The Cost of Cables
I crossed the finish line at the LA Marathon in just under 6 hours last Sunday. Not as fast as I wanted (is it ever?) but I did make it from Dodger Stadium to the Santa Monica Beach to receive my medal. Then I took a long nap, had a great meal with my wife and oldest son, and took Charlie for a short bike ride. The marathon is behind me for another year.
As part of the aftermath on the whole cablegate incident, I decided to do a little research in to the cable business. I’ve spoken to cable manufacturers, manufacturers representatives (mostly from China), fabricators (large and small), high-end suppliers, and retailers. Many of these individuals agreed to speak freely to me on the condition that I wouldn’t identify specific brands or individuals. I agreed. My goal is to try and understand what the dynamics are behind this business. What I’ve learned so far isn’t pretty.
Let’s start with the cost of goods. I certainly understand that it costs a great deal to do the research and development necessary to design and test a product line, but I’m going to ignore those costs because they get amortized over the entire life of the product. What I asked several people in positions to know was how much does it cost to actually build a cable? How much do the materials cost and how much labor is involved? Of course, there are cost differences between different materials including copper, silver, and gold but in the final analysis does a one meter USB cable use enough metal to warrant costs that easily get to hundreds if not thousands of dollars (and remember that digital cables have only one job…to deliver the bits from the source to the destination).
The information I received placed the cost of goods for a mid level USB cable at around $8 supplied by a Chinese maker. If the same cable were made in the United States, the number increases to around $15. And what is the retail cost of a digital cable that costs the company so little? It turns out the final retail price depends on how many marketing and promotion dollars are added to the “cost of goods”. A retailer will sell the cables for between $200 and $1000…and they will get these very high prices because of the pseudo-science spewed on their own company websites, nonsense reviews and awards on audiophile sites (“…is a little quieter and renders micro dynamic aspects of the music in a clearer fashion…”), and through testimonials offered by individuals that refute the basics of digital information theory and practice.
The breakdown of costs associated with a 1-meter USB cable should go something like this. The COGs (the cost of getting the raw materials into a retail ready product) is around $20 (fancy packaging, printing included). Then you add in the costs of running your company (salaries, office space, utilities etc), marketing and advertising, and then some profit (maybe a 10-25% margin would be fair). This establishes the wholesale cost of the cable…maybe $50. This number if then doubled by the wholesaler to $100 and doubled again by the retailer to $200. So the original $10 cable retailers for 20 times the original cost.
So how would you feel about spending $3500 for the same $15 1-meter USB cable? Especially when you come to understand the “micro dynamics” of the expensive cable and the Monoprice $5 USB cable are identical. What a crazy world it is.
47 thoughts on “The Cost of Cables”
Oh, oh, oh, Dr. AIX!!
I fear you have crossed so far over the line now that you will be targeted by elements of the “cable industrial complex”. If I were you, I’d avoid jogging with Charlie past any high rise office buildings or grassy knolls. Please get your book published before…well, just hurry.
Thanks Bill…I’m working on it…and I’ll keep my head down.
Congrats on the marathon! And thanks for the common sense! It drives me nuts when I, add a lay man, read reviews talking about dynamics and rendering when it comes to usb cables. I’m off the opinion that if there’s no noise in your chain there’s no problem. Thus rendering the “black background” cliche irrelevant, especially when it comes to cables
this is my first year as the track coach at the middle school where I teach math. Congrats on your run. I wish my asthma would allow me to do it, but I am using my time after practice to get back into some kind of shape at 68.
As to the cables, if the overseas price to manufacture is $8 vs $15 in the US, I would buy the US made cable every time, if I knew who those manufacturers were. I know there are differences in cables, but those differences pale in comparison to the differences I hear from the 16 microphones in my mic cabinet. I tend to buy cables that are in the middle of the price range I am looking at.
I am most greatful you sniffed out the snake oil in all of this. America has become a great marketing country, unfortunately. Bring manufacturing back home. A pipe dream for sure.
On the subject of USB cables, I found this article rather amusing: http://positive-feedback.com/audio-discourse/why-usb-cables-can-make-a-difference/ My favourite part might be the unnamed person blaming *too good* test equipment for lack of measurements to back up his claims.
