I understand that this raises eyebrows, but it's hardly fraud.
Do people actually think that retail price is a function of production/R&D cost? It's not, never has been. Dropbox charges 20$ for something that consumes marginally more ressources and incurs identical R&D costs when compared to the 10$ product. Chip manufacturers do this all the time. Discounts for electronics and groceries are fully artificial.
A much more realistic model is price as whatever the market can bear. I sincerely doubt that there is a moral obligation to set price points in any other way.
I do think this is fraudulent, and I think the comparison falls down: A customer buying the 20$ dropbox account knows exactly what he is spending his extra 10$ to get, and it is worth it to him to do so. Even if objectively, 10$ may seem like excessive premium.
Sennheiser in this case is being fraudulent by claiming that there is an actual difference between the two models while in reality they are exactly identical apart from a tiny piece of foam clearly put there only to defraud customers that want better sound and are prepared to pay for it.
To quote the amazon page for the 595's:
"The HD 595 is the top-of-the-line headphone of the audiophile 500 series range, boasting a new level of comfort and sound quality. Features include our E.A.R. technology and a highly constant,compressed cellulose fleece to reduce total harmonic distortion. Velour ear pads and high-quality leatherette headband both provide outstanding comfort."
compared to the 555's:
"A comfortable, high-quality headphone system"
Don't you see how this is fraud at work? Nowhere in the description of the difference between these models is the piece of foam mentioned or hinted at. To the contrary, the description of the 595's indicates that they include ADDED technology to improve sound quality and comfort. Which is full-on lie.
No, pricing is not connected to incurred cost. That's not the issue.
How is this in any way different than MS and Windows Home vs Premium vs Ultimate? The code / SW you purchase is exactly the same no matter which version you buy, but MS markets them as entirely different products. You then need to pay extra to unlock features that are already built in. Does MS need to mention that there's crippling going on? Sure, you could go in and hack your way through and patch things up to unlock it, but most people don't have the time for that.
Don't you see how this is fraud at work? Nowhere in the description of the difference between these models is the piece of foam mentioned or hinted at. To the contrary, the description of the 595's indicates that they include ADDED technology to improve sound quality and comfort. Which is full-on lie.
Nowhere in the 595 description do I see wording to the effect "exclusive to this model". Nor do I see anything in the 555 description that says it is missing features of other headphones in the line up. So where is this full on lie?
It's more a lie of omission. The 555 headphone produces the frequencies desired, but the company withholds them from the customer with a piece of foam.
If there's something you're not telling someone, which would really piss off that someone, you may be guilty of a lie of omission.
How so? Since the 555 and 595 are in the same series of headphones they should be more similar than dissimilar. Much like processors or graphics cards in the same line, it starts off as a good way to sell defective high end parts as middle to low end parts. Then as the process gets established high end parts are crippled to keep up with demand for low end parts.
In a well-functioning market, the price should be driven by competition towards a level a bit above the production/R&D costs, at least over enough of a time horizon. Of course, plenty of markets aren't well-functioning, and I wouldn't be at all surprised if high-end audio equipment were among them.
I agree it's not fraud, though, at least unless their advertising materials made false claims about the products' differences. For example, if they claimed that the higher-end headphone removed certain artifacts, but didn't disclose that they had created those artifacts in the first place, that would be misleading at best...
In a well-functioning market, the price should be driven by
competition towards a level a bit above the production/R&D costs
The main issue is that R&D is largely a fixed cost. It takes the same amount of engineers to write the Bing engine or the Dropbox I/O layer, no matter how many users are using it.
How do you decide the strategy for recovering a fixed cost of millions of dollars from the price of the individual product? Price all DropBox accounts at $10 and you may not have enough margin dollars per account to cover your R&D. Price all DropBox accounts at $20 and you may not have enough volume to... cover your R&D.
Assuming the incremental storage for 50 GB costs $2, it's ok to recover $8 and $16 respectively for fixed costs. Just because they are fixed doesn't mean that the user shouldn't have to pay for them, or that it should pay in the same amount. You could argue even that the R&D should be paid in a 2:1 ratio as well by those benefiting from 100 GB versus those benefiting from 50 GB. It's the risk of the entrepreneur to decide where to set the bar so that, at the end of the day, the margin multiplied by the volume recovers the fixed costs.
Competition driving the price towards a level a bit above the R&D (fixed) costs doesn't work at all for products where the marginal cost is trivial but the R&D expenditures are huge. Why Ask, with 1-5% market share, cannot compete with Google Search, which has more than 60% in the US market? Crawling the web, building the index and removing spam costs more or less the same in terms of R&D if you aim for an approximative identical standard of search quality in the search engine. But having a market 10 times greater or 2 times greater (in Google versus Bing) means that one allows himself 10 times or 2 times the total fixed costs at equal levels on a per user basis. No wonder Bing losses millions while Google uses the ad revenue to subsidize its other operational branches.
The problem is that customers don't understand the possibilities well enough to pay on commission. Right now, software companies are forced to dump a ton of money into a product, and then use the finished product itself to educate users of the benefit of the product, at which point they can begin selling it.
In a "well functioning market" buyers would be aware of what sort of product could be built with what sort of development time, and would pay for the work. (I think this is what's happening with Minecraft - the people who bought the Alpha see themselves as funding its development).
While I bought Minecraft with the understanding that it wasn't done and I was helping support Notch as he continued to develop it, it's not a practice I'd do for a non-game product. I've spent well over $13 on games and had them turn out to not be fun, or only amuse me for a few days. If Minecraft didn't pan out, I've barely lost anything. If it turns out well, it will be more than worth the money.
