Contact RMGI Before It's Too Late

[Beck]

It's important RMGI know the small and home studios are out here and we're not interested in audiophool prices.

Tape prices are up by 50% since late last year.

After talking to tapes.com about their 12% price increase for 1/2" SM911 since February it appears RMGI is basically fixing prices. All the vendors I know of are given virtually no wiggle room on pricing.

If RMGI follows the same “Way of the Asshole” as Quantegy did, we can kiss them goodbye as well. Mark my words… what they think will work will not work. There aren't enough Steve Abinis to keep them going. It's going to take large and small studios for tape to survive.

So, I hope I won’t be the only one writing RMGI. I didn't publicly make a big deal about problems at Quantegy for almost two years because I felt they were new at it and things would work out. I'm not waiting until the eleventh hour this time.

RMGI doesn’t have any competition and they're not allowing vendors to compete either… prices are the same now wherever you look. The best a vendor can do is send tapes by Media Mail to save us a few bucks on shipping.

Conventional wisdom would say it will get better over time, but only if RMGI knows the way it is now is unacceptable or just plain unworkable.

It's been said only about one in one hundred people that are bothered by an issue will actually pick up a pen or phone and contact a government or business rep. It really seams a bit worse than that these days to me. Not to mention people often feel their single voice won’t have an impact. The upside is that any good business knows that for every complaint they get there are 99 other people just as pissed, but aren't saying anything... so here ya go...

Hey RMGI! Tape emulators are starting to look pretty good!


CONTACTS:

Don Morris Upper Midwest & Canada
donmorris@rmgi-usa.com
PH: 269-469-2463
Fax 269-469-5411

Doug Bernhardt West USA
dougbernhardt@rmgi-usa.com
PH: 310-613-4418
Fax 909-460-6788

Tom Burrows Lower Midwest & Mexico
tomburrows@rmgi-usa.com
PH: 210-496-6011

Marc Feingold North East USA
marc@thinkfeingold.com
PH: 732-625-1318
Fax 732-625-1319

Phil Paske West USA& Western Canada
philpaske@rmgi-usa.com
PH: 661-287-9877
Fax 661-206-6209

Dean Sauer South East USA
deansauer@rmgi-usa.com
770-475-8193

Recordable Media Group International B.V.
Bredaseweg 108,
4902 NS Oosterhout
The Netherlands

info@rmgi.nl
PH: +31 - 162 - 40 89 50
Fax +31 - 162 - 46 26 11

Check the clickable map below for other agents in Europe and other parts of the globe:
http://www.rmgi.eu/continents.htm

~Tim

 

[Flangerhans]

Well, I just mailed the guy responsible for my area. Following is a copy of my letter...
Dear Mr. Morris;

I am writing you as a home studio owner who has, against all conventional wisdom, utilized analog tape for my output. Many of my fellow recordists feel that those of us who choose to use magnetic recording media are either living in the past or completely mad, but there are those among us who feel that no other media is comparable to tape in sound reproduction.

The loss of Quantegy as a resource has not only made production more difficult for tape-based studios, but has also caused a great number of users to switch to digital recording. This has caused damage to your market, although not your fault. Quantegy engaged in some very destructive retail models before leaving the business entirely, and it has come to my attention that RMGI is engaging in some of those same practices, specifically the fixing of prices for their dealers. If I have received bad information, I apologize for repeating it.

It is my considered opinion that selling tape in the future will depend not only on large studios that purchase cases, but small home recordists who, like me, use two or three reels a week, sometimes less. I find that the current price structure as passed down to me by the dealers I most use cause me to limit the amount of editing I do on tape, and are slowly pushing me toward a digital future. I prefer tape, and will go on using it as much as possible, but if it becomes too expensive to use easily, I must move on. Should the great majority of home users also begin to feel this way, your business will be limited to large studios using tape, which is a limited market considering that home recording is gradually placing strain upon all but the largest commercial recording facilities.

By allowing your smaller retailers more flexibility and profit in marketing your product, a continued supply of reasonably priced media will remain available to home recording enthusiasts, allowing us to use our favorite media and even convince others to try it. An expanding market, however small, is always preferable to a disappearing one, I'm sure you'll agree.

I hope this message will help to convince you and your company to give their smaller dealers more leeway in pricing your product reasonably enough to ensure the continuation of small tape based home studios like my own.

Thank you,

*Flangerhans*

Hope this does some good.

