The Law Of Diminishing Returns

[rigger67]

Hi-fi has always struck me as a good example of the law.

Go from spending £300 on a basic system to £3000 on something more substantial and the results can be astounding, but anything after that .. well, I'd argue you get less bang for your bucks and the increases will be marginal.

That thread about milestone equipment in the history of hi-fi made my eyes water with the prices of some of the gear being suggested.

I simply can't justify spending thousands of pounds on, say, Mark Levinson gear or a few hundred on a PSU for this or a little black box for that.


I love this forum and find the whole subject fascinating, but I'm also constantly staggered reading some of the comments.
Maybe it's all down to disposable income : I don't have that much so I'm careful with what I do spend. My next move will probably be to try a passive pre-amp to replace my NAD. It'll probably be the Tisbury. It'll mean I'll need a phono stage (I already have a DAC) so I'll probably go for a Project, but I may push it to a Graham Slee if I can find one reasonably priced.
After that, I doubt I'll do anything more other than to eventually get a more substantial cart to replace the P77 I'm using now.


I've got a friend who has a full-on Naim system based around an LP12.
He's got loads of their gear and he fully accepts his house could do with a lick of paint and he drives around in a rust bucket, but that's because he values his music more than his neighbours' opinions.

I respect that :D

Would I be right in thinking everyone on here is the same or are you all just filthy rich ? :scratch:

[struth]

Nope. I filthy poor :eyebrows: and my hifi is budget by most folks standards. In fact most on here are better off than me, hell it wouldnt be difficult. I dont think the average system here is all that expensive, although many do have expensive systems. I dont think its at the expense of their house or car though.
Average age is around 50, so most now have more disposable income due to mortgages, kids etc out of way, and most will have decent jobs.

[Arkless Electronics]

At the risk of stating he bloody obvious...I guess it's the nature of the beast.. It is not that expensive to get to a level of very good quality, lets say 80% of "as good as it gets at any price". If you want to go higher the cost of the parts and labour goes through the roof for fairly good reasons. If you want speakers with genuinely extended bass and a purer sound through the range you are then talking big expensive woofers in big cabinets that have to be properly braced, better mid and HF drivers, crossovers in which 20p electrolytics are replaced with a cap of the same value but polypropylene and £8 each etc etc. Also expensive gear sells only in fairly small quantities and so parts are bought in small quantities, missing out on bulk buy savings, and a years profits has to be made on say 100 units rather than on 10,000 units..

[bumpy]

If you really want to bring tears to your eyes then have a browse through this Site
https://www.facebook.com/odechelette/?hc_ref=NEWSFEED&fref=nf

[danilo]

Was rabbiting on in that vein myself Recently.
I often peruse Youtube videos of Live performances, as Music testers. The ones that impressed ,on my Desktop, I often buy the Cd(s)
Some are even better than the Youtube show, others are simply Piss poor recordings.. (yes Genuine ones) Including a Paco de Lucia one.. grr.
Dead flat sounds in truth... when played thru my Stereo system.
Recording qualities Well masked by Youtube quality? reproductions.

Same reason that I will not own a MC cart. As then my meager LP collection would be reduced to a dozen or two 'enjoyable' Lp's.
A fellow of years long association with selling/installing mega buck AV setups.
Claims that a prosaic NAD system is of Better sound quality than 80% of available gear.
Perennially suggesting that as a V good plateau that one can live on.. happily.
Few bragging rights there tho.

[rigger67]

If you really want to bring tears to your eyes then have a browse through this Site
https://www.facebook.com/odechelette/?hc_ref=NEWSFEED&fref=nf

Yeah, there's a few groups like this one, aren't there ?

To be honest, I'll drool over the pictures as I love design in every form - especially industrial - but that's all it is : audio pornography.

[Sherwood]

As an economist I agree that the law of diminishing marginal returns sets in very quickly. Indeed, the situation mirrors the logarithmic relationship between amplifier output power and sound output levels. A doubling of output power produces only a modest increase in sound levels.

Recent developments have made the expenditure:returns arithmetic somewhat interesting. Whereas 30 years ago one had to spend a lot for a good vinyl front end, it is now possible to get a good digital front end for a modest amount. A raspberry pi based system can sound excellent for little outlay. However, good amplification and speakers are still relatively costly. I agree that a good system can be put together for around three grand (assuming around 1200 each for a good amp and speakers). I would suggest that cost-effective improvements can still be achieved up to double this outlay (i.e. five to six grand) but that after that the returns fall off very sharply.

Of course, I am completely side-stepping the challenge of how to objectively measure sound quality!

I am also totally shocked by the costs of some "audiophile" components and find it incredible that there is a sufficiently large market to make these products viable. I would be very interested to know how others fare on the software to hardware spend ratio (that is the ratio between the amount spent on music and the amount spent on hardware). I am deeply suspicious of anyone for whom the ratio is less than one but can see that an obscenely expensive hifi system would require a huge music collection to balance the numbers. Perhaps some non-linear transformation could be used.

Geoff

[rigger67]

As an economist I agree that the law of diminishing marginal returns sets in very quickly. Indeed, the situation mirrors the logarithmic relationship between amplifier output power and sound output levels. A doubling of output power produces only a modest increase in sound levels.

Recent developments have made the expenditure:returns arithmetic somewhat interesting. Whereas 30 years ago one had to spend a lot for a good vinyl front end, it is now possible to get a good digital front end for a modest amount. A raspberry pi based system can sound excellent for little outlay. However, good amplification and speakers are still relatively costly. I agree that a good system can be put together for around three grand (assuming around 1200 each for a good amp and speakers). I would suggest that cost-effective improvements can still be achieved up to double this outlay (i.e. five to six grand) but that after that the returns fall off very sharply.

Of course, I am completely side-stepping the challenge of how to objectively measure sound quality!