Were it something important that I needed for my job, or were the cost less negligible, there's no way I'd throw a bunch of money at something and hope the inventor/developer/designer finished it adequately. If someone walked up to you and said "I'm going to build an electric car to compete with Tesla Motors, give me $80,000 and you can have the first one" what would you tell them?
EDIT: Kickstarter too. I've invested small amounts of money in things that I think are worth supporting, with the hope that they get finished well. But I'm not counting on it. It's a risk vs reward analysis that I'm willing to try, but only on small scales.
There's clearly people willing to pay the full price for the 595. If there wasn't, they would have cut the price already since it takes almost no effort to do so. People pay for the perceived value of the product, not the value of the underlying costs plus some margin.
Pricing based on cost is irrelevant because that has nothing to do with the value created or what people are willing to pay. E.g., why did Sony and MS sell the PS3 and 360 below cost for so long? Well, no one would have paid the $1000 plus margin that Sony would have needed.
On the other end, do you really think that bottle of Coke you buy is priced anywhere based on the cost of manufacturing? The ingredients in that cost about $0.02, but they charge $1 at the store. The 20oz bottle has maybe an extra couple cents of cost, but they charge twice as much.
To your point, Ask could have 5% share of volume, but if their ad platform was better to the point that they could charge 10x what Google could, they would be doing pretty well.
Re: Coke... They dong come anywhere near charging 2x as much for a 2x larger size.
I remember one day going into the convienience store near my office and finding that all the coke prices were identical, 1.69 iirc. The small bottle, the widemouth litreish one, the two litre, all the same price.
Hence the surprise of many consumers, I believe. They're actually being sold a luxury product, whose price is based a lot on branding/status/etc., but they believe, or want to believe, that they're buying a product whose price is based on the quality/cost of its inputs (and/or design, or manufacturing). So, 2x as expensive headphone is expected to be made out of better components, or constructed with a more expensive method, or something, and people are dismayed when they find that that isn't the case.
It is somewhat unfortunate as a consumer that the market has turned out that way, rather than as a more competitive market. It makes shopping for audio equipment a lot more time consuming, because prices don't have much to do with either production cost or quality.
The problem is that the companies producing luxury goods benefit from providing as little information as possible to their customers. It would be better for society if the companies with the most knowledge of how to produce a particular type of good could be incentivised to educate consumers rather than to capture as much consumer surplus as possible with dubious market segmentation partly based on keeping people ignorant.
This seems to me why people complain about IP laws. They encourage one type of good behaviour - innovation - but also discourage another type of good behaviour - sharing.
I cannot think of any other market with that much voodoo and obscure "magic" as high end audio equipment or (especially) guitar tube amplifiers.
And they make sure to keep their selling arguments to "musicality", "passion" and "emotions" because that is something you can easily sell, it gives you a very unique selling position and is virtually impossible for the customer to measure and compare.
This is classic market segmentation. The R&D costs are sunk, the marginal cost is low, there's only so many people who will buy the things for $350. If only we could sell some for $150 without pissing off the people who paid $350 or doing a whole new R&D cycle, there's lots of people who'd buy them for $150.
The real question that they should be asking is should they have just sold them all for $150 and not risked the bad PR? They may have sold enough at the lower price for it to come out a wash, and not be embarrassed by something like this.
The risk was minimal. Everybody does it. The odds of them getting targeted weren't significant, given the pool of possible targets. You could spend every hour of every day cataloging all the places this occurs. And this still is yet to be a big deal, even.
(Please note that when I say everybody does it, I mean simply that everybody does it, no more, no less. I'm not passing judgment about the virtues or lack thereof. It's just the truth. Oh, and everybody doesn't literally mean every single person, but this is a well-established meaning of the term.)
Everybody does do, but audiophiles are a tricky bunch to market to. Stuff like this really gets their attention. If they found out that they could buy their $350 headphones for $150, they might not buy either because they're "not expensive enough to sound good."
It could turn out well for them; all these people thinking they are hacking the system to pay $150 and save $200 when in fact both sets are actually worth $15 or less.
I doubt this is true. See those holes near the bottom / on the back of your computer speakers? Play some music and shove your thumb in them while it's playing. You'll hear the difference.
Air needs to move for sound to exist, even in the direction away from your ear. If stuff's in the way, the sound's going to be muffled.
There is a huge difference. I have a pair of Grados with hard, open foam pads. They came with soft, closed foam. The closed foam covers the speaker and you get muffled sound. I am not an avid audiophile but I have mixed music for my church some years in the past.
There's nothing wrong with market segmentation, this is simply a poor implementation. Adding a piece of foam to cripple the sound makes the consumer feel ripped off.
In my opinion, this type of crippling is okay, but with one condition: The consumer must be allowed to make this mod. Of course it is pretty legal in this case, however, I see this freedom as similar to the freedom to circumvent DRM, which can contain harsh penalties.
The real point is that blog posts like this make your company look bad. Consumers are fine with you jacking up the price so that the cost of production and R&D isn't significant, but if you do anything to intentionally make a product worse then people will really get riled up, as it looks like you're intentionally destroying value.
It may make some people regret buying the high-end product, but it makes the lower-end product more attractive. And besides, other companies get away with doing this all the time. In fact one of the selling points of the dual-core Amd phenom II chips is that you have a decent chance of easily turning it into a quad-core chip for free.
