The Rise and Fall of Onkyo

was going out of business. I also mentioned that the brand would actually live on because other companies had sort of swooped in to purchase those assets before the demise of on Chio, and it appears that the plan is to continue producing equipment using those assets that will presumably carry the Onchio brand names forward. Then I asked if y'all wanted me to follow up on that and do an episode on it, and y'all said, yeah, us at least five of you did, So here we go. That's

that's a bar that I am happy to hit. Now, before I really jump into things, let me give a few caveats up front in this episode. First, there actually are not a ton of great resources that chronicled the history and evolution of on Kio, So there are going to be some gaps in this episode. And we should probably consider any dates I talk about beyond like really formative ones like the founding of the company, to be

more or less approximate. Also, many of the resources I uncovered were obviously originally written in a language other than English, and the translations vary from pretty good to this is unintentionally disturbing. For example, one source I came across described a moment in an on Kio commercial that totally gave me the creeps, and I'm gonna go ahead and read what it said, because should I be the only one to suffer? This is literally how it read. Quote Yoko

Mina Mino and Idol speaks in a moist voice. I want you to like it slowly. This is a scene from the commercial of Radian, a popular mini component system of a Kyo In end quote, yeah, have fun getting that out of your head, because it's been haunting me for days. Anyway. My point is that the combination of scant sources and questionable translations, also some sources contradicting facts that other quote unquote facts that other sources are are listening.

All of this means that we could be jumping around a little bit and taking everything with a grain of salt. Beyond certain things that are pretty certain, I usually would default to the company's own history sources over everything else, thinking well, that's going to be the most reliable. But there's at least one instance where I feel like that was also incorrect, and we'll get to that all right,

back to a Kio. As we'll see, the story of on Kio includes more than one moment where the entire brand could have disappeared, and that only thanks to some other companies was on Kio able to keep going. Sadly, it's luck was bound to run out at some point,

and that seems to be what has happened now. But our story begins back in the early nineteen hundreds, and in fact involves not just on Kio's founder, who is Takeshi Godae, but another really important person in Japanese tech and business, Konosuke Matsushita, the founder of the company that would ultimately become known as Pana Sonic. Konosuke Matsushida became childhood friends with Takeshi Godai after taking a job at the Goodai Bicycle company. Mattsushida would later moved to Osaka

take a job at the Osaka Electric Light Company. Work his way up quickly in that business, and in nineteen seventeen, Matt Sushida would leave to found his own electronics company, initially focusing on stuff like bicycle lamps and light sockets.

This is the company that would ultimately become Panasonic, and it would take a few years for that company to find stability, but after that it grew pretty quickly, and Matt Sushida would eventually bring over his childhood buddy Takeshi Good Eye to oversee a manufacturing facility dedicated to making speakers loud speakers. After World War Two, Matt Sushida's company was actually in danger of being split up by the

occupying forces, primarily the United States in Japan. That was something that was happening to a lot of Japanese companies because Japanese companies had sort of a dynastic structure. There was very much a kind of inherited structure for companies where they would belonged to a family or maybe a small group of families and um. The concern by the occupying forces was that this was concentrating power in a way that was harmful at least to United States interests.

So around that same time, Matt Sushida's company spun off its audio production operations, which gave Takeshi the opportunity to make his own decision to found a company of his very own. So he did, and he called it Osaka didn' ki a kyo kk on Kio means sound acoustics, and Takesh's dream was to create a company that could produce higher quality dynamic speakers than what was typically available on the market in Japan, and he founded that company in

April of nineteen forty six. The next month, on Kio introduced its very first product, but this was not a loudspeaker. Instead, it was a cartridge pickup for record players. This is the part of the record player that has the stylus or needle inside of it. That needle will vibrate as it moves through the grooves of a record, so the needle kind of navigates this canal in the form of this groove, and the variations in that canal cause vibrations

through the needle. Uh and a very small, very sensitive electro magnet in the cartridge would convert the vibrations into a weak electric signal, and then when amplified, that electric signal would be able to drive speakers that could play back the recorded sound represented by those grooves in the record. Super cool technology. It's been around for more than a hundred years now, according to one source, which was a thorough source, but also impossible for me to verify because

I could not find any corroborating evidence. So again, take this with a grain of salt. This original product sold for a three yen in ninet. If that is indeed true, it would have been incredibly expensive. But again, the source I found was one that doesn't even exist online anymore. Actually had to use archive dot org to even get a copy of it. Like I found a link to the source in a forum about on chio. I followed

the link and got a four oh four error. So I went to archive and actually found a snapshot of the uh the link from two thousand and twelve in order to actually read this. And again, like I said, I couldn't find any corroborating evidence. So we're just kind of going to assume that the product was expensive. It would have made sense. You know, electronics typically when they first debut in a market, tend to be very very expensive.