I am also totally shocked by the costs of some "audiophile" components and find it incredible that there is a sufficiently large market to make these products viable. I would be very interested to know how others fare on the software to hardware spend ratio (that is the ratio between the amount spent on music and the amount spent on hardware). I am deeply suspicious of anyone for whom the ratio is less than one but can see that an obscenely expensive hifi system would require a huge music collection to balance the numbers. Perhaps some non-linear transformation could be used.

Geoff


:thumbsup:

Interesting post, Geoff.

Not sure I understand what "non-linear transformation" means in this instance though - isn't that a maths term, rather than an economics one ?

[Covenant]

I think that if I was filthy rich then hi-fi (as opposed to music) would be less interesting. It is precisely because you can get 80% of a decent system with a small outlay that makes it worth pursuing.

[Barry]

Assuming a figure of £10 for each item of 'software' (i.e. an LP or CD), then I just about meet your criterion of an equal split in expenditure between hardware and software.

[struth]

Assuming a figure of £10 for each item of 'software' (i.e. an LP or CD), then I just about meet your criterion of an equal split in expenditure between hardware and software.

Lol. Ive probably 10 times the software at a quick guess. Maybe 20

[danilo]

Likely a reasonable/healthy ratio.
Was a time when the Music was the rationale.

[Gazjam]

Yeah, there's a few groups like this one, aren't there ?

To be honest, I'll drool over the pictures as I love design in every form - especially industrial - but that's all it is : audio pornography.

Some truly fapworthy gear in there...
Something to be said though about being happy with what you have...

chasing that diminishing return can be a bit unhealthy!
All about a balance that works for you Id say.

[Macca]

Not sure the law of diminishing returns applies to the engineering side as much, meaning speakers and, to a slightly lesser extent, vinyl replay. If you ignore the overpriced rubbish or the stuff that has had most of the cost spent on bling there is a pretty big gulf in quality between expensive speakers and budget speakers.

There is also the expectation to consider. Happy is the enthusiast who never hears anything better than what he has already. Once he is 'exposed' to better he can no longer be satisfied, he must have that crucial extra 10% of performance, even though to get it will cost ten times what it cost to get the first 90%

[Sherwood]

Paul, most economics these days involves mathematics. Indeed, a whole branch of economics (econometrics) uses advanced mathematics and statistics to explore and explain relationships between variables (e.g the relationship between per capita household income and per capita spending on health care).

Sometimes a relationship exists between variables but as this is not a linear relationship it is not obvious when plotted on a graph. For example, in geometry the relationship between the length of square and its area are not linear. If you double the side of a square, its area will increase 4 times. There are a number of statistical techniques available to measure the correlation between two (or more) variables that involve converting the linear measurements into non linear form. In these case of the above example, area is equivalent to length squared so that the area of of square equals the square of its length.

I would not expect the relationship between hifi hardware and software expenditures to be linear. For me, if I calculate the cost of my main system I find I have probably spent over 6 times that amount on vinyl and cds. Over the years I have spent a lot more on hardware but have either sold that on or given it away. If I add in the cost of additional equipment the ratio probably drops to 4 times the software costs. I do know some people who have spent immense sums of hifi hardware and who have less than 100 cds. This seems odd to me.

Sorry for the digression but you did ask!

Geoff

[Macca]

. I do know some people who have spent immense sums of hifi hardware and who have less than 100 cds. This seems odd to me.



I suppose it is possible to be very rich and time poor. If you only have a couple of hours a week to listen to music there isn't much point having a large collection as you'd never scratch the surface of it. Our lives are finite no matter how many records we buy. No relationship there, linear or otherwise ;)

Technology has superseded this partcular argument in any case, Subscribe to a streaming service and you instantly have a collection bigger than pretty much any single enthusiast in the world. (Although I appreciate not everything is available that way).

[Sherwood]

Martin,

at the risk of appearing pedantic (I am of course) the concept is correctly termed "diminishing marginal returns". It is not that performance does not improve with greater expenditures, but that each successive pound spent produces less benefits than the preceding pound spent. That is the marginal bit!

Each person is different in their perceptions of benefits and the value they attach to each pound they spend. For me, the returns fall dramatically above around six grand.

I agree that a lot of the fun is putting together synergistic combinations of equipment that perform above what would normally expect for that level of spending. I am sure we all like to think we are master matchers of equipment and secretly feel a little smug when seeing how much some punters have spent to so little effect.

Geoff

[Sherwood]

Martin,

you raise a valid point. The amount of money and time we have is important though they are not unrelated and change over time. We can trade off time for money by working longer hours (and vice versa) and tend to have more free time in our later years. However, a key issue is how we value music time in relation to other leisure pursuits such as watching tv, going to the pub, walking etc. Some activities can be conducted simultaneously. For much of my career I have worked in remote locations overseas where there was little worth watching on tv and so spent many evenings listening to music. During that time I would regularly travel long distances by car that allowed me to listen to music for many hours. For me, music both live and recorded rates high in my preference list.

Geoff

[Sherwood]

Grant,

are you counting all your equipment or just the main system?

Geoff

[Macca]

I agree Geoff, and I'm the same, will happily get in 20 or more hours a week of serious listening. But the bloke with only 2 hours a week to listen shouldn't be castigated for not bothering to assemble a huge collection he will never have time to listen to. In terms of cost of gear you can't blame him for wanting those precious 2 hours to be really special.

[rigger67]

Paul, most economics these days involves mathematics. Indeed, a whole branch of economics (econometrics) uses advanced mathematics and statistics to explore and explain relationships between variables (e.g the relationship between per capita household income and per capita spending on health care).

Sometimes a relationship exists between variables but as this is not a linear relationship it is not obvious when plotted on a graph. For example, in geometry the relationship between the length of square and its area are not linear. If you double the side of a square, its area will increase 4 times. There are a number of statistical techniques available to measure the correlation between two (or more) variables that involve converting the linear measurements into non linear form. In these case of the above example, area is equivalent to length squared so that the area of of square equals the square of its length.