I completely agree that price is a function of perceived value. However, this scenario smells like they are misleading consumers in a legally grey area.
This somewhat reminds me of the case a few years back about the scam of daily contact lenses. Basically it was revealed that the daily contact lenses from Bausch & Lomb and Johnson & Johnson were exactly the same as the weekly/monthly disposables which pissed a lot of people off and got them sued.
Not sure but wasn't there a recent backlash about processors being crippled and then "unlocked" for higher power if they paid additional fees?
http://www.dailymail.co.uk/health/article-357082/Contact-len...
Agreed it's not fraud... But wouldn't it be (morally? commercially?) better to sell one product at the mid-point?
I know in a limited range it's good to have a better and a worse to sell the median, but that doesn't apply here. They have many models above and below these two.
It's all about what's called the consumer surplus. If someone is willing to pay $350 for a pair of headphones, but they only paid $200 because you didn't have a $350 offering, you just lost $150.
The trick is to effectively capture that surplus without pissing off your customers or making them feel they're being ripped off.
Are they really getting caught? Near as I can tell, there are no penalties for this sort of behavior, and for every person who is willing to rip open a $150 pair of headphones to get them working like the $350 pair, there's someone who has no idea how headphones work, but is still willing to pay top dollar for the best they can get. And odds are these people won't even be aware of this blog post.
Technically, they aren't lying about the product here. The foam in the 555 model degrades the performance, compared to the 595. It is a lower performing product, and it's pricetag reflects that.
I do, however, find it ironic that the $199 555 model physically contains more "parts" and more manufacturing costs than the $349 595 model.
Curious if anyone has thought about the correlation between shareware/trialware software and these headphones, being that HN readers are generally more software than hardware people. I mean, the only difference between my 30 day trial of Something.app and the unlimited version is a 32 character string, and depending on my current morality level, I could find any number of those strings floating around the internet.
> I do, however, find it ironic that the $199 555 model physically contains more "parts" and more manufacturing costs than the $349 595 model.
That's true, but imagine what they could do differently. They could have a whole separate assembly line to make the cheaper headphones out of different material, for example. But ironically, this might actually drive up the cost of both headphones, since they'd lose the economies of scale that they have now.
I agree that it seems wrong to intentionally make your headphones worse, but it might be the most cost-effective way of producing a cheaper set, given that you're already making the expensive model.
I can't really see any lying being done here. Is microsoft lying to people when it's selling windows 7 home edition to people for less money than the ultimate edition even though it wouldn't cost them any more to make copies of the ultimate?
Company doesn't have legal obligation to not lie (in most industries anyway).
However everything we humans do has moral implications, and company that lies is clearly behaving in immoral way. Then it's up to a customer to decide based on her morals what is the right approach to dealing with such company.
Can a machine that eats babies, whose owner isn't really interested in it one way or another but does happen to recall that it was left switched on in a public place, be immoral?
think what? of course company's registration certificate and brand name cannot be immoral (unless registration states "we kill people" and brand name is something like Murder-by-Order"). things are not what makes companies, are they?
A company has no feelings, no concept of regret or remorse, it simply lacks consciousness. Without this you cannot have morality. A chair, an action, not even an animal can be moral or immoral.
Oh please. You can't just make up your own definitions of words and then use those definitions in discussions. There is a definition of what a company is, and it's not 'people it consists of'. The wikipedia article about Company is actually quite correct.
How long until we get a DMCA-like law preventing these kinds of blog posts? He'd be guilty of trafficking in technology which aids in the circumvention of profit-enhancing business practices.
I see a lot of people reacting to this the wrong way.
Rather than getting angry at the company for segmenting its market, why not enjoy the fact that you can buy their top-of-the-line product for a fraction of the price? Rather than raise a stink and force them to do something about it, why not stay relatively quiet about it and let those of us in the know profit from it?
I'm still upset that Baush and Lomb got raked over the coals so publicly for packaging the exact same lenses as monthly, weekly, and daily wear at different prices. I would have been perfectly happy to wear my "daily" lenses for a month each, thus saving several hundred dollars a year. Instead, a witch hunt was raised and they were forced to actually develop a flimsy contact lens to sell cheaply.
It's a good thing, and now you know about it. Try not to ruin it for the rest of us.
You know what the most depressing thing about this article is for me? I no longer have the option of being an audiophile. :(
I toured professionally as a drummer with a tech metal band and played with a click track every night. I used Ultimate Ears (high-quality earbuds) with ProTools through a rack amp. I had guitar tracks going behind the click track (metronome) for reference and let's put it this way... the reference guitar tracks had to be louder than the actual live amplifiers/PA and the click track had to be even louder than that. On a scale of 1 to 10, relative to the loudness of the vast majority of electronic music players (computers/mp3 players/phones/etc.)... I'd say my click track was at least 17. It hurts my ears just thinking about it now... constant TICK TICK TICK TICK TICK for 30 (sometimes 45) minutes every night for weeks at a time! I don't wish that upon my worst enemy.
If it was another style of music there's no doubt I could have had it turned down to a fraction of what it was... but it was tech metal so it was always loud and heavy and all over the place. Most of the time I'm playing upwards of 300 bpm and the tempo and time signatures were always changing so the click track was necessary. I remember I tried turning it down a few times and it didn't work out so well haha... Bye bye hearing! I miss you.
That's astounding--the UE page says they provide up to 32db of sound reduction; and that wasn't enough to reduce the ambient sound from the speakers and other monitors to non-hearing-damaging levels?