I was in a quandary regarding a USB cable from my MacBook to my NAD Dac/headphone amp. I had the stock cable lying around but kept reading about AQ and others who produce higher cost cables. I came across a blog that recommended the Bekin Gold USB cable. I paid $8 for one at a local computer store and I am very pleased with the results. I have also made my own speaker cables and RCA interconnects. I almost secumbed to the hype but thanks to you Mark and others I have avoided the advertising traps.
You’re doing the right thing…and thanks for sharing.
I have this same Belkin cable and have had very very positive results with it. In fact, I seem to recall in many of the high end magazines that a number of reviewers have used this same cable as their reference over the years. I also have used the Belkin PureAV cables for optical, HDMI and USB and other interconnects and have no complaints there either. The real nice ones seem to no longer be made but are readily available on eBay. Belkin still makes a PureAV line but seems to not be as nicely constructed. Not sure how the newer ones function but the old ones I have compared with pricier cables and can tell no difference.
What’s possibly most fascinating about your current crusade, Mark, is that it has literally taken decades for a debate on cables of such vigour to surface. I guess it’s yet another example of the democracy of the Internet, whereby a few industry journalists no longer have the clout they once possessed and there is something of an open media platform for anyone of sufficient standing to intelligently challenge the status quo, which said writers, as industry insiders, have only perpetuated.
From an audio industry perspective, cables have been and remain a great way for retailers of all stripes to add value to equipment sales. They also are a great source of advertisement revenue and editorial review copy, so literally everyone from manufacturer to distributor, dealer, publisher and professional reviewer has a “stake” in their continued success.
Thus, a lucrative business has been built with very little, if any, true science to back up claims and you have the incredible scenario where it’s not uncommon for literally thousands of pounds, dollars, euros, yen, delete as applicable, to be invested in a product that, at best, can make insignificant alterations to the presentation of sound in a system.
In the end, however, audiophiles have been sufficiently convinced of the value of cables to make such huge,some might posit ludicrous, investments in them. To me it’s all symptomatic of a condition I once heard very humorously described as Audiophilia Nervosa, whereby enthusiasts will consistently spend silly amounts of money to attain infinitesimally minute sonic differences. Changes, indeed, that might simply be contrasts, rather than upgrades. Full disclosure, there was a time before I had kids that I was vulnerable to Audiophilia Nervosa.
So, in some senses, cable makers and marketeers are in the placebo business, whereby the normal conventions of value are cast aside in favor of change for its own sake.
Therefore I feel that there’s probably no chance that your revelations are going to result in lots of cable salesmen residing in cardboard boxes under freeway bridges, but if it helps those new to our hobby to not make the same expensive mistakes that generations of audiophiles have willingly and very consciously made, it can only be a very good thing indeed. For many of us of a certain age and vintage in this hobby, it’s probably too late for a sea change in dogma. For the new wave of folks we are seeing these days thanks in the main, it must be said, to headphones and vinyl, the realisation that purchasing cable from your local hardware superstore doesn’t kill a system’s potential at all is a very worthwhile, and money saving, discovery.
Thanks Chris…it’s a start. I’m working on a couple of things that might forward the cause. Stay tuned.
Very well said!!!
Very well said +1 Chris. I hope you don’t mind but you may find yourself being quoted and linked around the web.
Okay, this was my largest single cable purchase I am aware of. I may have bought more at a given single project but the cost was buried in other items so this is the only one I can pin down. The year was 1984, the supplier was the Habia Cable company in Ronkonkoma Long Island. The installation was to extend from the PDF (primary data facility) at RRC 1 to each of the 11 stories of offices in RRC 4 through ceilings and connecting bridges. The “put ups” were 1700 feet long per reel. the insulation was all Teflon as it was going into a return air plenum. There were 330 reels of RG-62 and 59 reels of 25 twisted pairs. Total cost, about $325,000 as I recall. I think that’s over 100 miles of wire. This was the best deal I ever got. Habia was the only supplier I could find who could not only meet my specifications (Belden wouldn’t guarantee the lengths, IT hardware support said no splices or patches along the route allowed) but they also met my delivery schedule witch was tight. They said I could watch the cable being manufactured at the plant, test it with my own or their equipment, and reject it for any reason before or after delivery.
