the Demise of Outlaw's Model 978 HT Processor

Outlaw Audio’s announcement of the abandonment of the long-awaited Model 978 Home Theater Preamp/Processor, spells more trouble for the company than people may think, and could have been avoided.

This is a picture of what it was expected to look like (linked from the Outlaw Audio website)

This is a picture of what it was expected to look like (linked from the Outlaw Audio website)

Demise may be a strong word. This is just one product, after all, not the whole company, right? Perhaps, but after so many excuses and delays as well as the inclusion of competitor’s products to fill this critical hole in their product line, I am worried that this may be a bad omen for the company as a whole. Now, this isn’t to say that I don’t like the company. On the contrary, I have owned amps, pre/pros and even their ICBM with great enjoyment. But despite their still-solid selection of amps, it is with pre/pros that Outlaw put themselves on the map, so well in fact, that they completely eliminated their 2-channel amps several years back. Now they have been dealt a serious, perhaps fatal blow in this crucial market sector, leaving the battlefield wide open for Integra, Cambridge Audio and others who make receivers and pre/pros to fill the void.

From a green ecological perspective, I also believe that they could have done things differently, with this pre/pro as well as long before it. I’m thinking not only of energy-efficiency, but also many of the other factors that make a product green. To wit:

Product Quality and Simplicity

Outlaw was pretty solid on quality. In all the years I’ve owned their products, I never had one fail. I did however receive a 970 pre/pro that was missing the 12v trigger jacks on the back – evidently they had not been soldered properly and had fallen out. That to me says quality control was lax. Of course, when you ship hundreds of products from a factory in some far off land, that is bound to happen. To their credit, Outlaw fixed the problem fast at no cost to me.

The bigger issue to me was simplicity. Outlaw tried in vain to provide the latest features like Trinnov audio processing on their announced but never released 997 pre/pro. It was eventually offered to the mainstream consumer on the Sherwood Newcastle Receiver, but this advanced and complex feature was a bridge to nowhere and Sherwood was quick to realize that. Outlaw pulled the plug on that pre/pro completely, apologized profusely to its patient but still-loyal customers and announced that they would offer an even better pre/pro at a slightly higher price-point. Feature bloat led to more delays and broken promises and to the announcement today that this pre/pro would also be abandoned.

The sad fact is that the 990 pre/pro, their most respected product to date, in my opinion, was lacking just one critical feature: HDMI. Initially Outlaw steadfastly stuck to DVI and refused to add HDMI claiming it had too many issues and that the spec was changing too fast for their product schedule. I believe that had Outlaw simply added HDMI to the 990, and continued to provide a rock-solid performer that was reliable throughout, with maybe a few extra certifications and software additions here & there, that over time, they would now be giving Emotiva a run for its money.

Energy-efficiency & Heat reduction

These are green factors that I think could have been added to the product line at minimal cost. That said, they could have provided a healthy new source for advertising: Outlaw: “An American company doing the right thing for the future!”

Energy-efficiency could have been added with minor tweaks to the hardware and software over time as the product evolved. Additional heat sinking could have been added to deal with heat. The 990 (and 970) were already pretty cool-running, so reducing this a bit more could have been done at minimal expense. As for energy use, low-power modes for standby could have been added with a simple upgrade as well, perhaps entirely in software. Another feature that could have been added at minimal cost is the option to turn off unused channels and/or to add a low volume use mode. Most of the programming people watch is TV, which typically doesn’t require the full capabilities of the whole pre/pro. Even movies are mostly dialog and low-volume, so this would have been a welcome and often-used feature, I believe.

Adequate Packaging

Adequate packaging is a no-brainer. Use recycled cardboard, work with a green organization to design packaging that reduces excesses, and find delivery methods, routes, and carriers that also use greener solutions. All this could be added to the marketing without affecting the product in any way. For a more aggressive approach, some components inside the pre/pro could be exchanged for lighter ones at minimal cost over time. That said, packaging alone could have been a marketing point.

Reducing the Toxicity of Components

For the toxicity of the components used inside the pre/pro, the situation is a bit more complex, I realize this. This would invariably raise the price of the product. However, there are some longer-term benefits to consider. It would make the product ready for future regulations that will require them, such as lead-free solder requirements. It would also extend the potential market for the product to countries, especially in Europe, that already require tougher guidelines for product distribution. In short, it would make the product more competitive with those coming from Europe. This would not only allow more expansion there, but also compete more aggressively with European products imported here into the US that are in the same price-range such as Rotel and Arcam.

Labor Relations

The simple fact is that the reason products are less expensive to assemble and manufacture in China, where Outlaw and most of its competitors source their products, is because the employees there are paid less, have fewer protections from abuse, and work longer hours. Ultimately, asking for a product to be manufactured in China entails a gamble of the sort that Outlaw lost. It is my opinion (and I make no claims to be an expert), that had this product been manufactured closer to home, the kind of underhanded pressure that drove Outlaw away from its chosen factory in China, and ultimately doomed the product entirely,  would not have been possible in the US. Even if this had occurred, Outlaw could have challenged the action in court and the cost of fighting this by said rival would have been too great to be as successful as it was in China.

