How can a new mic cost $5,000?

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Hard2Hear

Hard2Hear

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I have been looking at mics that I want to try out on my vocalist in the studio. The mics I'm looking at are brand new, not vintage, and cost from $4000 to $6500 new. I just don't understand how that much $ can go into a mic. I understand R&D and development costs, but most of these are old designs just re-created. Are all of the internal parts hand machined for that specific mic? And are they made of platinum??

I'm just having a hard time understanding it. I mean, $5000 for a car that is 2 tons of steel I can understand, but for less than a handfull of electronics, metal, and wiring I just can't get my brain to accept.

P.S. I'm not buying them myself anyways, we will just rent from a broker when I get this all figured out.

H2H
 
i think its so you can tell clients that you have a $5000 mic in the locker... plus from a business point of view if you, suckering 20 guys into buying a $5000 mic is more profitable than selling the same mic for $3000 to 30 people... jesus, they may aswell put a $100000 price tag on it and find just one massive hoover of a dude
 
who knows, when stephen pauls mic hits the streets it may cause a massive markdown on those $5000 mics...but, then it will be too late.
 
As long as people will pay $5000 for a mic, there will be $5000 mics.:rolleyes:
 
I'm not in the business, and someone like Alan would be a better authority, but my guess would be it has to do a lot with the economy of scale.

How many $5000+ mics are sold by any particular manufacturer in a typical year? My guess would be probably only a few dozen at best. That means that designing non-labor intensive assembly lines would be prohibitive, because it would take so long to amortize the costs. So a lot of the assembly would probably be done by hand. And amortization of whatever costs are incurred in the R&D process would also weigh heavily into the unit pricing.

The automobile analogy is flawed. A better one would be the cost of military jet fighters. All the research and development costs, plus the cost of setting up an assembly line must be recouped through a manufacturing run that might be limited to 100 units or less. The result: a $50,000,000 price tag PER UNIT!!! If only a couple of dozen cars were being manufactured every year, do you really think you could still buy one for $10,000-$20,000?

Viewed in that light, maybe $5000 is a bargain!
 
But it just doesn't make sense. IF costs are cut by alot, then more units are sold...that only makes sense. I'd LOVE to see an industry chart of sales of the most popular microphones.

I've been in the cockpit of an F-15. You are surrounded by massive amounts of electronics, and electronics behind the electronics. Not to mention the rare crafting and creation of jets. It takes many, many highly paid people just to assemble a fighter, not to mention the development teams for each tiny part or system. The over billion dollar F-22 actually makes sense to me.

But a microphone is a very simple design, it does only one thing. I mean, even if hand built, how many guys can it really take to assemble a mic? I guess I'm wondering if I tore apart a Sony C800, could I find all of the internal parts to buy, or do they custom make each resistor, transformer, wire, or whatever makes up a mic. I'm no expert of electronics, OR of mics. But I just would love to know what it actually costs to make one of those mics, compared to the selling cost.

Now...I'm supposing that this exact same thought process is what Alan Hyatt and Larry Villella were thinking when they came up with the Studio Projects and ADK microphone concepts, respectively. If so, my hat's off to them!

H2H
 
let me give a very vague rundown from my semi-educated mind-

raw components (not materials-materials are much less)-let's say 500 bucks per mic, because of the cost of exhaustive quality testing, short runs, custom designed and specced parts. let's also say around 20k for assembly line set-up (presuming these things aren't hand-assembled, in which case, 20k might pay for the training/etc time for hand-manufacturing per mic type)

200 ea. for assembly/QA-hand-assembly of components-seriously skilled technicians and inspectors could easily cost this for small-run custom-made mics

50k for design-labor rates on high-quality testing (or buying equipment for it, even more costly, but more of a one-time thing) per mic type

100k on promo per year per mic type (paying for ads, paying to design/print brochures, using people who actually know what they're talking about)

50 bucks per mic packaging/etc (whatever ends up included, let's just lump shipping total per mic here to make it fair)

so let's say 70k initially for every mic type, 750 bucks per every mic manufactured, 100k per year per mic type-and how many get sold per year? depends on the specific mic, who it's marketed toward, etc. might be thousands-in which case, huge profits are easily made. if it's a flop, money might be lost, in which case, the mic is not likely to be out long.

say you get the mic to distributors after all this for 2500 a piece-assuring good profits of the mics become studio standards, and hopefully breaking even if they're not so popular (at this price range, they're not going to likely be but so popular)

the distributor has a certain amount of leeway between that 2500, their own costs for promotion/shipping/etc, and their REAL selling price (maybe it's 3k for a promo, which might not make much per unit, maybe it's 5k)

not counting any of the finer points, you're looking at a hell of a lot of money to cover for, the kind of money that typically requires a rather successful business to justify.

supply and demand does dictate price. if demand is kind of small, but supply is even smaller (world commodity prices can influence this greatly, so people are paid good money to ensure that costs are still covered in case of material supply cost increases).

