The Netway Or The Highway

The Netway Or The Highway
Mike Rofared
December 1999

We Americans must seem like such an odd bunch to our cousins throughout the world. To the British, we are nothing less than fickle and stubborn at the same time — so quick to follow every new trend or product that comes down the pike, yet reluctant to let go of our old-fashioned values. Similarly, when compared to our counterparts in the Pacific Rim, who for centuries have been taught to save for a rainy day, Americans seem to be best at spending, and lots of it. Yet, as odd as it may seem to our friends abroad, Americans actually spend less than people in other developed countries for the basic necessities of life — a car, a home, a cell phone or a television set. Which all suggests that such contradictions in the American character can be best summed up by an overwhelming obsession with getting the most for our money. Doing so, after all, is as much of a National Pastime as baseball, bigger-than-yours SUV’s and talk radio.

And so it is that this primarily American ethic – getting the best “bang for your buck” – has now become one of the main reasons shopping on the Internet in the good ‘ol US of A is growing at such a break-neck speed. Why, you ask? Well, to begin with, whether you are looking for the latest Pokemon paraphernalia (I’ll pray for you), or for a new amplifier, shopping on the Internet embodies those qualities which we Americans like so much: it’s easy, convenient and very, very trendy (not to mention the fact that you can do it from the comfort of your own home, in your underwear even, and without leaving the couch for too long). Any doubt about the huge effort to capitalize on the convenience offered by Internet shopping can be resolved by attempting to track, even for a single day, the amount of new companies popping-up with “dot com” behind their name.

Not to mention the fact that we Americans have now become “the busiest people on earth.” Whether we actually are or not is really of no matter, so long as we believe it is so and the “dot coms” of the world keep reinforcing that belief. Moving well past our nascent stages where “fast food” and “instant pudding” was enough, everything is now fast and packaged to satisfy our need for convenience, price and instant gratification. For us audiophiles and home theater enthusiasts, this faster-is-better mentality, combined with the power of the Internet, will soon translate into “real-time” instant upsampling, instant speaker correction and in a blink, instant room correction. And fortunately, we will not need “instant loan approval” to get it.

But instant anything isn’t any good unless it is also cheap. Fast and cheap. And the faster and cheaper, the better. This is how products and technology which just a year or two ago were not only unavailable to most, but which also cost, for example, seven or eight thousand dollars, will soon be available for less than seven hundred dollars. Quite simply, this phenomenon can be summarized by what I like to call “The Netway.” Ah, yes, another mystery solved with a catchy title, you say? But then explain to me, if you will, how the Netway come into being in just a few blinks of the proverbial eye?

My answer is simple. For although it has been said that “behind every good man there is a good woman,” I will say that so it is true that “behind every good product or marketing idea, there is a person or persons of great vision.” And when you’re talking about the Internet in the microcosm that is audophilia, such a person is Mark Schifter. For the uninitiated, Mr. Schifter, in the minds of many industry pundits, went way out on a limb to several years ago (or was it only 1992?) to predict that the Internet would change the consumer electronics industry forever. Schifter’s prophecies also suggested that the Internet would force changes on the traditional distribution systems of consumer electronics, and would promote, no, demand international partnerships between manufacturers in one country and consumers in another.

But, alas, change does not come easily to everyone in audioland, and so there were those who thought what Mark had to say was nothing less than heresy. Don’t like the message – kill the messenger — as not everyone in the electronics biz was or is comfortable with the notion that people in any city, any state, or any country could almost instantly have information on products and pricing at their fingertips. And then to ponder the idea that those products could be delivered to the consumer’s door without him or her leaving the safety and comforts of home! Scandalous!

For those manufacturers who for years offered their products through dealers and distributors (who, in turn, were defined by agreement through various “territories”) the promise of The Netway was too much to fathom; a true paradigm shift in the making. With the Internet, or The Netway, if you will, a “territory” is changed in a microsecond from a city to a global marketplace.

Need an example? Think hard enough and I’m sure you’ll remember that long running Federal Express TV ad depicting an enterprising young designer of a modern red chair that could ship the chair almost anywhere on earth. It showed smiling people in the Orient, The Arabian dessert and the snow-capped mountains of Scandinavia all sitting and enjoying the comforts of this miraculous red chair. So it is now, as Mr. Schifter so accurately predicted, that hundreds of new sources for consumer electronics are available on the Internet, to be enjoyed by every member of the global village, on every corner of the globe.

Those who know Mark well often thought he had a crystal ball. When in 1989 he began talking about forming a company that could (and did) make products delivering high-end performance at VW like pricing, he was told to “go away, it simply could not be done.” If you were one of the thousands who enjoyed the DAC-in-the-Box or the original DEE v1.0, or who still looks fondly at your DTI-Pro 32, you know there is no stopping great ideas.

And the company Mark used to realize his vision was Audio Alchemy, a huge success in the eyes of many. In fact, today, there are over a dozen companies that were either spin-offs of Audio Alchemy, or which were inspired to compete with the idea of high-end performance at low-end prices. However, in the end, the execution may have consumed the idea, as Audio Alchemy grew much too fast and was ultimately swallowed-up by a larger company that did not possess the same vision or commitment. A hard lesson, indeed, but one that opened the eyes of several creative people to go forward with a new approach that could serve far greater numbers of consumers with an ease and convenience only possible on the Internet. And the Internet, in turn, convinced still others that high-end products and low-end prices were here to stay.

This is where Mark’s vision of the reach of the Internet comes into full blossom. For offering high-end products with low prices on the Internet is quite simply the only way to provide thousands of customers, on a cost-effective basis, with the products and services they desire. Without the Internet acting as a totally new distribution tool, most manufacturers (especially many specialized manufacturers who cater to the needs of audiophiles) will not be able to produce the volume needed to keep costs and, in turn, prices down.

If all of this seems like news to you, you might as well be selling Edsels on Route 66. Or better, yet, check out Mark’s new company, Perpetual Technologies, Inc. for a lesson on how The Netway is here to stay. In short, Perpetual Technologies makes real the vision of completely integrating the Internet to make breakthrough products available to music lovers and home theater enthusiasts all around the globe, at prices that will make them smile. Their introductory products, such as the P1-A, are a great example of how to use the new advantages that The Netway offers to conveniently bring high-end products to the masses.

If the recent past is any indication, the American appetite for “faster-cheaper-now” product selection and delivery will only continue to increase exponentially in the coming years. With convenience as the scripture, the new consumer religion created by the Internet will constantly win new converts by serving our desire for quality products and low prices, without the hassle of having to leave home. And in no niche market is this change likely to be as dramatic as in the consumer electronics industry. Mark Schifter, along with countless other budding audiophile entrepreneurs like, have recognized the opportunities that this new product-marketing-distribution phenomenon offers. For those who refuse to do the same, the only thing that can be said for sure is that your options, in the very near future, will be quite simply: The Netway or the Highway.

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