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Monster Responds To "Monster Cables, Monster Ripoff"

rebuttal.jpgThe Monster Cables Public Relations department sent in a two-page response to our post, "Monster Cables, Monster Ripoff. Without a shadow of a doubt, this is one issue that they are definitely taking seriously. Read their official company rebuttal statement, inside...

Response from Monster Cable on Article in the Consumerist

Monster would like to acknowledge and respond to the publishing of the Monster pricing from an employee at RadioShack in the article titled "Monster Cables, Monster Ripoff: 80% markups."

The article can be misread that consumers are paying inappropriate prices charged by our retailers for Monster Cable products. The article misleads the reader in citing retailer markups of 80% as if the retailer makes 80% profit margin on products that they sell. Anyone in retail knows that one does not calculate profit by markups, but by profit margins made on the sale as a ratio of what they paid for it. So in the example of the 19ft. HDMI-DVI cable that was highlighted as Retail $179.95, wholesale of $99.40, that's a profit margin of 44%, which is totally in line with what retailers choose to sell accessory items like Monster Cable. Also the DVI and the S-Video cable cited are both discontinued products using old cable technology. Most of the products listed in the article are 37% to 39% profit margins. This is much less than profit margins on other consumer products like clothing, jewelry, furniture, and accessories to other consumer products.

It's also misleading when the tone of the article alludes to Monster Cable ripping off consumers, when Monster cannot legally set retail pricing. This is clearly up to the retailer. However in defense of retailers of consumer electronics, it is typical that small items warrant higher profit margins, while large items like TV's have small profit margins. The consumer clearly wins in the electronics category.

We would also like to point out that Monster makes the highest quality cables in the world, but always with a variety of price points for the consumer to choose from. For example, with today's most popular digital connection, HDMI, the consumer has a wide range of performance choices with four models of Monster Advanced Speed Rated HDMI Cables, ranging from $49.95 to $99.95. The performance of each of these Speed Rated cables is independently verified by Simplay Labs www.simplayhd.com, so our customers know exactly the performance they are paying for. In addition, these prices are in line or lower than other high performance cables offered by Monster's competitors at retail locations throughout the country.

There is also a comment about digital cables not making a difference and that the only difference in digital cables is the price. This is simply not the case. HDMI Licensing, LLC, the group that develops the HDMI specification, has published two different cable speeds for the current 1.3 specification: Standard Speed at 2.23 Gbps, and High Speed at 4.95 Gbps, which is known as HDMI 1.3 Category 2. For more information, go to www.hdmi.org.

In fact, Steve Venuti, Vice President of Marketing for HDMI Licensing, LLC, stated in a recent Widescreen Review article:
http://www2.widescreenreview.com/127venuti.pdf

"...HDMI evolves as it continues to react to the demands of the marketplace. With the introduction of HDMI 1.3 in 2006, HDMI doubled the bandwidth of the specification, and with that, gave manufacturers the ability to design products that can output and receive signals at unprecedented levels...And where there is increased bandwidth, there is increased demand on the cable to deliver the HDMI signal."

This clearly states that not all HDMI digital cables are the same. Buying the best cables possible will insure that one always gets the best possible digital picture for the components they own.

For those who want to get the real facts on HDMI, please visit www.monstercable.com/HDMI/advancedhdmi.asp for the following videos:

1. The Constant Evolution of HDMI with Steve Venuti, Vice President of Marketing, HDMI Licensing, LLC
2. Certified HDMI Cable Performance with Joseph Lias, President of Simplay Labs, LLC

For those who want technical information on why there are different levels of HDMI Cables, one can reference the white paper on HDMI at http://www.monstercable.com/HDMI/whitepaper.asp, where you will learn about why different HDMI cables are needed.

For those who want to get an inside look on the testing of Monster's HDMI cables, visit www.monstercable.com/HDMI/advancedhdmi.asp for an eye opening video of Monster's quality R&D and testing.

