Why spend £1,000 on headphones?

By Alex Hudson
BBC News

Cheaper headphones can leave some screaming for a better sound

Consumers are spending more than ever before on headphones. But what makes premium audio so expensive and does spending so much money make much of a difference?

Smartphone manufacturer HTC is paying $309m (£190m) for a 51% stake in Beats Electronics, the company best known for its high-end headphones and partnership with rapper Dr Dre.

Despite the electronics market being heavily hit by economic uncertainty, the most recent figures show that headphones are still showing 24% year-on-year growth in volume.

This increase is because of the almost universal take up of music on mobile phones, laptops and tablets.

"The limiting factor on the quality of music on most devices is the headphones," says Dom Feeney, UK consumer product manager at specialist headphone firm Sennheiser.

"It's no good having the best quality of music if you have a rubbish pair of headphones. That said, low quality headphones will mask some of the quirks and flaws in MP3s."

The market is now worth over $680 million-a-year (£415m) and is growing.

And people are spending more and more money on each pair. According to market analyst NPD, headphones costing $100 (£61) or more went from around 2% of the headphone market in 2009 to 3.5% in 2010, with the average buyer replacing them once every 14 months.

OPEN OR CLOSED? Open backed headphones allow the sound to escape, creating the illusion of space and a wider sound but means that the bass is sometimes slightly less pronounced and will be audible to those around you They are principally used for home listening or when in quiet environments Closed headphones keep the sound inside the headphone and cuts out more ambient noise at the expense of a truly expansive sound Some people say that this makes it feel like the sound is coming from inside your head rather than a speaker They are used for commuting or when there is a lot of ambient noise such as when DJing

The age of the digital audiophile - someone who demands the highest quality sound reproduction - seems to be upon us. But what are they getting for their money?

"It's quite easy for people to line up some headphones and say 'it's just a bit of wire, a jack, and two small speakers, how different can they be?' but the quality does vary a lot," says Feeny.

Companies cite build quality, research and development costs and the raw materials used in the construction.

One of the big changes over recent years has been the introduction of "noise-cancelling" headphones.

Premium audio company Bose has been a pioneer in this section of the market, playing an inverse wave of the surroundings to cancel any ambient noise out.

But this sort of technology costs a lot of money to buy. And some audiophiles are critical of the sound created by a "closed back" headphone. The difference is nuanced but having a closed back means that the sound is kept inside the headphone creating a very slight echo and a "cave effect".

It is great for a public place as you won't be inflicting that rather embarrassing Cliff Richard track on the person sat next to you. Not so good if you want a "true" and "open" sound, said by manufacturers to be preferable.

The difference is a subtle one but considered important to those willing to spend £1,000 on a pair of top-of-the-range headphones.

We have to hit certain price points with these fashion headphones to be more credible. It's often the case of more money than sense with some people Dom Feeney, Sennheiser

One problem is that technology has not quite caught up with the audiophiles.

Originally CDs were designed to comfortably cope with the range of frequencies that could be heard by the human ear - generally agreed to be from around 20Hz up to 20,000Hz for a young, healthy adult.

But with the MP3 revolution came the compromise of a lower quality sound. The 1411kb/s of a CD was reduced to, initially at least, a bit rate less than one tenth that.

However, many tests have been carried out to show that, to the casual listener, there is not a vast difference between files coded at 256kb/s and those at CD quality.

'Silent' speakers

Jimmy Iovine, chairman of Beats by Dr Dre says his company's mission is "to clean up the destruction of audio caused by the digital revolution" but some say that this will fix itself naturally as the storage space of portable devices increases.

"Times are changing," says Feeny.

"Storage space is increasing and more people are turning to higher bit-rates. It's already moved from 128kb/s a few years ago to something more like 192kb/s and hopefully that will move up to 320kb/s and then even further."

Apple's iTunes store, the industry leader, currently offers a standard 256kb/s file.

But some high end manufacturers believe this is not the end of the story.

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Manufacturers have produced so-called "super-tweeters", which work beyond the frequencies audible to the human ear.

"When the tweeters are played alone, one can barely, if at all, hear a thing," explains high end manufacturer Townshend Audio's specification sheet.

"Remarkably, however, all listeners... experience the same enhancement when the super-tweeters are engaged, describing the sound of their hi-fi systems as more natural and comfortable to listen to."

The rationale behind it is that recreating the whole spectrum of sound means that it will interact with its surroundings more naturally. It is said to have the most dramatic effect on vinyl LPs and on Blu-Ray discs, both of which capture more of the audio spectrum than a regular CD.

The device alone costs £800 ($1,300) but is expected to be integrated into high end headphones in the future.

Gone Gaga?

Achieving the perfect listening experience is not the only thing that people take into consideration - headphones are a fashion statement.

Ever since the days of the original Walkman, headphones have been closely linked to cool.

This was taken to new levels with the white earbuds of Apple's iPod and many companies have dabbled with creating a product that appeals to the eyes as well as the ears.

Sennheiser created a range of products in partnership with sports manufacturer Adidas. The top model in this range sold for around £50 ($81) more than its unbranded counterpart.

Dr Dre has made a big impact with his premium Beats headphones

"It was exactly the same product with exactly the same sound quality but there was a price premium tacked on," says Feeny.

"It is only a slight one but it costs to deal with Adidas and the problem is we have to hit certain price points with these fashion headphones to be more credible.

"It's often the case of more money than sense with some people. You need to make sure you are offering a credible product but you are also at a price where it doesn't seem to be overshadowed by some of its peers."

And even Peter Chou, CEO of HTC Corporation, believes that the deal with Beats is not just about the music: "Beats has found a unique way to harness popular culture in a manner that is unlike any other brand today," he said in a statement.

What Beats is seen to have done very successfully is partner with musical celebrities such as Dr Dre and Lady Gaga to pitch what is a premium product towards a more mainstream audience.

It seems to have worked - 30% of those surveyed by NPD listed endorsements as very important when deciding what headphones to buy.

And the holy grail for any audio equipment is that the home reproduction sounds as good as the real thing.

"It can sound even better," says Feeny.

"With the headphones of the future, each ear will be taken into account and be customised for individual's hearing.

"But one thing you can never replicate is the energy of a live event. That's just an atmosphere that can't be replaced, at least for now."