Much audiophile cable is manufactured OEM by large cable companies and simply stamped with the logo the middleman desires. (Much labeled clothing made in sweatshops is often made the same way. Standard order men’s suits style 6285 sew in Bill Blass Labels. Standard Order men’s suits style 7436 sew in Pierre Cardin labels. Same sweatshop, same workers, same kind of operation, NYC, LA, Shanghai, anywhere.)
That’s the topic of my next post. In fact, much if not all of the cable manufacturing is done is a very few factories in China (sometimes with materials source in the U.S.) and simply branded at the exit of the factory.
I’ve never priced it out but my hunch is that the cost of setting up a wire and cable manufacturing plant could not be amortized soon enough to make for a sensible investment even at high audiophile prices if the sales quantity were as low as audiophile cable sales are. It therefore takes a high volume operation for this kind of investment to make sense. Belden’s rep told me that Belden would manufacture cable to any specification the customer wants if it’s not already in their vast catalog of standard products. Of course you would pay a high price for it especially if the order is small. In fact there may be a minimum order, I really wouldn’t know. I’m not quite sure how these small time operators would create prototype cables to experiment with looking for the best design. As I’ve posted before, the cable companies know so much about cable and the problems every industry confronts, they’ve already done the work for you and have an optimal solution for virtually all of them.
I’ll bet I was the first one posting on this board who bought exotic wire. I was 10 years old in 1958 in the fourth grade. I built a spectroscope from a DIY article in Popular Science Magazine for a science fair project and among the materials I had to buy was 2 inches of platinum wire to hold the specimen that would be heated to incandescence. That was held on a ring stand and heated with a propane torch. At 10 years old I was not allowed to light the torch myself. BTW, the spectroscope built exactly as described in the article using the very lenses, prisms, diffraction gratings the design called for never worked and I never found out why. How frustrating that was.
As the languages /advertisement gets very polished and technical some potential buyers get imitated by it and simply follow poor advices from sellers which of course have to make a leaving and have the tendency to sell always a step higher .At least you have the guts to say what it is and hopefully some people in the business getting back to the basics .One has not to spend xxx thousand of dollars to enjoy music .
Congrats on the marathon and keep on going we do need a voice like yours in the technical “over-softicated” wilderness of stereo / HD or what ever they call it.
Congratulations on finishing the marathon, and keep doing what’s so badly needed in this hobby of ours.
Congrats on the marathon also from me.
Two weeks ago I bought a 1 meter USB2 cable for $1.50 and a 2 ft toslink optical, beautifully hand made with aluminum ends for $11.50 from Blue Jeans Cable, along with a $6.95 shipping charge the total was $19.95. I am fully comfortable in the knowledge that both are doing the job of delivering the digital bit streams without issue and sound just as the source was encoded.
I’m tired of arguing with the lunatic fringe over the snake oil craziness that is regurgitated out of their months day after day on the web and in print media. I’m coming of the opinion they are getting exactly what they deserve.
Cat cable between my Linn and the NAS
Not sure I understand the explanation but despite being a complete sceptic I can hear differences between different cables in this scenario A friend brought a cable over to try and there was a very noticeable difference would be interested in your thoughts
Jitter and interference have been mentioned as possible explanations
It depends on a lot of other non cable considerations. If you have a compliant CAT cables (which standard?) there is no way that the data at the receiving end is different…thus no difference in the sound. Jitter can be a problem if your DAC is not well designed. More information needed.
This is exactly why I buy all of my cables from the guys at Bluejeans. They respect their customer, provide an excellent price/quality ratio, made in the US (I am Canadian but the US is second best 🙂 ) and they follow the standards without inventing pseudo-science.
Continue your work … this is needed to clean the industry
You could almost see how someone that doesn’t know much about electricity could be tricked into believing a USB wire carrying digital audio can affect the sound. But even more crazy are people who believe that AC power cords affect the sound. And beyond that even are the fuse believers. I am not kidding. You can spend $120 each for standard fuses that claim to be “audiophile” quality. Here’s one example:
Thanks Ethan…yes, it’s amazing. SR is one of the most flagrant companies in the space.
