Originally Posted by Salt Peanuts
FYI, whey RS-1's came with the wooden case, they didn't come with an extension cable or mini-adaptor that they include today.
I had a feeling that would be the case. I would any day prefer the extension & mini adaptor
I guess I will preface this post by saying I am a huge fan of the Grado house sound and love their headphones. That being said I will comment on what I feel qualified to discuss.
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I don't know what part you don't understand? Imported goods are more expensive than their domestic counterparts. Imported goods are cheaper in their originating country. In order to protect dealers, distribution networks need to be controled, and they are, through binding contracts. Each distributor is able to sell to their respective zone, which happens to be by country in most cases. The US is fortunate in that they are able to purchase directly from Grado Labs. This cuts out a middle man. The price then is cheaper. Grado sells the phones to the distributors of other countries at a lower price than he sells to the dealers in the US. He makes less money with the international sales. If for example, Tyll sold via the internet to folks in Germany, the German distributor is cut out of the equation as are the potential German dealers. If the German dealers feel they can't compete with online sales from US dealers who get their phones at a better price, then they will stop carrying the Grado line. This means fewer people will have access to Grado products through those stores. Grado has built up its business around "brink and mortar" stores, not online sales outlets, and out of appreciation to them, John insists on protecting them. This also means that the industry has a greater respect for Grado products and they will then likely more readily want to sell his products.
Shipping costs
Distributor takes his cut which also includes his storage costs
Dealer takes his cut which also includes his storage costs
The end result? The consumer pays more.
The issue is the distribution networks. Import costs apply to everyone and are not a reason to have these protections. Rather a distribution network is a method for a monopoly to price discriminate. Which is all well and good. After all a profit maximizing firm should always choose to do this. And generally speaking being allowed to price discriminate maximizes consumers and producer welfare. And I agree that monopoly protection rights will make distributors much more willing to sell Grado. I guess what I am trying to say is: I can understand what Grado is doing, but talking about things like shipping costs and import taxes is misleading.
Of course none of this has stopped me from starting my own RS-1 fund. :rs1smile:
Moderator Headphoneus Supremus: Moderator and SHAman who knew of Head-Fi ten years prior to its existence
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Originally Posted by mikeg
I wish that I hadn't mentioned the R10, since there is lots of disagreement regarding which dynamic headphone is best. But, there is almost no disagreement regarding the HE90 being the best of all headphones. So, obviously the HE90 is the one to equal or beat, and hopefully at a lower price. I find it really hard to believe that a product that was developed perhaps two decades ago (i.e., the HE90) can't be bettered with 2005 knowledge and technology. As for the number of sales that Grado can make with such a headphone, since each HE90 costs about $5,000, it takes Grado the sale of seven or more RS-1's to make this much money. So, Grado would need to sell fewer such super high quality headphones, to make as much money as they now make by selling lots of lower cost headphones. And, I also believe that they would sell lots and lots of HE90-equivalent headphones, if they had the know-how to develop and produce them. And, think of the prestige that Grado would gain by producing the world's best headphone. They would thereby gain the crown of being top-dog heaphone producer, thereby replacing Sennheiser in this regard. But, if John Grado is either incapable of, or too lazy to grab hold of this opportunity, then he and we are the loosers. BTW, I hope that John Grado is reading this thread.
Wow, I guess I just don't really know where to begin with this. First, I agree, the R10's should not have been mentioned, but I think your assumption that the HE90's are the best in the world is again...a gross assumption. In fact, there are MANY here who feel the R10's best the HE90's! So who is right? Many don't like the electrostatic presentation of music. If I had to choose, I would go with a dynamic over an electrostat most of the time for sure. Though I have not yet heard the HE90's, the HE60's are close enough for me to discern whether I would put them in a class by themselves, and certainly I would not. But that is neither here nor there, opinions being what they are.
