The New Inverse Square Rule Strikes Back!

In the first installment of this three-part article, I reminded you of what the Inverse Square Rule is and said that something very much like it seems to apply to the purchase of hi-fi-systems or equipment. (i.e. spending twice as much won't get you twice as much performance and spending only half as much won't cut your performance level anywhere near in half!). I went on to touch on how speakers don't really run on watts, but on voltage-enabled current, and told you that although "watts is watts," and they all carry exactly the same amount of energy, a watt can be made-up of any combination of volts and amps that comes out to 1 under the formula W=VA.

cable_price2.jpgThen I said that, just as there are all kinds of ways to produce a watt, there are also many ways to measure one. And, because there are so many, and because just the fact of high wattage output can sell amplifiers to unsophisticated buyers, there are manufacturers out there who, to keep their production costs down, will take advantage of them to portray their products in the most favorable light possible. At the high-end, keeping costs down is usually much less of a concern, and the manufacturers of most high-end amplifiers will, for the best possible sound, usually, avoid the shortcuts and give you all you pay for and even more. Finally, I said that that was just one example of why better performance can cost disproportionately more to get, and that more examples would be coming, along with the reasons for them, in the next installment.

Well, here I am, back with more examples as promised. And what could possibly be a better source for those examples -- at least the first few -- than cables, the part of the hi-fi industry that, more than any other that I know of, is constantly bashed for being overly expensive for no reason at all.

Just by way of background, for those of you who may not know, I started and owned XLO -- the cable brand recognized as "the best in the world" -- until 2002, designing all of its products until I sold the company, and even still, on a consulting basis, having some influence on their product design since then.

Cables are the perfect products for demonstrating the "new inverse square rule," and the best way to illustrate that is the fact that speaker cables, one of the main cable categories, are currently on the market for anywhere from about 13 cents a foot for Radio Shack 24 gauge (Model: 278-1301 Catalog #: 2781301) to -- I'm told, but even I find it hard to believe -- $50,000 for an 8-foot pair of the top-of-the-line product from one well-known high-end brand.

There are at least three reasons why that 13-cent-a-foot cable can be offered for so little money. One of them is that to make a full 1,000 feet of 24 AWG stranded wire takes only a little over 19.2 ounces (1.2 lbs. or 544.8 grams) of copper. With the cable having two conductors (positive and negative or "going" and "coming") that still means that 500 feet of it -- well more than 1½ times the length of an American football field -- can be made from that very small amount of copper. Furthermore, the copper that's used is (although it's not stated) almost certainly ETP ("Electrolytic Tough Pitch," also known as C11000), the most common (read "cheapest") grade of copper currently available. As of February 18, 2015, the commodity "spot" price for non-recycled copper was US$2.58 per pound, which means that at that current price the manufacturers of Radio Shack's $0.13 a foot speaker cable have only about six tenths of a cent per foot tied up in copper. (Copper =US$2.58 per pound. US$2.58 x1.2 = US$3.096 = 1,000 feet of 24 AWG gauge wire. 1,000 feet of wire ÷ 2 = 500 feet of 2 conductor cable. US$3.096 ÷ 500 feet = US$0.006192)

Back when I owned XLO, ETP wire wasn't US$2.58, but was less than US$1.00 a pound. By way of comparison, even back then, the "6 nines" (99.9999% pure Laboratory Grade™) copper we used for all of XLO's premium cables cost us more than 40 dollars a pound. And because, instead of 24 AWG gauge, even our least expensive speaker cables were 12 AWG, we got only 25 feet 3.3 inches (7.7 meters) of two-conductor cable per pound of copper. If you work it out, you'll see that, even at pre-2002 prices, our cost for the copper we used for even the least expensive of our premium cables (XLO Reference Series and up) was more than 250 times more expensive more than that for the Radio Shack cable today. (1 pound of copper = US$40 = 25.276 feet of two conductor 12 AWG cable. US$40 ÷ 25.276 = US$1.583. US$1.583 ÷ US$0.006192 =255.58)

XLO's insulation was also vastly more expensive. The Radio Shack cables -- like the vast majority of all cable manufactured today -- use PVC (polyvinyl chloride) insulation. All of our premium cables used one or another type of DuPont® Teflon® for every insulation function, both internal and external, even including the cables' braided outer jackets. At the time, we could have bought PVC for around US$0.80 a pound. Instead we paid, in a volatile market, anything from US$12.00 to US$21.00 a pound for PTFE, FEP, and PFA Teflon®.

Was it worth it? Our customers and the reviewers certainly thought so. At US$27.50/foot, our Reference Type 6 speaker cable sold for 211½ times as much as Radio Shack's 13-cent-a-foot cable. Did we overcharge? No, as you've seen, our manufacturing cost, just for the copper, was more than 255 times as much as that for the Radio Shack cable, so it may even, proportionally, have been a bargain. Was its performance 211½ times better? Almost certainly not, but as I said, there's a new inverse square rule out there, and it applies to hi-fi.

We'll finish this off and more in the next installment. See you then.

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