I would not expect the relationship between hifi hardware and software expenditures to be linear. For me, if I calculate the cost of my main system I find I have probably spent over 6 times that amount on vinyl and cds. Over the years I have spent a lot more on hardware but have either sold that on or given it away. If I add in the cost of additional equipment the ratio probably drops to 4 times the software costs. I do know some people who have spent immense sums of hifi hardware and who have less than 100 cds. This seems odd to me.

Sorry for the digression but you did ask!

Geoff


Wow, this reminds me of another subject I did at A-Level : Geography (I did economics too).
Spearman Rank Correlations anyone ?? :D

It's an attempt to see if there's a positive link between two variables such as time of the year and rainfall.

The last book I read anywhere near the subject was Soccernomics : https://www.amazon.co.uk/dp/B006PVZ3LE/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1

It raised some great theories about football and economics, examining the GDP, Total Population and History of The Game in any given nation to work out whether said nation over or under-achieves in international football. Believe it or not, England do better than they should :D

It also came to the conclusion that hosting any major sporting event - World Cup, Olympics or a major US club franchise - is neither financially beneficial nor hurtful.
But it does guarantee an uplift politically due to the feelgood factor.

As Harold Wilson once said : England only ever win the World Cup under a labour government ...

[Barry]

I should have added that I have two systems with much redundancy, so there is a lot of equipment laying around. Also, whilst it is only a means to an end, I'm actually interested in the equipment side of things, especially vinyl playback.

Apropos the number of records one has, I have about 2,000 titles, more or less equally split betwen vinyl and CD. Not large by any means, yet I wonder if I need to enlarge my collection as I'm not sure I have time to play it all, even though I use my system at least 5 hours a day when I'm at home.

I started a thread to discuss this some time ago, perhaps it is pertinent to bring it up now? http://theartofsound.net/forum/showthread.php?8161-Can-one-have-too-much-music

[Sherwood]

Martin

my points are observations not criticisms, though I do find it hard to understand why someone should spend so much on hardware and not have a big appetite for music and music listening.

I think it might be a generational thing. When I started buying albums (mid 70s) there were only 3 tv channels and most of what was on was rubbish. Buying a new album was a social event and hours would be spent listening to its with friends and pondering the details of sleeve note (lyrics, engineer, mastering lab etc). Yes, I would make compilation cassettes, but the album was the thing. I talk with younger people now and few of them appear to listen to albums, just playlists.

As for music streaming, I find it very useful for discovering new music and for deciding whether a new cd is worth buying. I daresay that if it was around in the 70s I would not have bought as many of the albums I did, many of which only have one or two tracks worth listening to. However, I still find the quality of music streaming services disappointing so if I like a cd I will buy it and rip it to flac.

Geoff

[daytona600]

Audio is a cheap hobby/habit save a tenner a week & after 30years you get a £15600 hifi
start hobby in your 20s & in your 50s £15k buys a top notch system

[Sherwood]

Paul,

you might be interested in this book. It is written by a professional economist for the lay person to explain how pervasive economics is in terms of the problems it is applied to. Quite humorous too.

https://www.amazon.co.uk/Freakonomics-Economist-Explores-Hidden-Everything/dp/0141019018

There is also a Freakonomics radio station.

If I recall the authors look at the football industry and ask what id the best way to take a penalty.

Geoff

[rigger67]

Cheers Geoff - I am aware of the whole Freakonomics thing, though I haven't read the book.

It's fascinating .. especially when linked with subjects close to your heart like footie and music.

That penalty thing is a bit of a fallacy though.
I believe in practise and muscle memory - it can only help - but when it comes down to it, it's as much about mental strength as technique.

I remember listening to one manager recently who said that in addition to actually practising the kicks themselves, they also replicated that walk from the halfway line to the spot as they had a big cup tie approaching.


.. needless to say, they lost on penalties ;)

[Macca]

Martin

my points are observations not criticisms, though I do find it hard to understand why someone should spend so much on hardware and not have a big appetite for music and music listening.

I think it might be a generational thing. When I started buying albums (mid 70s) there were only 3 tv channels and most of what was on was rubbish. Buying a new album was a social event and hours would be spent listening to its with friends and pondering the details of sleeve note (lyrics, engineer, mastering lab etc). Yes, I would make compilation cassettes, but the album was the thing. I talk with younger people now and few of them appear to listen to albums, just playlists.



They may have the appetite, just not that much time to indulge it. There are people out there who have so much spare money they have to actively look for stuff to spend it on. ( I know 2 off the top of my head, neither has children of course), I suspect that globally that amounts to a fair number of people, enough to create a market anyway. There is an element of the magpie about those with massive collections, nothing wrong with that but it isn't a compulsion everyone shares.

I also recall fondly the days when a new album purchase was a big event (due to the cost) and as you say, the art, the sleeve notes, you did feel like you were getting something special for the money. You'd then take it round your mates so he could have a listen, give a verdict and then asess if it was worth the cost of one side of a TDK90SA to tape a copy for himself. Now the youngsters just find it on their phone in 20 seconds. I think we had the glory days, myself. :)

[Sherwood]

Martin,

I have returned to the UK having worked overseas for most of the last two decades. I have recently had my Linn LP12 serviced and upgraded and have been rediscovering my extensive vinyl collection which has been in UK storage for most of that time. What surprises me is that I can still recall where I purchased many of these albums and the experience of listening to them for the first time. Not sure I could say the same for the CDs I purchased in the intervening period, even though many were re-purchases of the original vinyl. I can also recall the pleasure of hearing new aspects of these recordings as I upgraded my system over the years.