Now then, your other gross assumption is the profit margin with the new top phone over the profit margin of selling 7-8 RS-1's. The R&D I'm going to assume has been paid for by now. The R&D needed to produce an electrostat would be enormous. In fact, are you aware that Stax themselves outsourced (perhaps they still do?) the design and production of at least a few of their models (and top models btw)? Again for John it seems he has an objective with a sound he wants to present and electrostats can't do it. His idea of a hybrid is a very interesting one, and one I would like to see come to fruition at some point, but John was clear that he does not see the need to continually develop products to remain successful. The fact that he is having the best year of Grado's history is testament to the success of the current line. He wants to enjoy his success right now by spending time with his family, and doing things other than business strategy and planning. R&D is time consuming and he once went through this stage at a rigorous pace with long long hours. He knows what it takes and frankly, having a son at home myself, I can completely relate to wanting to spend time with my family over making more money and/or establishing oneself as the manufacturer of the "best headphone in the world." As a complete kicker to this, there was one print publication that I read wherein the reviewer graded the RS-1 over the Big O. That says something. Some folks think the RS-1's already ARE the best in the world.
As for your fine comments on how he is lazy well, I'm sorry, this just demonstrates your ignorance on his life goals and his priorities I guess. I'll blame myself for not relaying that well enough in my write-up.
Moderator Headphoneus Supremus: Moderator and SHAman who knew of Head-Fi ten years prior to its existence
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Originally Posted by recstar24
I hope he reads this thread but skips your post. John clearly stated why he has not really gotten into the whole new headphone thing - his priorities are very clear, spending time with his children and family is much more important to him than going through extensive research and development which would take away time he would rather spend with his kids.
It's easy for people to harp on the RS-1's, saying they are colored and what not or that they don't compare to the big-wigs like the HE90 or R-10. In my humble opinion, they are right up there, the RS-1's can do things which simply amaze and in certain aspects are unparalled by anything else i have ever heard. Sure they aren't perfect and are not for everyone, but they have a very unique and special "flavor" that on some music sounds heavenly, and it makes me realize that John is a freaking genius to be able to make certain instruments sound so freaking real. He has proven to me that he has the ear, know how, and resources to create something truly special, and I would imagine and bet that we have not heard the end of what John Grado is capable of.
The issue is the distribution networks. Import costs apply to everyone and are not a reason to have these protections. Rather a distribution network is a method for a monopoly to price discriminate. Which is all well and good. After all a profit maximizing firm should always choose to do this. And generally speaking being allowed to price discriminate maximizes consumers and producer welfare. And I agree that monopoly protection rights will make distributors much more willing to sell Grado. I guess what I am trying to say is: I can understand what Grado is doing, but talking about things like shipping costs and import taxes is misleading.
I agree with this....the underlying motive is simple..the policies are in place to protect the distribution network, plain and simple. Grado is not the only one to do it.
Also one other thing to note, due to the size of the market for the USA, things will likely be cheaper in the USA than most other markets, sometimes even for foreign (to USA) goods. For example, I can buy Canadian owned Energy brand speakers at a Goodguys store for less than I pay at my local Canadian dealer.
Moderator Headphoneus Supremus: Moderator and SHAman who knew of Head-Fi ten years prior to its existence
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Originally Posted by mikeg
Since John owns Grado Corp., I know that no one can force him to match Sennheiser's HE90. But, since John knows that the HE90 is almost unanimously considered by Head-Fi members to be the world's best headphone, I hope that his pride will cause his company to rise above their second rate status; i.e., second to Sennheiser, and Sony, in the production of top-notch headphones.
The problem with this is that Head-fi is PEANUTS in the grand scheme of things. Not that John does not respect Head-fi members, but frankly his profits aren't coming from Head-fi, they are coming from his worldwide clientele through his dealer network. I remember folks getting all uppity on Tyll when his product line was apparently "slipping." He was flamed pretty hard and he remarked how Head-fi consisted of maybe 1% of his sales. 1%! Folks, as much as we are an insane bunch over these headphones, to a major manufacturer, we are a blip on the screen, in most cases anyway. Folks like Ray, Mikhail, Justin...sure they make their living off of folks here, buying and selling amps and continuing the cycle, but the real cash cow are the non-members spread throughout the world.