EDIT-Forget to say, if anyone wishes to use all or part of this letter for their own choice of representative, feel free. This issue is very important to me, and I hope everyone on this forum feels the same.

 

[Good Friend]

please

please dont piss these people off. im just glad they are still making tape at any price, man. id rather overpay than have nothing.

sorry but I AM SCARED OF NO TAPE AT ALL.

 

[cjacek]

Great post Tim (Beck). I applaud you.

Flangerhans: good letter but I'd opt out of saying we'll go digital if tape prices don't go down. Many here, I'm certain, don't want to even go there or contemplate that option. Best to leave that out of future correspondence to RMGI. I think we should focus more on RMGI marketing toward the home recordist and letting the people at the top know that the market for used semi pro gear is booming and to not recognize that and only cater to the big studios is a mistake, one which already shut down tape production at Quantegy. It'd be nice to get RMGI representatives to visit forums such as this one and join in the discussions.

One other thing ..... and I may get criticized for this but the prices are not all that bad considering tape is a very, very small niche, specialized market. To have RMGI, same stuff as BASF / EMTEC, is truly a blessing. It's arguably the best tape of all time and to be able to afford it, is great. Is 13 or 15 bucks too much for 1/4" tape on 7" reels ? Is paying 60 bucks (45 for pancake) really that much for 1/2" tape on 10" reels ? Considering where we are at today, it is not too much to pay at all. It's not cheap but we could have it a lot worse.

This is not to suggest, however, that we shouldn't try to pursuade RMGI to give some wiggle room to dealers, so that we can get better prices out of the deal.

 

[jpmorris]

Great post Tim (Beck). I applaud you.
One other thing ..... and I may get criticized for this but the prices are not all that bad considering tape is a very, very small niche, specialized market. To have RMGI, same stuff as BASF / EMTEC, is truly a blessing. It's arguably the best tape of all time and to be able to afford it, is great. Is 13 or 15 bucks too much for 1/4" tape on 7" reels ? Is paying 60 bucks (45 for pancake) really that much for 1/2" tape on 10" reels ? Considering where we are at today, it is not too much to pay at all. It's not cheap but we could have it a lot worse.

Not to drag this into some kind of political flamefest, I think you'll find that what's happening is that the US is finally paying the same prices as the rest of the world. The prices I'm seeing here still have RMGI less than the equivalent Quantegy product. In 2003/2004 the EMTEC stuff was actually more expensive, but I wanted to try it anyway because it was supposed to be better (I was about a month too late at the time).

Part of this may be because the dollar is particularly weak at the moment. With a US product, people in the US might not have been able to tell, but with an imported product it's going to be a lot more noticeable.

I'd agree that they should perhaps look more closely at the the small/home studio market, though.

 

[_DK]

Great post Tim (Beck). I applaud you.

Flangerhans: good letter but I'd opt out of saying we'll go digital if tape prices don't go down. Many here, I'm certain, don't want to even go there or contemplate that option. Best to leave that out of future correspondence to RMGI.

Better say we'll all buy from tapeandtape

 

[FALKEN]

interesting point.....though I am not sure this is the same as anti-competitive price fixing. There are lots of companies who fix retail prices...for instance most books. I dont think its the same as collusion between competitors who are selling a similar product (say all DVD player manufacturers had colluded to keep prices at $300 a few years back). Often fixing retail prices can benefit the consumer, In that you will have a trusted supplier instead of getting everything from banjo mart cuz they have lower overhead. This is especially true for boutique outboard gear, where if you ever encounter a problem you can go back to your sales rep and they will take care of everything with the manufacturer for you. (try getting that done at banjo mart).

But what I really wanted to post is that after enough time with both tapes, I think 456 is better.

 

[Beck]

please dont piss these people off. im just glad they are still making tape at any price, man. id rather overpay than have nothing.

sorry but I AM SCARED OF NO TAPE AT ALL.

NO TAPE FOR YOU!!!!

(Don't worry... RMGI wouldn't be worth investing in at all if they were that fickle so it wouldn’t matter anyway)

 

[Beck]

Not to drag this into some kind of political flamefest, I think you'll find that what's happening is that the US is finally paying the same prices as the rest of the world.

We Americans are used to it. The fact is though... no North American market; no tape for anyone anywhere. If Americans can't afford to buy the tape RMGI will fail.

When Quantegy and EMTEC were both making tapes the prices were comparable and SM468 was about the best deal on the market.

IMO RMGI is taking advantage of the Quantegy situation. They are the only game in town and they’re beginning to act like it.

