Hi-Res Listening Stations Expand. . .

The news is not simply that Best Buy/Magnolia stores' 82 Hi-Resolution Listening Stations which they developed in the US in conjunction with Sony, have proven so successful, and generated so much interest in hi-res, that the company has added 250 more listening locations around the country. It's also that we now have data that shows a major reason for the expansion: Far more people care about sound quality than many would have you believe. In fact, we audiophiles represent far more than a thin slice of the listening public pie chart. Audiophiles comprise a 15% market segment that exercises a significant (albeit not dominant) influence on the decisions of software and hardware companies involved in music and home theater.

The Best Buy story first. Just two days after NPR ran a story on Best Buy's turn-around success as a multi-platform, retail chain that maintains a successful presence on both brick-and-mortar and internet levels, the company announced a much-expanded commitment to the Hi-Res initiative that is coordinated by the Digital Entertainment Group (DEG) on the part of the three major music companies: Sony, Warner, and Universal.

According to Marc Finer, Senior Director DEG, the purpose of the new Hi-Res Listening Stations is twofold: 1) provide, in a controlled environment, a convincing hi-res listening experience on compatible devices and headphones, and 2) also provide, three times a year, an update/refresh of the music, both in terms of new and newly reissued titles in all genres. The genres are primarily pop, rock, country and EDM, but there is also a lot of jazz, some classical, etc. At the stations, listeners are also able to access metadata about the origin of the recordings, including some artist interviews about the experience and significance of recording their music in hi-res, and, of course, cover art.

One significant change to the Hi-Res Listening Stations that has come with the expansion is that the equipment is no longer solely from Sony. While the listening device continues to be the Sony Walkman file player, the new displays include headphones from a variety of manufacturers, including Sennheiser, Polk, Sony, and V-Moda. As such, the High-Res Listening Stations are designed to appeal to both head-fi aficionados and the general public, and fit the lifestyle needs of the growing number of consumers who are downloading and streaming music.

The other piece of juicy news is that market research has identified four core groups of music participants. Finer broke them down as follows:

The largest, at 44%, is the digital-based "music lifestyle group" that listens to music as background to their work, travel, or other leisure activity. These are the "Low-Tech Listeners" who listen more for convenience and lifestyle versatility than fidelity. They like music, but they are not passionate music fans.

The smallest segment, at 9%, are "Disinterested Consumers" who don't care about music at all. To them, music is a total backdrop experience that they barely notice. This group's main exposure to music may be in elevators or public spaces.

A significant 15% of the market is "High-Tech Audiophiles." That's us—people who are into music and listening in a very big way. The audiophile phenomenon, at least at present, seems to be largely a boomer-based passion of people who grew up in an era when music was a primary source of emotional connection and entertainment.

The fourth, at 32%, is the growing "Emotional Music Lovers" millennial segment of people in the 20s to mid-30s. These folks are totally committed emotionally to music. They spend thousands of dollars going to festival, clubs, and concerts. While they are also buying vinyl, they primarily seek digital convenience to fit their lifestyle needs. They also want to be in the studio with their favorite artist or band, which means they want to get as close as possible to the music of artists they love.

"They're streaming customers," said Finer. "For the most part, they don't download or buy physical media for their day-to-day listening. They are the future of hi-res music. If we can find a convenient and flexible way to get them their favorite music, we hopefully will be able to enrich their experience both sonically and socially through streaming."

Finer contends that while the general mass media and so-called analysts refer to music in singular terms, there are in truth multiple types of customers, and multiple types of music experiences. The answers to questions aren't as simplistic as mass media and so-called audio experts make them out to be. In other words, people who dismiss the Hi-Res listening experience, and claim that it and formats/delivery systems (eg, MQA) that promise better sound quality are a fringe phenomenon that appeals only to a tiny group of audiophiles, have not seen the research that proves them incorrect.

Finer acknowledged that the problem with streaming is that besides the services themselves, no one, least of all indie artists, seems able to make any money off it. "We're examining the viability of the streaming business model, which works on a different principle than downloading," he said. "Everyone is aware that without the involvement and support of the artists, songwriters, publishers etc., there's no industry. The dialogue is underway, but evolving a new model and getting everyone on board takes time.

"What's important about the High Resolution Listening Station success story is that not only is retail still viable, but it is also very valuable. It is the recorded music industry's touchpoint to get people to experience what we're all committed to in terms of delivering better quality music and sound. We're hoping the Magnolia Hi-Res Listening Stations in these Best Buy stores will motivate other specialty dealers to do the same thing, and create additional opportunities to hear what hi-res has to offer."

COMMENTS
Anon2's picture

This is a welcome assessment of portable/digital audio listeners and their categorical assignments.

I'd posit that a significant group of portable/headphone listeners are people who work long hours. They might belong to one of the other groups identified in this article. Indeed, work-based listening may be the superseding grouping parts of the high-tech/low-tech groupings.

I listen to music through headphones more than to my home stereo. Home stereo listening is now almost confined exclusively to the weekends. Work schedules, long commutes may have as much to do with the ascendancy of portable audio listening than anything else.

I'd counsel listeners that they can let the "industry" worry about making money for now; perhaps their money making resides on a lack of creativity and novelty of what they offer.