Geoff

[Macca]

Indeed. No diminishing returns there, increasing returns if anything. I have considered selling my vinyl collection but found that I had, with difficulty, to accept the fact that they are like sacred objects to me.

[Joe]

Would I be right in thinking everyone on here is the same or are you all just filthy rich ? :scratch:

I'm just filthy rich.

The thing with me is, I can't resist a classical box set, especially at bargain prices, even though I know I'll only ever listen to a fraction of what's in the box. So I have a huge collection of discs and two excellent systems to play them on, but unless I listen to music 24/7 for the next ten years, much of that collection will remain unheard. Compare and contrast with my LP collection; apart from a few duff items, I've played each of the several hundred LPs I own many times; some so often I can't bear to listen to them any more.

[paulf-2007]

Very little of my kit has been bought new. My valve phono stage was new but only £200. The rest was used and would sell for what I paid for it. So not much loss really. I'm not one for spending huge amounts on individual components like some for example a preamplifier for £8000.
It's not my place to criticise anyone's hobbies or interests and what they spend on them. A friend once said to me about another friends brother who spent most of his money on beer, I said that was his choice and he probably wouldn't think much about you spending your money on model aircraft, so if someone wants to spend huge amounts on hifi and drive a rust bucket and live in a hovel that's their business. What I don't like is hifi snobbery.

[struth]

or any kind of snobbery.

[Joe]

Intellectual snobbery's OK.

[rigger67]

You're not the only one, Joe.

I've got LPs and CDs that have never been played : twenty years of working in record shops and DJing does that to you as you get given a lot of stock.

Actually, it makes the whole question of "what you paid" for software vs hardware an interesting one for me given 90% of my collection was either bought with a staff discount or simply free of charge :)

[Sherwood]

Joe,

sounds as if you have passed the point of diminishing marginal returns with some of your box sets and moved into the murky domain of negative marginal returns: each relisten is causing you harm rather than giving you pleasure.

I have a few albums and cds like that, though it did not take multiple plays to reach that point.

Geoff

[Reffc]

You can get a very good sounding system for £3000, but don't kid yourself that you'll get a great sounding system unless you've been very thrifty and plain lucky with used buys. By "great sounding" I mean genuine full range, not arrived at by driving small, large x-max drive units loud (never convinces) but a genuinely effortless full range system.

The question is sort of loaded to fail before anyone answers or gives a view because it automatically assumes a point of diminishing returns, and this point, in reality, has probably a £10,000 broad band spread from £3K upwards depending on what it is you value in your hifi.

For some people, full range is not a necessity and aesthetics are more a priority, as are minimalism and a willing to compromise location. Convenience hifi if you like (and nothing wrong in that if that's what someone wants).

Others may be fortunate enough to live in larger spaces and have dedicated rooms for listening and will require full range sound and want quality workmanship be that bespoke or mass market.

Whilst £3K is a relatively large budget for the first option and you could easily put together a great digital front ended system for £3K, don't kid yourself that £3000 will come close to providing the latter. It wont. Even dealing with things like used vintage Tannoy drive units, you'll pay at least £700 per pair for serviced 12 inch units, twice that for 15 inch MGs and that's before you think about cabinets, amps, or front ends and cabling.

Big JBLs would probably cost you your budget each one, never mind a pair.

Is it worth it? Those that have heard what a genuine full range and very efficient system delivers will usually argue that it is. You only have to experience that sort of sound, done well, once to appreciate the difference between going that route or the more conventional slim tower floor standards churned out by the thousand for a grand a pair. That's before we start talking amps and sources.

Good amplification doesn't have to cost the earth at all. A good class A/B amp can be had for probably £100 to £200 used, or certainly for £500 new. Once you start talking good valve amps, quadruple that as things like wide bandwidth low distortion output transformers are not cheap, and neither are hand assembled point to point wired circuits in heavyweight chassis (they have to be to take the mass of the transformers). Again, some people may decide to go the powerful SS route on the basis that they'll have enough headroom for driving less efficient loudspeaker designs and nothing wrong with that, but many people appreciate what a good valve amp does slightly differently and once experienced may not want anything else, especially if their loudspeakers are efficient and a relatively benign load.

It's too broad a question to have just one answer.

Yes, you can have your cake and eat it with £3K to spend and tripling the budget probably wont buy you much better sound in some set ups in some circumstances.

If you wish to go full range and with superb dynamics and good accuracy, be that big and efficient or electrostatics, or multidrivers and active, think again.

As to whether things like MC Vs MM are relevant, that depends on the rest of your system and your music collection. For me, a good MC will always better a good MM but at a cost which one can argue is past the laws of diminished returns. I am fortunate enough to have built up both types of vinyl front end and each has their strengths but for ultimate delicacy, detail retrieval, realism etc etc, the MC with a superb phonostage wins every time.

[rigger67]

Thanks for the detailed and well reasoned reply :)

[Sherwood]

Paul,

I think you have missed the point and I refer you to my earlier note on diminishing MARGINAL returns. Nobody is seriously questioning that one can obtain progressively better sounds as one spends more and more on a hifi system. I am aware that there are systems that cost 500 grand that can be bettered by systems that cost 600 grand.

However, at the lower range of the budget, the price performance curve is relatively steep. Plotting the price/performance of, say, 100 systems costing from 1000 to 3000 quid would see a broad clustering of points around a plotted curve. The "best" systems would be positioned above the curve (assuming price is represented on the horizontal access). However, above this range, the curve starts to flatten out becoming progressively horizontal with increased expenditures. I suggest that the curve becomes closer to horizontal as one moves beyond 3k and very flat above 10k.

