Back to the future?

By Terry Herbert June 20, 2017 Industry features & issues

Innovation is driving the hi-fi & audio industry at a blistering pace – both forwards and backwards at the same time. Confused? Terry Herbert reports.

To view a PDF of the complete profile as it appeared in Wares magazine, click the download button at the bottom of this page.

We start this aural odyssey at a Harvey Norman store with Monaco Corp’s Michael Jenks with his Pioneer hat on.

In terms of home cinema, I ask if soundbars are overtaking 5.1 home cinema systems? Quick to respond he says: “For us, we’re actually selling more traditional home theatre at this stage.

“We’re seeing a resurgence back to 5.1 or 7.1. The key driver for us is Dolby Atmos. That’s overhead sound, not just sound coming from the front and back. We’re very close to ‘full immersion’ – how you would hear it in a movie theatre. That’s 5.2.2, where two speakers are overhead.

“Our new speaker range includes ceiling speakers or speakers which sit on top of your traditional speakers but sound is fired up and it reflects down on you. Your amplifier has to recognise that you have overhead speakers.

“You set up your lounge and there’s a mic included. It calibrates the room setup and makes sure the sound reaches you (seated in your key listening position) all at the same time. It’s really pushed the boundaries.”

Monaco also has a new completely wireless Pioneer system. “This will connect with a central hub and send wirelessly to your surrounds and a subwoofer. It’s ideal for apartments or where you don’t want cables around your room.”

It’s a busy weekend at Harvey Norman, the sales guy is engaged, the TVs are playing Zootopia and the Pioneer demo hints at greatness, but we’re both distracted by ambient noise.

A chunky toddler stuffed into a puffer jacket stares menacingly at me as though I’m a food group. Making no sudden moves, I back away from this tiny predator toward the soundbars…


Soundbars are surging ahead

Like a scene from Hitchock’s The Birds, soundbars are perched everywhere – for good reason.

Globally, after a slowish start in this market, the value of the soundbar market is poised to more than double in the next few years. Driven by the uptake of sound-poor 4K/UHD televisions, consumers want a quality of soundtrack that matches the picture quality.

All the TV brands are working at this but we’re finding too that specialist hi-fi brands both major and minor are on board. One such brand is Orbit, built by British engineers and rated four stars by What Hi-Fi.

When I speak with the distributor, Adam Turner from Direct Imports (DI), he sounds jubilant and for good reason – his brands are doing well.

DI picked up Orbit two months ago. “That’s us getting into soundbars for the first time. We’re extremely excited about the category.” Previously, Orbit had been in New Zealand selling through design stores.

“They were looking for a local distributor and had heard good things about us. Our intention is to support the brand and find new channels”


Sonos – clever marketing or clever sound?

From soundbars to multi-room speakers, one brand that’s impossible to ignore is Sonos, which continues to work at the upper end of the market.

With both the Sonos Playbar soundbar and Playbase weighing in at almost $1400 retail that’s more than Bose’s Soundtouch and way more than major brands like Sony, Panasonic, LG and they throw in a subwoofer!

Is it clever marketing or superior sound? It’s midweek and I want to ear test Sonos and other brands. Next stop, therefore, a specialist retailer rather than national chain where the noise made by the TVs rather dampens the music coming out of the hi-fi.

It’s like stepping from a general merchandiser into a cathedral when I enter the sanctum of AV World in the gridlock that is Auckland’s Dominion Road. I’ve phoned ahead to interview owner/audio guru and all-round nice guy, Paul Halliwell.

So what makes Sonos popular? “Mainly because they do one thing really well and that’s play multi-room speakers anywhere in the home without any dropouts.”

"Globally, after a slowish start in this market, the value of the soundbar market is poised to more than double in the next few years"

Halliwell touches his iPad and Bic Runga’s Something good starts playing, clearly and surprisingly loudly, from a distant room. The music is coming from a Play 1, Sonos’ baby speaker.

Another touch of the iPad and suddenly Bic is right in front of me. The detail is extraordinary as I hear her draw breath between lyrics. “That’s the Play 5,” says Paul Halliwell in a low voice, even though Bic and the band are belting out “I’d always let you get your way,” at considerable volume.

Later that week, and still impressed, I speak with Jason Lake, Playback Systems’ MD and the sole NZ distributor for Sonos. I think he’s still counting his blessings having “grabbed” the distribution when Sonos first launched here in 2005. “I was very fortunate,” he says.

Sonos started out here 12 years back in specialist hi-fi outlets and has over the last five years moved into the mainstream electronics and appliance stores.

Apart from the sound the products make, what makes Sonos so special? “We’re very proud of the fact that they plan carefully for every product to last 10 years. There’s no obsolescence in our product line up from day one.”

Sonos also uses Wi-Fi to connect music source to output device. Why? “Bluetooth is a protocol that was never designed to stream quality audio,” says Jason Lake.

