Gray Forecast or Silver Lining?

Photo: VPI

Social distancing. Flattening the curve. These expressions are embedded in our collective psyche as we to try to keep COVID-19 and the novel coronavirus that causes it at bay. Few of us who live through this will ever forget them.

But life and work must somehow go on, if at a slower pace than before. Even now—as I write, just a couple of weeks after the earliest stay-at-home order went into effect, in California—the pandemic anxiety and resulting closures have businesses across all sectors taking a huge hit. Today's unemployment numbers were staggering, dwarfing those at the peak of the 2008 financial crisis. High-end audio—a specialty niche within the luxury market—is hardly immune.

Stereophile wanted to find out more about how COVID-19 was impacting the audio industry—how companies and people are coping and adapting to an unpredictable and unprecedented situation that's still unfolding, changing daily. Also: What else is on manufacturers' minds? What are they anticipating? Could there perhaps—strange as it sounds—be a silver lining to all this? Not everyone, it turns out, is entirely glum.

Let's get the bad news out of the way first. People are dying—although so far we've heard of no major figures in our own industry who have passed on. There have been layoffs—lots of them apparently—although few are willing to talk about them. One who is is Bill Low, founder and CEO of California-based AudioQuest. Low provided Stereophile with a statement, with excerpts from a recent email addressed to his employees:

For only the second time in the forty years of AudioQuest, we have had to lay off people and make adjustments that are based not on the merit of the employee, but based on the extent to which the company can remain afloat without their valuable contributions. Some of the most valuable people the company has ever employed—irreplaceable people who had been with the company for decades—have been let go. . . .

"I apologize deeply and profoundly that I can offer no more hope other than that our heroic managers and I have stepped up to the plate to do our best to keep our intentions to regrow alive. Maybe that process can begin before the end of the year. . . ."

AudioQuest's Stephen Mejias later sent an email adding that, because of Netherlands policies that ensure job stability, no layoffs have occurred among the company's European staff: 38 people, all told. AudioQuest is operating at reduced capacity, for the health and safety of the staff (many of them working from home), but the company is continuing to process and ship orders.

We're not here to circulate hearsay—we won't be repeating anything specific we could not confirm—but we've heard numerous credible reports of layoffs, including at well-established companies. "The whole industry is being filled with layoffs, and no one is talking about it," Mat Weisfeld, president of VPI Industries, says. "It's as if these companies don't want to talk about it because it's going to make them look weak. And I'm like, 'No, this doesn't make you look weak, it makes you look like [the industry is] in a crisis, because we are.'"

At the time of this writing, some 35 states have ordered people to stay at home, except for essential activities like grocery shopping and dog-walking, in order to slow the transmission of the virus. Companies deemed "essential" are allowed to remain open, but the definition of "essential" varies from state to state.

In phone interviews and email exchanges, a common theme emerged: people and companies doing their best to stay the course however they can. Two company leaders uttered the phrase "keep on rocking and rolling." "So far, so good" was also uttered twice by company heads. All the companies we contacted that remain operational are stepping up their sanitary practices, keeping hand sanitizer handy, arranging for some employees to work from home, ensuring that on-site staff follow CDC guidelines.

For some, this is a time for introspection. "This situation certainly pushes us to pause and evaluate every aspect of our business," MSB Technology CEO Jonathan Gullman told Stereophile, via email. "But for every challenge, there's a solution. No audio shows? Maybe we need to work on more online video to compensate. Will our team have to spend more time working remotely? Then we'll improve our online systems, communication, and networking software. Are we short-handed for daily operations? Then we'll improve documentation and company organization."

California, which is home to MSB and many other audio companies, is on lockdown. MSB's whole production team has been furloughed, but all are receiving some compensation and full health insurance and other benefits. In the meantime, principals Jonathan and his brother/business partner Daniel are "holding down the fort."

Pushing Plans And Pivoting
COVID-19 has led two companies—Schitt Audio and VPI Industries—to accelerate plans already in the works. Push came to shove, you might say.

Schiit, which has headquarters in Santa Clarita, California, sells its products direct online, via brick-and-mortar dealers, and also at its own shop, which it calls the Schiitr, and which is closed until COVID-19 subsides. Although some of its 20 employees are now working from home, the company is still operational, for service, support, shipping, and so on.