They're expensive to make, and so the manufacturer passes that onto the customer, and thanks to you know, bleeding edge early adopters who have a lot of disposable cash. Then eventually the price comes down because manufacturing improves and you start producing at scale well despite the cost. At least according to this one source, the products sold well enough for to Cache to mark those profits toward developing a loudspeaker research and development division, as well as set money

aside to pay for the construction of a factory. That part is absolutely true because by January, two years after the company had been founded, the company had built its factory. Now, one of the first things that that factory began to produce were speaker cones, which means we should probably take a quick moment to explain what speaker cones are and

what they are for. So briefly, a loud speaker or just speaker for short, takes an incoming electric signal, feeds that to an electro magnetic set up, and that in turn drives a diaphragm or cone to move inward and outward, which creates fluctuations and air pressure that we perceive as sound.

So inside a speaker you typically have a permanent magnet that's attached to the chassis of the speaker itself and suspended in the speaker is a coil of conductive wire, and as electricity moves through the coil, it creates a magnetic field, the magnetic field, and the coil interacts with

the magnetic field of the permanent magnet. And depending on the direction of the current, because we are working with alternating current here, the magnetic fields either repel one another, which forces the coil outward from the speaker, or they attract one another, which pulls the coil inward toward the speaker or the back of the speaker. I guess well, that coil in turn is attached to a cone or diaphragm.

Typically there's a connector sometimes it's a direct connection, but usually there's a a component that serves to connect the coil to the cone, and the cu own is secured to the speaker at the wide end. So if you think of a megaphone, the part where the sound comes out is the bit where it would attach to the chassis, and it's the narrow endo the cone that attaches to the coil. So the movements of the coil push and

pull on this diaphragm. The stiffness of the material of that diaphragm, as well as the size of the diaphragm, will affect the quality of sound that comes out of it. Larger diaphragms can be much louder than smaller ones and generate lower frequencies of sound as well. Your basic subwhiffer has a larger diaphragm than say, a tweeter speaker would, and there's a real art and science to creating the

right cone shape and the right stiffness for speakers. Typically, speakers have a range of frequencies and volumes that they're very good at reproducing. But beyond that range, if you try to go either higher frequency or lower frequency, or turn up the volume more than the speaker can handle, things start to get ugly. And a lot of those factors depend upon the cones material and shape. On Kio, like other companies in the loudspeaker business back in the

early days, was producing paper cones. Paper in this case includes cones that have materials like wool or even synthetic fibers interwoven into them, so it's not you know, it's not like printer paper or notebook paper or anything like that. It is a type of paper just as currency tends to be a special type of paper that has various fibers interwoven into it, so are speaker cones. And soon the company had its first real hit. One early speaker released by on Kio was the e D one hundred.

It had a driver measuring times or about ten inches across, and it was also expensive, more expensive than its nearest competitor according to a Kio itself. And yet despite that expense, it sold well as reviewers praised it for the sound replication capabilities that it had. And from what I can tell, this was just the speaker itself, like just the actual speaker part, not the cabinet that would house the speaker.

Now I could be wrong about that. Maybe they produced an entire cabinet for this, but to me, it sounds like it was more of an O e M product. So O e M stands for original equipment manufacturer. It's a common term in business. These are the companies that make components that other companies used to put into their

own products. So a lot of those types of companies have names that you probably aren't that familiar with because we are not the customers for O e M s, right, we don't go out and buy O E M products

for the most part. I mean, there are places that will sell them, to sell the O e M components where you can do things like do a repair or something to a product, but typically we're more familiar with the consumer companies that the consumer brand companies UM not the O E M s, but other companies are the customers for those O e M s. Uh. If you think of it, Fox Con which is the company that Apple relies on for a lot of the assembly, can

kind of fall into this business to business category. So anyway, all of that would have been an irrelevant tangent if in fact the E D one was a full cabinet speaker product. But all the photos I saw of it have been just for the speaker part itself, as if you had taken a cabinet apart and pulled the speaker part out and just had that. That's what all the

pictures show. So my guess is that's exactly what it was when a Kia was selling them, and some other company would do things like create the cabinets or chassiss that would hold this loud speaker. Now, in nineteen fifty on Kio filed for a patent on nonpressed cone drive unit technology. All right, this brings us up to pressed versus nonpressed That refers to the process of making speaker cones.