The digital TV revolution is moving fast, as one sees from the introduction of 240Hz displays from TI and Ultra High Definition Displays from Samsung at CES this year. These advanced displays paves the way for vastly improved high definition components that will need even higher speed HDMI cables, all of which are available today from Monster's Advanced Speed Rated cables.

For those who want to know more about higher definition, Monster and Disney have partnered together on a DVD that educates customers on the various levels of higher definition and how to buy and set up for higher definition TV. The DVD is called The Higher Definition Home Theater Experience, and we would like to offer it at no charge to everyone who is visiting this site by sending your shipping address to the following email: pr@monstercable.com.

Monster has always made the highest quality products at reasonable prices. We stand behind the retailers that offer great service and advice to our customers at a fair profit and we hope that this additional information clarifies some of the confusion that the article might have generated.

Response from Consumerist on Monster Cable Response on Article in the Consumerist

1. As decided in Leegin v. PSKS, this statement, "Monster cannot legally set retail pricing. This is clearly up to the retailer..." is patently false. See "Supreme Court Allows Manufacturers To Dictate Minimum Prices, Screws Consumers"

2. Their response neatly sidesteps a giant section of the original post, so I'll reproduce it here:

The worst part isn't really the markup. Stereo equipment routinely has markups of 80 to 100 to 200% by the time it hits the shelves. It's the initial inflated price, and how gadget stores try to push the cables so hard, telling people that Monster cables offer superior picture and sound then what you would get with another cable. But that simply isn't the case. Our sister site Gizmodo ran a battery of tests and found Monster cables are for the most part, completely unnecessary. (see The Truth About Monster Cable - Grand Finale (Part III), HDMI Cable Battlemodo Resumes, The Truth About Monster Cable, Part 2 (Verdict: Cheap Cables Keep Up...Usually), and The Truth About Monster Cable).
3. So the paragons of the truth about HDMI cables are a Vice President of Marketing, and the Disney corporation?

4. Monoprice.com.

PREVIOUSLY: Monster Cables, Monster Ripoff: 80% Markups

9:18 AM on Tue Feb 19 2008
By Ben Popken
45,572 views
151 comments

Comments

  • Liars.

    Monoprice rules, Monster drools.

  • I've never used Monoprice. It seems like people are having good luck, so I'll check it out next time.

  • Oh well, it was fun while it lasted. Plus, there are plenty of mouth-breathers that are about to upgrade to digital (oh noes, we HAVE to get HD, the gubment told us to! its ok, put it on credit card) and they will happily be ripped off for monster cables.

    Survival of the fittest consumer, I suppose.

  • I picked up a 6-ft HDMI cable from Amazon for like $6. Eat a dick, Monster.

  • They are absolutely right, at least in the sense that the markups are not atypical for the retail industry. 44% margin is very common.

    But really, the cables are still overpriced, even at wholesale, and do not represent a good value. But that's a separate issue entirely

  • [gizmodo.com]

    You may or may not need "monster" cables... for the most part most people do NOT need it. Save your money.

  • If monster cannot set retail prices then howcome iPods all cost the same?

  • Who wrote this dren? I'll tell you who, MARKETING!

    Someone take pity on the bastard and send him a dozen old, blackened, wilted roses, showing how much we cared about his poorly written "rebuttal" that really didn't mask his true attempt to sell his "certified" HDMI cables for over 75% market.

  • Yeah, Monster...go suck a bag of dicks.

  • I hate to sound like I am defending Monster but I don't see what the big deal is in what they are doing. There are plenty of companies out there that position themselves as being a premium product despite being made of the same components/materials as a competitor

    Tiffany sells a platinum & diamond ring at a much higher price than a local store's ring that is of identical quality and design.

    The real villans aren't Monster, its the stores that are lying to the customers about the quality.

    For the record, I have shopped with Monoprice several times and find their price and service hard to beat.