"Some people are actually going into the office because under California's rules, we are considered an essential business, or at least that's what our lawyer [said]," Schiit cofounder and analog designer Jason Stoddard told Stereophile. "Our lawyer was okay with us continuing as long as we did all isolation measures and posted the right signs and everything." Stoddard, who says he dislikes the phrase "social distancing," has divided the production staff into two shifts within an 18,000-square-foot building so that employees "basically each get their own house to roam around in." His staff is working voluntarily, knowing they can take a fully paid leave of absence if they want to. Very few have accepted that option, he says.

ARTICLE CONTENTS

COMMENTS
Jason Victor Serinus's picture

Thank you,
jason

tonykaz's picture

Are we simply trying to be optimistic ?

We are sailing into a Hurricane.

Washington is obsessed with the Dow Jones Industrial Averages while people are draining the food Banks. Our President is Golfing in Virginia.

People are loosing their Jobs and their Heath Insurance with Covid treatment costing $35k.

If Schiit is the bright spot, shit is hitting the dam fan right now.

Great piece of Doom & Gloom

Tony in Venice

Bogolu Haranath's picture

NY state just reported a downturn in the number of cases ........ So, there is hope :-) .......

John Atkinson's picture
Bogolu Haranath wrote:
NY state just reported a downturn in the number of cases ........ So, there is hope :-)

The best source I know of for statistics on the pandemic, global and local, can be found at https://ncov2019.live/, with the data gleaned by a teenager!

John Atkinson
Technical Editor, Stereophile

Bogolu Haranath's picture

Hope that teenager is not playing 'Candy Crush' and 'Super Mario Brothers' in between but instead, concentrating on the Covid-19 statistics :-) ........

Bogolu Haranath's picture

According to Google, more women than men, including teenage girls, play video games on their smartphones, these days ...... Majority of those teenagers, pursue STEM careers and get those STEM jobs ...... Now we know, JA1 used to play video games on his smartphone when he was a teenager :-) ........

Bogolu Haranath's picture

It is also a good idea to check with the individual state HHS statistics numbers ......... Those state numbers could also provide individual county numbers :-) ........

Bogolu Haranath's picture

HHS said that the feds will pay for Covid-19 hospital care, even if the patient's health insurance won't cover it :-) ......

tonykaz's picture

This is typical of all that Chinesium stuff in the Audio World. NO dam Service available & who's gonna pay???

White House to the rescue !!

Can we get JA1 to pay when those S.Gross Loudspeakers fall apart?

Tony in Venice

ps. the number details about the Virus are fascinating, thanks Mr.JA1, all arrows are pointing up.

Bogolu Haranath's picture

A statistician is a person who draws a mathematically precise line from an unwarranted assumption to a foregone conclusion :-) .......

Bogolu Haranath's picture

Statistics say one out of every four people is insane ....... Think about three of your best friends ....... If they are ok, then it is you :-) ........

Briandrumzilla's picture

Thanks for the CNN updates.

JulieAudiophile's picture

Thanks, Jason! Glad I'm signed on to comment now.

Bogolu Haranath's picture

Welcome to the great world of Stereophile comments section :-) ........

rt66indierock's picture

The key thing is an over reliance on manufacturing and parts coming from China in high-end audio.

JRT's picture

I was gladdened by the news that VPI are doing what they can to make a positive difference in the unfolding events surrounding the COVID-19 Pandemic.

Relative to large producers of hand sanitizer, VPI production is surely tiny, but the importance is large if it prevents just one infection that might otherwise take a life.

Kudos to VPI.

rschryer's picture

"With so much of the population at home, isn't this an opportunity for people to start thinking more about improving their stereos?

""Everyone is time poor," B&W's Andy Kerr says. "If it's one thing this [situation] has put back into people's lives, it's getting the gift of time back." To that end, he wonders if perhaps sheltering at home will remind people why they paid money for their hi-fi systems in the first place.

AudioQuest's Mejias says this: "We've often said that a good hi-fi is not a luxury but a necessity. In times such as these, the truth behind that philosophy is only more apparent. Will there be a long-term return to listening to music as a dedicated activity? We can only hope!"

mmole's picture

...there is so much to admire here. VPI and Audioquest are fine companies and Stephen Mejias was an insightful writer when he was on staff at Stereophile. But I'm a little put off by Stephen's quote. My wife is a nurse in New York City. You know what's "a necessity in times like these?": face masks, gloves, ventilators, and ICU beds. "A good hifi" is simply not. Although a good system is nice to come home to, my wife can't even come home for fear of infecting our family.

