Headphone newcomers carve out success in the premium segment

The headphone market may be the most competitive and saturated in all of consumer electronics. Amazon.com has over 8,700 products listed in the over-ear segment alone.

Products range from giveaways to those costing thousands of dollars. For decades, giant consumer electronics brands such as Sony and Panasonic have competed with audio specialty brands such as Bose and Sennheiser. Their fray has been joined more recently by design-focused brands such as Skullcandy and Beats, the latter of which was famously scooped up by Apple for over $3 billion.

As crowded as the market has been, it keeps attracting new entrants. If you're bringing the noise at this point, though, solely leaning on marketing isn't enough anymore. Instead, finding a common ground for expectations with the right customer segment is more important. And while this strategy doesn't necessarily print money like Beats did when it first entered the scene, it has generated enough to get some different visions off the ground.

I recently spoke with three companies that entered the market within the past five years -- one a respected maker of audio products, the second an aggressive newcomer, and a third taking a boutique artisan approach. All have begun to find a footing with a mix of high quality materials, excellent sound reproduction and a signature tuning years after the Beats explosion that led to a gold rush.

The Crossover: Blue Microphones

If you're going to enter the headphone category, perhaps one of the best places to do it from is a closely related category. But Blue Microphones was in no rush. "We actually sat on the sidelines for a long time. I mean years, and years, and years," admits John Maier, the company's CEO.

Maier notes there's a long precedent for microphone companies moving into headphones. "The actual physical process [of moving audio through headphones] is essentially the same as a microphone, just in the opposite direction," he notes, citing brands such as Sennheiser, AKG, Audio-Technica and Beyerdynamic as companies that originally made microphones.

Now facing those companies as competitors, Maier acknowledges how crowded the market has become after the watershed introduction of Beats. "Beats to be honest kind of started to jump the shark a bit. They started to become the sort of thing that was a little less cool."

After the favorable debut of its power amp-equipped $399 Mo-Fi headphones, Blue followed up last year with the smaller, lighter and unpowered $249 Lola, which has inherited just about everything else from its predecessor. In fact, Blue's website now primarily characterizes them as powered and unpowered versions of the same product. The headphones have a unique retro look and great comfort. But with so many products offering excellent audio quality, its value comes from listener preference subjectivity.

"The company that tells you that their microphone or their headphone is flat is probably not telling the truth because it's physically impossible to make it flat or a flat response, but it also probably doesn't sound very good," says Maier, who notes that the sound of Blue's headphones stem from the same kind of audio sweet spot it has pursued with its microphones.

Despite the relatively short gap between Mo-Fi and Lola and a roadmap for future products, Blue remains cautious and doesn't want to risk an inventory glut. "What we don't want to do is just start coming out with lots of different models at different price points and different features. Even with all the companies that have come and gone, it's still a very crowded market."

The Encroacher: Master & Dynamic

Its headphones evoke a bygone era and their tuning reflects the judgement of musicians and audio engineers, but there are many differences between Blue and Master & Dynamic, which introduced its first headphones less than three years ago. The company's founder and CEO, Jonathan Levine, has no background in the audio business although he notes that he had founded a few consumer products companies "that you've probably never heard of."

Like Blue, Master & Dynamic (M&D) was inspired by legendary audio companies that have come before it. "If anything, we were looking to become the next Bose, Bowers and Wilkins, Bang and Olufsen, Sennheiser... companies that have been around for a long time, [and] have been disrupted by Beats. I thought that the consumer was essentially looking for something new."

The company's beachhead product, the $399 MH40, drew attention for its use of premium materials and durable design. It offers a warm sound and excellent comfort. And while the M&D line may embrace a retro design, it has been relatively early to offer a Bluetooth version of its headphones, a prescient move in advance of Apple and other vendors nixing the headphone jack.

Levine says that the company has pursued designs divorced from the trends of the segment. "I think [focus groups] would have pointed me in a very different direction. I think that putting blinders on and just doing something that resonated with me and the people around me became a very important part of that process." The company has even celebrated its design by offering a companion stand to display the headphones when not being used, but Levine insists that he wants his product to have much of its time spent cradling heads instead.

The Artisan: Meze

To Master & Dynamic's credit, consumers aren't the only ones taking notice of its efforts, Competitors are too. One of them is the Romanian team over at Meze, named after its founder Antonio Meze, who praises both the M&D product and business growth. But he is taking a slower road. For more than two and a half years, Meze (the person) spearheaded the design and creation of the $309 "99 Classics" series, sporting an earthy aesthetic with a signature wooden earcup.

Like Blue and M&D, Meze rejected the trendy glossy plastic of lifestyle brands but didn't necessarily aspire to the legacy of well-established headphone brands. "There's a lot of companies that used to do good technical headphones that looked pretty horrible but sounded okay. None of them seem to have any magic in them," says Meze. Instead, he says, he wanted headphones to embody the kind of iconic sound and design he admired so much in his Fender Stratocaster.

Meze started with $5,000 and kept reinvesting, until the point where he could invest in his own tooling, the kind of expense for which many companies go to Kickstarter. But, being a product designer, he was able to optimize for relatively low volumes. He then found success garnering reviews from audiophile-obsessed sites such as HeadMania, InnerFidelity and 6Moons where reviews characterized the sound as fun and engaging with a very wide sound stage for closed back headphones.

Meze says he doesn't mind going to a bigger market eventually, but for now he's content to keep the company focused on knowledgeable users who appreciate quality audio wrapped in quality materials. He has already rejected investment offers out of concern they would disrupt the team. "I actually care about these headphones. So I'm not really looking at it like a business. We're doing okay. But we're not looking to buy islands in tropical places."

Also: Best Headphones of 2020 (CNET)