I agree with you that certain system attributes are more costly to achieve than others. Systems that play loud can be achieved at less cost than systems that play deep. Increased detail can be achieved at relatively low cost though it is more costly to build a system with genuinely wide dynamics. Good imaging can be achieved with any number of small speakers, though tonal accuracy is hard to achieve with budget box speakers. For many years my main system was valve based with LS35a speakers which probably tells you where my priorities lay. However, over the years I have strived to achieve a system with greater dynamics and a faster transient response; hence, my move towards Magneplanars and single driver high efficiency box speakers. I have never been a fan of the majority of full range speakers precisely because they cost so much to get right. To my ears it is necessary to spend many thousands of pounds to build a full range speaker that does not sound boxy or compromised in some way or other. With a budget of 3000 quid one can achieve a pretty good system, albeit with a number of compromises. The problem is that is becomes progressively more costly to iron out those compromises and to build a system that performs superbly on all parameters.

On that note I am off to listen to some live music and remind myself of how far we have come and how far we remain from accurately reproducing real voices and real instruments.

Geoff

[Firebottle]

Interesting thread this , particularly with my designers hat on. I have just completed a project that has given me an incremental increase in SQ.
With my move to monoblocks recently that also gave an incremental increase in the SQ.

What I find compelling is that once achieved there is a great reluctance to step back to the 'inferior' SQ.

:) Happy Bunny.

[paulf-2007]

or any kind of snobbery.
Indeed, I detect some in this thread and so I'm out of here.

[Reffc]

Paul,

I think you have missed the point and I refer you to my earlier note on diminishing MARGINAL returns. Nobody is seriously questioning that one can obtain progressively better sounds as one spends more and more on a hifi system. I am aware that there are systems that cost 500 grand that can be bettered by systems that cost 600 grand.

However, at the lower range of the budget, the price performance curve is relatively steep. Plotting the price/performance of, say, 100 systems costing from 1000 to 3000 quid would see a broad clustering of points around a plotted curve. The "best" systems would be positioned above the curve (assuming price is represented on the horizontal access). However, above this range, the curve starts to flatten out becoming progressively horizontal with increased expenditures. I suggest that the curve becomes closer to horizontal as one moves beyond 3k and very flat above 10k.

I agree with you that certain system attributes are more costly to achieve than others. Systems that play loud can be achieved at less cost than systems that play deep. Increased detail can be achieved at relatively low cost though it is more costly to build a system with genuinely wide dynamics. Good imaging can be achieved with any number of small speakers, though tonal accuracy is hard to achieve with budget box speakers. For many years my main system was valve based with LS35a speakers which probably tells you where my priorities lay. However, over the years I have strived to achieve a system with greater dynamics and a faster transient response; hence, my move towards Magneplanars and single driver high efficiency box speakers. I have never been a fan of the majority of full range speakers precisely because they cost so much to get right. To my ears it is necessary to spend many thousands of pounds to build a full range speaker that does not sound boxy or compromised in some way or other. With a budget of 3000 quid one can achieve a pretty good system, albeit with a number of compromises. The problem is that is becomes progressively more costly to iron out those compromises and to build a system that performs superbly on all parameters.

On that note I am off to listen to some live music and remind myself of how far we have come and how far we remain from accurately reproducing real voices and real instruments.

Geoff


I don't think I have missed the point at all Geoff. Forgive me but your last post was self-contradictory. The trouble with threads like this is that they mean different things to different people and your opinion of where these diminishing returns, marginal or otherwise, kicks in is less scientific and more opinion. I have no argument with that at all, as after all, it's your view of things. However, I stand by my fundamental point that you first need to nail down a firmer definition for it to be relevant at all.

You can arguably put together a fine sounding system for £500 used and there's little marginal about achieving dynamics, genuine full range, microdynamics, imaging, realistic timbre and tonality, decay, delicacy. In fact doing so demands that certain designs are implemented because only certain designs will give you all of those things. You can get a heck of a lot of mediocre system by spending £200 or £20,000, and in some ways I think I'd prefer the more honest and carefully assembled £200 system because it was more carefully considered and less wasteful. However, if taking your argument, we assemble, say, a well matched system for £1500, compared with a well matched system of £3000, I'd argue the opposite to you. I'd say that carefully considered, there's probably only marginal differences between them because at this level, marketing, overheads, profits and sales drive things, and by and large, there's little to choose between them SQ wise bar more costly enclosures, more production costs etc.

Jump to say £10,000, which is a heck of an investment for most people, and stay with the well considered system, put a good chunk in the dynamics side of things (loudspeakers) and in a decent source(s) and the differences between your £3K system should and probably would be a bit more than marginal. I take the point though, and repeat, that there's a lot of mediocre kit parading as "high end" (whatever that means), but I have first hand knowledge of what it costs to produce decent gear, and the loudspeaker end of things, you simply cannot get something for nothing. I am assuming here that we are talking new and not used, as that's a whole different ball game.

I would agree with your argument once we get to perhaps £10K but £3K new? No chance. The difference between a system that is really quite good and one that blows your socks off with massive scale, dynamics, bass, and all of the things that we strive for in our hobby in our own individual ways simply cannot be had for £3K, that is a cold hard fact and not hifi snobbery which has nothing to do with it, and for the best £3K system up against the best £10K system (where the amps may only represent say £500 and the rest is source and speakers) then my money is on more than marginal gains.

We can argue the point to kingdom come and probably won't agree. it's one of those threads where unless the definitions about "gains" and SQ fundamentals are firmly nailed down, then your definitions are right for your argument whilst others may hold alternative benchmarks. Talking of points on graphs and trying to reason on some statistical theory counts for little on this subject without first nailing down definitions and with so many variables to play with, the argument soon becomes a circular one.

