I think it's a personal opinion piece not really backed up by any facts.
- The fact that two products happen to be manufactured in the same factory doesn't make them the same product. But having said that, there has been tremendous consolidation in the industry and there are many products that are virtually the same or if different, use largely the same design approaches and/or ICs. Although the following may have changed for 2012, as of 2011, Pioneer and Denon AVRs below $1299 list were designed and assembled by Inkel, the parent company of Sherwood. Onkyo AVRs below $1499 list were designed by an independent Korean team which also did design for Harmon/Kardon. However, the Onkyos were assembled in their own Malaysian factory while the HKs, NAD, Marantz and Teac products were assembled in the same Chinese factory (but again, that doesn't mean that they're the same design or eve use the same parts).
But if anything, the above demonstrates that the top-of-the-line products are distinctly different than the bottom of the line products.
- On mass market products, even top of the line mass market products, dealer margins are incredibly small and that's one of the main reasons (aside from big box and internet competition) that local independent dealers are going out of business. When I worked in the audio industry in the 1970s, we used to give a 30% discount to the customers just for buying a system (turntable, 2 speakers and a receiver), so our wholesale price was no more than 50% of list. Today, many manufacturers are approaching a 10% margin for the dealer. The average dealer makes more selling you a package of overpriced cables than they do selling a TV or receiver. This is true in the photo market as well. Nikon's 2012 pricing is just a 10% discount for the retailer. Most independents make their money on installation and other services, not on selling you the products.
For big retailers, most of their profit is in cash management - the float from the time they get paid either by the consumer in cash or by the credit card company and the time they pay the manufacturer. Since interest rates are so low these days, there's not much there. In the old days, you could make 1 to 1.5% a month. That's not a bad return on investment.
- Where I do agree with the article is that some (certainly not all) of the esoteric audio market is a sham. While I understand that a hand-crafted speaker from a small company might only sell a few hundred units a year and therefore has to be priced very high, many of the esoteric components that I've seen/heard sound like crap and aren't worth the money. In many cases you are paying for hype. But I think that's also true for a wide range of products including expensive fashions (saw a bunch of informal $3000 summer mens suits in the Times the other day), cars, watches and many other products.
- One of the things that we've lost (except perhaps in the esoteric audio market) as compared with the "hi-fi" industry of the 1950s to 1970s is that in those early companies, the owners were also the lead designers of the products and each company's products had a fairly distinct design approach and sound that was consistent with the owner's design philosophy. When they weren't distinct, it was because the designers moved from one company to another. So we had people like Edgar Vilchur, Henry Kloss, Avery Fisher, Paul Klipsch, H.H. Scott and many others. Today, those that have survived are just brands of big companies.
- While price doesn't necessarily determine quality, to claim there are no differences is to be completely naive. It's like claiming that there's no difference between a McDonald's hamburger and a burger prepared in a fine restaurant with meat from Pat LaFrieda.
- There are tremendous differences in dealers. I've been in some esoteric high-end audio stores where the sales people are elitist and obnoxious. Then you have dealers like Value Electronics in Scarsdale, NY who runs those shootouts every year where at his own cost, brings in industry speakers and the best calibrators. They held one last weekend and there's lots of video of the sessions posted on their website. The owner will spend as much time with you talking about a $200 speaker as he will talking about an $8000 plasma.
- However, the biggest factor in whether independent dealers can survive is us. If we continue to buy from the big-box chains (which for the most part, in spite of their reputations, actually DON'T have good prices) or buying from unauthorized dealers on the internet to save $20 or giving all our dollars to Amazon, then the dealers most certainly will not survive. We've already lost the record stores, we're losing the bookstores and we're going to lose these quality A/V dealers as well. What's going to be left on our Main Streets and downtowns are banks, drug store chains, check cashing places, gas stations, liquor stores, fast food restaurants, Starbucks and a lot of empty stores. Is that what we want?
- IMO, it's unlikely that Best Buy can survive. There are too many people who walk into Best Buy (and stores like it), "test drive" the products and then go on the internet and find a slightly cheaper price. It almost (but not quite) makes me feel sorry for them.