Are Aging Baby Boomers Spelling the Demise of Hi-Fi Audio?

Is the Audio Industry Slowing Down?

A few weeks ago, Audioholics.com published an article talking about how the audio-video business didn’t plan for the end of the COVID-19 pandemic. Never before in my biological life as a soon-to-be 50-year-old have I ever seen everyone in the world stuck at home and scared to death of a respiratory virus that killed off over 1,000,000 Americans. 

What it didn’t kill off was the specialty AV business, in that the core demographic of the audiophile and home theater hobbies is Baby Boomer men and, with a lot of time on their hands, they were looking for something to do at home, since going to a movie, a sporting event or any kind of meaningful travel (I was slated to go to Tuscany in early April of 2020 which didn’t happen for obvious reasons) all got canceled. What replaced that was spending on things like streaming services, food delivery, daily fantasy sports (I got good at DFS golf and hockey in that period), as well as, thankfully, listening to music on our stereos.

Supply Chain Issues Were Only Part of the Problem…

Vinyl’s grossly over-hyped comeback (physical media made up about eight percent of all of the record-high 2022 music sales thus including all new vinyl and Compact Disc sales) was part of the spending, as were all sorts of system upgrades. Supply chain issues were well-documented in the news, but they were even easier to see from my living room balcony, as I could see anywhere from 48 to 60 gigantic container ships traveling from Asia waiting to be unloaded in either the Port of Los Angeles or the nearby Port of Long Beach, which combined take in about 40 percent of the goods consumed by the world’s largest economy. Some of those goods included parts needed to make high-end audio products like semiconductors, pre-made speaker cabinets, and/or complex boards and assemblies. Other shipping containers were filled with finished goods from China, Vietnam, and elsewhere, be they AV receivers, integrated amps, speakers, streamers, subwoofers and so much more.

While the delays in getting these products into the California ports were real, they ultimately all got dealt with, and consumers learned to snap up the gear that they needed when they had the chance. Another effect was the rise of online retailers like Amazon.com, which didn’t used to be the “stereo store” that it is today. The audiophile system that you can build from Amazon.com today isn’t just Chi-Fi cheapy stuff – it is legitimate, respected, well-reviewed gear.

Inflation Was the Next Logical Outcome of the Pandemic

In the true spirit of TMI (too much information), I only wipe my fine ass with Quilted Northern toilet paper. That’s the only kind and you only need to try it once to understand my uncompromising position on this all-important matter. 

Do you remember going into the grocery store in mid-2020 and seeing fully empty shelves – especially in the paper goods aisle? It was scary. Forget Clorox wipes, as those were impossible to find. So was my beloved Quilted Northern, but I wasn’t to be deterred. I went on to eBay.com and paid the market price for three big packages of the luxury TP. It cost me a whopping $110 for the toilet paper and the shipping, but I was just happy to have enough in supply to be able to wait out the supply chain issue. Dammed if I was going to wipe my rear with that office-building sandpaper stuff. There was no chance that that was going to happen, regardless of said pandemic.

So, if morons like me were willing to overpay for luxury toilet paper, then what were other key items going to sell for in this increasingly product- (not service-) driven economy? A lot more than normal was the short answer. Hotel rooms in Southern California were a glaring example, in that so many of us were not willing to travel. From where I live in Los Angeles (near the Baywatch Headquarters for those old enough to remember Hoff and Pamela prancing around on the beach – that’s my hood) it is a two-hour equidistant drive to resort locales such as Palm Springs, San Diego, and Palm Springs, and that is all by car. The hotels, while grossly understaffed and unprepared for the unique and real challenges of the day, raised prices between 200 and 300 percent, and have never really lowered them to this day. My wife and I have been going to what is now the Ritz Carlton Bacara just north of Santa Barbara since the second week that it opened nearly 20 years ago. Room rates were priced from $469 to, say, $699 per night for a standard room, based on seasonality. By mid-2020, the prices were $1,750 per night plus a resort fee of $75 (where you could only spend half of the day at the pool by property rules), $55 to park, and $17 per plastic cup prices for an Au Bon Climat chardonnay, when the bottle at the local drug store was $19! Things were getting batshit crazy in terms of pricing and as we know now – this was the end to a long run of close-to-zero percent interest and a return to 1981-like interest rates designed to stamp out inflation.

If a techno-junkie like any of us needed a new Roku and saw that there were only a few left on Amazon, you were smart to buy one right then and there. Gone were consumables and in were tangible assets, which is the opposite of the Millennial cliché, but these were unforeseen times and events, and prices were going up and up and up.