If we add to this the fact that it is simply too difficult to monitor quality and proper output with the same diligence that Outlaw’s larger competitors do this, it becomes clear that Outlaw’s options in China, or any other far away place for that matter, are limited. I’ve spoken to many representatives from PrimaLuna, Cambridge Audio, and others about the difficulties of ensuring quality in China, India, and other Far East countries and it’s an uphill battle that requires significant infrastructure and investment to do effectively. Outlaw is a much smaller player and simply does not have the resources to compete at that level.

While I don’t want to belabor the obvious point, but I am also convinced that employees paid a fair wage, working less hours, and offered such important benefits as health insurance and savings options, produce a higher quality product. This is especially true over time. People may disagree with me, but in my own work (yes I do have a day job, LOL), I see this model repeated over and over again and this is true in the private sector as well as the public sector. Employees that are unhappy cut corners, work less energetically, and are sick/absent more often (not to mention that if they come to work sick, they make others sick). If you’ll permit a small segue, it amazes me how much backlash there is against workers’ rights in the US, especially by conservative lawmakers, when it has been shown over & over again that happier workers produce better goods faster and that this is better for the bottom line of the company/organization, as well as the economy as a whole. What is true in Chinese sweat shops is true here too, I’m afraid.

Product Recycling

Here is another area where I think Outlaw could have done more. They are already half-way there, since they do occasionally purchase back products such for refurbishing, parts salvaging and resale. I can’t fault Outlaw too much on this since they are one of the few companies that do. However, it should be something they promote more, on their website and on other websites through ads.

I understand that there is a downside to this – namely that it makes people see Outlaw as a recycler of goods rather than an innovator of new products. I agree that this is a stigma endemic in American consumerism that is hard to ignore. However times are changing. I believe that if done well, with a carefully managed marketing campaign, such an effort could dwarf the negative impressions that consumers may have. If Outlaw made it part of a broader “Green and Made in America” campaign, I think this could very well become an important selling point.

There is a significant backlash against the “walmartization” of products for the American consumer, and this is especially acute in mid-fi and hi-fi audio where Outlaw competes. I’ve been to many audio events and the resellers/manufacturers of Chinese (and other foreign-sourced) products stumble over themselves downplaying where the products come from. Those show-rooms are also the emptiest and least visited. While it is likely not the case that these products sound or perform significantly worse, the fact is that consumers tend to avoid them nonetheless. Outlaw could build on that trend by returning to manufacturing and assembly in the US.

Fair Pricing

This seems to have been the primary motivator for Outlaw’s decision to outsource its manufacturing and assembly to a Chinese factory. Despite this, the product was expected to be more expensive than the previous 990, and ultimately after years of delays, it never materialized. I firmly believe that consumers at all levels, from middle-class consumers to price-is-no-object millionaires, are willing and able to pay a bit more for products that they feel is of higher quality, will last longer, supports local economies, and won’t take months to have repaired. I’ve asked this of consumers everywhere I go and while money is tight, to be sure, the benefits of longevity usually outweigh the quest for the lowest price.

I’ve also talked with Hi Fi manufacturers and resellers about this as it is a cornerstone of my project here, and they also concur that the quality control issues and distance of products sourced from the Far East negatively affect sales. Consumers are realizing that cheaper prices don’t necessarily imply better value. While at the lowest-levels of mass-market quality, price is still the dominant factor, this is not where Outlaw is trying to compete, and one could argue, nor should they compete there. What Outlaw needed to do years ago, is realize that prices would increase if products were produced domestically, but that this would ultimately work out for them in the long run. With such a loyal following in the industry, I truly believe their customers would have accepted this honesty and continued to purchase their products. Unfortunately, Outlaw now doesn’t have any pre/pro product that their loyal customers can defend.

Final Thoughts

Those were my initial thoughts about Outlaw Audio’s announcement this morning that they have abandoned the development of their Model 970 pre/pro. I can’t say I am not a bit bitter about this, and perhaps my disappointment shows in my post today. If so, post a comment. I should also add that I’m not privy to any inside information or other details about what led to this debacle – I don’t even know what rival company pressured Outlaw’s chosen factory for producing the 970 to abandon them – although I’m sure that will be leaked onto the internet in the next few days.

Ultimately, this is a tragedy for a company that has tried to find a niche for itself in a very competitive market, and this time it has seriously miscalculated its abilities. I believe that if Outlaw had adopted more green initiatives a long time ago, they would have reaped the benefits early on and been in a much better position today. Instead, it is now going to struggle to survive and demonstrate where in this industry it can still have an impact. I sincerely hope this is not the end for Outlaw as I have greatly enjoyed their products and service over the years, but this is certainly not a good omen for the future of the company.