  • I don't really care how they make their magic math work for margins, charging hundreds of dollars for a cable to "improve" a DIGITAL SIGNAL is ripping people off.

  • "Buying the best cables possible will insure that one always gets the best possible digital picture for the components they own."

    Maybe, but buying the cheapest cables possible doesn't guarantee any loss of quality.

    "There is also a comment about digital cables not making a difference and that the only difference in digital cables is the price. This is simply not the case. HDMI Licensing, LLC, the group that develops the HDMI specification, has published two different cable speeds for the current 1.3 specification: Standard Speed at 2.23 Gbps, and High Speed at 4.95 Gbps,"

    Yes, these cables that meet two different specifications are "not the same," and using the cable designed for the low speed specification in a high speed application may lead to signal loss, but this fails to prove that using an inexpensive cable that meets the high speed specification would result in signal loss.

    "'And where there is increased bandwidth, there is increased demand on the cable to deliver the HDMI signal.'
    This clearly states that not all HDMI digital cables are the same."

    ... much like CAT5 Ethernet cables aren't the same as CAT6 Ethernet cables, but there's no point in buying the most expensive CAT6 cable you can buy, because even an inexpensive cable rated for CAT6 will work just fine.

  • The different HDMI standards is what gets me. I tried to hook up my 360 to my new tv via HDMI, but they won't play nice:-(

  • Oh contraire, mon frere! Who does Monster's PR flack think he's addressing? We are Consumerist readers, after all, and know damn well that manufacturers ship products with an MSRP - Manufacturer's Suggested Retail Price. Retailers can discount if they want, but most stay pretty close to the MSRP. And anyone in the consumer electronics industry can tell you that Monster's advanced tecnologies are mostly smoke-and-mirrors.

  • @HRHKingFriday: Hey, what do nasal allergies have to do with this?

  • @coreynyc: I am going to have to agree here. The problem isn't Monster. It is the Best Buy employee who tries to make you think it is necessary.

    As for Monster's claims about HDMI bandwidth. Is the higher speeds required to watch 1080p? If not, as I suspect, then the extra bandwidth is currently worthless (until 2160p or something like that becomes the standard).

  • Can someone please explain how they figure a 44% profit by selling a $99.40 cable for $179.95? I just don't understand the math.

  • Monster is even more useless in my book now.

  • This comes back to the issue of consumer knowledge. Some people really don't know that their gilded cables are a waste, they just know that they need the cables for their device. Though it won't happen, I wish that stores provided ready access to consumer advocate information in these sort of situations.

    I was in Lowes the other day, and I happened to remember that I needed a coaxial cable. I checked the prices there, and it was ~$17 for a 12 foot long cable. Guess how much the 25 foot one I picked up from the dollar store was?

  • "...HDMI evolves as it continues to react to the demands of the marketplace. With the introduction of HDMI 1.3 in 2006, HDMI doubled the bandwidth of the specification, and with that, gave manufacturers the ability to design products that can output and receive signals at unprecedented levels...And where there is increased bandwidth, there is increased demand on the cable to deliver the HDMI signal."

    This clearly states that not all HDMI digital cables are the same. "

    -Is it just me, or does this not say that at all? I read that as devices are now capable of sending and receiving signals faster, and that the cable has a higher demand, not that any cable is better than another cable.

  • i am astonished that they responded - what could they possibly have hoped to gain? not only is their response poorly written, but their failure to address significant issues from the original post reads like an acknowledgment of their truth.

    should have let this one slide, monster. next time, have someone who has at least a passing familiarity with the english language and the tenets of common sense take a look before you send it out for public consumption...

  • Monster can't set retail prices, but they are allowed to offer contracts for binding minimum prices. In other words, the retailer must agree to the prices (usually for some other benefit, such as advertising or a wholesale discount) in order for it to take effect.