Anyway, if you think tape prices are as ridiculous as I do don’t just sit there and take it. They’ll be happy to maintain the status quo if people don’t protest. And all things considered the prices are insane.

Keep in mind IMO we are living in an age of incompetence at the highest levels. Just don’t make the mistake of assuming RMGI knows what they’re doing like we did with Quantegy. None of us would want to see them slide to a point of no return due to preventable missteps.

I’m just sounding the alarm a bit early this time so we don’t have a Quantegy type disaster… which is quite possible if we sit on our hands.

 

[Erockrazor]

Hey RMGI! Tape emulators are starting to look pretty good!

Good one!



Isn't this called a monopoly?

Why not use that sticky tape and rust thing that those crazy guys on youtube used.

 

[_DK]

Why not use that sticky tape and rust thing that those crazy guys on youtube used.

And again, we're going back to tapeandtape

 

[Beck]

interesting point.....though I am not sure this is the same as anti-competitive price fixing. There are lots of companies who fix retail prices...for instance most books. I dont think its the same as collusion between competitors who are selling a similar product (say all DVD player manufacturers had colluded to keep prices at $300 a few years back). Often fixing retail prices can benefit the consumer, In that you will have a trusted supplier instead of getting everything from banjo mart cuz they have lower overhead. This is especially true for boutique outboard gear, where if you ever encounter a problem you can go back to your sales rep and they will take care of everything with the manufacturer for you. (try getting that done at banjo mart).

I don't disagree for the most part, if that were what’s going on. Unfortunately, what we're seeing in many industries isn’t based on these noble motives. We give manufacturers too much credit, trying to find some method and genius in the madness. I’ve made that mistake enough times to not want to make it again.

What we have working in many cases is a form of capitalism that isn’t possible without slavery or some other form of exploitation. It’s a fine line, but one must be able to discern when that line has been crossed.

RMGI is artificially inflating the price of tape, much like oil companies are doing with oil, but on a smaller scale. This isn’t based on free market supply and demand, but rather manipulation. We don’t have a true oil shortage or a tape shortage. They are both man made for the benefit of a few that will profit the most.

The risk for all of us… tape ain’t oil because there’s already a cheaper, easier digital alternative (as most people see it).

We have no hope of expanding the analog market if the curious can’t afford the price of admission. Quantegy just didn’t have a clue in that regard. If RMGI doesn’t get a clue, we’re screwed.

 

[Flangerhans]

"We have no hope of expanding the analog market if the curious can’t afford the price of admission. Quantegy just didn’t have a clue in that regard. If RMGI doesn’t get a clue, we’re screwed."

I agree. It is in their best interest to make tape an attractive alternative to digital, and to do so, they must understand their market.Educating them is our responsibility if we want to assure availability of our media. Tape is expensive, just compare what it costs to record twenty minutes of product on 15 ips 1/4" compared to hard drive at high resolution, and the figures will show you that we are paying easily ten times more for our quality. I am sure that the tooling to make tape is expensive, but the raw materials aren't, leading me to think that there is artificial inflation involved. Going for maximum profit currently is short sighted, as the only growth market for tape likely to exist in the future is the small studio, large analog recording operations are not becoming more common. Pissing RMGI off is not a danger, they will make tape as long as it is profitable, but letting them destroy their market will ultimately lead to our chosen format disappearing. The only way I see to underline this point is to explain to them that digital is their competition, although I don't actually think that.

 

[FALKEN]

a bit O/T.....

RMGI is artificially inflating the price of tape, much like oil companies are doing with oil, but on a smaller scale. This isn’t based on free market supply and demand, but rather manipulation. We don’t have a true oil shortage or a tape shortage. They are both man made for the benefit of a few that will profit the most.

oil companies do not have the ability to artificially inflate the price of oil. There is a free market for oil, its called the NYMEX. Now, the oil producing nations can inflate the price of oil by adjusting their output, but that price increase would benefit anyone who is currently in a long position. You can take a long position if you want on oil and wheen opec reduces output you will benefit. And those nations probably wouldn't benefit anyway because they are selling less output so their net revenue will be down.

If anything this resembles 'dumping', whereby a producer will lower prices below the cost of production, and take a loss for a short while to push their competitors out of business, and then jack prices up. But I dont think RMGI was originally priced below their cost so this would not be considered dumping. There is a natural price where their ROI would be maximized, and with fewer competitors that price point has increased. sure they might be selling fewer units but the point is to maximize profit, whether that means increasing prices or lowering prices. As long as they are maximizing profit they will continue to make tape. In effect, you are trying to tell them how to run their business. And, you might be right. But I wouldn't expect them to listen.