Press cones typically have a more uniform density and stiffness, but they also tend to have a smaller surface area than non pressed cones. So nonpressed cones, while not being quite as consistent and sometimes having some quality issues, are able to move more air, and they could be louder than a similarly sized pressed cone. At least that's what

I've come to understand on the matter. I started going down the rabbit hole of this and quickly discovered that speaker cone technology can be treated with a complexity and reverence I would normally associate with quantum physics. Well, we've got a lot more to say about on chio before

we get any further. Let's take a quick break, all right, My understanding about pressed versus non press cones really, non press cones, mostly we can just say, tend to be more power efficient and can produce louder sounds than similar sized pressed cones, But they also vary in quality, and therefore you cannot be absolutely certain that you're going to get the absolute best from a non pressed cone nt This was also when on Kio introduced the on Kyo o P six seventy, which was a high fidelity audio

system complete with four speed turntable. And if you're like a lot of folks, you might be saying, wait, a turntable with four speeds. I think most people who have played with turntables they know that there are two standard speeds that you pretty much find on every single turntable slash record player that's out there. There's forty five rpm r VM O course, stands for revolutions per minute, meaning the turntable will turn forty five times every minute. This

is usually reserved for seven inch records. Typically they are singles, which means you know, you have like a single song per side of the disk of the wreck, and then you have thirty three RPM, or really thirty three and a third, and this is what we typically use for long play albums or LPs, the larger records. Right, most people are familiar with that. Now beyond that, there are some folks who are probably aware that older turntables in particular often had a seventy eight rpm setting, so it

would turn seventy eight times in a minute. Uh, that has dated back to some of the earliest records. You don't typically find seventy eight rpm records these days. I'm not saying no one's making them, because I'm sure someone out there is, but but these were the early early records. However, did you know And some of you probably do, but I doubt everyone does that. A few systems also included a fourth speed, which was all the way down to

sixteen rpm. Technically it was actually sixteen and two thirds rpm, half the speed of thirty three and one third. If you're wondering why these odd speeds are hitting these these seemingly arbitrary numbers, it actually has to do with the gear ratios that were used in turntables, um, because it's the it's the ratio of these gears that determine what speeds you can have something turned to based upon the speed that the motor works at. And it's really fascinating.

But the reason for of these these numbers, UH really has to do with the capability of an electric motors that turn at a very specific speed and thus, by using gears, you can gear up or gear down that speed. Right. So that's that's why they are all these weird ratios of thirty three and a third or sixteen and two

thirds or seventy eight. Now, when I was a kid, I was convinced that the purpose of these different speeds on turntables was really so that you could turn up any LP or thirty three rpm album into a Chipmunks album, because if you play a thirty three rpm record at forty five rpm speeds everything you know, speeds up and all the sounds get pitched up, so it is hilarious

if you're you know, nine, or in my case, forty six. Conversely, if you play a forty five rpm record at thirty three rpm while then everything slows down and pitches down,

and I can tell you that the effect is often disturbing. Um. I remember in college where my roommate made an entire cassette tape where he he recorded songs played on albums but at the wrong speed, because we had a turntable in our dorm room and a cassette deck with it too, and so one day he just spent he spent the whole day converting thirty three rpm songs to forty five and vice versa, and listening to that forty five rpm recording of the BGS, Stay in Alive played at thirty

three rpm was really the stuff of nightmares. I'm amazed that a horror movie hasn't done that, because it did sound like it was coming from you know, like a psychological thriller or something. Yeah, give it a try if you want, um it's it's it's a juvenile way to

amuse yourself. Highly recommend it. Anyway. The whole thirty three and a third versus RPM story is rooted in different music labels attempting to set the standard and then eventually meshing together so that one format, the forty five would essentially be associated with singles, and the other, the thirty three RPM, would be associated with long play albums. But

that speed really does impact other stuff. So naturally, the faster the RPM, then the faster the turntables stylus makes its way through the groove of a record, right, I mean,