    In other words, companies can see uncontracted with no MSRP and the store has only the profit incentive to price above wholesale or companies can AGREE to come to terms with the company and set a minimum (and maximum) price. This is what happens with the Wii (and why there is a shortage) and most other programs. Some cases, like the Wii, a supplier is strong enough (in other words, nintendo has a monopoly on the market for the Wii) that EVERYONE signs the contract, but this just isn't so for monster.

  • I think I'd rather buy 15 $10 cables until I find one to my satisfaction than buy one $150 Monster cable.

    Especially after this rebuttal - it's on principle now. It's painfully obvious that Monster exists only because of the ignorance of many consumers.

  • You'll always have people like Monster staying in business because of the uninformed smacktards that just go to Best Buy, point at a big TV, and tell them to just throw everything in the cart that they're going to need. By the same right, you're always going to have those idiots that keep Monster in business because they either don't care about the money, or they are just too dumb to do the research.

  • The thing that I like the most is that shining a little light on these guys has made them come out and address the issues that all of the posters above want addressed. Love to see arrogant monopolies or near monopolies get their comeuppance. Not by the government ,mind you, but by sharing of information on sites such as this one. Memo to companies : There's no place to hide now that we consumers have this internet thingy...

    Consumerists- Don't let up on these guys one bit !

  • I also don't see Monster as so venomous and evil. They made a relatively benign response to pretty strident claims. That doesn't make them right. I still feel that for the most part they don't provide a benefit to the end user, but that doesn't automatically mean people are ripped off.

    Moreover, the fact that monster makes identical cables for HDMI doesn't mean that they make identical cables for analog purposes. The only monster cables I use are for longer runs of (gasp) analog cabling. I put them in because I was seeing RFI at my old house and they made a difference. What I'm suggesting is that monster made money marketing marginally better analog cables at much higher prices (price selection at work, ppl) and then continued on with HDMI.

    What would you expect that they say? "Uhhh, so guys. Our analog cables were actually a hair better than radio shack but these new digital cables aren't different at all, so please don't buy them and spend your money on other things, like puppies."

    Hell no.

  • @Snarkysnake: how do they have a monopoly again? I mean, it is CLEAR that there are perfect or near perfect substitutes for about 1/2 the price available RIGHT next to the cables at the store. that doesn't really sound like a monopoly to me.

  • Um, yes there are two types of HDMI cables. And that is supposed to mean you need to spend 10x more than is necessary to get a cable? There's a logic disconnect there. You can get both kinds of cable at monoprice for $ vs $$$$ from Monster.

    I'm still awaiting the Monster/BOSE merger that just seems too natural to not happen.

  • Touche.

  • "Anyone in retail knows that one does not calculate profit by markups, but by profit margins made on the sale as a ratio of what they paid for it."

    Actually, Monster is being a bit deceptive here. By their account, a cable that retails for $179.95 and wholesales for $99.40 has a margin of 44%...ain't so! The retailers that I've dealt with for the past 15 years don't refer to "profit margin" but to "margin" (the word "profit" being the key here, as a lot of other expenses also come out of the sale price, reducing the "profit").

    Doing a little old-fashioned, Jethro-styled cipherin', I reckon that on the example used, a retailer grosses $80.55 ($179.95 retail - $99.40 wholesale = $80.55), which, as a ratio of the wholesale price, provides a margin of 81%, not 44% ($80.55 / $99.40 = 81%). The average margin depends on the retail industry...on groceries, the margin is around 2%, while on shoes it can be 100%. Most sporting goods go for around 30-40% margin.

    No matter how you slice it, Monster Cables are an expensive choice for the consumer, without delivering noticeably superior results (in my humble opinion, after replacing a $50 pair of crappy-sounding Monster stereo cables with a much less expensive alternative).

