Special Report: The Japanese Audio Industry

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Special Report: The Japanese Audio Industry

A High-End Playground
That night, Esoteric whisked me to Dynamic Audio 5555, the largest high-end store in Tokyo. The facility, which has been in business for fifteen years, consists of seven jam-packed floors of equipment and listening rooms. Each floor has its own autonomous manager with discretion over matters such as the brands that floor will carry. Consequently, Dynamic Audio reflects a variety of tastes and philosophies as represented by the dazzling selection of equipment.

For my visit, the store’s Senior Managing Director, Toshiaki Kawamata, arranged a demo of some of its most bespoke gear. Four massive Esoteric Grandioso M1 monoblocks bi-amped a pair of Japanese Hiro speakers. The latter are custom-made, built to order, take five months to deliver, cost $220,000 a pair, and are not exported. Also visible from my vantage point in the demo room was equipment from dCS, Mark Levinson, TAD, Sonus faber, Genesis, and an Air Force One turntable.

On other floors, just as Sheen had foretold, I saw healthy dollops of Western brands, especially JBL, McIntosh, Tannoy, and Altec Lansing. According to Kawamata-san, these brands sell briskly. He also told me that despite the Japanese market for high-end audio being sluggish overall, business at Dynamic is strong. He attributes this good fortune to the store’s bustling location near the famous Tokyo Tower, its proximity to multiple upper-class neighborhoods, a selection that offers something for everyone, and a dedicated, passionate customer base. Whatever the reasons for this store’s existence and success, my advice to audiophiles visiting Tokyo is to put Dynamic Audio on your must-see list.

The Growth Imperative
I began my time with Esoteric in the company’s Sound Room, located deep within its Tokyo headquarters. The space pulls out all the stops to create an ideal environment for evaluating gestating products. During my visit, the setup included Grandioso Series electronics driving the ginormous Avantgarde Trio XD horn speakers. Through this rig a live, solo voice-and-piano recording of Diana Krall was skin-crawlingly realistic. I also spun up my trusty Michael Wolff 2am jazz CD, which on this system had the best string bass rendition I’ve ever heard: deep, dark, and tight as a drumhead.

I could have listened to music all day, but there was much to learn from Esoteric’s perch as one of Japan’s foremost high-end producers. The company, which before expanding into electronics made its reputation building what many consider the world’s best disc transports, recently broadened its lineup. Indeed, Esoteric has moved in both upward and downward directions. I wanted to understand these moves, but the question foremost on my mind was why Gibson had bought the brand.

Part of the answer, related by Hiroshi Oshima, TEAC’s Business Unit Manager for the Audio Products Division, involves Gibson’s new mission statement. Though historically focused on musical instruments, Gibson decided it wanted to provide solutions for the entire musical chain—from creation to recording to playback. Together, TEAC and Esoteric gave Gibson a strong and immediate presence in both the middle and back end of the chain.

But I suspect there is more to it. The sad fact is that guitar sales, Gibson’s bread and butter, have declined steadily for several years. In reaction, the company has undoubtedly sought to shore up revenues through diversification and new markets. TEAC and its subsidiaries fill that bill as well.

The relationship between Gibson and Esoteric, according to Esoteric President Haruji Katsumura, is largely hands off. Esoteric has total independence when it comes to product development, marketing, and sales. In return, Gibson expects its new subsidiary to be self-supporting and to generate growth. That’s where the product-line expansions come in.

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