it's turning faster, so the journey takes less time. That also means that if you have two albums that are the exact same ameter, but one is a thirty three RPM and the other is a seventy eight RPM, well the seventy rpm record is gonna play through much much faster, assuming you've you're using the proper playback speed for each record. Of course, the record spends faster, the stylist gets to the end faster, which makes sense. Well. Another thing that

the faster speed tends to do is affect fidelity. Slowing the speed down can impact the quality of the playback sound. If you go slower than normal, then it's going to start to sound worse. Slower speeds produce lower quality audio, is one way to think about it. So that meant that albums designed to be played at sixteen rpm had limitations on sound quality. For that reason, most but not all, of sixteen rpm records were spoken word pieces where the

audio quality wasn't as big of a deal. And I know that was a tangent, but this is tech stuff, and that's what I do. If I didn't described technology, then I wouldn't really be doing the show, right. So anyway, if you weren't familiar with four speed stereos, now you know they could play albums at sixteen thirty three r p M. I'm sure some of you out there have

had experience with these. I don't think I've ever seen a four speed I have seen three speeds, but I don't think I ever at least I definitely never owned a four speed turntable. Now, on Kio was already off to a fast start. By just four years after opening its first factory, it was time to move into bigger digs. The company expanded both its factory space and it's office space. The next year, on Kio re released the e D one hundred loudspeaker, but this time they changed out the

cone material. The loudspeaker had the non pressed cone design in the new version. You know, the original e D one hundred was a pressed cone one. But now on Kio had filed for its patent for non pressed cone technology and was able to incorporate that into the e D one and the improvement and sound quality garnered more positive reviews from critics, so on Kio's reputation in the audio world in Japan was on the rise. Now this

next bit I have to take issue with. According to on Kio's own website, the company introduced a transistor radio in nineteen fifty three called the OS, complete with a speaker cone measuring twenty centimeters across, which was a much larger speaker cone than what you would typically find in transistor radio's at the time. However, the issue I take isn't with the speaker size. That's fine, that's with the

year nineteen fifty three. See the general agreement is that the first commercially manufactured transistor radio was the Regency tr one that didn't hit store shelves until the end of nineteen fifty four, and I cannot find any corroborating evidence that suggests the OS fifty five debuted in nineteen fifty three. In fact, all other sources say that it came out in nineteen fifty five. To keep in mind on Kio's own sources, the one that says nineteen fifty three but

everyone else says no, it was nineteen five. Honestly, five makes more sense. It would fall in line with the fact that the Regency tr one is widely considered to be the first transistor radio that was commercially produced. And also it would make the OS fifty five name makes sense right if the fifty five was in fact a reference to the year in which it came out, nineteen fifty five, and then you wouldn't contradict the earlier fact

about the Regency tr one. So my guess is that the on Chio official website has an error on it in this case, um, either that or everyone has been wrong about what the first transistor radio actually was. Anyway, transistors are super neat because they allowed for a miniaturization, and I've talked a ton about that in past episodes. So the too long didn't listen version is that older radios relied on vacuum tubes to act as diodes and

to serve as amplifiers. A diode is an electric component or electronic component I should say that allows a current to flow in one direction but not to flow in the reverse direction, and vacuum tubes were used for that, and they were used for amplifying a signal, that is, taking a week signal and then boosting that up to a stronger signal. Vacuum tubes are large, and they're also delicate, and they also generate a lot of heat. They're kind

of like light bulbs. Solid state transistors are much smaller than vacuum tubes, and they allowed manufacturers to make stuff like radio sets that were much smaller and lighter than older versions. If you've ever seen like a really old radio set, you know it's a piece of furniture, it's a big, big thing. Typically it would have its own set of legs, kind of like a table, and it

would be a standalone piece. Transistors allowed people to make much smaller radios, eventually pocket size radios, and uh so it was a a truly important development in electronics. It is what allowed us to create manaturized components and have things that didn't take up an entire section of the

floor like televisions and radios and later on computers. Now I'm not gonna go through every product released with a company, at least not in any detail, but the following years saw on Chio expand into speaker chassis manufacturing, and they also created a record player called the Kyo HP ten. From what I understand, this is a record player that has its own dedicated speaker, so you just you know, to put a record on it, you plug it in you that you can play the music straight from that.

