SonicAlbert

Great cars cost a lot of money, great houses cost a lot of money, great wine costs a lot of money, great gear costs a lot of money. Etc., etc., etc.

You always pay for quality. There a so many factors involved you could write a book about it.

Definitely true. With gear, as with any boutique item, I think a big factor still is perception though-- especially with the really high end stuff. You eventually get to a point of diminishing returns in terms of improvement in quality versus increasing price, but many people will still pay 100% more for a 10% increase (arbitrary number for sake of exposition) in objective/measurable quality. A lot of the distinctions are totally subjective too (e.g. what sounds better at the same price point-- a Fearn, an Aurora, or a Pendulum pre) .

That said, I still want one of those 251 E's really bad. I may have to sell a kidney or something...

I guess I'm mostly wondering how a mic can cost $10,000. Surely, even with the best components, the price of making one doesn't come near $10,000?

And how much of a difference those components make in the quality of the mic/preamp/whatever.

Obviously, there will be a difference between an Audio Buddy and a Great River, but once you get to a certain price point, you would think the difference in quality would be negligible and not worth the huge price increase.

[kojdogg]

Originally Posted by danny.guitar

I guess I'm mostly wondering how a mic can cost $10,000. Surely, even with the best components, the price of making one doesn't come near $10,000?

It costs $10,000 because enough people will pay that much for one.
It won't cost nearly that much to make, but companies incorporate a percentage of all of their other operating and marketing costs into the price tag plus a profit margin, which goes to the retailer, who then marks it up to cover their same expenses.

[Massive Master]

There's the simple law of Supply and Demand - The market plays a large role in pricing. Prices go as high as people are willing to pay.

A Fairchild 670 in good condition goes for around $30,000. Personally, I wouldn't pay $3,000 for one (unless I was going to turn around and sell it for $25,000 the next day). But enough people *would* pay $30,000, so that's what the market decided. If all of a sudden, someone found a thousand brand new FC670's in a warehouse somewhere, the price would plummet overnight to perhaps only several thousand. Demand would still be high, but so would supply. On the other side, if suddenly all the FC670's in the world exploded and there were only two left, those would probably have a price tag of perhaps 10 times what they're "worth" today.

So production & marketing costs establish a bottom line price - The price that needs to be paid to substantiate further production. After that, the market decides.

[ndycus1]

yep...it all goes back to economics class

Well I asked this question because people seem to expect that the more you spend, the better stuff you're going to get.

I'm just trying to figure out where to draw the line between what gear is expensive because of its components, or because of its name/hype/demand.

I'd hate to buy a real expensive preamp, or mic, when I could have gotten one for half the price that's just as good but less popular. Or uses less-quality components, but good enough to where the difference is negligible.

[kojdogg]

Originally Posted by danny.guitar

Well I asked this question because people seem to expect that the more you spend, the better stuff you're going to get.

I'm just trying to figure out where to draw the line between what gear is expensive because of its components, or because of its name/hype/demand.

I'd hate to buy a real expensive preamp, or mic, when I could have gotten one for half the price that's just as good but less popular. Or uses less-quality components, but good enough to where the difference is negligible.

There's a lot of subjectivity in what's better. Some pres and mics are really expensive and well-regarded because they are very clean and transparent (e.g. Earthworks microphones, True Systems preamps, Millenia Preamps, Avalon preamps, Great River pres/eq's, and many others), some are expensive and well-regarded because they are very charactered/colored (e.g. Ribbon mics of various brands, Neve preamps, Altec pres/dynamics, UA pres/dynamics, etc.).
In terms of components, if you search these kinds of boards and learn the component vernacular, you can usually find out a lot about what's in various pieces of gear (input/output transformers, op-amps, etc.).

[pohaku]

At the high end, we aren't talking about interchangeable widgets. All high end preamps or compressors aren't clones of each other or some "vintage" box. In addition to the cost of parts, assembly and simply running a company to make money, there is also the R&D and design cost that goes into this gear. Even with gear that is based on some desirable vinatge piece (like a Neve clone), the manufacturer often has attempted to make improvements in order to make a better product and differentiate itself in the market. All that stuff costs money.

In addition, at the high end, we aren't talking about a huge market in terms of sales volume. There's a relatively limited market for high end gear worldwide and as a result, overhead, design and development costs get spread out over fewer units, thus making them more expensive as well.

