Beat By Dre: The Exclusive Inside Story of How Monster Lost the World
I'm sure a lot of us have daydreamed about quitting our jobs and starting a loudspeaker company. Here's an interesting story about how Monster Cable lost $50,000,000 making loudspeakers, and this loss set them up to sign a really bad deal with Beats by Dre.
If any of you went to CES about ten years back, you may have seen the Monster Cable speakers tucked into a corner of the show. Those speakers were a real head-scratcher, they looked like the line arrays that Rick Craig builds, but appeared to use Aura Sound drivers and cost something like five times as much.
They also made an odd choice of naming them after this
I'm sure a lot of us have daydreamed about quitting our jobs and starting a loudspeaker company. Here's an interesting story about how Monster Cable lost $50,000,000 making loudspeakers, and this loss set them up to sign a really bad deal with Beats by Dre.
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If any of you went to CES about ten years back, you may have seen the Monster Cable speakers tucked into a corner of the show. Those speakers were a real head-scratcher, they looked like the line arrays that Rick Craig builds, but appeared to use Aura Sound drivers and cost something like five times as much.
They also made an odd choice of naming them after this
As noted in the last post, when I saw the speakers, I thought "these are Aura Sound"
Anyone heard the Eleganza Godfather 1500 subwoofer ? - AVS Forum
One of their dealers confirmed it here. Odd. You'd think Monster Cable would make their own drivers, not use someone else's.
Anyone heard the Eleganza Godfather 1500 subwoofer ? - AVS Forum
One of their dealers confirmed it here. Odd. You'd think Monster Cable would make their own drivers, not use someone else's.
Where did the $50 million number come from? its pretty hard to spend that much in this business. Development costs, advertising costs, ramped up overhead, product stock purchases, you would have to be pretty foolish to dump a ton of money into those before you had some sense that your program was going to be successful.
On the other hand, the Monster Cable guys were pretty ambitious and arrogant.
David
On the other hand, the Monster Cable guys were pretty ambitious and arrogant.
David
https://web.archive.org/web/20071128085641/http://www.mdesignlife.com/eleganza/
looks like 1/2 dozen products, ~$5k prices, that's some millions $ development, prototyping expense and then if they wanted few k units stock...
looks like 1/2 dozen products, ~$5k prices, that's some millions $ development, prototyping expense and then if they wanted few k units stock...
Maybe all their attorneys were tied up in lawsuites against Minature Golf Courses and such????
Monster made fadish speaker jewelry
Beats makes fadish headphone jewelry
What Dre did to Monster is called Karma--you can't BS a BS'er--unless you are better at it than they are!
It used to bother me when folks were scammed with speaker wire, power cords and magic pebbles--but no longer. If you can't Google "Brand X scam" and just sniff around for a few minutes--then you deserve to get taken.
As for 5 Million bucks on R&D. Well, McIntosh did R&D on speaker wires before Monster came out with no difference. All Monster had to do was read that, figure out
a different way to word it and cash in. 5 million calories in beer later...viola!
Beats makes fadish headphone jewelry
What Dre did to Monster is called Karma--you can't BS a BS'er--unless you are better at it than they are!
It used to bother me when folks were scammed with speaker wire, power cords and magic pebbles--but no longer. If you can't Google "Brand X scam" and just sniff around for a few minutes--then you deserve to get taken.
As for 5 Million bucks on R&D. Well, McIntosh did R&D on speaker wires before Monster came out with no difference. All Monster had to do was read that, figure out
a different way to word it and cash in. 5 million calories in beer later...viola!
Probably the most likely scenario, if they really did lose $50,000,000, is that they built a lot of loudspeakers, then realized there were no buyers for them.
The best example of this that I can think of is back in the 1980s, when Atari made millions of E.T. games. They overestimated the demand, and literally dumped the product into a landfill. (http://en.wikipedia.org/wiki/Atari_video_game_burial)
700,000 games went into a hole. If Atari wrote them off at full retail value, that's about twenty one million dollars.* A year later, Warner Communications reported a loss of over half a billion dollars (yes, with a "b") http://articles.latimes.com/1985-02-15/business/fi-3350_1_net-loss
If Monster found themselves in a similar situation, it might explain why AuraSound drivers have been widely available at cut-rate prices for a decade now. (Both Madisound and Parts Express have been selling Aura Sound midranges at a discount for ages.)
Just speculating of course. The cabinets would have no real value in the discount channels, but the drivers that go in the cabinets would.