After all, most groups, if one reviews Allmusic new releases, are "Indie" now. Non-"Indie" music has become the new "Indie," if you ask me. In any event, most Pop-Rock-based genres of music essentially lost their evolutionary track in the 1980s. The 1980s were the "end of history" for many popular musical genres. If you don't believe it, compare what you are buying today with the stalwart offerings of the 1980s.

There are so many sources on the internet for listening, that people should shrug off the, yet another, monthly fee for this or that service; less should they surrender their browsing habits to a place that demands yet another userid and password.

There are superbly curated "radio stations," principally from European radio services. Americans repel from any radio service, no matter how great and thoughtful the music selection is, if there is not an English-speaking DJ. This is sad because there are some great programs in Europe. My reaction when listening to these stations in the early morning or late evening is: "I forgot that song even existed." This is more satisfying than some self-affirming algorithm, or self-selected tunes from other fee-based services. The best part of these foreign services is that there is no login, no userid, no password; there's only perhaps a slightly lower resolution; the excellent curation of music offsets any loss in sound resolution.

For those American listeners who can't take a foreign language voice playing their favorite (and often forgotten) tracks, there are always BBC Radio 1, 2, 3, 4..... I even found a fascinating web site with hosted audio clips of Guarani/Paraguayan music last year.

The boundaries for computer based streaming are a lot wider, and less expensive, if there's a cost at all, than many people might imagine. The "industry" wants you to hear the threadbare offerings that are on FM radio; they want you to pay for it. The "value" of all of this is debatable to me.

Take a savings on the fees and personal information--save what Google gets from your browsing history. There's a very big world out there with more music than a single human being can assimilate in a 24 hour period.

Boogieman1's picture

Does this mean that quality remastering is in the future? Or are they presenting the same, compressed drek in high res?

Jason Victor Serinus's picture

then you'd have to use digital technology to try to restore what was lost during the recording. This isn't my area of expertise. Perhaps some recording engineers can chime in.

crenca's picture

...if it is going to be viable I think. I would pay significantly more (would not even blink at paying 3 or 4 times what I pay now) for Tidal's "Hi-Res" 16/44 service (though if they really do go all in with MQA I probably would back out to a 320 service like Spotify's). It will have to be commercial free. Indeed, one of my main problems with DRM in video is how it is used to force eyeballs on commercials, FBI warnings, etc.

While I question the numbers it is good too read about Best Buy's success. 15% for a category of "high tech audiophile" is simply too high. Shoot, it would not be that high if income/cost was no object - throw in the cost of reak high fidelity playback chains and hi-res recordings and you are down to something closer to 2 or 3 % real numbers I think. Even when considering the fact that "personal audio" has brought the cost of a real high fidelity experience down considerably, most people still balk at paying more than $100 for a head-fi playback chain, let alone the minimum of $500 you have too actually spend for a decent pair of phones, amp, DAC, and playback software...

tonykaz's picture

Hello Jason,

I'm only 5 miles from a Magnolia Store, I don't buy anything from it.
They do offer a $1,500 Marantz TT with a "low coloration tone arm", do you suppose they have a guy in the back room to properly set it up? ( would Mr.Dudley approve? )

Still, thanks for all this data.

My oldest daughter just moved to Tacoma, she'll be shopping at your Trader Joes & Whole Foods ( if you have those kinds of stores ) and your exotic cat-food shop ( if you have one ).

I've been itch'n to ask you about the LG V20 Audiophile Phone being released in Sept. I hope you get a chance to review it, geez, one of you Stereophile lads needs to step up to this challenge, doncha think?

Again, nice reading your stuff.

Tony in Michigan

Herb Reichert's picture

seem a little sexist stereotype oriented? Or is it just me?

AllanMarcus's picture

You are just now noticing that audiophiles are predominantly men?

AllanMarcus's picture

"Finer acknowledged that the problem with streaming is that besides the services themselves, no one, least of all indie artists, seems able to make any money off it."

The music industry needs to wake up. The days of making money from music distribution are over. The money spent for streaming should be used by the service to offer at least CD quality sound and an exceptional listening experience. Hell, let them sell ads on the screens, but not in the music. The money will need to be made selling song rights for commercial use and with concerts. It's a new world, time to figure that out.

monetschemist's picture

Streaming royalties are established by the Copyright Royalty Board (at least in the USA). See this article

http://fortune.com/2015/12/17/music-industry-streaming-royalties/

which says

The Copyright Royalty Board (CRB) has set new streaming-music rates for 2016 at 17 cents per 100 plays on free, ad-supported services and 22 cents on subscription-based platforms. The rates, which were set on Wednesday by federal judges who serve on the board, are up from the 14 cents per 100 plays on ad-supported streaming and down from 25 cents on subscription services. The blended rate, however, is now higher, jumping from 15.3 cents per 100 plays to 17.6 cents under the new terms that will take effect on Jan. 1.

AllanMarcus's picture

Link to the study?

Jason Victor Serinus's picture

Hey, it's the weekend.

AllanMarcus's picture

That's my point. I have time now to read it! :-)
If you could post the link on Monday, that would be great.
Is it a study, or market research? If market research, was it done by Best Buy to justify vendors paying money to fund the listening station, or by vendors trying to justify Best Buy using store space for the stations? I'm just trying to understand potential bias in the study.

Jason Victor Serinus's picture

Time to clean the house.

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