also, you run into what i would call the phone company cost issue-it cost a hell of a lot of money to get these custom mic-designing and building operations together-if you do well, you start making a real profit and a killing on the backend come budget time, but do you lower the price? is anyone else lowering theirs on the competition? no? then why lower the price? not only are people willing to pay it in many cases, but many purchasers ONLY buy products that cost a certain amount, because they have a vague idea in their head of what a good product is meant to cost, and they never deviate from this-even the best recording engineers don't always have open minds when it comes to putting a cheaper product in the studio, especially when clients may not WANT to record into cheaper products, regardless of sound. os you keep the prices up, and many people are put off, but what can you do? put out a budget line? sometimes this really pays off-sometimes you move a lot of product with poor profits, though. poor decision-making can easily kill a company who tries this.

i've left out many things, and i think that my overall cost estimates are pretty conservative.

i think that the real broad-production price point for a great single microphone (monaural, single-cap mic) should NEVER be above a grand-but lots of people can and do spend more, so my money (which can't even cover a grand for a mic right now) doesn't speak very loudly above a market that is getting theirs in the end.

i think that a 5k mic can't be a great deal in purchase, but if it attracts you 3k a year of extra business in the studio, that really pays off over time-highly succesful studios know this, and they're willing to invest wisely, even when wisely means an insane amount of money on a mic.

i think that the studio project and adk ideas are excellent solutions that may one day help shorten the ivory towers of the boutique mic makers, but there will always be people who are willing to charge and/or spend huge amounts of money on the tools of their trade. don't underestimate customer sentiment in keeping something like this around (in the end, if the most successful high-dollar recording engineers are using them, that means a lot to less-successful people who MIGHT be able to afford them). it's a long proccess, and i think that a revolution on the order of the quality solidwood guitar makers is in the making right now.

i think that stephen paul represents a point of light for those of us wanting grade-a solutions. real change in a market like this has to come from a labour of love. these mics will still be expensive, but they will help pave the way for more indy makers who eventually put the crunch on the big guys, at which point, most mics should stabilize at lower pricepoints (it's already happened in the budget market), with a few stragglers selling to a handful of very satisfied and loyal clients.

in the end, i think that if you buy a 5 thousand dollar mic today without expecting to increase profits to high-paying clients in a recording studio, you're wasting your money, but there are people who think otherwise. people like me will fuel the revolution, but it takes time. in the meantime, use the best solutions you can at prices you can (pretend to) afford. there's no other choice. the future is bright, the impetus is here, and we will make it. don't expect to not have it stuck to you if you want a big-name high-end mic just yet, though.
 
I think you're forgetting Gene Lawson. Not that Stephen Paul won't be delivering a Grade A mic @ a mid-range price, but Lawson mics are AMAZING, and their most expensive model is $2500, and their low end is only $1000. So I think we should be praising his name just the same.

Later,
Musik
 
Quality control. The mics you are talking about rely on extremely precise machining, and a number of labor intensive steps are involved. Some of the work can be automated, but some parts of the work can not be done accurately enough unless it is done by hand. Automating the jobs which can be automated would require a production scale which the non-automated jobs can not support. It is also important to use components which are very precisely matched. You may have to go through 200 capacitors to find the one that is right, or 20 transformers. You pay for the process of sorting out the right components.

To use your can analogy, the $5000 can you are talking about is fine, and can get you from place to place. So why then do so many people buy $50,000 cars, or $100,000 cars? How many of you don't at least know someone who wants a Ferrari.

There is a concept known as a rate of diminishing returns. As the price of a type of product goes up, the ratio of price increase to the rate of quality increases slows. For an example, with acoustic guitars, there is a huge difference between a $500 guitar, and a $1000 guitar. The difference between a $1000 guitar and a $2000 guitar is smaller, and for a larger price increases, though the difference is still quite notice able. There is a smaller difference still between a $2000 guitar and a $4000 guitar. At a certain point, with the guitar, the improvement in quality is not an improvement in quality, but a difference in style, or visual appointments (inlay and such). It is up to the individual to decide, what is the point where the increase in price is not worth the increases in quality? With microphones, the difference is never purely visual. I mean, why bother? None the less, there is a difference between a $2500 mic and a $5000 mic. Both of those mics will be great, but is the $5000 mic twice as good? It most certainly is not, but it is different, and for some things may be better. You must decide if the difference is worth doubling the price for you.

Don't ever let anyone tell you that a $500 mic can compare with a $2500 dollar mic. They should not be compared, because they have different intended markets. Among other things, the $2500 mic will (probably) be more consistent from mic to mic, which is important, and is very difficult to do on a large scale.

If a mic cost $5000, it is probably not just because of the name (though that does happen) or so that you can say you have an expensive mic (though that happens as well). Your budget, your needs, and your desires will decide which microphones you buy. The difference in the $5000 mic may not be important for you, but for others it may be essential. I very much miss the $5000 mics I have used, and the $2500 mics, and the $150,000 consoles, and the $15,000 reverbs. They sound better. They make your job easier, becuase you do not have to do much to make things sound right.

Light

"Cowards can never be moral."
M.K. Gandhi
 
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