Bose in the age of streaming - The Morning Context

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• On 15 January, one of the most recognizable flagship brands of all time announced that it was on its knees. Granted that wasn’t the literal announcement, but the space between two sentences can sometimes be more revealing than a book.

• The intention was to underline that switching from brick-and-mortar to online is progression rather than compulsion.

• Bose stands out in the recent list of retail elegies. Because when the Framingham, Massachusetts-based company opened its first store in the US in 1993, it also paved the way for experiential retail. With its understated interiors, white lacquer surfaces, experience stations and reverential staff, the Bose Store set a standard for try-before-you-buy formats.

• And the Walkman and Discman had pizazz, not panache. Enter Bose, whose aesthetic was bolstered by its research-first image.

• But what if Bose’s predicament has less to do with e-commerce and more to do with the age of streaming? And where does that place it in India, one of its last offline footholds?

• Harman—a subsidiary of Samsung—is an audio systems and enterprise automation giant whose 18 brands include JBL, AKG and Bang & Olufsen.

• The closure of Bose Stores abroad is bad news for us all. Bose is walking away from the very thing that defined it—the ability to sell an experience,” he says. “How many audio brands sell experiences today? And I say this despite working for Harman: Bose has the uncanny knack to make anything sound good.”

• It’s a lot coming from him, because it’s rare for connoisseurs of hi-fi audio to like Bose.

• The story of Bose, like most success stories, is the story of disruption. When Amar Bose published “On The Design, Measurement, and Evaluation of Loudspeakers” in 1968, he blasphemed against the sacred testament of hi-fi audio.

• A proponent of psychoacoustics—the perception of sound—he created for the subjective, not objective listener. The 901s, with their oddly placed innards, used walls as additional speakers to create a “concert hall” experience. Casual listeners were entranced. Audiophiles were not.

• We have no wherewithal to hear audio in isolation. Instead, it’s an appendage to video, to our jogging, our working, our boredom, our angst, our sex.

• When vinyl ceded to cassettes, CDs and mp3, sound engineers had to compress, equalize and overemphasize certain frequencies in recorded music. There was particular emphasis on volume, so much so that the advent of digital birthed the “loudness war”. Different releases of the same record became louder across newer mediums. For purists, this was audio hell; no more hi-fi, a lot more distortion and a corruption of what original recordings are supposed to sound like. But for generations unfamiliar with and unmoved by audio fidelity, this was a non-issue.

• “Loud” became a parameter for judging sound quality, which reflects in product reviews even today.

• Nothing, however, blew things out the water like streaming did. Audio stored on the cloud has to be compressed even further for smooth playback over mobile data.

• Music compressed to 64 kbps is indeed a travesty. But how many of us can tell the difference unless we pay attention? The always-on era has moved music from the foreground to the background.

• Which brings us to the second epochal change: the cult of bass.

• “Popular music today, whether Bollywood, hip-hop or electronic, is bass-heavy. Hearables further boost this low frequency, because that’s what sells,” explains Sarit Chatterjee.

• The human hearing range is 20-20,000 Hz. The deeper the bass, the lower the frequency.

• Bass sells because it is primal. The thump and rumble of a subwoofer mimic a beating heart and other bodily functions—the first sounds our ears are exposed to as foetuses bathed in amniotic fluid. This is why mainstream composers build up to a bass drop, and why audio equipment manufacturers use drivers that ignore mid-range frequencies so audio sounds more “powerful”

• While bass-friendly hearables win over mass markets, those with a flat response—a reproduction most faithful to the original—are preferred by audiophiles.

• Company filings with the Ministry of Corporate Affairs show that Bose India’s profits increased over the last three fiscal years, from Rs 3.8 crore in 2016 to Rs 42 crore in 2019. As steady as the profits, however, are increased cash outflows for inventory, from Rs 9.3 crore in 2016 to Rs 18.8 crore in 2019. The company is buying more goods than it is selling.

• Just three years after it kicked the headphone jack to the curb, Apple—with the help of AirPods and Beats, which it owns—has conquered 71% of the wireless hearables market. Its dominance isn’t as pronounced in India. But it will be.

• Branded hearables don’t sell as much offline as much as their unbranded counterparts do.

• Headphone Zone is particularly fascinating, because unlike other e-commerce sites, its focus is “premium lifestyle” and audiophile brands. It’s the only online marketplace in India dedicated to hearables, with filters to choose equipment based on sound signature and frequency response.

• In the US, the tech company is buoyed by automotive and military contracts, and solutions for professional applications (Bose Pro). Up to 60% of its business was believed to come from Pro a decade ago. We don’t know what the breakup is in 2020 because Bose won’t tell here, either.

• Offline is and will be key for premium home audio. But herein lies a complication. Interior designers and system integrators—those who set up “smart homes” and home theatres for real estate companies and home buyers—are the new movers for offline sales.

• Fifth, and most important. The smartphone being a microcosm unto itself means immersive audio will one day be device- instead of accessory-centric.

• “Samsung, Mi and other brands are working to bring Dolby Atmos sound to their devices. You’re seeing a shift in sound innovation from traditional hearables to personal devices,” Chatterjee underlines.

• But that’s the thing about innovation. It isn’t always practical. It isn’t always a success. Like sound quality, it isn’t always objective. It is also alright to be a sap for experience; Apple users would know.