Why these points? Because as much as many members may consider the HE90's the best, this is not the case worldwide. In fact, there are again plenty of people who think the RS-1's are the best, or the HD650's, or the Qualias etc etc. The best is simply a marketting claim. It can't exist because we all like different things. There have been plenty of direct comparisons of the Omega II system vs. the Big O where the Stax came out on top...to repeatedly declare the HE90 the best and demand an American company to do something better...well, if we were to poll all those in the world who have heard the RS-1's and the HE90's and we found that 30% felt the RS-1's were superior, John can actually sell to those 30% and better yet, sell to the other 70% if they are willing, because the HE90 is out of production.
As for giving control of his company to someone else, that means he is giving up something that he has worked hard to achieve and maintain. Again, he is ridiculously successful for a company that does not advertize. The likes of Sennheiser, Audio Technica, Sony, they are marketting machines always needing that new product line out to keep profits high. And once again, new does not equate to better, just look at the Qualias. How many feel they are the best?
Moderator Headphoneus Supremus: Moderator and SHAman who knew of Head-Fi ten years prior to its existence
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Originally Posted by Elephas
One question then is who, if anyone, is being groomed to take over Grado Labs the way John took over from Joseph. Granted, it is probably still too early to raise this issue, but due to the relatively small size and nature of the company, this is critical to the continued success of the company.
I'm thinking one or both of his sons? They are 14 and 10 right now, John is in his 50's, he has plenty of time to train them as Joseph trained him.
Moderator Headphoneus Supremus: Moderator and SHAman who knew of Head-Fi ten years prior to its existence
John was very clear on telling me that he likes to sell what he makes. A few years ago, Sennheiser actually had to dump their remaing stock of Big O's. Now they are essentially getting rid of (but not dumping) the last bit of parts stock they have by making a final uber limited batch of HE90's. One has to wonder why they have this stuff lying around still (or had to dump the Big O) if it was sooooo good? I mean 20 years or whatever, that should have been enough time to sell it all. I mean, they only made 300 units!
John likes the fact that almost anyone can afford one of his phones and that the SR60's offer a whole heck of a lot of the sound of his top models. He mentioned how he has demo'd the SR60's and the RS-1's to folks and there are plenty who can't hear the difference. Not that they would never be able to, but that they were completely content with the SR60's and walked away super happy. This is a testament to how good he has made the SR60's sound for their price. The RS-1's of course are his statement phones, with nuances, refinements balances etc, set in place to make them the arguably best headphone Grado has ever produced. I believe he enjoys pumping out products that are within reach in many cases.
However, it would be prudent to note that he did make a "Statement" cartridge and a total Statement line. He took his Reference line of carts, lowered the output by a large margin and then taking what he had learned, went all out for the Grado Statement Statement. This thing is $2500 USD. Not exactly cheap nor within the reach of most. Perhaps in time, he will take his Reference Line, do something to it and bring them into a Statement line and/or take what he has learned and go to a Statement headphone.
The retro styling though is one that I think will be sticking around. They are completely unique in the market place, they are renowned for it (love or hate it) and they certainly fit the need of many. Now...speculating on a new Statement phone would be fun, perhaps a new wood, and new dampening techniques that would further reduce unwanted resonance. An even faster driver that remain smooth but well extended yet the magic has to remain, nothing analytical, I wouldn't want (personally) to just have an even more refined HP-1000. Some of course would
I was considering recabling my KSC 35's with some Moon Audio cables. Yeah, utter insanity but the stock cables suck..and the sheath tears easily. Now that Grado is comeing out with StreetStyles, I'll definitely hold off on doing anything.
If my partsexpress orders comes in like it should this Friday, I should finally get my portaPro recable done. I will post pics in the non-grado recable thread i started. and it isnt utter insanity, but something fun to do.
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Originally Posted by Tyson
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