A stirring story: EQ Mag's "Chinese Connection" by Yours Truly

[3daudioinc]

If you haven't read the Gearhead article that I wrote for the March issue of EQ Magazine, titled "Chinese Connection," then you should. It's about importing mics from China, with this article specifically targeting Chinese ribbon mics. To view it from the EQ page, click here:

http://www.eqmag.com/story.asp?storycode=13258

Please read the story in full before responding in this thread because what it has to say is the crux of this matter.

I got an email yesterday from the sales manager at EQ Magazine, and in it was forwarded an email from John Nady, president of Nady Systems which is the company that sells the RSM-2 ribbon mic which we have talked about here. The letter was thoughtful in tone, but contained certain words such as "dismay," "unhappy," "interfering," "personally insulting" and "undermining." Needless to say, John was unhappy with the article. I have not asked permission to quote the letter here so I won't.

I offered this public forum to him here so he could express his views. My initial response was this:

John,

Would you be interested in discussing this matter publicly on my forum?
It's at

http://www.3daudioinc.com/3db

There has already been a lot of discussion of ribbon mics, Chinese and
otherwise, and the people there are very interested and receptive to
your perspective. If so, just let me know. But take a look at the forum
first before you decide. You could do a search for the word "Nady" or
"ribbon mic" or "chinese ribbon." There have been lots of discussions
already.

I seriously hope I did you no harm in my article. That's why the
conclusion stated "If you're looking for a project, try buying from
China. If you want a mic, just buy it from a dealer." That was my
ending summary and an opinion I definitely stand by.

Just so you know, I bought 10 ribbon mics from China, but I bought 12
of the RSM-2 from Nady during the research for that article. You
probably didn't know that.

John wrote me back this afternoon, concerning the harm that my article did in cheapening Nady's contribution in making these mics possible in the first place. And that an e-mail to him prior to writing the article might have mitigated the potential damage and losses that Nady might suffer as a result of its publication.

Here is the portion of his letter that he asked me to post. It was written by John Nady and reflects his opinion.

Nady's Innovation of Value Priced Ribbon Mics.
John Nady
President
Nady Systems, Inc.

Over two years ago I saw the potential of value priced ribbon microphones broadening the use of this, up to then, somewhat esoteric and inaccessible technology too a much wider market. I researched the technology of the classic RCA and other vintage ribbon mics as well the some of the more modern brands such as the AEA and Royer. I approached Alctron in China with this idea and upon their agreement for our exclusivity under a written Purchase Agreement subject to jurisdiction under California law, sent them the necessary information and technology to proceed. Unfortunately, in violation of this agreement, they almost immediately started knocking off variations and selling to other US distributors, including Yorkville, SM Pro Audio, Shinybox, PPA, et al, as well as consortiums of end users willing to buy a few as 8 units, as outlined in your article. Since realistically it was difficult to enforce this agreement in China, with its self-protective legal system, we shifted our production to another factory and notified and legally went after some of the early distributors, including PPA and Yorkville. We reached a settlement with PPA, and the Yorkville litigation is ongoing, pending resolution. In the meantime, due to the Wild West, fast- and-loose nature of much of China production these days, several other traders have jumped in to this market with more knockoffs. This is not surprising considering that in China you can get counterfeit versions of just about any branded product, including Shure wireless and SM-58s, AKG and Sennheiser wireless mics, as well as numerous other branded audio products, including some Nady units. You could also get very accurate reproductions of Rolexes, Gucci bags, etc, etc, and there is always a market for such sham goods.

With regards to the ribbon microphones now available, we hope potential customers would consider the following:

1. Ethical issues and fairness in selecting products. I concede, however, that for a generation mostly raised on free downloading of copyrighted materials this might not resonate as much as I would hope.

2. Ultimately you get what you pay for. As pointed out in your article conclusion, it really makes no sense to nickel-and-dime when prices are so low already, especially from Nady, considering the hassles and lack of service and support later. You didn't mention that the units you can buy direct are somewhat of a lottery ticket, since there is really no guarantee of quality and uniformity. This is true even of the units from other distributors, your so called "badgers", who have taken over some of our models, trying to cash in on someone else's idea. They have spent little or no effort, other than appearance items, on the development of this product, as we did, and thus have no input as to the final product they are selling in terms of quality, reliability etc. They are simply box movers in this regard on these units.