I feel sorry for the patrons of the venues you played in. I do care about my own hearing, and I hate it when I forget to bring non-distorting attenuators of some sort to a place which makes a goal of preventing conversation even in shouts.
I'm not sure if the UE model I used reduced sound by 32db but they definitely reduced it a LOT. That's actually why I bought them. I didn't buy the high-end though. At the time I needed them immediately and could only afford the $50 buds from Best Buy. The difference in sound when wearing the headphones was insane, but the click trick still had to be turned way up.
Now that I think about it iirc, it was actually mostly my drums (mostly cymbals) that I had to drown out... the guitar cabs/PA levels varied depending on the venue setup.
Ambient noise is part of the reason why mutemath's drummer duct tapes his headphones to his head, no?
Do you think you could learn to play with a tactile click track? I always thought it would be interesting to build a thing you strap to your body that taps/shocks instead of blasting your ears with clicks. It doesn't help with backing tracks, but it might keep someone a bit more sane.
I understand people defending the practice, but this nonetheless offends me. For me, it isn't about the 555 owners getting a crippled product, but that the 595 owners are paying a huge markup.
People are talking about market behavior and what not, but I don't feel like Sennheiser is behaving in good faith here. They are intentionally relying on opaque information (this is obviously news to almost everyone), and making price the only way consumers have to reliably differentiate between the products (you can't even test drive the products to tell). Also, with respect to the "luxury" part of the discussion, they are competing against themselves, the branding and "Sennheiser" name you get with the 595 or 555 is the same.
I've been considering getting 800's, I'm a huge Sennheiser fan. I think this has put me off though (even knowing that everyone else probably does the same thing).
If they didn't know about this, you could probably argue that they actually enjoyed paying a huge markup for little benefit. Considering most of them would probably not be able to tell the difference in a blind test between the two states of the cheaper headphone, the only possible difference is price and perceived value. They are paying more simply to pay more, not because they're actually getting better sound quality.
>I understand people defending the practice, but this nonetheless offends me. For me, it isn't about the 555 owners getting a crippled product, but that the 595 owners are paying a huge markup.
The baseline in this discussion is $200 headphones.
* (you can't even test drive the products to tell)*
Sure you can. Under EU Distance Selling Directive (97/7/EC), you can return any product you buy online within 7 days, even if you've just changed your mind.
HD 555 MSRP in the States is $170, and you can buy it for $85 on amazon.com[1]. Right across the border, the MSRP is 200 CAD (202.5 USD) and you could get it for 180 CAD on amazon.ca[2]. In other words, the discounted price in Canada is higher than the nominal price in the States, which in turn is almost twice what consumers actually pay for these headphones.
It's not just Sennheiser, all quality headphones seem to have a high markup in Canada. In addition, many companies refuse to ship them across the border (I suspect because the don't want to deal with customers who refuse to pay import tax).
The retailer may to agree not to ship internationally. A lot of outdoor gear companies require this so they can price independently in different countries, it seems at least plausible that these companies do the same.
Perhaps, but I've experienced this specifically for headphones. Companies that will ship other goods refuse to ship headphones. Maybe it applies to other electronics, but I've had no problem with getting electronics across the border in the past.
The retailer will ship other products by the same company? A lot of other electronics products have more equitable international pricing models and value that can be assessed more objectively.
Imagine you are kid and the other kid approaches you with mug you really like:
- Take a look at this wonderful mug with Mickey Mouse. It's worth 20$
- I'd love to buy that but I only have 5$
- Would you pay 50$ for it if the mug didn't have handle?
- Yes I need a mug, but handle is so convenient...
- I can take 5$ (as he breaks of the mug handle)
Could you really buy this thing and not feel like he spat in your face?
It's not about market it's about psychology of human exchange. Someone destroys value with no purpose other than better conning his peers. How could that not infuriate specimen of social species?
For what it's worth, I picked up a pair of HD595s back in early 2007 for $150, refurbed. They're still in absolutely perfect quality (despite more abuse than you can imagine) and by far the best headphones I've ever owned. Worth every cent, no questions asked.
Im going to agree. I have the HD555's and have given them a lot of abuse over 3 years or so of owning them. They are still in very good condition and sound the same as the first day I got them. Totally reccomend the 555 or the 595 as being the best quality affortable headphones I have ever come across.
Apparently I am more abusive to my headphones because I managed to break a plastic part on one side that connects the ear parts to the headband, mainly from them getting dropped on the floor countless times due to repeatedly tripping over the cord that's just a bit too long. I've kept them together with glue and tape in various combinations, since otherwise they still work fine.
Those are indeed the best $20 headphones (and the same drivers are available in all sorts of different form-factors) but they only sound better than the $149 Bose headphones, not anything remotely audiophile quality. I definitely prefer certain $60 Sennheiser headphones (HD497, which I don't think they make anymore, haven't listened to the equivalent from the current product line) to the Koss drivers.
Or for a $100, you can buy a pair of studio grade Sony MDR-7505's or a similar monitor type of headphones that will more or less faithfully reproduce a recording and not over-accentuate the lower and high end sacrificing the crucial midrange (if you listen to anything with electric guitars, that is).
Holy crap, I bought a pair of these from Radio Shack about 6 or 7 years ago and LOVE THEM (for what they are). They are falling apart -- one foam earpad is shot and the other has been replaced (badly); the headband adjusters lost their ratchet, so I hot-glued the pieces together.
