TWICE: Will the home audio industry ever come close to matching its peak year of 1990 in dollar sales?
It's almost certainly not down from its peak if you include all those products that are an expression of music reproduction — iPod-type product. If you're asking whether the audio industry as expressed in larger boxes, the high-fidelity product category, will ever again experience that level? It's hardly likely, but I don't think it will ever go away. There is a whole series of audio reproduction products that are in fact responsive to the way people now live. People are more mobile. Their lives are more varied. They need to have the music instantly at hand and transportable. I don't simply mean in terms of lifting and carrying it but being able to have access to your music wherever you are. All of that has altered the way the product and service needs to be provided, and it is an expression of the way people live.
TWICE: Do you think there have been a number of home audio brands that haven't been responsive to these changes?
Well, you know that's so. The answer to that question is evident.
TWICE: Will products such as iPod speaker systems and audio networking products help established audio brands survive?
Yes. And certainly, a matter of consequence is the ability to get seamless connectivity in a system that reflects the way in which we live, and to be able to do it effortlessly is something that people need. It's an aspiration that makes sense.
TWICE: Do you think the home audio industry has moved too slowly to embrace some of these products and consumers' lifestyle changes?
Some companies have a history of responding effectively. Some companies don't. Back to an earlier comment, the truth is it is often easier for a small new start-up company, unburdened by obligations or responsibilities to sustain existing product lines, to respond effectively to change.
TWICE: Are established audio brands losing awareness of younger consumers who believe the iPod is the be-all and end-all of music reproduction?
It's a good closing question. Decades ago, a wonderful writer, H.L. Mencken, said, "For all these serious problems, there is one single, simple solution. And it's wrong."
The iPod has some limitations. You know what they are. Digital has some limitations. You know what they are. But there isn't any doubt at all that the general digital world, and iPod is an expression of it, has multiplied enormously the interest, the appetite, the accessibility of music. Anybody in the industry has to say that whatever does that is a good thing. Right?
More people are interested in music now. More people listen avidly to music now than anytime in history, and for all the weeping about the disappearance of music, live or otherwise, there are more concert halls in America today than ever, and tours draw larger crowds than ever. Is there a marketplace out there? It's so obvious. These developments have significantly multiplied the market, and that means there is a significant market opportunity for someone who is interested in designing and producing product that will reproducer music to the optimum.
There's no question that you don't see high-fidelity stores on every corner. There is no doubt that although it is a smaller percentage of the total than it was then, the hunger, the need, the opportunity for that kind of sophisticated product is still there. Though the percentage is smaller, the market opportunity in the gross is probably larger than it has ever been.
I'm saying simply that when you use the iPod less as a specific and more as a general expression of what the technology and marketplace have generated, it is clear that today there are more people listening to more music everywhere on earth. As that happens, it increases the number of opportunities for firms offering specialized equipment to do the job better.