3. Nady Systems continues to innovate this product line in its ongoing mission of bringing innovative, high quality ribbon mics to the masses. We offer five models currently, with a proprietary tube ribbon mic of our own design (only one on market at any price) shipping shortly. Unless they knock that off also, this will not be available from Alctron.

We hope, therefore, that fair-minded and sensible ribbon mic aficionados will see that it is both to their advantage and the long-term advantage of this emerging technology to support Nady in our ongoing development of this product line. No other distributors currently offering knockoffs can make this claim.



It was not my intention to discredit anyone with my story. I was simply researching what I have noticed as a popular trend. Neither is it my intention to discredit any product line or manufacturer in this thread.

I will, however, point out that my article never mentioned the name of a single microphone company, Nady or otherwise, or any Chinese manufacturing concern. It did not mention any of Nady's competition that sells nearly identical products. It gave no contact info for how to get in touch with any Chinese manufacturer. And the summary suggestion from the story was to buy a ribbon mic from a dealer, unless you wanted an adventure more than just a microphone. In case you want adventure and to save a few (very few) bucks, "Go East, Young Man," and find your microphone.

John Nady made it clear that he could see no ongoing value engaging in back and forth forum communications over these issues. So I do not expect him to respond. My purpose in posting this here is twofold.

1) To let you know that all pro audio press is not tripe and regurgitation of press releases, and

2) to open an honest and thoughtful (and respectful) discussion about the issues raised.

Your thoughts?

[3daudioinc]

I approached Alctron in China with this idea and upon their agreement for our exclusivity under a written Purchase Agreement subject to jurisdiction under California law, sent them the necessary information and technology to proceed. Unfortunately, in violation of this agreement, they almost immediately started knocking off variations and selling to other US distributors, including Yorkville, SM Pro Audio, Shinybox, PPA, et al, as well as consortiums of end users willing to buy a few as 8 units, as outlined in your article. Since realistically it was difficult to enforce this agreement in China, with its self-protective legal system, we shifted our production to another factory and notified and legally went after some of the early distributors, including PPA and Yorkville. We reached a settlement with PPA, and the Yorkville litigation is ongoing, pending resolution. In the meantime, due to the Wild West, fast- and-loose nature of much of China production these days, several other traders have jumped in to this market with more knockoffs. This is not surprising considering that in China you can get counterfeit versions of just about any branded product, including Shure wireless and SM-58s, AKG and Sennheiser wireless mics, as well as numerous other branded audio products, including some Nady units. You could also get very accurate reproductions of Rolexes, Gucci bags, etc, etc, and there is always a market for such sham goods.

This is an interesting point and one that I mentioned in my article. You can do the design and have it manufactured inexpensively in China, but at the risk of it showing up in your competition's catalog. I wasn't sharing any secrets there.

With regards to the ribbon microphones now available, we hope potential customers would consider the following:

1. Ethical issues and fairness in selecting products. I concede, however, that for a generation mostly raised on free downloading of copyrighted materials this might not resonate as much as I would hope.

I was not raised on free downloading and issues of fairness and protecting intellectual property rights are very much my concern. Obviously the Chinese manufacturers are less concerned with it than even the manufacturers who offer clones of other people's mics.

2. Ultimately you get what you pay for. As pointed out in your article conclusion, it really makes no sense to nickel-and-dime when prices are so low already, especially from Nady, considering the hassles and lack of service and support later. You didn't mention that the units you can buy direct are somewhat of a lottery ticket, since there is really no guarantee of quality and uniformity. This is true even of the units from other distributors, your so called "badgers", who have taken over some of our models, trying to cash in on someone else's idea. They have spent little or no effort, other than appearance items, on the development of this product, as we did, and thus have no input as to the final product they are selling in terms of quality, reliability etc. They are simply box movers in this regard on these units.

I am aware of the "lottery ticket" phenomenon that John mentions. What he does not know is that I tested all 12 of the Nady mics that I bought from his company to see how closely matched the mics were. They were indeed very close. I also checked the 10 mics that came from China to see how consistent they were. They were also very close to each other. Close enough that I could have picked any two of the total of 22 Chinese ribbons and used them as a stereo pair without concern.

