On May 13, 2019, Paradigm issued a press release that stated, in part:
Scott Bagby and John Bagby are pleased to announce the successful purchase of Paradigm Electronics, Anthem Electronics, and MartinLogan Loudspeakers, effective May 10, 2019.
Scott Bagby, one of the original founders of Paradigm Electronics, continues as Chairman and assumes the role of CEO. John Bagby, who has been active in many areas in the business over the last several years, takes on the role of Managing Director.
When I read this, I breathed a sigh of relief. I’ve long admired Paradigm, but for many years have had some concerns about the company.
John (left) and Scott Bagby
Paradigm was founded by Jerry VanderMarel and Scott Bagby in 1982, when the Canadian loudspeaker industry was ramping up and Dr. Floyd Toole was steeped in his groundbreaking research into loudspeakers at Canada’s National Research Council (NRC) -- research in which Paradigm took part. Paradigm charged in with cutting-edge designs for budget speakers that were lauded for their high sound quality and low cost. I vividly recall one conversation I had in 2000 with VanderMarel’s brother, Bill, who handled Paradigm’s marketing from the beginning, including its US distribution. Bill told me how, in the old days, he loved to bring a $500 pair of Paradigm stand-mounted speakers to an audio store, set them up, and have them outperform whatever $2000/pair floorstanders that store might be featuring. Paradigm’s combination of good sound and low prices led to their becoming the biggest, most successful speaker brand in Canada, and one of the most successful in the world.
I first got to know the Paradigm folks in the late 1990s, when SoundStage! toured their two older factories in Mississauga, Ontario. Those facilities were impressive enough, but plans were already underway for a third plant in Mississauga -- a 225,000-square-foot, state-of-the-art factory that could house under one roof several hundred employees and make a lot more speakers. It would also have an anechoic chamber even bigger than the one Paradigm had been using, for more exacting research and design. Paradigm moved into this facility in 2001 and is still there today.
In 1998, Paradigm acquired electronics maker Sonic Frontiers, including their sub-brand Anthem. Paradigm preferred the name Anthem to Sonic Frontiers; when they developed a line of electronics, to be released in the early 2000s, the new models -- including the P2 and P5 power amplifiers -- were all branded Anthem.
SoundStagers at the Paradigm factory in 2002
By the early 2000s, Paradigm and Anthem seemed to be flying high, their products still earning accolades. But in 2003, Jerry VanderMarel told Scott Bagby that he wanted to explore new ventures outside of audio. For a brand that seemed rock-solid, this came as a shock. Scott faced a choice: buy out VanderMarel’s share of the company? find a new partner to take over VanderMarel’s share? or, with VanderMarel, sell it to a third party?
Enter the US investment firm Shoreview Industries. In 2005, Shoreview and Bagby became partners in Paradigm and Anthem, but eventually Shoreview held the majority ownership stake, with Bagby in a noncontrolling role. In 2005, Shoreview and Bagby acquired MartinLogan, which had been founded in 1983, and I began to grow concerned about the future of these companies.
I’ve always felt that the best hi-fi companies are those run by people with a passion for the industry, and are intrinsically involved in the products they make. It’s not rocket science -- if you look at the histories of the best hi-fi companies, you find that each one was run by a visionary who cared deeply about the brand and its products, and had a unique way of making the company a success. But investment firms usually aren’t interested in what’s best for a company, its products, or its customers. Their goal is strictly return on investment -- to maximize that return, they usually need to sell off a company in fairly short order.
I can’t pretend to know exactly how Paradigm-Anthem-MartinLogan was run over the last 15 years, but what should be obvious is that Shoreview didn’t tank any of the brands -- each is still admirable, and has a loyal following. What’s more, Paradigm, Anthem, and MartinLogan all came out with great products in those years -- products that span many price ranges, and moved the brands forward. For example, MartinLogan’s Neolith loudspeaker, which debuted in 2014, costs $80,000/pair (all prices USD). Creating it was a bold move.
The string of great products includes some we’ve recently covered. For SoundStage! Ultra, Aron Garrecht reviewed the Paradigm Persona 7F loudspeaker ($25,000/pair), then bought a pair to serve as his reviewing references. Although Paradigm didn’t make such expensive models in the old days, such products have come to represent even more the high value the brand has built itself on from the start, even as they haven’t lost trace of their reasonably priced roots. Just last year, for SoundStage! Access, Hans Wetzel reviewed the Paradigm Monitor SE Atom loudspeaker ($298/pair), which became one of our Products of the Year for 2018. Ditto the Anthem STR Integrated Amplifier, which Roger Kanno reviewed for this site, and which was also named a 2018 Product of the Year. Granted, the STR costs $4499 -- but that price is reasonable when you consider that it builds on Anthem’s existing amplification platform, and includes the newest version of the world-renowned Anthem Room Correction (ARC) software, which is backed up by decades of R&D.
Those good things have been consistent, but for me the Shoreview years weren’t exactly the same as Paradigm’s early years. In the last 15 years, I’d felt something of a detachment from the brands. Scott Bagby was still there, but in a diminished role, and in the mid-2000s Bill VanderMarel left to pursue other ventures, as his brother had before him. Now, whenever I stopped by Paradigm’s big new factory (usually a few times each year), there wasn’t the same feeling as when the VanderMarels and Bagby were calling the shots. There was a hint of a faceless corporation running things now -- it didn’t feel like the same owner-operated place.