Priaptor's picture

I am not sure what you are put off by? If you were a healthcare provider or a worker cleaning or technician unknowingly exposing themselves, you would get it. To be honest, in these times, I am kind of put off that you are put off.

mmole's picture

All I was saying was that in a time where it's hard for healthcare workers to get the necessary protection to keep them safe; where it's hard for hospitals to get the necessary equipment to save lives; where it's hard for consumers to get such basic necessary items as water or toilet paper; it's a bit tone deaf to describe a "good hifi" as a "necessity."

Perhaps my living in the hardest hit part of the country with a spouse who is dealing with the epidemic on the front lines makes me a little more appreciative of what is truly a 'necessity..

Priaptor's picture

Agree.

mmole's picture

I appreciate your response. Stay well.

Jim Austin's picture

But I don't share your perspective. There are different imperatives for different circumstances. Right now, for healthcare workers and those afflicted, PPE's and ventilators are unquestionably more vital. But even here in New York City--ground zero--life goes on for most of us. We can be (and are) sympathetic toward those fighting the fight against this disease, but for most of us--and the vast majority are not infected, not so far--life goes on. And life will continue to go on when this crisis is over. There are things we can learn from a crisis like this, about what we value and what it means to be human. About what gives us solace in difficult times.

On the day before New Yorkers were locked down, I assisted my wife in collecting PPE's from university science labs; we delivered a truckload to Columbia Presbyterian. They were thrilled to have them. The next day, we were instructed to stay home. So we did.

I understand very well the vital need for PPEs, ventilators, treatments, cures, vaccines. Saving life is the great imperative when life is in jeopardy. But in other times--and also, for some, in those very same times--knowing how to live well and meaningfully can also be vital. It isn't a contest.

Jim Austin, Editor
Stereophile

HJC001's picture

hello, Mr. Mmole. My heart is with you and your family. Thank you for your work and sacrifice. Please understand that for "Some" people, the OCD of audiophilia is LIKE medicine for the mind. a neato hi-fi is part of the mental health that keeps us at home instead of going out to look for something to do. writing artists should be allowed a bit of poetic license in these very stressfull times. indeed, broad generalizations that a hi-fi is a necessity are absolutely wrong. However, an indication that a neato hi-fi may help many, many, many people with the mental health to keep them OUT of hospitals is ok. In moderation, in Sharing the burden and Not turning on each other. Etc. Etc. Etc. I send you and Everyone much Love. Be Well and Healthy.

Stephen Mejias's picture

VPI and Audioquest are fine companies and Stephen Mejias was an insightful writer when he was on staff at Stereophile. But I'm a little put off by Stephen's quote.

Hello mmole.
Thank you for reading and thank you for sharing. I'm sorry I came off as being unsympathetic or callous. I can't imagine how difficult this situation must be for you and your family.

In my mind, you and your wife are heroes. Plain and simple. I'm so sorry that you're going through this experience.

I live just across the river in Jersey City, and I have dear friends who work in hospitals. This situation is terrifying. Sadly, we may have reached a point here in the US where we all know someone who has tested positive for the virus.

So, just to clarify because I don't want to seem like a complete ass, my words were in direct response to questions regarding silver linings to the present horrible reality. Julie asked: "Could there be any silver lining to this? Maybe people staying at home will start thinking more about home entertainment and perhaps some better stereo gear?"

I absolutely agree that face masks, gloves, ventilators, and hospital beds are far more important than hi-fi or music -- now and always. I also know that there are some very fortunate people for whom this situation has granted time and freedom, the ability to finally stay at home, either alone or with loved ones, to be bored(!), to pursue new or old interests. I want them to be happy. I know for a fact that some of them are turning to music and hi-fi, which is great.

My relationship with the current reality is somewhere in the vast between. I feel extremely fortunate to have my wife and daughter, our family and friends, my job, and a full refrigerator. When I begin to wish for more space, more sleep, or some time alone, I remind myself that I would never otherwise have this opportunity to watch our daughter grow. That's my personal silver lining.