On the other hand, you can actually buy this stuff from a vendor now. Back in the day, it wasn't unusual for it to be custom built because it simply wasn't commercially available on an off the rack basis.

[sdelsolray]

Originally Posted by danny.guitar

Well I asked this question because people seem to expect that the more you spend, the better stuff you're going to get.

I'm just trying to figure out where to draw the line between what gear is expensive because of its components, or because of its name/hype/demand.

I'd hate to buy a real expensive preamp, or mic, when I could have gotten one for half the price that's just as good but less popular. Or uses less-quality components, but good enough to where the difference is negligible.

Your pain threshold for the cost of gear will be different than someone else's. It basically depends on (i) your wealth and (ii) how committed you to getting good sound in your recording.

Generally, once you get further up the food chain, virtually all the gear is great - just different flavors of great.

[SonicAlbert]

Originally Posted by danny.guitar

I'd hate to buy a real expensive preamp, or mic, when I could have gotten one for half the price that's just as good but less popular. Or uses less-quality components, but good enough to where the difference is negligible.

But these are all non-factors, completely don't matter at all. With top end gear this kind of quality versus cost comparison no longer matters. You are approaching buying high end gear with the same mentality as you would low end gear, and it just doesn't apply.

When you get beyond a certain point it is indeed about the sound and what works for you and your music. Whether you could get the same thing for less by an unknown maker is totally irrelevant. If you have the money you buy what you need and what you like, and forget about the rest.

[xstatic]

I agree that the law of diminishing returns definately applies, but that is not necessarily a bad thing. There is excellent equipment that costs $2000 a unit, and excellent equipment that costs $5000 a unit. The difference here is not usually going to be as drastic as comparing a $200 unit to a $1000 unit, but the difference is still there. In my opinion, if you aren't sure what those differences are and whether or not they are really worth it, than you are not ready for the higher priced unit, go with the less expensive one. A lot of the differences between the higher end units is definately subjective, but that does not mean that they should not be valued as they are. When you are ready to fully take advantage of those differences, you will know it and the price tag difference will not seem like such an issue.

In general, I do not think you are going to have much luck buying a unit for half what another costs and still get the same quality. Today you may not notice the difference much, but down the road as you get more experience, knowledge, time, and develop your ears more those small differences may become more and more apparent to you as well as more and more valued to you. In this day and age however, there seem to be more "bargains" popping up. Those to me are the items that you buy that outperform their price point. It does not necessarily make them as good, but there is definately a more solid "middle ground" now than there was 10 years ago.

[MOFO Pro]

Originally Posted by SonicAlbert

Whether you could get the same thing for less by an unknown maker is totally irrelevant.

I can't believe you just said that Albert... can you say DAV BG-1

That's the beauty of a forum just like this one... the premium boutique pres are a no brainer (everyone knows they're great, and have the sound that every manufacturer strives for)... but it's here that you can discover those diamonds in the rough... the ones that actually get close... for significantly less (Studio Projects, FMR also both come to mind)...

[SonicAlbert]

Yes, buy gear from unknown makers and research gear from unknown makers, that's all valid. What I'm saying is that when shopping for high end gear the price part of the equation is essentially eliminated. So it doesn't matter whether the gear is from a name maker or a non-name maker and the relative price difference thereof. It's about the tone and the sound and the function only, regardless of price or maker.

I bought my BG-1 because I liked it, not because of it's price. I wasn't looking for a deal and I didn't care how it compared with units costing more or less: I liked what I heard so I bought it. I feel that's how gear purchases should always be. Too much emphasis is put on featuritis and a consumer oriented type price comparison shopping thing.

[Ironklad Audio]

to make long story short...

suppose some super-knowledgeable engineer guy goes out and makes his own mic. the price tag ends up being pretty high, as he only uses the best components in the mic, and builds it by hand with the best tools

now this guy figures "i'm probably only going to sell X amount of these in a year, and i need to make Y amount to cover my costs and also have enough to pay my bills and eat and shit at the end of it all"

divide Y by X, and you often get a 4, sometimes 5 digit number

[MOFO Pro]

Originally Posted by SonicAlbert

I bought my BG-1 because I liked it, not because of it's price.