[dave2010]

Lol. I've probably 10 times the software at a quick guess. Maybe 20I guess I'm with you there. Since 2001 I probably spent between £500 and £1k per year - maybe around £600 , so that's £9k, and I don't think I've spent anything like that on hardware. However, you have prompted me to take a quick inventory, and perhaps I spent more on hardware than I'd thought.
In that period - about 15 years - a DAB tuner, a few DVD/Blu Ray players - a couple of T-amps - a DAC and a couple of Logitech streamers - maybe £2k's worth. So the ratio is very approximately 4.5:1. One computer might have been bought originally with audio in mind, though it's not been used much, for that or any other purpose. That would and rather more (over £1k) to the hardware side of the balance equation, though it could be argued that the DVD and Blu Ray players (one is an SACD unit) are not only audio related.

Scary stuff - maybe I need to go into a monastery and give up spending. Still, I suspect most of us spend more money on other things, either from choice or presumed necessity. Cars are an obvious one - £2k per year is probably a realistic figure for many - and maybe that's ignoring the petrol and maintenance, though I did scrap one a few years ago which was somewhat over 20 years old, and didn't cost a lot second hand when we bought it.

[Sherwood]

I don't think I have missed the point at all Geoff. Forgive me but your last post was self-contradictory. The trouble with threads like this is that they mean different things to different people and your opinion of where these diminishing returns, marginal or otherwise, kicks in is less scientific and more opinion. I have no argument with that at all, as after all, it's your view of things. However, I stand by my fundamental point that you first need to nail down a firmer definition for it to be relevant at all.

You can arguably put together a fine sounding system for £500 used and there's little marginal about achieving dynamics, genuine full range, microdynamics, imaging, realistic timbre and tonality, decay, delicacy. In fact doing so demands that certain designs are implemented because only certain designs will give you all of those things. You can get a heck of a lot of mediocre system by spending £200 or £20,000, and in some ways I think I'd prefer the more honest and carefully assembled £200 system because it was more carefully considered and less wasteful. However, if taking your argument, we assemble, say, a well matched system for £1500, compared with a well matched system of £3000, I'd argue the opposite to you. I'd say that carefully considered, there's probably only marginal differences between them because at this level, marketing, overheads, profits and sales drive things, and by and large, there's little to choose between them SQ wise bar more costly enclosures, more production costs etc.

Jump to say £10,000, which is a heck of an investment for most people, and stay with the well considered system, put a good chunk in the dynamics side of things (loudspeakers) and in a decent source(s) and the differences between your £3K system should and probably would be a bit more than marginal. I take the point though, and repeat, that there's a lot of mediocre kit parading as "high end" (whatever that means), but I have first hand knowledge of what it costs to produce decent gear, and the loudspeaker end of things, you simply cannot get something for nothing. I am assuming here that we are talking new and not used, as that's a whole different ball game.

I would agree with your argument once we get to perhaps £10K but £3K new? No chance. The difference between a system that is really quite good and one that blows your socks off with massive scale, dynamics, bass, and all of the things that we strive for in our hobby in our own individual ways simply cannot be had for £3K, that is a cold hard fact and not hifi snobbery which has nothing to do with it, and for the best £3K system up against the best £10K system (where the amps may only represent say £500 and the rest is source and speakers) then my money is on more than marginal gains.

We can argue the point to kingdom come and probably won't agree. it's one of those threads where unless the definitions about "gains" and SQ fundamentals are firmly nailed down, then your definitions are right for your argument whilst others may hold alternative benchmarks. Talking of points on graphs and trying to reason on some statistical theory counts for little on this subject without first nailing down definitions and with so many variables to play with, the argument soon becomes a circular one.

Paul,

Forgive me, but I think my point is valid. Let me clarify (one last time). The "Law" of diminishing marginal returns is a widely observed occurrence confirmed by measurement and empirical evidence across a wide range of human activity. In this context I should emphasize that the term marginal does not mean small or insignificant but instead refers to incremental or successive change (i.e the performance improvement for each successive price increment). I am not clear if your challenge appears to be that the price/performance tail-off does not apply to hifi; that it cannot easily be measured or verified; or, that you dispute that it applies at the level of spending for the bulk of hifi consumers (i.e. below 10K). I dispute this strongly. What I will concede (as an economist) is that inter-personal comparisons of utility are impossible without a lot of complex analysis. I cannot know how much you value an apple relative to an orange or a banana. Nor can I know how much you value an extra hour of leisure time relative to the hour of income you might have to forego to get that extra hour. Indeed, I made that point earlier when I referred to the problems of measuring subjective performance in hifi. However, I can draw some conclusions based upon the actual economic choices that individuals do make (i.e. revealed preferences as evidenced by actual spending decisions).

Let us agree some basic assumptions. First, that individuals vary in their disposable income and the amount that they are willing or are able to spend on a hifi. They will have a rough idea of their budget but may be willing to spend a little more or a little less based upon how they rank the performance of different systems. Second, that individuals seek to purchase a system which best matches their individual tastes and preferences subject to their budget constraint. If an individual auditioned 10 hifi systems in a blind listening test their scores would probably correlate well to price, though almost certainly this would not be a linear relationship. If 100 individuals went through this same blind audition process, there would be variations in the scores assigned and in the ranking of the systems auditioned though it is likely that the aggregate ordering would correlate fairly well with price (assuming that the systems were carefully assembled rather than random collections of equipment). When the price of each system is revealed, individuals will make a purchasing decision based upon their personal subjective views. They might have initially planned to spend 3k on a system, but then decide to spend 4k because of their subjective price/performance assessment. Alternatively, they might have set out with the aim of purchasing a 10k system, but then found that they could get the performance they were seeking by spending only 7k.