  • #4 is all you really needed to say...
    My brother in law just bought a new TV last week, and they told him at the store that he needed an HDMI cable, which they happily sold him for $50 for a 6' cable. I didn't ask what brand, but I knew it wasn't Monster - too cheap. He didn't need it. He has a 360, but a pre-HDMI flavor of it, which he told the guy who still insisted he needed the cable. He thought that he really needed it to make the TV work. He isn't that technically inclined like 90% of the country is. He called me, I told him to take it back. If he needs one in the future for cable box/satellite/BR/PS3, I told him about Monoprice and never to buy HDMI at any store.


  • Everything Monster said was correct, up until "We would also like to point out that Monster makes the highest quality cables in the world".

    Not at all true. There are dozens of wire companies all getting their bulk wire from the exact same Chinese factory that Monster gets their stuff from. And then there are companies that still make a good portion of their product in the USA.

    They are correct though when they say that margins are very very small on plasma tvs. The pricing right now is very bad for anyone running a mom and pop type retail operation. I had one for 4 years, and we had to make money on things like wire, or else we were done.

    As far as setting prices, pretty much every brand we carried had us sign a dealer agreement. Most of those agreements dictated that we have a minimum price policy. This was set to not only maintain the reputation of the brand, by not making it seem like a cheap discount brand. But it also helped small retailers like myself, because the big guys wouldn't be able kill us by selling it cheaper. It helped us maintain a fair profit level.
    Sure, you as a consumer would like to get the lowest price on everything, as would I. But the fact of the matter is that stores need to make money to stay in business. If you came to my store because we offered better service, and better product than what you could get at Best Buy, you would probably like me to still be in business a year from now if you need help with something. My business was not a charity. It was a business. I can't help you at noon on a Sunday when you are having a big party, and can't figure out how to get the music on on the back deck, if I am out of business.

    So I see the markups on cables 100 percent necessary for survival. You certainly can't stay in business selling a $1,500 plasma TV for $100 profit. After the credit card company takes their two percent, the landlord takes his rent, and the electric company takes their piece, there really isn't much left for many small business owners.

  • The Monster marketing flack that wrote that didn't know the audience he was addressing! Radio Shack/Best Buy price divided by monoprice.com price = large number aka ripoff

    monoprice.com FTW

  • Monster Marketing Manager: Please visit our website, paid for by us with the profits of our hugely overpriced cabled, populated with our marketing spin-speak, for the REAL facts on HDMI.

  • I had a BB guy tell me that the monster hdmi cable was better because it was injection molded, thus the cable wouldn't corrode.

  • Cable quality can make a difference in digital signals. Look at the Cat 6 networking cable that is in use today. If the impedence is not right, or poorly shielded, you can get noise in the cable that causes corruption of the bits, and you lose data.

    On the other hand, Cat 6 cable is less than $0.50/ft. Hmm... Nope, still can't justify Monster's cable prices. Tried though..

  • Yeah, citing the Marketing guy was not the greatest idea.

    Not that it makes what he said wrong, it's just that he's in... Marketing!

  • It's a bit dated, but the folks at McIntosh did a bit of research on types and quality of cabling and found that there really isn't any advantage to the "premium" cabling.
    www.roger-russell.com/wire/wire.htm


  • Image of ElizabethD ElizabethD at 10:42 AM on 02/19/08 *

    ZZZZZZZZZZZZZZZZZZZZZZZZZZZ.

    (tl;dr)

  • what a lame letter!

  • If it's certified to be an HDMI cable, it'll have the same quality regardless of who makes it since a digital signal is a digital signal.

    I would challenge the President or a videophile of his choosing to have 10 HDTVs setup using content of their choice (blu-ray or a live HDTV feed) and see if they can tell the difference between their top HDMI cable and a generic one bought for under $10.

    If they can pass that test, I think it would certainly give their company a lot more credibility. It's also deceitful for them to try and pass a white paper off as credible like they did above. Either that, or their marketing department doesn't know the difference between a white paper and an independent study.

  • I'm sure I was just unlucky but the one time I used monoprice for a USB cable for my printer, the bigger end (is that A or B? not sure) got stuck in one of my USB ports rendering both the port and the cable useless. I don't fault them, and it was probably just bad luck, but personally I don't use them anymore.