I'm wishing the best for you, your family, and all of Stereophile's readers. I'm wishing the best for all of us.

tonykaz's picture

Hmm, wishful thinking.

All that momentum building, poof, in only a short few weeks.

Foundational Industries are being crushed.

Lives and Careers are stalling and uncontrollably nose-diving like those 737 Max events.

Americans just completed the 10 year recovery process that began with the 2008 financial crisis.

Now this....

Overall, we as a Nation are better equipped to handle the Financials that any of the other Industrial Nations but we are gonna feel pain.

Discretionary purchases are the lowest Priority so daddy's purchase of that $14,000 Mono phono cartridge will have to be....

Of course, those top 10% folks won't be feeling anyone's pain, Private Jets and Helicopter Taxis will still Fly.

but...

We citizen deplorables still don't have Masks, Tests, Vaccine.

Thank you, the Mail is still running.

Fingers Crossed

Bon Vivant

Tony in Venice

HJC001's picture

My friend, 2000 years ago we could barely support about 500million people on earth. Now, billions!!! We'll ge through this. I have met many beautifully intelligent young people, so I am confident that this currently underappreciated generation will pull through.
Hope. Hope. Hope. Be Well!

rt66indierock's picture

The first Coronavirus patient in Pasco County was Gene DellaSala of Audioholics he got it from an industry representative. Audiophiles spreading Coronavirus, that will cause some interesting discussions.

From the Tampa Bay Times March 11th and updated March 12th.

tonykaz's picture

I am in Lock-down.

I'm building a cabinet, using a bike trip to pick up some Kreg Screws only.

Reading the NYTimes about the pathology of this virus has me spooked into hiding.

This thing is a killer for a small percentage of us, which ones ?

I'm trying to come up with 15 months of useful activities till that vaccine arrives.

I can't see how any Business will survive two or three more months of shut-down.

I dreamed about a Dick Proenneke Alaska Wilderness Isolation, now I seem to have as much of it as I want.

My grandmother in Manitowoc Wisconcin died from the Spanish Influenzas in the 1918s. Now it's our turn to experience those horrors.

I imagine the World to be a different place after we come out from harms way. So, 2022 will bring some exciting opportunities.

Bon Vivant

Tony in Venice

rt66indierock's picture

I don’t blame you for being scared. The Medicare crowd, people with heart issues as simple plaque in their blood vessels, people with chronic lung issues and people with Diabetes should take extra precautions according John Hopkins University. They are my go-to source for medical information.

I don’t think America will be that much different. I have been talking with clients across the country and they have one thing common. They want to get back to lives as they were around the new year.

Please stay safe I have a lot of hard questions for you.

Bogolu Haranath's picture

'Get your kicks on Route 66' :-) ........

rt66indierock's picture

I've studied it my entire adult life off and on. I've hiked, biked and driven all that I can except for Missouri.

The other highway I've seriously studied is the John Marshall Highway.

Carry on

Bogolu Haranath's picture

You missed the Gateway Arch, St. Louis ribs and Budweiser Clydesdale horses :-) ......

rt66indierock's picture

It was a planned trip this summer, We'll do it then in a few years do the whole thing.

Seen the Arch, love St Louis ribs and Kansas City BBQ and the Clydesdales travel so I've seen them as well.

Bogolu Haranath's picture

Even if you have been there before, next time you visit Missouri, visit Branson again :-) ......

tonykaz's picture

Sure, rt66 is important. I didn't realize you are including the original Route 66. I would've liked to have had an Adventure discovering the History but I never had anyone changing their life by "Going West' in that Era of mid 1920s till mid 1980s. except traveling West by 707s, and 1960s Station Wagon Vacations. I've never seen the Grand Canyon. I have traveled Route 66 via YouTube and nearly joined a group flying Powered Paraglider making a Cross Country trip of a lifetime. ( my Bonding Company forbade that exciting adventure, maybe now that my Bernie responsibilities seem bleak ! )

America is changing, as is the World.

No.1 ) Tesla is now in No.2 Position in the Transportation Industry, in just a few years, phew. We will all have our Gas Stations on our Roof Tops. NOBODY saw Tesla coming.