To be clear, Synergistic Research (LOL at “research”) are just as dishonest as Audioquest. Actually, “are” is a misnomer because it’s just one goofball guy named Ted Denny. If you’re not aware, some years back Ted posted in the Stereophile forum what was obviously fraudulent data he claimed “proved” the effectiveness of his little Acoustic ART bowls. These doodads are the size of golf balls, and his graphs showed six of them making a huge improvement at very low frequencies in a very large room. I called him out and after many pages of slimy posts he finally admitted he “made a mistake” with his measurements.
Among the most entertaining people on audiophile message boards were Peter and May Belt from England. Among the many ideas May Belt had was to be sure to not water your plants in your listening room with fluoridated water. Very degrading to sound. I’m surprised “The University of the Trees”, a commune in Hollister California didn’t get into the act. They believed praying to small pyramids would not only keep you healthy but would keep your car in tune as well. Good thing word never got out or there’d have been a lot of out of work auto mechanics back in the day.
One product no longer on the web was a $500 wooden knob to be used in place of the one supplied for a volume control. The seller claimed the special configuration of the wood would damp out vibrations in the potentiometer improving “microdynamics.” Funny, I had one just like it on my very first phonograph when I was six years old.
I’m sure you are familiar with “The Amazing Randy” who took up BBC’s million dollar challenge to prove homeopathy is a complete fraud.
Thanks Mark. I watched a whole Netflix documentary on the Amazing Randy…very interesting. I’m considering doing a YouTube channel that would inform and demonstrate some of the issues discussed in my blog. Stay tuned.
Geoff Kait is continuing the Belt tradition with his Machina Dynamica outfit. One of his claims is that placing a photo of yourself in the freezer will improve sound quality.
It’s even worse than I thought. From the SR fuse site:
“Due to the use of the new material Graphene, the BLACK Quantum Fuses need at least 75 hrs initial burn-in time and up to 200 hrs until the full performance potential is reached.”
They must block the electricity…
Does he know what a fuse is supposed to do?
I have enjoyed theses posts over the past few weeks. I’m looking forward to the day when an unbiased article is published on amplifiers. Maybe a chapter in Mark’s book will address the subject?
Amplification and other front end components will definitely be included in the book.
Having worked in a cable manufacturing plant I can attest to it being even more complicated that that. We made twisted cable with three solid strands, old telephone cable with about twenty four strands “Bunched” together, striped runs of single strand and multi-thin strand cable. 10, 12, 14, gauge single strand. Our pickiest customer was the federal gov’t… deep under-sea cables with nylon and silver braided jackets under thick black pvc plastic.
Today it is a lot of fiber-optic cable and digital co-ax. So you see there is a lot of diversity.
if you think that all those who propagate these overproced cables now stand back and be quiet for a moment then you are wrong.
Just went to the AudioStream wesite and saw one of Mr Lavorgna’s last post.
It is so insidious I cannot tell.
Of all he who cried out loudest that you have pointed to the wrong person feels himself to be one with the silent majority.
If it were not so wicked one could laugh.
We see the battle going on.
I didn’t post the link because I do not want to spread this misleading opinions.
I did happen to read Michael’s recent post on the “silent majority” and their praise of the site he manages. He casts himself as the calm, collected, nice guy when in fact, I’ve never encountered a more aggressive and nasty individual. What he writes behind the scenes in private differs by a large measure from the public persona he demonstrates. I think his reference to the “silent majority” may be on target…the original SM was actually neither silent nor a majority. Audio and music lovers are slowly coming to realize that the cozy relationship between the reviewers and manufacturers means that never a harsh word is said about an advertised product no matter how crazy it is.
It is not a cable, but…..
How about this ;-)))
‘I never expected this glaring improvement. Actually I hoped for a small improvement, if any at all. But the difference was amazing! A clearer, wider and deeper soundstage, more space between instruments, more focus… The next test CD was a classical piece from a Reference Recording CD, this CD already sounds great without a treatment. But after the treatment with the “KLANGTUCH III” everything sounds clearer, more relaxed, more detailed, less digital… simply fantastic!’