The best example of this that I can think of is back in the 1980s, when Atari made millions of E.T. games. They overestimated the demand, and literally dumped the product into a landfill. (http://en.wikipedia.org/wiki/Atari_video_game_burial)
700,000 games went into a hole. If Atari wrote them off at full retail value, that's about twenty one million dollars.* A year later, Warner Communications reported a loss of over half a billion dollars (yes, with a "b") http://articles.latimes.com/1985-02-15/business/fi-3350_1_net-loss
If Monster found themselves in a similar situation, it might explain why AuraSound drivers have been widely available at cut-rate prices for a decade now. (Both Madisound and Parts Express have been selling Aura Sound midranges at a discount for ages.)
Just speculating of course. The cabinets would have no real value in the discount channels, but the drivers that go in the cabinets would.
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I'm waiting for the movie version - can't help thinking that if it wasn't for that weasel Iovine, that this couldn't have happened to a nicer snake oil pitchman
Maybe that's a bit harsh - almost want to empathize with Kevin
Almost
Ah, the American entrepreneurial dream at it "best"
"Son, one day all this will be yours, just sit back and learn from the master"
As for the Atari game, as I heard the story it was that the game was developed hastily in attempt to ride the wave of the film's popularity, and that rather than simply overestimating demand, it was a case of underestimating the game players' desire for an enjoyable, worthy experience -IOW the game sucked big time - I read that on both the internet and my local print media, so it must be truthieness
Maybe that's a bit harsh - almost want to empathize with Kevin
Almost
Ah, the American entrepreneurial dream at it "best"
"Son, one day all this will be yours, just sit back and learn from the master"
As for the Atari game, as I heard the story it was that the game was developed hastily in attempt to ride the wave of the film's popularity, and that rather than simply overestimating demand, it was a case of underestimating the game players' desire for an enjoyable, worthy experience -IOW the game sucked big time - I read that on both the internet and my local print media, so it must be truthieness
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If you take a closer look, the speakers look like a power bars with 4 outlets, 2 leds for each outlet, and a switch 
I've seen companies sink $50M+ dollars in software projects, with nothing to show for it. The project just have a life of their own and no one that started the project will admit they were wrong and stop it.
They were ugly anyway
I've seen companies sink $50M+ dollars in software projects, with nothing to show for it. The project just have a life of their own and no one that started the project will admit they were wrong and stop it.
They were ugly anyway
The ones they used (except for the NS3, which isn't much cheaper than Dayton's, um variant) haven't been for sale at low prices. There has unfortunately not been a flood of cheap NS12-794-4A's, NS15-992-4As, or Whispers. And the NT1 tweeter is long NLA. Also, they never used the NS6.
While I expect that $50m number was significantly exaggerated for dramatic effect, it's worth noting that M-Design, Kevin Lee's "speaker" project, was probably better characterized as a home A/V furniture project. They came out with two cosmetically-distinct lines that not only included the line arrays and subs, but also sofas, consoles, and racks. Not a very thoughtfully-conceived lineup. Seriously, sofas and speakers?
Yes, the drivers in the line arrays and subs were mostly Aurasound, and the electronics were also off the peg. Unfortunately, the crossovers for the line arrays were...hopefully not designed by someone who reads this forum.
FWIW, after M-Design folded I bought two of the "Bella" subs (NS12-794-4A in a credenza-looking vented box, 500W Class G amp) for less than raw NS12's, and later added one of the "Godfather" subs (NS15-992-4A in a back-loaded horn type vented box shaped like a gigantic - 31" on each straight side! - pie wedge, 1kW Class G plate amp). I bought the Godfather on eBay, and paid more to ship it than to buy it. The amps were made by the same source who makes Part Express's Dayton "Class G" plate amps, though the Bella had a half-width plate with the toroid remotely mounted. (The Godfather's plate was the same size and shape as the 1kW Daytons. IIRC the main difference was that the Godfather's amp added speaker-level inputs.) I no longer use the cabinets, which while very well made just don't fit our aesthetic. All of those killer Aurasound drive units migrated into my current multisub system, though, along with an NS18-992-4A.
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If you take a closer look, the speakers look like a power bars with 4 outlets, 2 leds for each outlet, and a switch
I've seen companies sink $50M+ dollars in software projects, with nothing to show for it. The project just have a life of their own and no one that started the project will admit they were wrong and stop it.
They were ugly anyway
$50 million for an abandoned software project is relatively cheap:
Abandoned NHS IT system has cost £10bn so far | Society | The Guardian
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