No.2) The Internet provides us with an "Everyman's" Publishing House. We can now have access to vast ranges of detailed information. Education has been democratized, home schooling is for everyone. I would trade my early education for the Internet. Of course, the Internet doesn't Mentor.

Tony in Venice

ps. I live by the Tamiami Trail built in the same Era as Rt66. It's still in everyday use connecting Tampa and Miami. It even has Bike Paths and wonderful SeaFood.

rt66indierock's picture

Tony,

You don't live in the West where you would meet people who had their lives changed by heading west in the 20's and 30's.

A powered paraglider sounds like fun until I remember watching Piper J-3 Cubs flying backwards into headwinds when I was a kid.

A Tesla is unusable many places I go. And it will be interesting to see the accounting trickery they are up to.

Bernie's chances were always bleak and the Democratic Party establishment is looking the wrong way.

All the internet did for information is create more bad information and create a lazy press that is reduced to lift clan and replace. It has however increased the advantage people like me had in past researching. My advantage over say a typical PhD is now probably unbridgeable.

Finally you have to be near an Ocean for good seafood.

Take care,

Steve

tonykaz's picture

The Internet is Research's greatest Tool. ( in my estimation, of course )

I would stay at the Washington-Jefferson Hotel in NY,NY where I could/would access NY's Main Library for important Research details of a Project I'd be working on. ( and a little time on the Town ) I could never live away from a useful Library. In fact, a dam good Library was the deciding factor in my residence location. I couldn't live on St.Croix because they don't have a library. Phew!!!

Now, I can function & work from home, I can research from home, I can discover obscure/important & critical details from home. All within the last 25 years, all on the Internet thru my large screen iMacs running standard Safari & Chrome & Firefox.

This Internet will be the defining element in our youth's future success. We can now do without the Pains of sitting in a St.Bridigid Grade School Classroom getting drilled with Catechisms day after day, having our displayed curiosities shunted & stunded .

Is there an abundance of defective information out there lurking, sure, just like there was in that 3rd Grade Classroom with Sister Marie Angelica insisting that God Died for our Sins.

Defective information will continue to live in our technological world. Advertisers control our Media, Brand Ambassadors disguise themselves as Reviewers ( sometimes ) or so it seems.

A nice Adventure: Marty Zoffinger on YouTube.

Marty is a Kayak Renter in the Tampa Bay Area, he's sponsored by Pelican Kayak in Canada. Marty is virus shut-down and doing a Daily YouTube Diary called : "The Life of Marty"

The Life of Marty, yesterday, episode 021 is a December bicycle tour of the Florida Keys. This is pretty much the kind of Adventures I'm up to these days.

Tony in Venice

tonykaz's picture

I did own a Bicycle Company in the San Fransisco Bay Area and I'd thought that the Monterey Bay was the place I'd retire. Monterey Bay is the center of Bicycle Greatness, here in the States.

That is until:

I discovered Venice, by mistake, visiting my dying brother in spring of 2016. I've lived here in Venice for a year now and haven't had one single bad day, NOT ONE!

Venice is Paradise! No Bugs, no Sweltering heat ( never over 92F ), two days worth of rain falls in one half hour-then it's dry in another half hour. The Shore Birds are elegant.

and:

I bicycle everywhere I need to go. I get 10 miles to the cheeseburger. I'm nearly 100% Solar Powered. I have NO CAR and don't intend in ever owning one for the rest of my crazy life.

But, i make up for all my goodnesses by flying to the next Bernie gig. ( any more is/are doubtful )

So, I did spend plenty of time in Ca. , my Son lives in Sacramento and I LOVE California, I can easily understand people driving out from horrible Indiana to live life LARGE in LA.

LA is the greatest Civilization EVAH. ( ask anyone )

Tony in Venice

Bogolu Haranath's picture

LA LA Land or, Lah Lah Land :-) ........

Grant Fidelity's picture

We as an industry have to come together to battle the downfall of high end audio, which has started before the covid-19.. make it affordable and accessible to average people, even those hit hard by covid-19 but still love music.. not just the top 10% or top 1%.

We have just finished developing an online tool (www.wheretolisten.biz) to connect audiophiles, brands and dealers alike.. As part of contribution to the industry to sustain this difficult time, we decide to open it for FREE TO ALL to use indefinitely till the Covid-19 is behind us..