A piece of cloth for 49$!
Having looked into the whole snake oil audio accessories market, I found that many of the testimonials and comments come from people working within the industry. My neighbor owns and runs Shakti Systems, which makes a very expensive stone to change the sound and video of your system (complete nonsense). But you’ll find him talking up the “enhancement” products made by SR and Bybee. It’s an incestuous business to be sure.
I just read a comment on another site’s blog this morning, related to cables and interconnects, that, even from everything I have read previously is flabbergasting to me. Curious your take on it. First off, the comments had to do with the integrity of the connections into your devices (and there was discussion about the effects of the detox solutions and cleaners to keep your RCA connectors from corroding, etc. – BTW the general consensus was that just plugging and unplugging them periodically is enough, no need for special sauce of any kind).
But, then, we came to the next comment, where one fellow said he was so concerned with the qualify of the connections that he takes every wire and interconnect he owns and HARD WIRES THEM. He takes the tips off and opens the box and solders them on (or that is how I gathered he did it, I can’t imagine hard wiring an RCA plug into the slot). Yikes, is this over-the-top behavior of some kind and really unnecessary or is there some subculture of folks that finds this the way to go? Curious your take on it, as I have never ever seen anyone mention before going to these lengths to supposedly reproduce the music in the purest of ways.
Larry, connection quality is important, but it’s not magic. Even a $5 wire plugged into a 50 cent jack will work perfectly well as long as neither is broken or defective. All of this stuff is easily measured! The basics of audio fidelity have been understood fully for about 100 years! My AES Workshop video explains a lot about how audio gear is spec’d and tested:
What do you make of this, then? http://benchmarkmedia.com/blogs/application_notes/117842759-star-quad-cable-demonstration-video?mc_cid=5f88ca7b2f&mc_eid=e87e34e5ff
I watched the whole thing the other day…it’s very good. I think he made a very good case for “star quad” cables. However, viewers should made note of the fact that he was driving the system with microphone level signals, which are very much lower than anything encountered in a home playback system. I asked him about this and he acknowledged that mic levels are not representative of signals used at home.
@Ken Wyatt, I posted the comment below on Facebook the other day. Note that star-quad wire is not the same as BS audiophile wire that costs hundreds of dollars for one meter length. Further, Mark’s discussion here is about the ridiculous claims made for USB wires, where hum and noise don’t matter. For noise to harm a digital signal it would have to be nearly as loud as the signal. In other words, a s/n ratio of 3 dB. :->)
This demo shows that star-quad cable definitely rejects interference better than standard balanced wires. But it doesn’t show that star-quad cable is actually needed in most situations. I’ve used normal microphone wire for 45 years and never had a problem. I’m not saying there are no situations where star-quad could help. But he used “switching” power supplies that generate large amounts of buzz extending to high frequencies. And there was no interference until the devices (or PC power cord) were applied directly onto the wires, literally 1/10th inch away. How often does that happen? I’ll also guess that the preamp gain was cranked to maximum or at least 60+ dB. I wish he had said what the preamp gain was set to.
I also wonder how the capacitance differs between the normal and star-quad wires. He didn’t say that either. If the star-quad has substantially more capacitance than normal wire, that could be a problem with long runs.
The interesting item to consider:
Most cabling is produced by a few factories. So an outfit producing AQ cables will get an order from AQ to produce 1000 units of X or Y.
The factory will order enough parts to actually produce 1200. 1000 goes to AQ and the other 200 make it into additional packaging and you get it on Ebay and shipped from Hong Kong.
Now here is the kicker: Audioquest want’s you to SHIP them a suspect cable (which they won’t return). But if you are actually wondering if it’s counterfeit shouldn’t you be able to hear the non-difference it makes in your system?
There are counterfeit products all over the marketplace…including audio accessories and cables. It’s too bad that high-end manufacturers price their items so high that pirates enter the market with fakes…that probably sound just as good as the original.
you get what you pay for, whether you can hear it or not.
I wouldn’t agree…you pay a lot more for expensive cables and you don’t get any enhancement in fidelity. You might get prettier cables with shiny connectors and polished wooden blocks wrapped around them but no improvement in the sound of you system.