I had no idea this was a phenomenon -- I just got lucky with a random Rat Shack purchase. As a 90th percentile audiophile (with industry experience) I can vouch for these 'phones. They are the real deal. I am ordering my replacement now.
If they are broken, get a replacement, I think you only have to pay shipping. I read about people taking advantage of this all the time on their older headphones.
Disregarding the hack, with Koss I would even go more expensive if you can as you get lifetime warranty, replacements, and upgrades if the old model is gone. It's easier if you live near Milwaukee as you can just drop them off, but you can mail them too. I have these ones: http://www.amazon.com/Koss-Pro4AAT-Titanium-Pro-Headphones/d...
I love my Koss PortaPros with the same drivers as the KTXPRO1. They're extremely open - they stop no sound getting in (or out) - but the sound quality is amazing for the money.
I've used the same pair of Sony MDR-7506's on a professional, near daily basis for about seven years. They're very accurate, and more importantly, super solid. I mean, they're tools. And they work. About $100, and a really good value for money.
I love the sound from my Grados, but they're not exactly the most comfortable headphones in the world. they can be somewhat painful if you're wearing glasses, since your ear tends to get some pressure on it.
My sennhausiers (585) are a lot more comfortable. A bit clearer sound, a touch less bass, and way less reliable cords.
I've had the Grados since the early 90s, and the Sennhausers since about 2000.
Which Grados are you talking about? The SR60i and SR80i's are about the most comfortable headphone I've ever worn. They're so light and unobtrusive you forget you're wearing them.
I think I have the SR80i and I love them! Only thing I can't stand is the thick, clumsy cables which tend to always seem to have some tension because the two headphones can turn freely. Still, I would not replace them for any other brand.
I've owned two pairs of the Sony MDR-150's over the span of the last 3 years now, and I must say, for $15 you really cant go wrong with them. I use them at work and I can't complain. I usually get ear pain after about an hour or so of use with any other headphones; Not these. The sound quality is pretty damn good for 15 bucks too.
I had a pair of those. They're the best headphones at that price range but I didn't love their sound. The bass was too high and the higher frequencies weren't there. And the pads flaked after a while. They broke after I sat on them by accident. I am rather heavy.
Alternatively, check out the many excellent alternatives to Sennheiser's high-end cans, eg. from AKG, Denon, Beyerdynamic and Grado, where your dollar also pays for better build quality than Sennheiser.
We had two pairs in the office and modded one and not the other. In a blind test two of three actually preferred the non-modded 555's. Our test wasn't great though, 10 seconds of a relatively low quality mp3 and none of us are audiophiles, though the one of us who is the closest to being an audiophile was the one who preferred the modded headphones so, take that fwiw.
If you're going to do it, I found that you have to pull hard, as in really, uncomfortably hard on the foam padding to get it off. It does come off though, and everything went back together fine.
My friends and I tested both the 555's and 595's in the shop to see which one we wanted to buy, and all of us agreed on the 555's because they sounded better to us.
I seem to recall something about not being so blatantly bass-ey and being able to hear the mid range more.
So are software companies. I offer two versions of my software and will be adding a 3rd soon. The program is the same, but the availability of some features is based on the license. In light of that, I'd be a hypocrite if I complained about these practices with hardware vendors when it's done all the time in software, including my own.
There are lots of differences between hardware and software, so I don't think it is hypocritical to complain about the hardware manufactures doing this.
Why do these types of market partitioning practices anger people so much? Isn't it a good thing that these companies are offering different price points for people to choose from?
Why do these types of market partitioning practices anger people so much?
Because it makes them feel ripped off.
Enthusiasts were likely having positive feelings about their purchase of Sennheiser products and now they feel like an idiot. Psychology is a big part of the audio business.
Isn't it a good thing that these companies are offering different price points for people to choose from?
That Sennheiser is taking headphones and expending extra cost to muffle them in order to sell them at a lower price indicates that they do not consider themselves to be in an efficient economic market. Likely they are selling the muffled headphones in order to artificially inflate the price of the normal ones.
It also raises the question of in what other ways Sennheiser might be intentionally degrading the quality of its products.
A similar thing happens with TVs in electrical appliance stores. Brighter pictures are more appealing to the average viewer, so the stores bump up the brightness setting on the more expensive TVs.
They can pull tricks like this because most people don't care that much about whether their chosen product is better according to some objective measurement. Rather, they care about getting a good deal and being made to feel happy about their purchase.
Unfortunately for Sennheiser, high-end audio customers are probably one group who do care about buying something objectively better. News like this risks hurting their target market substantially, I'd say.
Perhaps it's that people who bought the more expensive model thought they were buying higher quality components, but now realise they paid to have a piece of foam not be put where a piece of foam should not be?
That consumers in general are happy to pay premium for premium features, but not for nothing?
I mean, to me this practice is practically fraudulent when it comes to consumer goods. Yes, it makes business sense to offer product at different price points. You could argue that the higher priced model pays for the R&D that went into developing the headphones. That doesn't change the fact that these are the exact same headphones with a $150 price difference.
Comparing to the software case where you pay more to have features put in that may be disabled in the cheaper version, there is a big difference there. When you buy the more expensive version you know what was taken out, and getting that is what you are paying for. Would anyone buy the more expensive headphones if the box said "unnecessary foam not added"?