If we all put our heads together, we may have a solution to come out of this crisis stronger than before..

Happy Listening.

audiolab1962's picture

Great a headline picture of how NOT to wear a mask. A complete and utter failure, cannot even follow a few simple pictorial instructions on the side of a box. As fitted offers practically zero protection. Darwinism ?

Priaptor's picture

There are some who may wonder why the industry is feeling it as much as they are "as people staying home will likely want to listen more". Reality is many people staying home are wondering how they are going to pay next weeks bills when they have no income coming in, not looking to buy new equipment, except maybe for a select few.

No industry is exempt from the claws of Covid. As a healthcare worker, I have heard people say, "well your industry is protected". NO, actually the reverse. Almost 70-80% of cash flow in healthcare comes from elective procedures which are on lock-down. Doctors, nurses and just about all healthcare workers are taking huge salary cuts. Quite frankly, after a grueling days work I rather listen to my iPhone chilling in bed than my fancy stereo.

On the bright side, this will pass. Not sure how many of those reading are in the USA, but things, with the exception of a few hot-spots are improving on multiple fronts no matter how the news portrays it. New point of service testing (from Abbott) will greatly help. New mass testing with Roche's COBA 6800 and 8800 as well as a variety of other companies will make a huge difference in determining the epidemiological spread, the true nature/number of "asymptomatic" individuals in our geographically disparate country/states/counties, a huge issue relative to just about every other location around the world. Many things are happening that should be encouraging to all and not just in the testing arena. We are in a way fortunate to be the biggest technological revolution ever and I am not talking computers, but Biotech and Pharma. I have never seen the kinds of things coming as fast as furious as they are now. This not just for Covid, but all of healthcare.

I feel for all those impacted from a health and welfare standpoint and hope we all come out of this for the better. People are obviously suffering and my best wishes to all and hope we all come out better when this passes, which it will.

Poor Audiophile's picture

I think of my self as a pessimist,(I like to say from experience) but several here have me beat! I like this article! It reminds me of the old saying. If life hands you lemons, make lemonade! Larry

HJC001's picture

"always look on the bright side of life, tadum, tadum tadum tadum, tadum tadum."

Bogolu Haranath's picture

'Here comes the Sun ...... It's alright' :-) ........

Bogolu Haranath's picture

'Stay Home' ........ Big & Rich :-) .........

invaderzim's picture

As someone who works for a company that scoffed at the danger of the virus and hasn't implemented any cleaning or social distancing policies I'm impressed by Schiit's response to the virus. Even if I worked for a company that cared at all I'd still be impressed by Schiit's response to it.

monetschemist's picture

... seems to me to be to do our best to avoid getting this darned thing, avoiding putting stress on our respective medical systems, avoid infecting our friends and neighbours, etc etc.

Those of us that can go further, like VPI, ¡wow! well done, thank you!

invaderzim's picture

The foolish companies like the one I work for by not spending a few dollars to protect employees and customers will drag this on longer and lose large amounts of money.
Our business is less than 20% what it was and yet they are so short sighted they can't figure out that if they take precautions things could get back to normal faster.

Bogolu Haranath's picture

Is 'Bugs Bunny' the CEO of your company? :-) ........

invaderzim's picture

They are just locked into the "money not spent is money made" line of thinking and can't break free of it for any reason.

Bogolu Haranath's picture

So, that person is like Mr. Burns :-) .......

davds1582's picture

that the manufacturers you canvassed are doing reasonably well.

But what about our friendly local hi-fi retailers -- you know, the goniffs who hard-sell your readers, along with everybody else, and then charge a 50% mark-up for the privilege?

I for one, wish them the best of luck -- fingers crossed -- in these hard times.

mrounds's picture

The article did note a couple of companies setting up full-scale online sales that ask for your local retailer then send a commission (didn't say how much) their way. Frankly, more onliners should do that; take it out of the "support" budget if you want to, since the stores are probably the first line.

This isn't the only bunch asking for your local connection, though others do it for other reasons. Log in to PBS, for instance, and they want you to confirm (they're guessing based on your IP address) what your local station is. In their case, it's so they can show you only what has run on the local station, but the concept can easily be expanded to commissions where local retailers are official distributors.

anomaly7's picture

Great article and informative as to how the industry is changing to stay afloat- we hope.

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