Which is why I found that May 13 press release such good news. But I had questions: What’s their long-term plan? Will anything change? What products are coming next? Or will this just be a quick flip and re-sale? So in mid-summer I sent Scott Bagby an e-mail, asking if he and his son, John Bagby, could meet me to talk about all this. He immediately assented. It felt like the old days.
Scott, John, and I met at the Paradigm factory on one of those hot, humid Ontario days when most find it easier to stay indoors. First we sat and talked in the main boardroom, then toured the factory. I’d met Scott many times before, but John only once, earlier this year, and he’d left a favorable impression. I’d dropped by the factory to present the Product of the Year award for the STR Integrated Amplifier, and to take a photo of someone from Anthem holding the trophy. By then John had worked at Paradigm some five years in another capacity, and had recently become Anthem’s product manager -- he seemed the likeliest candidate for the photo. But when I arrived, he said, “It shouldn’t be me in the picture. It should be the guys at PARC -- they designed it.” (PARC stands for Paradigm Advanced Research Center, a separate facility in Ottawa, Canada.) The following week, when I traveled to PARC and took the picture, I could tell that they appreciated the recognition.
Now I spent two hours with Scott and John, talking about their takeover of the brands, their many new products under development -- and asking Scott point-blank the questions I most wanted answered.
Scott Bagby was frank and forthcoming. He told me that when Jerry VanderMarel left, he (Scott) had seriously considered buying the entire company, but the situation hadn’t been right -- he didn’t want to run it all himself, he couldn’t find a partner willing to invest and run it with him, and at the time, none of his children wanted to be involved.
Scott inspecting a bespoke Paradigm driver
But over time, things changed. Before joining Paradigm, John Bagby had gotten involved in the custom installation of home audio systems, and liked it. He’d found a field in which the Paradigm group was also active, and that he enjoyed and in which he wanted to be involved. Although John wasn’t involved in the design of the STR Integrated, Scott credits him with leading the charge on Anthem’s new STR MDX-8 and MDX-16 multichannel distribution amplifiers, which are aimed squarely at the custom-installation market.
Scott said that he knew his son could “add value” to the company, but would take him on only if John agreed to be his partner -- otherwise, no go. “John gets what’s good for the industry and the company,” he told me. John’s involvement now extends past product development -- he’s moved up from his post as Anthem’s product manager to become the managing director of the entire company.
I asked my next question: Did they plan to sell Paradigm anytime soon?
“My idea for the future is to build the company,” Scott replied; “my goal is not to sell the company. You can’t build a company if you’re just looking to sell it. We’re building it.”
Scott with a subwoofer cone, made in-house
Besides building his company, I have the feeling that Scott, too, will be involved in product development, at least to some degree. I’ve always known him to be a product guy -- someone involved in which products get made, as well as in how they’re made. I reminded him of a conversation we had in the early 2000s, when he refused to add a feature to a product because he thought it would provide no clear benefit to the buyer, even though his marketing department thought it a nice box to tick. “I struggle with the concept of crap,” he’d said. “I want the products we produce to have a real reason to exist.”
This approach has its downsides. Paradigm has long been known for announcing a new model, then taking longer than planned to get it to market -- usually, the delay is caused by their desire to get everything about it just right. That pattern seems unchanged. Earlier this year, I got a look at a new line of loudspeakers that I thought we’d be reviewing by now. According to Scott, he told the engineering crew to go back and make the new models even better. “I want to make sure, when we go from one line to another, people know why they are paying more. And I want to make sure there’s a certain timelessness to it. I want to look at something in eight years and be proud of it.”
That philosophy extends beyond individual product models, to the three companies he and John now run together. “I want us to make a difference. And I don’t want us to be the same as other companies out there.” He slapped the boardroom table.
I see nothing but positive things ahead for the three brands, all of which are developing and releasing new products. One of the biggest surprises was MartinLogan’s introduction, at CEDIA’s Expo 2019 in September, of the wildly ambitious and expensive 40XW in-wall speaker. The 40XW sports eight 6.5” woofers, 16 3.5” midrange drivers, 16 AMT tweeters -- and a price of $20,000 each. But not everything will be expensive -- Scott pointed out to me that “there is a void in the middle range -- around $1000 to $2000 for a pair of speakers.” Don’t be surprised to soon see something new from Paradigm to fill that gap. And during a recent visit to PARC, I saw a team of about 15 feverishly working on new developments.
Scott Bagby feels enthusiastic about the future -- not only the future of his own brands, but of the entire specialist audio industry:
The amount of music being listened to on a given day is one thousand times greater than it was before. Out of that group, there’s a given percentage that will take it further. This is a smaller percentage, but not an insignificant percentage. The goal that I have, the goal I’ve always had, is that if we make better audio, there’s more people we can introduce to better audio -- and then we will become more successful.
That goal bodes well for the Bagbys’ three recent acquisitions, which seem to be in good hands for now and well into the future. It also bodes well for those who care about these brands, and about good sound.
. . . Doug Schneider
das@soundstagenetwork.com