On the flip side - whenever I see stuff which is so easily modded to its full version I usually imagine an engineer inside a large corporation grinning because he knows some kid somewhere will figure this out and get an early christmas present. Case in point - the amd 6950 radeons that can be flashed to radeon 6970's, earlier nvidia cards that could be softmodded to quadros etc . I mean the product differentiation could be actually a lot more involved and sometimes it just feels like the product was designed to be unlocked by the hackers and tinkerers.
I see a lot of Web 2.0 applications these days that have their own pieces of foam. It's really all the same code on the backend and theoretically it wouldn't cost them anymore to enable all features completely. They purposely disable features or put their own pieces of "digital" foam in between plans in order to provide different price points for users.
The difference is that people generally expect to own the utilitarian physical goods that they pay for. Since information can't be owned in the same sense, it's understood that buying it is going to take the form of some sort of licensing arrangement with more arbitrary conditions.
In reality, the economics of the utilitarian physical goods business may sometimes resemble more those of the information business, but it's up to manufacturers to justify that to their customers.
Most of us would like to believe that the companies from which we purchase products have our best interests at heart when we buy their products. Apple, for instance, has benefited enormously from this brand perception. We'd like to believe that they built the best product at that price point which they could afford to, given their commitment to supporting excellent R&D, QA, etc. Intentionally crippling a product, particularly a physical product, means that resources were expended to produce an intentionally suboptimal product. What if auto manufacturers could intentionally reduce the fuel efficiency of their vehicles, say by manipulating the ignition control software, in order to differentiate their vehicles? Or produce were intentionally held in storage for a few extra days, at additional expense, in order to create a lower price category? What if life saving drugs where partially denatured by heating them to artificially reduce their effectiveness to provide lower price points for people who couldn't afford the premium medication? It feels wrong, perhaps because it is wrong. Companies should at least be up front about it, rather than concealing the practice, and acting huffy when they are called on it.
It is not only about feeling personally cheated, it is about observing such a glaring inefficiency of the economy. Sennheiser expended a lot of effort to create a perfectly good product, and then our economy stimulates them to waste a part of this effort by crippling the product just to create... a kind of pay-what-you can scheme.
Did you read the post? The $200 headphones are /exactly the same/ as the $350 ones, except for a piece of easily-removable foam they crammed in the opening to reduce the sound quality.
That's not "market partioning" -- that's utter hostility toward your customers.
In the general human mindset, there's a huge difference between "they're adding extra for those who pay more" and "they're taking stuff away from those who pay less".
If the feature differentiation is achieved by taking the premium offering and adding a component to remove functionality, then that feels a lot worse than taking the mid-range offering and adding components to result in the premium one.
In this case it does cost less to produce since they don't have to develop a new product and setup separate manufacturing processes. That piece of foam saves a lot of money.
Software doesn't have a per-unit manufacturing cost, and everyone knows that, so it does feel bad if a firm offers different versions of the software based on price.
Hardware does have a per-unit manufacturing cost, and people expect a more expensive product to cost more to make.
The anger comes from essentially paying for air, or just adding profit for the company. If two parts are almost essentially the same, why am I paying more just for a different label?
Chip manufacturers actually do sell you a different product when you buy the high performance product, and it's related to chip yields.
> The anger comes from essentially paying for air, or just adding profit for the company. If two parts are almost essentially the same, why am I paying more just for a different label?
I think this question is rooted in a flawed "cost-based" perception of product pricing, which is intuitive and seemingly "fair", but not how the world works. In reality businesses should charge based on the value (perceived or actual) their product brings to their customers.
Consumer surplus through cost-based pricing is the very goal of having a free market. We route resources to the most efficient producers because they're capable of offering lower prices. If Sennheiser can come out ahead by doing useless things to reduce the value of their products (that don't even reduce costs!) without fear of being undercut, that represents a market failure.
This is really disappointing. My excellent HD-280s are finally cracking after years of heavy use, and now I have to reconsider doing business with them for a replacement.
A perfectly efficient market is nice in theory but I don't think it exists outside of commodities like "sorghum and gypsum" (I think those are tptacek's words). Consumers are usually not going to be perfectly informed so there's always room for marketing to increase the perceived value of a product.
In this case it might be exactly same as with chips, with headphones failing some QC test being labeled as cheaper and getting additional piece of foam to partially fix whatever badness was discovered in such test (like unintended resonance caused by manufacturing tolerances).
In my opinion, the high-res photos in the original forum thread clearly shows some difference in build quality between both models. Compare for example how cleaner is hot gluing job on the driver on the 595 and that there is glob of something (hot glue?) on the external grill catch (lowest on first picture) on the 555 where there does not apear to be anything like that on the 595.
Extruding things from plastics (and especially ABS which this appears to be made from) is surprisingly inexact process and one would assume that manufacturing headphones selling for hundreds of dollars requires quite tight tolerances. My assumption is that the foam is there to damp rattling of case that is made from not exactly matched parts (and this is consistent with few posts in the forum which describe sound quality getting worse after removing the foam).
And I don't see why speakers/headphones/whatever can't be differentiated on quality, while having same overall design.
There is no way to sort out speaker driver rejects into 1st, 2nd and whatever category. If a sample has quality issue, it is likely to deteriorate further in use rapidly.
Lower quality speakers are not rejects of high quality speakers, they are just cheaper designs.
As to the mold, the holes there require no tolerances, they are there just to avoid air cushion behind the driver and serve no other purpose. Similarly, a foam pad is a rough hack to reduce its effectiveness, driving the speaker's response down. Do you really feel like this foam cut is some precision fix to tolerances problem?