My point is this: that it is no business of anyone else how an individual chooses to allocate their income assuming that they are meeting other obligations (e.g. feeding and clothing their kids). It is an entirely subjective matter. Those with fewer financial obligations (i.e. those with no kids and the mortgage paid for) and those with higher incomes overall will have more choices. I would (safely) predict that most of those with 10k+ systems are richer, have bigger houses, and drive higher performance (possibly German) cars. There will of course be a smaller number of individuals with 10k systems who are not so well off, but have prioritised a good hifi over other acquisitions because that it their preferred leisure pastime. I will not quibble with you over the precise shape of the price/performance curve because at the individual level, that is subjective. Clearly, for you, 10k is the price level at which you begin to meet your performance goals. However, I would suggest that you are an outlier and that for many (I would argue most) that the critical figure is lower. Although this forum is not a random sample, I suspect that if we were to plot the distribution of the actual expenditures of forum members on their main hifi system we would observe an asymmetrical bell shaped curve. I am guessing that the mean would be below 5k and that the number of purchases above the 5k level to be lower than the number below that figure. Again, it is only a guess, but I would expect to find a very small proportion of systems costing 10k or more (even amongst this particular audience). Since these figures would be based upon actual consumer choices, it would indicate the operation of diminishing marginal returns. Personally, I could easily afford to spend 2 or 3 times more on a hifi system than my current system without compromising my other leisure pursuits. In fact, for other purchases, I have often gone well beyond my planned budget because of my price/performance assessment on the day. The most recent example being a camera purchase where I spent twice what I had planned to for a camera with a much larger image sensor and faster lens. The fact that I do not choose to spend more on my hifi is that I cannot personally justify the marginal performance gains relative to the the marginal cost increase. I say this as someone who listens to music a great deal, both recorded and live.

Other observations confirm my views. I am repeatedly amazed by how few younger people now own what I would classify as a high fidelity system. Many have never owned a cd player or turntable and have only ever listened to music in highly compressed form, often through very poor (often white?) earphones. When they do listen through speakers it is often on poor quality bluetooth/docking devices that compound the compressed formats of the source material. Often, these same individuals run their own cars, go on multiple annual vacations, and spend large amounts on cellphones, video games and other gadgets. It may be a generational thing, but hifi seems to have dropped significantly in the rankings of leisure pursuits of those under thirty. Clearly, younger people do not consider the performance/price ratio to be high enough to justify them investing in a good quality system. I suggest that for many of these individuals diminishing marginal returns is kicking in at very low price points.

It does not help in my mind, the the hifi industry and particularly the hifi magazine industry seems intent on creating discontent amongst hifi enthusiasts. Each year a new product is declared as a significant and worthwhile upgrade on a product declared as best buy only a year or two earlier. If there was this continuous and inexorable annual improvement process, how is it that I could easily live today with a hifi system produced at the time of my birth (e.g. Garrard turntable, Radford or Leak valve amp, and Quad ESL57 speakers). Yes, that equipment was expensive in its day, but nowhere near as expensive in relative terms as today's audiophile products. I understand that today's elite products are significantly better than the 50 year old system I refer to, but at such a cost premium as to put most people off. I suspect that the sales of some of these products represent an expression of conspicuous consumption and that their high price is an element in their attractiveness. Curiously, I would say the real improvements in value for money in the 40 years I have been involved in hifi has been at the lower end of the market. The inflation adjusted cost of the classic NAD student system of 40 years ago would buy a much better starter system today, especially if one was using a streaming approach based upon uncompressed digital files.

You suggest that there may be little difference in actual performance between a 1.5k system and a 3k system because of overheads, distribution and marketing costs. I dispute that, but if it is true it reinforces my cynicism of the hifi industry in general and reminds me why I avoid reading the magazines anymore. This pessimistic view also ignores the growing number of artisan manufacturers who sell their products direct to the customer and the basis of word of mouth rather than expensive and often offensive, sometimes inane, marketing. Increasingly, my system has been acquired from direct sale manufacturers whose products not only sound good at their price point but look good too.

In conclusion, I have no dispute with your claim that your optimal price performance point is achieved with a system of around 10k. You are the sole judge of that and I am sure your conviction to this judgement is reflected in the products you have chosen to sell. What I am suggesting is that the optimal spot for the majority of the hifi community is lower, and for many younger people, much lower. If this were not the case, we would see a great many more systems at the high price points.

Geoff

[Sherwood]

I guess I'm with you there. Since 2001 I probably spent between £500 and £1k per year - maybe around £600 , so that's £9k, and I don't think I've spent anything like that on hardware. However, you have prompted me to take a quick inventory, and perhaps I spent more on hardware than I'd thought.
In that period - about 15 years - a DAB tuner, a few DVD/Blu Ray players - a couple of T-amps - a DAC and a couple of Logitech streamers - maybe £2k's worth. So the ratio is very approximately 4.5:1. One computer might have been bought originally with audio in mind, though it's not been used much, for that or any other purpose. That would and rather more (over £1k) to the hardware side of the balance equation, though it could be argued that the DVD and Blu Ray players (one is an SACD unit) are not only audio related.

Scary stuff - maybe I need to go into a monastery and give up spending. Still, I suspect most of us spend more money on other things, either from choice or presumed necessity. Cars are an obvious one - £2k per year is probably a realistic figure for many - and maybe that's ignoring the petrol and maintenance, though I did scrap one a few years ago which was somewhat over 20 years old, and didn't cost a lot second hand when we bought it.

Dave,

maybe the index needs to be adjusted in some way. Perhaps the relevant variables should be total expenditure on your current main system compared to the total expenditure on music that you have played more than once or would buy again having heard it played!

Geoff

[Reffc]

Geoff

There seems to be some rather tall assumptions creeping in, and I think we do have to be careful about making those assumptions. Not all £10K systems are good, never mind great. Not all £3K systems better £1K systems. One cannot generalise that way. So much depends upon the design and quality of the kit, what market it's aimed at, the distribution/profit business model (hence mark-ups) and what the end user wants.

You can argue until the cows come home that £3K systems are twice as good or have major advantages over say a £1.5K system and in some cases, that may well be true. It may also be true that some £3K systems are only marginally away from something at three times the cost, but the opposite can and is true in many cases also.