It wasn't a component, in other words, it was its own standal own product. The company also got involved in TV set manufacturing around this time. Also, in nineteen fifty five, the company settled on a logo just shy of a decade of the company's founding I couldn't find any other information suggesting that they had created a logo before nineteen fifty five, which is funny. So from ninety five apparently

they didn't have an official logo type. Only a couple of years later the company would actually refine that logo type to quote suit the rapidly changing style of the times end quote. And yeah, this does make sense. Like the fifties and sixties, things were changing very quickly, especially in the world of audio equipment, and you didn't want to get associated with being left behind, right you didn't.

Your company did not want to have this stigma of being stuck in the past because technology was evolving so quickly that in order to remain relevant you needed to change things up. And so it makes sense that even just a couple of years after they first settled on a logo type, they would change it. In ninety seven, the Toshiba Corporation entered into an accepted capital participation with on Kio. So you might say, well, what the heck

does an accepted capital participation mean? While further documentation reveals that Toshiba brought up a lot of shares of on Kyo, a ton of them, like sixty nine percent of the ownership of on Kio went to the Toshiba Group, with the bulk of the remainder left over going to on Kio's founder, Takesh a Go die Um, and some of it going to some other executives and some members of

good Eyes family. See. While on Kio was introducing new products and generally receiving a positive reception for them, the cost of doing business was so high that the revenue coming in wasn't keeping up. So in other words, like, yeah, they had a great reputation in the market, but the market wasn't big enough to support the expansion that on Kio was doing, and so it was costing them more to to do business than they were making in revenue.

So despite having huge success in the market, a Kia was on the verge of bankruptcy and there was a very real possibility that Takeshi would have to liquidate the company and go out of business. So the Toshiba Group represented a lifeline for on Kio, and Toshiba saw the value of incorporating on Kio's reputation for high quality audio

components into Toshiba products. Plus, a Kio was already serving as an O E m for Tashiba for television sets, on Kio was manufacturing TV sets that would later be sold under the Toshiba brand, so there was a chance that if you went out and bought a Toshiba branded television, the actual manufacturer of that TV was on Kio. Also, a Kia was making its own TV sets the Onkio brand, so there were both brands on the market in Japan

at the same time. Now, Toshiba is yet another company that I need to do a full episode on in the future, but I'm going to resist the urge to do it right now because you're already gonna have to put up a lot from me today. Anyway, on Kio's relationship with Toshiba would end up becoming a bit of an albatross thirty years later that, my friends, is foreshadowing. And with that, we're going to take another quick break.

We're back now, getting back to on Kio's history. The company kept introducing new products, mostly in the audio space. Much of the work was in loud speakers, including bookshelf type speakers, which were a fairly new thing at that point. Now they are sort of a go to speaker style. You can spend thousands and thousands of dollars getting high end books shelf style speakers. I know because I've looked

at them. Didn't buy any, but I looked at them and then ultimately said, you know what, I don't think I even have a space that would accommodate the way these speakers would need to be set up so that I could get the benefit from that. And so I'd be spending a lot of money on high end stuff that I wouldn't be able to use properly, and I talked to myself out of it. I'm proud of myself for that. However, on Kio also began to produce full

audio systems. They've done a couple of those in the past, but they really got into it uh in the late fifties and early sixties. That included things like the on Kyo ST four hundred d L stereophonic system in nineteen sixty three and a standalone turntable component in nineteen sixty six called the ST fifty five. The company even branched into making radio transceivers, essentially Walkee to Hokey style radios, and in sixty three, Onkyo manufactured a phonio cardiograph, which

is an actual medical instrument. So they were really diversifying here. They weren't just making high end audio equipment. They were making stuff that was related to audio still but had uses apart from rocking out with the latest record. Now, this was in the beginning of the real high fidelity craze, where they started seeing audio files who would seek out specific components in an effort to put together their ultimate

audio system. So instead of buying an all in one stereo system, they were interested in buying the individual pieces and connecting them together to create what they felt was the perfect sound system. Now I should add that on Chio had been making components since the late nineteen fifties, but it was really in the sixties where we saw the craze really take off. The goal was always to create the best listening experience, but that's a subjective thing.

So I'm just here to tell you there is no real right answer for which system or which uh collection of pieces is the best. It depends on so many different factors, like the kind of music you listen to. Because some components are really good at representing or replicating certain frequencies and volumes that are best for one genre music,

while others are better for a different genre. Plus, listening is a a psychoacoustic phenomenon, and in that our brains are interpreting the sound, so that means there is a filter in our gray matter that affects how we experience sound.