The blog post doesn't mention all of the aesthetic differences--which, at the current Amazon price point, could justify the price difference for some--so I thought I would mention the others here:
-the headband is leather
-cans have a Sennheiser logo on them
-cans have a chrome ring around them
-comes with a nifty headphone stand / mount
disclosure: I own some 555's, and will be trying this mod at the office on Monday.
FWIW, I did the mod, but I don't have an effective way to AB test. Tried one ear at a time, but could not detect the difference. Went ahead and removed the foam from the other, and the increased sound stage sounds great (though without an accurate test it's difficult to say how much of a change is placebo vs. noticeable).
While this is really neat, the 595s also feature some nicer padding on the headband. Probably not enough for the price difference, but I just wanted to note that the piece of foam is not the only difference between the two.
Years ago, I recall reading (almost certainly on Usenet) a parable which involved a king who needed some bricks, but the cost of getting them could only be recouped by creating some artificial distinction between 'gold' and common bricks, to sell some at a low-price/high-volume and others at high-price/low-volume. In a contrived manner, it neatly illustrated the case that some arrangements that offend one's intuition are actually the best way to get certain things everyone wants financed.
Would love to find a link; it's stumped all my search attempts (including at Google Groups) ever since.
But is IBM's practice as easily circumvented? If they are literally inserting nops, then that sounds like something a quick binary conversion could erase.
If you could then update the jump addresses (which are relative to IP) -- definitely possible programmatically, then yes. However, I don't believe you had the permission to alter the system software on an AS400.
Not to mention, if you have engineers capable of doing systems programming and re-imaging the system, you're not a target customer for an AS400 or the AS400 is used in such a function where it makes no business sense for you to allocate "real" engineering resources (who are working on your core product, not your accounting system) for this.
The AS400 was/is meant to be a turn key solution: IBM profesional services sets it up for you, after which you run SAP (or the like) on it. It also already came with DB2 and is fairly interesting by making the database the file system (decades before WinFS failed, Hans Reiser went to pursue other interests and btrfs is promising but still unstable).
I just performed the mod. Was really easy and I hear an audible difference (even to my untrained, non-audiophile ears).
For the record, the practice does not offend me. This has been done for ages. R&D costs for creating the HD595's were no doubt great and to recoup some money they created a cheaper, crippled version. With headphones you aren't paying for the parts but for the engineering.
So the plastic bag that supposedly contains the driver is labeled, "System with resonator left side". Is "System" what they call the driver?
I'm interested in seeing what Sennheiser's justification for this is. It seems odd to piss off buyers of high-end products, because they're the ones that do the research. You can't just go to Target and buy some HD5*5 cans; you have to order them from an audiophile-y place (or Amazon).
(The processor manufacturers make their price structure clear. They make the good ones, part of it is broken, so they turn off the broken part and sell it to you as a lower-end model. And if there is no demand for the fully-working ones, and they don't have enough broken ones to meet the demand for them, they just cripple the good ones. But like unscrewing the headphone and taking out foam, you can just change the multiplier and enjoy the increased performance. So why complain unless you already bought the high-end product?)
> So the plastic bag that supposedly contains the driver is labeled, "System with resonator left side". Is "System" what they call the driver?
Well, the driver itself in those headphones is an integral part of a larger piece which includes some more acoustic parts. That's what you can see there, and it's not symmetrical, so it has left-hand and right-hand versions.
> I'm interested in seeing what Sennheiser's justification for this is. It seems odd to piss off buyers of high-end products, because they're the ones that do the research.
It's worth noting that the 595s have a better standard of finish and come with a few accessories such as a nifty desk-mounting hook. Not that that justifies it.
In case anyone is interested, I just did this mod for my hd555s and can confirm that it does seem to make the sound clearer although I can't really make a good comparison for obvious reasons.
I just pulled them off. They are attached with small plastic clips but luckily not the nasty ones that break. The fabric mesh under those also comes off just by pulling. You should probably be careful with pulling the ear pads, they are glued to a plastic ring and apparently it is possible to just pull them off the glue (my friend did that to his ones).
FWIW, Sennheiser USA's CEO says the mod upgrade claim isn't accurate:
http://twitter.com/#!/SennheiserUSA/status/37092187850153984 ("Urban myth deserves no response. Read the specs; do the tests....all factual. Listen to both and you be the judge.")
I asked him to comment here, since I'd like to hear more than can fit in a tweet. With 170 comments in 16 hours, it should be in their interest to describe any manufacturing differences in more depth.
Yes, the HD595's have a leather headband and some sort of chrome accents. Also, the 595's come with a headphone mount/clip you can attach to your desk.
Sennheiser is a company I've always tried to steer clear of because of this. There's a lot of companies that take advantage of their branding (i.e. M-Audio, Monster cable, etc) to jack up the prices on mediocre hardware.
Once stuff hits guitar center and best buy, you're probably going to be getting ripped off somewhere. You can buy better quality Mogami mic cable from a pro-audio supplier than you can from Guitar Center for half the cost. The audiophile world (along with the "guitar aficionado") is a very strange place.
I think the key is to actually find out about what you're buying and get some word-of-mouth recommendations rather than relying on brand alone as a measure of quality. I think the pro-audio industry is small enough that nearly all big players expand into the consumer region eventually. That doesn't mean that all their stuff is crap. I still think my Sennheiser HD-25s are some of the very best DJ monitor headphones, but they are a world away from the Sennheiser consumer stuff.