You have missed the point completely. Up to a certain level, what's inside the boxes you buy b(ie the bits that matter) will not really differ that much be it in a £3k or a £1.5K system. Don't believe that or do. It's the truth. They just wont be that much different to produce, simple as that. The casework and aesthetics often costs more than the populated PCBs, fact. Speakers at say £500 can sound great, and there's plenty of absolutely cracking speakers about these days from around £200 per pair upwards. Will a £1K pair of standmounters be that much different from ones at half the price? In terms of cabinet construction or quality, I doubt that very much. There may be better drive units or there may not be. I could name a few manufacturers (but wont as I wont do down other makers in public) who use £30 drive units in £3K loudspeakers. Their marketing strategies set them apart and dictate final aesthetic quality, and they'll aim to sell a certain number at a certain profit. But are they really that different? Nope. Not where it really matters, in my experience (added to avoid finger pointing and name calling).

As for what I "choose to sell" reflecting my views...you're way wide of the mark. You should note that I am NOT a dealer in the sense that you mean it. I represent one of those artisan companies that you mention, and am a designer and maker of bespoke hifi goods, mainly loudspeakers, hifi furniture, and good value audio cables (great value for the quality of the components used in their assembly). My main annual turnover is not in off the shelf goods sold, not even close. It is in the provision of hifi services to others, including other companies. Most of RFC's turnover in fact is in repairing and refurbishing cherished loudspeakers that people may have owned for 40 years where people do not want to buy the next latest and greatest thing, because they know full well that hifi (except in the digital realm and in materials technology and affordability of certain items) really hasn't moved the goal posts much in the last 4 decades. Because I undertake that work to a professional standard at exceptional value, the order books remain full. It makes it worthwhile knowing that people get great pleasure out of having something they may not have paid much for restored to factory spec, or fettled to last another 30 years, so please be careful about how this hifi snoberry nonsense is being banded about far too loosely.

The point that you fail to grasp here is that to produce something that produces a truly awesome dynamic range, and encapsulates all the other attributes we aim for, at close to full frequency demands a system with loudspeakers at the end of the chain able to convey that, and sources at the beginning capable of extracting as much info as possible. That part has got cheaper, undoubtedly so and thankfully so, but the loudspeaker end? Nope. No way, no how. You simply cannot go there on a budget and that is NOT snobbery, it is the reality of the costs involved for the sort of drive units required, the size and construction of cabinets required and the amount of design and R&D required. None of that comes cheap because of both materials costs and hours needed in production and that's before marketing and overheads need to to be covered and profit has to be made to survive and reinvest.

Anyone who doubts this should simply take a closer look and do some homework. Do not take my word for it.

I offer you an open invitation to bring any £3K system you like to me, and we'll set up and directly compare with a system that is half designed and built by myself, and half by other similar artisan UK manufacturers. I invite any member of AoS in fact to do the same. You'll be welcome. It is the only way that I will prove the point that I am trying to make here. Please do not take offence because I am not in any way talking down less expensive, affordable systems. I spend most of my working days helping people sort those systems which I hope to conserve for them for many years to come and sincerely hope that people are wedded to whatever they have. This is not about £££££. This is about sweeping statements being made without a shred of evidence or common sense applied to the arguments and just because you say something half a dozen times still does not make it true. There's really no argument here, just crossed wires. Before you unravel that lot, I'd urge you to pick up the phone, have a chat and take me up on my offer. I have no doubt whatsoever that you will change your mind about part of the argument you are putting forward. There's an olive branch for you. I'll bow out of this one now and tbh, should have known better than to get involved in any forum debate...I won't be going there much in future.

[rdpx]

I am not sure why the thread is discussing one particular £3K system being better or worse than another system of a higher or lower price. Surely this is irrelevant to the OP which was all about the idea of diminishing returns, not comparing different systems at different price points?

The idea of diminishing returns seems entirely valid in hi-fi world. The better a system gets, the more money it takes to make improvements. I really can't see why that is so controversial?

I am sure it was you Paul who once advised me that the Nagaoka MP-200 was the "sweet spot" in their cartridge range with regard to price/SQ. Is that not the very idea of diminishing returns?

R

[rigger67]

The idea of diminishing returns seems entirely valid in hi-fi world. The better a system gets, the more money it takes to make improvements. I really can't see why that is so controversial?



This is what I was getting at.

Simple point, really ..

[struth]

Not nessesarilly lol

[Sherwood]

I am not sure why the thread is discussing one particular £3K system being better or worse than another system of a higher or lower price. Surely this is irrelevant to the OP which was all about the idea of diminishing returns, not comparing different systems at different price points?

The idea of diminishing returns seems entirely valid in hi-fi world. The better a system gets, the more money it takes to make improvements. I really can't see why that is so controversial?

I am sure it was you Paul who once advised me that the Nagaoka MP-200 was the "sweet spot" in their cartridge range with regard to price/SQ. Is that not the very idea of diminishing returns?

R

Frankly, I can't understand why Paul takes issue with this point either. It may be that he falls into a small group of users for whom diminishing marginal returns do not kick in below the 10k reference that he marks as his quality/performance threshold. Of course, he is right in arguing that full range speakers are expensive to do right but that is precisely why most consumers go for smaller boxes that get most of the other things right albeit at a much lower price point. The 3k figure is merely an arbitrary price point to present the case. In fact, I would argue that diminishing marginal returns kick much lower for most of us, and I would guess (no more than guess) that they kick in very low for a younger generation brought up on compressed music played through lowfi systems. Apparently, Paul is unimpressed with my theoretical exposition, and not convinced by my claim that empirical data would support the theoretical model. If my resources were unlimited I would probably have a top flight electrostatic or ribbon speaker and a national grid sapping mono block valve power amp. In reality, my system has been chosen as the "sweet spot" on my personal price/performance curve. This system is the optimal one for my diminishing marginal returns profile.

Geoff

Geoff