“With Sonos we have all house coverage and complete control. We have the option of playing different music in every room or playing the same music in every room to a maximum of 32 rooms with perfect synchronisation. The phone, laptop or iPad is purely your control like your TV remote. The Sonos speaker talks directly to the Spotify server. I can turn my phone off and the music will still play, effortlessly streaming high quality audio.”

When I mention that Sonos Australia is now selling direct to consumers online and that Australian retailers are on record as saying they are “very concerned”, Jason Lake is quick to say: “New Zealand retailers should not be concerned. We have a fabulous network of resellers many of whom have supported me for 12 years. We value that. That’s not our game. We’re a distributor.”


Stepping up to High Fidelity

I’m personally impressed with the Sonos sound and I love the fact that the company is constantly making its system better via free software updates and that soon it will play music from virtually any streaming service with voice commands via Amazon’s Alexa platform.

But I guess I’m not a hi-fi connoisseur. As Paul Halliwell realistically puts it: “Sonos is CD quality fast food but true hi-fi is fine dining. It’s four times the quality. Have a listen to these French speakers from Devialet” (the 4500W wireless Phantom Golds).

He had me at “Hello”, Adele’s mega hit, playing effortlessly through speakers shaped like and not much larger than a rugby ball. The sound was so pure and full, I knew it could skewer my ear drums and I just didn’t care!

By several accounts hi-fi is well and truly alive. “We still sell 50 to 100 amplifiers a month, so they’re still a massive part of our business,” says Halliwell. “We’re regularly selling $5k and $6k packages. This week we sold an $11k package. Typically that would be a pair of B&W speakers, a power amp and a streamer.”

It’s an even more rarefied environment at The Hi-Fi Store, home of the true purist audiophile and domain to Dean Harnish, who explains: “We have no products here less than CD quality as a standard. Linn is the big brand for us. It’s at the top end of the market. The product sounds fantastic and we’ve been selling them for 30 years. They’re hand-built in Glasgow and a lot of their products are upgradeable. You can own a product for 40 years and upgrade it.”

I ask him to describe the benefits of owning a good music streamer – by which term Dean Harnish isn’t talking about taking Spotify from a smartphone.

“We have several brands that are streamers. You can choose a hi-fi streaming service like Tidal that’s now available in NZ, or Qobuz a FLAC (CD quality) subscription service, or download studio mastered quality from sites like US-based HDTracks. Most will allow you to play studio master quality these days – right up to 192 kHz – in our homes for the first time.”

In terms of the hardware to make the most out of such quality sources, he says the Klimax series from Linn is “the best” and “the first to stream studio master quality 11 years ago”. “They retail at $37,000,” he adds without the trace of an apology.

"The ‘modern audiophile’ wants to integrate with everything: home, TV, mobile, the bach, whatever"

Dean Harnish by the way is also the Linn distributor. Who’s he selling to? Linn customers are not just old, male and wealthy. “Our average customer is around 40, but ages range from 35 to 65 and our female demographic is definitely growing. We like it simple and pure here.

“We sell a few soundbars but most are two channel high quality home cinema systems. To us it is far better having two good quality speakers than 7.1 where it’s shoehorned into a lounge. We haven’t sold a separate DAC for 18 months.

“We consider our customers the ‘modern audiophile’. They want to integrate with everything: home, TV, mobile, the bach, whatever. To me sound quality should be pitch accurate at every touch point.”


The world is turning back to turntables

Admitting he doesn’t sell valve amps but loves turntables, Dean Harnish tells me: “Linn is the best in the world. The LP12 has been out for 46 years and the same model is still produced now. The starting price is $6k and goes up to $38k. I’ve sold over 3,000 of these units. We’ve noticed a definite increase in sales – a 60% increase in turntable sales YTD since last year.”

Globally, as young and old turn back or forward to vinyl, sales have grown every year for eight consecutive years – while sales of CDs have continued to plummet to historic lows. Many even predict that CDs will disappear completely as a format before 2020.

Adam Turner from Direct Imports is the distributor for Audio Technica and believes there is a real resurgence in turntable sales. “Vinyl sales in the US are the highest they’ve been for decades and a brand new LP pressing plant opened up in Australia. The demand is here so yes, it’s happening.”

Who’s buying? “There’s a trend of younger people coming through. More enthusiasts are getting into vinyl. It’s certainly not just the old farts anymore. How long it will last will be the interesting factor.”

With analysts projecting sales increases through to 2020, it’s safe to predict this trend will be here for a few years yet. And possibly beyond.

Adam Turner freely admits he didn’t see this trend coming. However, having released a TEAC turntable about three years ago, expecting to sell through just a single shipment, eight shipments on, he says: “I’m thinking maybe this isn’t going to die like we thought it was.”

Since then, Direct Imports has introduced more turntable brands and products. “Our entry level Teac has a USB that’s a cheap and cheerful so people can record out. There’s a low-price Technica that has USB and then the higher spec AT LP120. It’s such a heavy piece of kit, it feels like real value when you pick it up.”

His end users are a different set of people from those prepared to spend thousands on a Linn deck: “You’re catering for the newbies who want the nostalgia of playing vinyl and the ability to Bluetooth it out to a speaker.