  • I replaced every cable in my home theater / PVR setup with Monster "THX Certified" cables. I found the Monster cables at a closeout store for $5.00 / $6.00 a piece. My old cables were the cheapest dollar store crap that you could possibly find.

    I noticed absolutely no difference in picture or sound quality including HD.

    The biggest differences were lots of extra insulation and fancy looking gold connectors on the Monster cables. The insulation may do something for you if you have lots of inteference where you live (2 hairdyers and the microwave running at the same time?).

    The fact that the cables are so fat and heavy can make them difficult to use in some situations.

  • If Monster wants to make Magical Cables that are better for no other reason than the price, I don't care.

    BUT, I don't like how Best Buy and other retailers ONLY offer Monster Cables (and similar high-price-point) cables. Again, I understand the reasoning behind it (a 44% markup on a $50 cable is more profit than a 44% mark-up on a $10 cable), but it's still shitty that I have to go to Radioshack or an electronics warehouse to get regular, normal, perfectly functional cables.

    This weekend, my Monster s-video cable broke (thanks to me being careless). I replaced it with an off-brand cable and have suffered no loss of quality.

  • @bdgbill: Oh yeah! And I hate how thick they are. We've got a tight home theater set-up, and it was made much worse with short, inflexible cables.

  • Hah, I tried to request the DVD and the email they provided send back a failure.

  • Executive summary, translated to English from PR speak:

    "Sure, a retailer might mark up our product 80%. But... but... that doesn't mean that they don't have any business expenses!!!"

    "The high prices you pay everywhere for Monster Cables? We don't set these. We have no idea how everyone prices them so high! And, besides, small electronics usually make big profits!!!"

    "These are the best cables in the world! Although if you compare us to other high performance competitors, there are some places where we're actually cheaper than some of their markups!!! It is true! Some people mark up their cables even more!!!"

    "It isn't true that the only difference between HDMI cables is price. Uh... uh.... oh, look! They've come out with a new type of HDMI cable called HDMI 1.3 Category 2!!!" [side-steps the quality argument and replaces it with an argument on specifications]

    "Look! Someone talks about a new faster specification of HDMI! See? Didn't I tell you? All HDMI cables aren't the same. There are two types. No... not working and defective. Normal and then another standard that is unnecessary for 99% of all TV viewers!!!"

    "Visit our PR videos for the facts!!! Read the whitepaper we put out!!!"

    "You know what? We actually test our cables. Can you believe that? Check out our testing PR!!!"

    "OMG! Our cables are future proof! You'll never need a cable again for ridiculous 240hz displays. Unless they change the format of the connector, then we'll sell you the new version!!!"

    "Look, we'll even MAIL you a free DVD with our PR! We teamed up with Disney so we must be telling the truth!!!"

    "We have the best products in the universe at reasonable prices! (Our reason, HA!) We think that the people who sell them are neat. We're sure we cleared up any ''confusion'' that doesn't match our message, thanks!!!"
    End of translation block

  • just in case monster reads this... there is no point to the pricing of your hdmi cables and most of your car audio cables... you blow the prices completely out of proportion and you know it your hdmi isnt any better than the $20 ones at wal-mart no human can pic up on the speed differences that you speak of. and there are is no t.v. that is really affected by the speed difference its so tiny its ineffective. so all in all eat a dick monster your cables are horribly priced and are not any better so matter how much you think your shit doesnt stink your cables do.

  • Well according to their response, HDMI cables are not all the same and it's important to have a HDMI 1.3 Category 2 for higher bandwidth. Well here I is a nice comparison. Which would you buy?

    $86.99 - Monster Cable HDMI Cable - 6.6' at Circuit City:
    [www.circuitcity.com]

    $3.72 - HDMI 1.3a Category 2 Certified Cable 28AWG