And I bought mine because I liked it... for the price

I understand your point Albert (and it's well taken)... but honestly... would you have forked over two grand for the BG-1 without giving it a listen... or was the low price tag, the reputation of the designer, and the praise in the various audio forums, enough to get you to spring for it... (as was the case with me)

Personally, for me... price always matters, no matter which end of the financial spectrum you're at...

[SonicAlbert]

I did give it a listen, and that was the motivating factor in me buying it. I already owned a fine preamp that cost near $2,000, the Grace 201, and really didn't even need another preamp. It was the sound alone that convinced me to buy it.

As far as price mattering, yes it does to most of us most of the time. But for the purposes of this discussion I think that it is important to bring up points about gear or situations where "price is no object".

It's important because if you can begin to think that way, it trickles down into better buying decisions on even low priced gear. The reason being that you get away from the intellectual game of "what am I getting for the money" and more toward "what do I like, what sounds good, what works for my music". In many if not most cases, extra features don't matter, but sound does.

[tdukex]

0-60 & 1/4 mile times, and top speeds of two cars:

2005 Ferrari 612 Scaglietti: 4.6 12.8 196 mph $250,000
2005 Chevrolet Corvette C6: 4.2 12.5 186 mph $50,000

The Corvette is just as fast and has similar handling and breaking characteristics, but the Ferrari costs 5-times as much as the Corvette.

Is the Ferrari worth it?

[kojdogg]

Originally Posted by tdukex

0-60 & 1/4 mile times, and top speeds of two cars:

2005 Ferrari 612 Scaglietti: 4.6 12.8 196 mph $250,000
2005 Chevrolet Corvette C6: 4.2 12.5 186 mph $50,000

The Corvette is just as fast and has similar handling and breaking characteristics, but the Ferrari costs 5-times as much as the Corvette.

Is the Ferrari worth it?

That's a great point. A more blatant example from the world of mics/gear comes from the Apex 460/Telefunken M-16 Mk I. Telefunken bought mics from the same factory (Ningbon Alctron) in China as Apex, made some small changes and sold their M-16 Mk I for $1400, where the Apex 460 is virtually the same mic and streets still for about $200-220.
Read all about it here:
http://www.studioreviews.com/m16-460.htm

edit: yeah this story has popped up here before, unearthed by others far more knowledgeable than me, but I do love re-telling it.

[MOFO Pro]

Originally Posted by SonicAlbert

I did give it a listen, and that was the motivating factor in me buying it. I already owned a fine preamp that cost near $2,000, the Grace 201, and really didn't even need another preamp. It was the sound alone that convinced me to buy it.

As far as price mattering, yes it does to most of us most of the time. But for the purposes of this discussion I think that it is important to bring up points about gear or situations where "price is no object".

It's important because if you can begin to think that way, it trickles down into better buying decisions on even low priced gear. The reason being that you get away from the intellectual game of "what am I getting for the money" and more toward "what do I like, what sounds good, what works for my music". In many if not most cases, extra features don't matter, but sound does.

Excellent points Albert (as usual)... I guess it would be better to just state my own philosophy, then to contest yours...

I picked up the DAV because of the price... sound unheard... due to what I was hearing about it. Being made in the UK, with no local distributor... I didn't have access to one, or the ability to put it through it's paces.... but for the $600 or so that I dropped on it... it was worth the chance... If it had been $2000 it never would have happened... not without a listen first...

When I purchased a hard disc recorder I could have dropped all the money on a Mackie HDR... but the SDR was being discontinued and was sonically the equal to it's big brother... so I made a common sense financial desicion to go with the cheaper unit...

I could have bought a Roland V Drum set for $3,000 or $4,000 but instead pieced together a very decent kit from the DM-Pro sound module (GC blowout), Pintech Silent Tech trigger pads, hardware and cymbal triggers as I found them on discount (took over a year to find everything)... and wound up spending about a grand total on a set that I feel plays as well as the top of the line Roland.

I picked up a dBX Quantum for $200, and a TC Finalizer Express for $30... I don't do any of my own mastering, so wasn't looking for these particular pieces... but at those prices... I couldn't refuse... (if only for the investment)

Price matters... Quality matters... and my purchasing decisions are based on a balance between both...