“It’s the new age, but we’re still getting the audiophiles who want to listen to their vinyl collection with that uniquely open, warm sound. We’ve doubled turntable sales units year on year for three years. At the moment we’re enjoying riding the wave and there are no indications that it’s slowing down.”


Headphones – you pay $100 to cut the cord

Exponential growth or not, to be fair, turntable sales are barely mainstream compared to headphones. We cross to Graham Pudney from Pudney & Lee with its Philips connection and, like everyone else we spoke, with he’s not complaining.

“We’re definitely selling more corded than wireless,” he says, “but [corded] sales are flat. We’re not going backwards but all the growth is in wireless. You pay a hundred bucks to cut the cord off pretty much.”

Philips is almost ubiquitous in appliance stores, but there are plenty of other headphone brands, like Beats, that would sit more comfortably on a hipster than your uncle.

“I’m from a hi-fi background,” Graham Pudney explains. “I can’t stand a pair of headphones that are all bass. It appeals to young people. A nice crisp, clean bass with subtle mids and highs that aren’t too bright, that’s what I personally would choose.

“I’d put Phillips or Bose against the others on the market. If you listen back to back, there’s no way you’d buy these $600-700 headphones unless you’re a fashion victim,” he says pulling no punches. “The big difference is Philips is an established brand that appeals to an older age group.”

AV World’s Paul Halliwell reports excellent sales of headphones: “We sell up to $5,000 a day of headphones on a good weekend day. Over 40% of our headphone sales are now Bluetooth. We’re selling a lot of Bose, Sennheiser and B&W as well.”

Looking to another key brand in headphones, I talk to Heather Reid, Sennheiser’s Marketing & PR Manager Australasia, who tells me that sales in New Zealand and globally have been “phenomenal” but that 18 months ago the family-owned business decided to step back from lower end volume sales.

“We’re still enjoying growth across the board,” she tells me, “but we’re focussing more on our premium models. It’s a family business, no shareholders tell them what to do and absolute quality performance, design and comfort without compromise is where they want to be.

“The market definitely wants wireless, that’s the trend. Our new Momentum in-ear buds are NCBT (noise cancelling, Bluetooth) they’re hand-stitched leather and we’ll be shipping those to New Zealand in Q4.”

Graham Pudney tells us the future is: “More and more wireless. As the price comes down, the volume goes up. Once you have sub-$40 wireless buds you’re going to see a massive take off in sales. Those buds still dangle as you still go from one ear to the other, but the recent release of Apple AirPods will change all that. We just have to catch up.”


Streamwars and the future of Hi-Fi

There is so much happening in these categories that I would need the whole magazine to showcase all the new products, new streaming services and file formats that are coming online almost every week.

Take MQA Audio, for example, which is a new method of digitally storing recorded music that “zips” up to 24 bit/192 kHz true hi-fi quality files and then “unzips” it so you can hear the file uncompressed as the artist intended.

The future is streaming people so get used to it. What we need
is a streaming service and a go-anywhere, play-anything at hi-fi level speaker system. As Graham Pudney says, “We just have to catch up.”


The low-down on the NZ hi-fi market

With thanks to GfK ( we look at how the hi-fi and audio categories fared in the first quarter of this calendar year (Q1 2017).

  • Soundbars – These are the two categories experiencing the largest revenue increase so far this year. Soundbars are still expanding in the market with 30% growth in value, but alongside just 5% volume growth, there was a significant increase in average price. Soundbar systems with a Subwoofer are accounting for the majority of the sales, but Soundbar Singles are gaining value share.
  • Home Theatre – The growth of Soundbars has not been offsetting the decline of Home Theatre Systems which saw a very sharp (–47%) decline in Q1.
  • Headphones & Mobile Headsets – Value increased by 20% in Q1 2017. Bluetooth devices now represent 35% of total Headphones & Mobile Headsets sales value, up from 21% last year. By volume however, this segment grew by 80%. Non-Bluetooth devices were flat both in units and value.
  • Audio Home Systems – Connected Audio Home Systems are experiencing a drop in value with falling lower average prices driven by the growth of low-powered systems (up to 250W). Multi-room systems are still growing in value with an increasing average price.
  • Docking Mini Speakers – Wireless mini speakers continued to grow by 10% in value in Q1. The growth rate has however also continued to slow.


Pioneer: new AV and audio products

The FS-W40 Free Style Sound System has a very clean style. Accented with luxurious aluminium and ceramic-like textures, this slimline AV centre makes the most of home entertainment, from movie and games to virtually any streaming music through compact yet powerful loudspeakers.

The VSX-932 7.2 channel AV Receiver streams music to any room with FireConnect Chromecast built-in, and DTS Play-Fi. Listen to a multitude of songs via internet radio and network streaming services, with smooth control on the Pioneer Remote App. You can even connect a turntable via the phono input.

The X-CM56 Micro System is one of a sleek new range of entry level and hi-res micro systems for 2017. With its Scandinavian-inspired design this micro system oozes style with its unique beech wood finish.

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