AV manufacturers had months-long waiting lists for gear to be made. They could sell anything and everything that they could make and didn’t have to offer discounts to sell what they could make. Their aging core clients were back and ready to spend on a new turntable or AV preamp or something cool, because they didn’t have to spend on season tickets for the NHL, Taylor Swift tickets for their granddaughters, or luxury travel to anywhere that wasn’t a car ride away.

While the AV manufacturers raked in the profits during this two-plus-year period, they also started doing things like ignoring the now outdated and wrong concept of Just in Time manufacturing. If it takes 125 parts to make a pair of $10,000 loudspeakers but the 121st part isn’t available, then, despite the overwhelming consumer demand, this one missing part left nothing to sell, resulting in even longer wait times. AV companies started doing things like buying up all of the parts that they could to stockpile them, just as I did with Quilted Northern, thus they too added to the inflationary pressures on the market. Finding labor at the time was also tough, although the PPP and other government money wasn’t as free-flowing as some would want you to believe. A $600 check from the Treasury only went so far, especially with the costs of eggs, butter, and used vinyl.

So, What Is Coming Next Now That the Pandemic (not COVID) Is Over? 

As we all know, things returned to a new level of normal in 2023, with 66,000 Millennials and roughly 73,000,000 Baby Boomers (I don’t even count GenX in there, but we are like 33,000,000 folks) all looking to travel, go to an NFL game or even out for a date night. With experiential spending back in a big way in 2023, spending on consumable products for the home that was so relevant during the lockdown slowed down. That caught so many of the AV companies flat-footed that, for the last six months, the AV business has been in its self-made recession, even if the U.S. economy is still nowhere near recession for the past 15.5 years (and counting).

Today’s best AV companies will get back to making more relevant, compelling, and high-value gear again in the coming months and years. They have no choice if they want to survive, but there is a bigger, more disruptive change coming to the market that is going to specifically rock the audiophile world. That change is the inevitable end of the spending of the Baby Boomers. As of the Census of 2020, there were 73,000,000 Baby Boomers. The audiophile hobby was started by and always supported by Baby Boomers. Generation X is into the hobby, but not at the same level or volume. Millennials and Generation Z love music, perhaps more than any other generation before them, but music means something different to these younger folk than to Gen X or Boomers. Zs and Millennials love hard goods like fashion-forward headphones, but they also truly love photos of Kardashian-ass from Coachella on their Instagram account even more. They often value intangible, consumable things in ways that Xers like me and the Boomers who started the AV party don’t. These are essential, generational differences to understand.

When I started my new publication FutureAudiophile.com in late 2022, the sole goal was a challenging one, which was to get younger people into our hobby. We are over a year in, and I can tell you in all humility that the challenge is pretty large. Readership is strong. Social media is growing quickly. Email lists are growing accordingly, and a group of core/enlightened advertisers sees the vision, but not every company in the AV or audiophile space understands the hellfire that is pending.

Imagine that you are at, say, the AXPONA audiophile show in Chicago (likely the best in the United States at this point) and you took 10 percent of the older people away from the event because they were dead, broke, or couldn’t justify the cost of audiophile gear anymore. That would be a sea change to the business and hobby. What would that show’s attendance look like after five years of 10 percent compounded losses to its oldest and most loyal attendees? It would be utterly catastrophic.

How many AV companies are prepared for this massive demographic change? How many of these companies are designing products that are price-competitive for the younger generations, versus how many companies are making Oligarch Audio-level gear, like $87,500 phono stages and $675,000 pairs of speakers? Just because you can sell them now doesn’t mean that there is a big future for said absurdly-priced gear.

Baby Boomers & the Future of High-End Audio?

The warning has been made, but expect little to change, as change, specifically in the audiophile hobby, is a bad word. 

The audiophile print magazines that have dictated the narrative of the hobby for generations have, over time, convinced their aging audience if they want to be “in the club” that they need to spend the type of money on their monoblocks that would build a small hospital in Africa. Will they embrace the future, or will they cling to their turntables, tubes, and ways of the past? Time will tell, but the warning bell has been rung. Did these companies learn anything from the post-pandemic AV recession? Perhaps, but is it enough for them to embrace radical new technologies, high-level values, and real-world-priced systems designed for younger consumers? History suggests that this would be a solid, enthusiastic no. Here's hoping that history is very wrong. 

What do you think will happen when the Baby Boomers aren’t buying AV equipment as they did during the pandemic or in the decades before? What is your prediction? We want to hear from you in the comments below.