The term for what you are describing is called 'demand destruction'. And, I agree, RMGI is setting themselves up for this. But its not like they've never thought of that possibility before. the 'cost of tape' is already an issue and I am sure they are thinking 'a little bit higher' won't hurt but we know that it will. Its not like they haven't thought of this possiblity though. Anytime ANY seller of anything raises prices they have to worry about this.

By the way, it is my opinion there is an oil shortage, if you live in places like china and india. The cost of oil in these countries is much higher and as their economy is developing they have a need for more power.....which they currently cannot afford but they are buying more and more every year.

 

[jpmorris]

The fact is though... no North American market; no tape for anyone anywhere. If Americans can't afford to buy the tape RMGI will fail.

By and large I'd agree, except that Zonal aren't selling in the US at all AFAIK. Why is a mystery - they might not have capacity, or they simply don't think they need to.

 

[Beck]

oil companies do not have the ability to artificially inflate the price of oil. There is a free market for oil, its called the NYMEX. Now, the oil producing nations can inflate the price of oil by adjusting their output, but that price increase would benefit anyone who is currently in a long position. You can take a long position if you want on oil and wheen opec reduces output you will benefit. And those nations probably wouldn't benefit anyway because they are selling less output so their net revenue will be down.

If anything this resembles 'dumping', whereby a producer will lower prices below the cost of production, and take a loss for a short while to push their competitors out of business, and then jack prices up. But I dont think RMGI was originally priced below their cost so this would not be considered dumping. There is a natural price where their ROI would be maximized, and with fewer competitors that price point has increased. sure they might be selling fewer units but the point is to maximize profit, whether that means increasing prices or lowering prices. As long as they are maximizing profit they will continue to make tape. In effect, you are trying to tell them how to run their business. And, you might be right. But I wouldn't expect them to listen.

The term for what you are describing is called 'demand destruction'. And, I agree, RMGI is setting themselves up for this. But its not like they've never thought of that possibility before. the 'cost of tape' is already an issue and I am sure they are thinking 'a little bit higher' won't hurt but we know that it will. Its not like they haven't thought of this possiblity though. Anytime ANY seller of anything raises prices they have to worry about this.

By the way, it is my opinion there is an oil shortage, if you live in places like china and india. The cost of oil in these countries is much higher and as their economy is developing they have a need for more power.....which they currently cannot afford but they are buying more and more every year.

The NYMEX I could launch into a 10-page reply about oil companies so lets move oil to another thread. It was only an aside. I am well acquainted with human behavior, business management and economics. Yeah, I have a lot to say about the new borderless nations known as oil companies. Now where to put that thread... the cave?

Never assume the powers that be in a business know what they are doing or would consider the things you or I might consider. Businesses fail every day because of poor management. There is wisdom in many counselors. You might be surprised to learn what people calling the shots don’t know.

If a business, be it McDonalds restaurant, Ford Motor Company, or RMGI, moves in a direction contrary to your best interests you must let them hear from you. It’s not that complicated… or you can stand around and view everything like the weather… it comes and goes and there’s nothing you can do about it. Unfortunately most people tend to do the latter.

 

[Beck]

By and large I'd agree, except that Zonal aren't selling in the US at all AFAIK. Why is a mystery - they might not have capacity, or they simply don't think they need to.

Zonal never did have a U.S. market and they are now only making 1/4" open-reel. The first thing RMGI did was establish its North American network... a smart move, and I would hate to see it all undone by stupid miscalculations.

The bases are loaded and RMGI is at bat with one strike to go… then the game is over.

 

[cjacek]

While I still believe RMGI prices are pretty much on par with Quantegy past and not that outrageous, that they have inflated the prices is a fact. I've seen it. There is no doubt about it. I too believe we need to make a note of this to the people at RMGI. They may indeed be setting themselves up for self destruction. They've upped the prices because they think that they can. This form of thinking may indeed turn against them. It's the wrong strategy.

 

[Beck]

...And sometimes you'll find that email or phone call just won't have the same impact as a visit in person.

 

[cjacek]

...And sometimes you'll find that email or phone call just won't have the same impact as a visit in person.

[Oh, oh.. I feel another Rambo image upload coming on.. Have to restrain myself! ]