Klipsch To Market Oxmoor's Distributed Audio System

By Joseph Palenchar -- TWICE, 9/27/2004

Indianapolis — Klipsch's agreement to market Oxmoor's distributed-audio system on a worldwide basis might eventually lead to a Klipsch ownership interest in Oxmoor, executives of both companies told TWICE.

“We'd like the two to become one at some point in the future,” Klipsch Audio's president T. Paul Jacobs said. Oxmoor's chairman Lynn McCroskey added, “We feel [the agreement] will take us to a closer relationship when it makes sense for us and the market.”

If a purchase agreement is eventually reached, it would mark the speaker maker's second brand purchase in recent years. In late 2000, Klipsch bought select Mondial assets, which marketed the Aragon and Acurus audio electronics brands. At the time, Klipsch called Mondial undercapitalized and unable to afford an aggressive marketing campaign. Today, Klipsch markets Aragon-branded amplifiers and an Aragon preamp/processor to complement its speaker selection. The Acurus brand is inactive.

Capitalization issues were also behind the Oxmoor agreement. “As a small company, we had a problem keeping up with demand,” McCroskey said. “Klipsch had the sales team we needed, and we can concentrate on developing new products.”

For Klipsch, the agreement enables the speaker maker to further diversify its product selection to become a one-stop shop for dealers. In the custom market, Klipsch offers speakers, and Oxmoor offers “everything but speakers and sources,” McCroskey said.

“A one-stop is very attractive to independent contractors who spend 50 percent of their time acquiring products,” said Jacobs. A single point of contact for speakers and a distributed-audio system, he added, will “reduce integration issues.”

The agreement is also part of an effort by Klipsch to increase its profile in the residential custom-installation market. The effort included the recent launch of at least 50 custom speakers and related products, representing the company's largest ever product launch.

The Oxmoor agreement, however, is more than a marketing alliance, the companies stressed. It's also a technology partnership that would allow Oxmoor to design its DSP-based system to maximize the performance of Klipsch's custom speakers. Oxmoor's ZON system digitizes all audio sources and sends the digital signals and low-voltage power via CAT5 cable to in-wall controllers, which feature built-in 60-watt digital amps and DSP. In the future, the DSP could be designed to perform crossover functions, time alignment, and equalization tailored to Klipsch speakers.

On the distribution side, Klipsch's factory reps have already begun to sell Oxmoor products with a primary focus on “growing the independent contractor and specialty retail distribution,” said Jacobs. Sales through the Crutchfield catalog will continue, however.

If it purchased Oxmoor, Klipsch would also expand its penetration of the commercial audio market, where Oxmoor manufactures product and designs commercial systems for installation in large venues such as theme parks.

Oxmoor is able to deliver sufficient current via CAT-5 to power a 60-watt amp, the company said, because current is passed through every CAT-5 conductor. Power and digital signals share the same conductors in a manner roughly analogous to the way that a home's powerlines distribute power and signal when connected to products that use the HomePlug powerline network standard.