3. Nady Systems continues to innovate this product line in its ongoing mission of bringing innovative, high quality ribbon mics to the masses. We offer five models currently, with a proprietary tube ribbon mic of our own design (only one on market at any price) shipping shortly. Unless they knock that off also, this will not be available from Alctron.

We hope, therefore, that fair-minded and sensible ribbon mic aficionados will see that it is both to their advantage and the long-term advantage of this emerging technology to support Nady in our ongoing development of this product line. No other distributors currently offering knockoffs can make this claim.

Royer showed me a tube ribbon mic at the AES show two years ago, and I believe they are shipping now. Although if the "(only one on market at any price)" refers solely to the "of our own design" portion of the statement, that statement is still true. But Nady claiming to have the only tube ribbon mic on the market is not correct.

CORRECTION-3/17/05: I just spoke with John Jennings at Royer and he told me even though they have taken advance orders for several of their tube ribbon mics, they just decided to redesign the power supply and make it smaller based on early tester's feedback. They expect to be shipping final product within a few months. By the way, the Royer design dates back to 2000 according to John Jennings.

[ozraves]

Lynn--

I enjoyed the story. It's one of the reasons I keep coming here. You actually think about this stuff. I appreciate your efforts. I also want to thank you for posting up John Nady's comments.

[Mike Derrick]

Lynn,

Weren't you basically supporting companies like Nady by saying that it'd be better to leave the headaches to others
rather than going the route you did and doing all the work yourself and realizing that you weren't breaking even?

That's what I got from reading your article. Maybe I missed something...

One thing I've learned about the internet and email since I began using them, is how easy it is for us to
misunderstand each other through just reading the printed word, and reading what we want into those words.
(or even our eyes skipping lines without realizing it and the result giving the messsage a totally new meaning!)
I've done it, and had people do it to my words as well. Hopefully in the future we (myself included)
take the time to read a little more carefully, and ask to clarify with each other when we suspect something amiss.

~ mike

[Wireline]

Man! Talk about opening up an entire CASE of worms...

1. Superlative article...informative, touch of humor (intended or otherwise )...yet gets to the meat in a hurry....and I found nothing offensive, nothing of questionable ethics by the author, or nothing that was out of line...

2. Nady's reaction: I think was to be expected...I do not know for sure (no pun intended) but I believe that Nady's approach to the audio world is to offer inexpensive versions of what us end consumers want...they are making a little of everything, none of which (that I have encountered) is considered as "hi end", "audiophile", etc... and this is fine. It is unfortunate their ribbon mic design was made available to other badgers (we dun't neeed no steenking badgers......) and I understand their angst....but it was not the author's fault for reporting what is somewhat common knowledge, nor was it the magazine's fault for carrying the story. I don't think Nady and Co were "outted" to the high end crowd...maybe they wanted to keep this kind of information rather low key....(sidebar: rebadging is not a new phenomenon: Norelco C12s, for example...Altec badged EV RE16s for another...)

3. This kind of activity (I believe) has been the business model for many companies...how many times have Samson, Behringer, etc, been sued for reverse engineering a product, and reselling it as their design, sometimes without nary a change to the product other than less expensive components and labor?

4. Seeings how Nady is is direct competiton with the other ChiCom mics mentioned, I can see how they might feel...don't agree with it, but can at least understand it...now, if they (Nady or any of the otherwise mentioned rebadged versions) were competing against AEA or Royer, I would really have to question their business approach...reality check, anyone? (Yes, I have demo'd the mic in question, and put it back in its box and took it back to the store within 2 hours - it wasn't bad, just not what I was looking for)....

5. There is room for everyone with legitamate business motivations, niche or high end...

6. Wonderful piece...touchy spot you seem to be in, Lynn...folks wanting to blame the messenger and all...

[3daudioinc]

6. Wonderful piece...touchy spot you seem to be in, Lynn...folks wanting to blame the messenger and all...

It does seem to me that there is an underlying "read between the lines" frustration at the way the Chinese have handled it. And that he is venting at me. I mention it in the article and he mentions it to me. Is it my fault that the problem exists because I wrote a story exposing it?