And no two people are exactly the same, So the perfect system for person A is not necessarily going to be the perfect system for person B. You can always hook up components to very sensitive equipment and say, hey, the number on this piece of equipment is better than the number on that piece of equipment, and that might be correct, but doesn't necessarily mean that the experience of listening to the different components is going to make a

huge difference. So I say that because audio files get obsessive about the mathematical association of all the different components from everything from the electrical side to the actual acoustic side, and I get a little squirrel e when I go into those discussions, because I feel like people obsess over things that are largely ephemeral that that we don't necessarily they don't necessarily translate into how we experience the actual output.

So that's a long way of me saying it's okay if you go out there to build an audio system, and you're not going with what someone else says is the absolute best of the best, because it really depends on how you perceive it that it's the system that makes you happy that's the one that ends up being the best, not the system that arbitrarily hits certain you know, electronic metrics necessarily that can have an effect, but you get what I'm saying, alright, So on chios standalone turntable

means that you would actually need to connect this turntable to other components like an amplifier for example, to boost the signal, and then speakers to play back the sound, and on Kio standalone record player, this s T fifty five would be part of the initial audio file craze in Japan. UM At this point, on Kio is still very much a Japanese focused company. They had not really started massive exports to other parts of the world yet, so the st fifty five was valued for its performance

as well as it's simplified, no frills aesthetic. The company continued producing stereo systems as well, adding in new features and refining designs with every passing year. No big shock there, and it got into making headphones in nineteen seventy Most of Onkyo's fame came from its full stereo systems and the individual audio components such as loudspeakers and receivers, turntables, amplifiers, and such. In nineteen seventy one, the company changed its name from Osaka on Kyo k K to simply on

Kio Corporation. Then we get up to nineteen seventy two. A few things happened that year that were really important. For one thing, Akio established the Onkio Germany Facility, which primarily focused on research and development and acoustics, and also served as a base of operations for marketing and distributing on Kio products to Europe. So the Japanese facilities would export products to Germany, which would then be able to

distribute those two retailers in the Europe region. The company also introduced loudspeakers that used titanium instead of paper for the speaker diaphragm, and on Kio got out of the television set business in around nineteen seventy two. This will also be important when we come back to Toshiba more foreshadowing.

At that stage, an Kio was ready to focus completely on producing just audio equipment, its dependence on Toshiba had declined, although Toshiba still owned nearly seventy of on Kio, so between nineteen fifty seven and seventy two, a Kia was kind of acting like a subsidiary to Toshiba, but really starting in nineteen seventy two, an Kio was operating as an independent company. Yes to Toshiba had ownership interest in

on Kio, but was not directing the company. So this would be a key argument that on Kio would make in nineteen seven. Yet more foreshadowing, nineteen seventy two was also when on Kio introduced the INTEGRAE power amplifier, so Integra is another brand name under on Kio. People probably heard of Integral products that came from on Kio. Uh I also recommend that you Google image the Integra ninety one power amplifier because it looks unlike anything else that

was on the market at that time. On Kio described it as having a steam locomotive like design, and I can see that. On Kio continued to expand and opened up manufacturing facilities in Korea, so it started to build out its manufacturing capabilities and in nineteen seventy three, the company debuted the Intech four oh five stereo system, which

supported quadraphonic sound. I've talked a bit about quadraphonics before. Uh. Quadraphonics are essentially a surround sound system that used for or used is four channels, and typically the way you would set up a quadraphonic listening area is you would have speakers at your front left, your front right, your back left, and your back right, and you would be in the middle and each of those speakers would play

back a distinct channel of audio. There were several different quadraphonic formats, which probably impeded widespread adoption of quadrophonic sound because people were using different ways of producing quadrophonic sounds and they weren't all cross compatible. So I'll have to do a full episode on quadrophonics in the future, and maybe I'll even try to record it in a style that mimics quadrophonic sound, if I'm being cheeky. We'll see.