Great bargain. Additionally, the HD-555 can be had for about 100 on eBay. I've been buying my Sennheisers there for years, always the 570 model but that's a bit dated now.
The added piece of foam has to cost them something. So, really, the "broken" headphones should be more expensive, right?
In any case, my friends and I have long held the belief that "If you can't open it, you don't really own it". If my toaster breaks, you can be sure I'll open it up and try to fix it before I think of buying a new one.
Though before anyone thinks of flaming, I'm ok with my iPad. I can make an exception for this type of tech!
I just did this, and performed a very rough A/B test with one earpiece modded, while leaving the foam on the other. The bass (on a bass-heavy song) was very noticeably more muted on the stock earpiece, sounding almost completely dead compared to the one without the foam. Needless to say, I quickly removed the other, and now they sound better than ever. Highly recommended!
Having tried this mod out about a year ago - there is a definite increase in sound quality.
However, it does turn your headphones into the most annoying things ever for people who are in the same room as you as they too can hear, quite loudly and clearly.
It's pricing like this that leads people to just buy the cheapest offering available, without doing any research. If you already know you will be taken for a ride, why not just pay the least amount possible for the 'privilege'?
Er, no it isn't. People pay the least amount possible because they're tight.
Some people are actually offended when I tell them "you get what you pay for" - particularly for services rather than products. There's this weird consumer fantasy land where you get top quality for fire sale prices.
You manufacture your product and you intentionally damage part of the volume to sell it cheaper only to make the price of other part of the volume justifiable.
If that's not sign of pathology of free market than I don't know what is.
Maybe I'm just cheap, but $200 for the cheaper headphones sounds ridiculous to begin with, and well into "anyone paying that much probably deserves it" territory.
$200 isn't the actual market price for the HD555. You can get a pair from Amazon (US) for $85.
If you've only listened to your music with cheap earbuds, you haven't truly heard your music. Rediscovering your existing music collection, particularly if it's high-bitrate compressed or lossless, is a joy. Well worth the money if you enjoy music at all.
I agree on them being worth it. That said, the best sounding headphones I've head (better than my HD 555's) were some 30 dollar Sony G74 (or something) 'street' headphones that they don't make anymore. The trade-off was that they were easily the most uncomfortable headphones ever devised. It was literally too painful to wear them for extended amounts of time.
I know plenty of people who pay that much, and more for headphones. These are people who get into discussions about the loudness war [1] and the pros/cons of various audio formats for different musical genres. They're not stupid, just enthusiasts, and as such enjoy using high quality equipment, just like any enthusiast.
True, and I'm something of a headphone enthusiast as well, but there is a lot of snake oil. Even among stuff that isn't outright snake oil, it's very hard to actually spot differences above a certain level, and I'm not convinced everyone who claims they can is actually doing so. Sometimes I'm not that sure for my own listening. I do try to do blind tests sometimes, but they're hard to really keep blind (different feel of headphones, recognize the sound of a headphone I've already heard before, etc.). And beyond that, what exactly constitutes "quality" is a whole other story! The easiest way to tell differences among high-end headphones is to train yourself on certain test samples that are notoriously hard to reproduce properly, and then listen for differences, but it's not at all clear that doing that is a meaningful predictor of subjective enjoyability when using the headphone to listen to normal music.
Overall I've settled on open-back headphones in the ~$70-150 range as the sweet spot for me personally (I mostly use Grado SR-80s).
And there's the rule proven right there -- I couldn't hear enough of a difference between the SR60s and SR80s to justify the price difference. The 120s were audibly better, and the RS1s better still (and at that price, they ought to be). My only use for 'phones, though, is in places I can't control (their complete lack of soundstage drains the enjoyment out of a good recording for me when actively listening) and there is no substitute for in-ear monitors for killing interference. At home, it's speakers (I don't need loud, just a sufficiently low noise floor).
Hah, fair enough. I'm actually not sure I can tell the difference between the SR60s and 80s, but the price difference was small enough (US$20) that I didn't spend a lot of effort trying to tell. The SR-125s were another $50 above that, which was worth some effort, and at least in my listening I wasn't sure I could tell the difference, so I stuck with the 80s. Possibly I could've just stuck with the 60s!
True, often high end hardware can be snake oil. It is like using gold in HDMI cables, a basic copper cable does just as well but companies still tout their stupidly expensive cabling.
If only there were a mod to add an Apple headphone connector and a Zalman microphone to the sennheiser 555, that would be an amazing VOIP headset for the Mac.
I was lying in bed last night think about how to do it. Im thinking of cutting the end off of old iPhone buds and then soldering the mic, and headset together with that on the end. Fun times! Thanks for the encouragement.
I'm not an audiophile, because audiophiles are the homeopathic suckers of the audio world. I do, however, like high-quality sound.
If you want a good over-the-ear headphone, the Sony MDR-V6 is quite nice. They sound decent, are built a tank, and have been in continuous production since the mid 80's. They're $90 on Amazon.
If you want in-ear, get Etymotic ER-4's. They're the only headphone I've ever found that can compete with my NHT 2.5i speakers. They should be available around $200.
Do people actually think that retail price is a function of production/R&D cost? It's not, never has been. Dropbox charges 20$ for something that consumes marginally more ressources and incurs identical R&D costs when compared to the 10$ product. Chip manufacturers do this all the time. Discounts for electronics and groceries are fully artificial.
A much more realistic model is price as whatever the market can bear. I sincerely doubt that there is a moral obligation to set price points in any other way.
[This may be relevant: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...]