I don't know how much design time was spent on engineering the RSM-2 and I don't have reason to doubt that John Nady did make a contribution to the Chinese development of that mic. I almost hate to bring this up, but several people have commented to me (other ribbon mic manufacturers included) that the RSM-2 is a "cloned AEA R-84." The motor assemblies of the two are nearly identical. I was reluctant to believe it until I saw pictures of the insides of the two. (I've never opened up either of mine.) If that is the case (with the emphasis on the word IF), then it seems disingenuous of a company that copied an existing product to be upset over the fact that other people are selling the "copies" it commissioned. It would be like "cloning clones."

Has anyone seen the new RSM-3? Take a look. http://www.nady.com/products/product...m3mics_pg.html
Does it bear any resemblance to any other popular ribbon mics that are on the market right now? Do you think that this is coincidental? You may notice that the mic pictured has no microphone element in it, but is just an empty shell.


My perspective may be unique in that I have friends at four different ribbon mic companies that share information with me that is not available to the general public. Much of this is not information that I can ever share publicly. I will say that only one of those four companies imports mics from China. The other three are major players whose original design mics are made here in the US. Not that I'm taking sides, just wanting to make sure that readers realize that I'm not dreaming this stuff up or reading it on the internet ("It must be true. I read it on the internet!")

[3daudioinc]

Now I have heard from the Chinese manufacturer who has heard from one of his large US customers who is upset about the story and its implication that these mics can be bought in quantities less than thousands.

[Haigbabe]

It certainly looks like a case of "shoot the messenger".

For a start, I can't see anything in the article that should make his hackles rise. The article is well written and entertaining, not to mention most informative.

And while I may feel a degree of sympathy for Mr Nady, perhaps he is now discovering the down-side to dealing with a country that has given him the opportunity to manufacture cheaply.

The playing field is possibly not as level as he first thought. Dealing with China etc can sometimes be a two-edged sword. (Yes, I've worked there).

Contracts: The large print giveth, the small print taketh away.

Haigbabe

[David Klausner]

A certain innovative mic manufacturer has a capsule with some very unique tweaks that they are having made in China. I asked the designer about the dangers of showing these modifications to the Chinese, since with the way they do business, there is no guarantee at all that those capsules won't start showing up in other people's mics. The response was that they were fully aware of the dangers, but to compete on price, they had no choice.

It's a very difficult situation, where manufacturers are forced to look to China for manufacturing in order to compete in the marketplace, yet they risk losing their intellectual property in the process. China really has become the 400 lb. gorilla in the world economy, and I'm not sure the West has any power (or even strong enough interest) to take them on in terms of intellectual property laws, artificial fixing of currency exchange rates, etc. Where it will get really interesting (and it has already begun) is when the Chinese workers decide they would really like to own some of the kinds of things they are making and exporting...

[3daudioinc]

A certain innovative mic manufacturer has a capsule with some very unique tweaks that they are having made in China. I asked the designer about the dangers of showing these modifications to the Chinese, since with the way they do business, there is no guarantee at all that those capsules won't start showing up in other people's mics. The response was that they were fully aware of the dangers, but to compete on price, they had no choice.

I think that's a very unfortunate perspective. It's like selling your land so you can afford to buy seeds to plant on the land you sold. What good does possibly sacrificing your original design do if you are marketing it based on its uniqueness, but by the time you get it to market you may only have months to recoup your investment of time and energy before your competition is selling the same product for the same price or usually less?

It's a very dangerous business model and one that has little chance of success. The old saying "cutting off your nose to spite your face" comes to mind.

Other manufacturers have considered doing the same in order to "compete" financially in the marketplace. But in the end, keeping their proprietary designs in house and made in America are the ways that they have kept their customers happy and kept them "their" customers. Would they have sold more if they were offering them at half price after making them overseas? Sure. Would they be ahead for a few months? Maybe. But what is the ultimate outcome of outsourcing the manufacturing when their same product will end up being sold by dozens of other "badgers?" Will it ultimately increase or decrease their company's strength, sales and stability? I honestly doubt it would be to their benefit.

I have spoken to several manufacturers/designers about this. We discussed it amongst ourselves at the Preamp Designer's Summit. Even George Massenburg considered it briefly. And he discussed it with us all.