In nine, on Chio established the Onkyo USA Corporation. That subsidiary would serve as a foothold for on Chio sales in North and South America. So, again like the German version, the USA version would import products from Japan and then distribute those to US stores and US retailers at least for several decades now. In nineteen seventy seven, on Kio once again refreshed its logo. The company also introduced the Scepter Speaker system, which I thought was super cool. Uh,

this was really for the serious audio file. So the company offered customers the chance to customize their speakers, and I'm talking like crazy levels of customization. According to a Kio, there were one hundred seventy three different combinations possible. If you had your own idea of what combination you wanted of speaker drivers, enclosure setups, and more, then you could do that through the Scepter Speaker system. On Kio even provided a helpful handbook to guide those who weren't already

obsessively detailed in their approach speeding onward. In nineteen eight one, on Kio introduced the first consumer high speed dual dubbing cassette deck, meaning it had to cassette decks and you could put a you know, a tape that had stuff on it in one, a blank tape in the other, and very quickly dub and and copy tape one to tape two. I'm guessing that that probably set the music industry into a bit of a tizzy, because the introduction of any technology that makes it remotely easier to copy

media tends to put music studios on tilt. In a Kio offered a CD player called the C seven hundred in some markets, so five still pretty early for CD players. It was also called the d X seven hundred and other markets. It featured optical fiber connections between the digital components and the digital to analog converter. UH. The sales pitch for that was that it would cut down on signal degradation between going from digital to analog. You have to go to analog in order to power analog speakers.

So the idea here was that, oh, we're gonna make this pathway as clean as possible so that you get the full benefit of the digital recording UH process. Now we're up to nine, so we could finally find out what all that foreshadowing was about. In the summer of the U S government was proposing a ban on the sale of all Tashiba products in the United States. Why, well, have you seen a little movie called The Hunt for at October or you know, read the book that the

movie was based off of. See in the film, a Russian submarine commander wishes to defect to the United States. This was back in the Soviet Union days, mind you, and the commander is aboard a prototype Russian submarine with a propulsion system that can operate in near silence, which makes the submarine very difficult to detect. Well. The US government, meant, was miffed at Toshiba's subsidiary, the Toshiba Machine Company, for essentially supplying technology to the Soviet Union that would allow

for the near silent operation of submarines. So kind of the same as the Hunt for October, right, They were saying, Hey, you're not supposed to do that. You're not supposed to supply high tech tools to the Soviet Union. We have very strong feelings about that. So the US government proposed a multi year ban on the sale of all Tashiba products in the United States as a result, which is pretty wild, right mighty was the missage thereof the actual

sales happened in the early nineteen eighties. Uh So, Toshiba Machine Company was responsible for that around the early to mid eighties, and then it was uncovered in the late eighties, and that was in violation of this policy the United States had, and that represented a pretty tough choice for the US government. So, on the one hand, the Soviet Union was the hated rival of the United States. The two countries have been in a Cold war for decades.

On the other hand, this was Ronald Reagan's America, and the general philosophy of Ronald Reagan was that government should stay the heck out of the way of business. So you're in a real quandary, right, like, what do you do? You you hate the Soviet Union, but you've also been saying, hey, government should not get in the way of business. And there's a lot more to this story, and maybe one day if I do a Toshiba episode, I'll certainly go

into more detail about all of that. But the part that concerns us is that because Toshiba still maintained a majority stake in on Kio, like it still had that massive amount of ownership of on Kio stock, that put on Kio's business in jeopardy as well, because to the US government, on Kio looked like a Toshiba subsidiary, so it would also get covered by this ban. On Kio hired lawyers who filed a mess with the US government, and those lawyers argued that a Kia was, and always

that mattered, an independent company. Yeah, Tashiba maintained a stake in on Kio. The Akio no longer made televisions for Toshiba. It had stopped doing that in the seventies, and on Kio's products were actually competing against Toshiba products that were on the market. So a Kia was arguing for the survival of its business and pleading with the US government

not to lump it in with Toshiba's own operations. An Kia was able to mitigate the impact of the political scandal on its own business, so it was able to remain afloat. In nineteen nine, an Kio got a new president, takeshe Go Die had led the company from nineteen forty six to nineteen nine. Now I'm not certain if he stepped down, if you retired, if he passed away. I couldn't find any definitive information on that. But the new president was Sunio Otso, who would hold that position until

nineteen so only from nineteen ninety ton. At that point, Naoto Atsuki would take over and he would actually stay on until two thousand nine, so to two tho nine, and then Munnan Nori Otsuki took on the reins, and I wanted to get all of that out of the way to illustrate how one man to Keshi go Die led on Kio for almost forty five years, and then the next three leaders in charge were leading it for the next thirty years, and some for very few, like

four years for the first one. Now we have a few more things we got to cover with on Kio before we wrap things up. In two thousand and twelve, on Kio got another capital partner. This time it was Gibson Guitar Corporation. Now back in eighteen, I did some

episodes about Gibson Guitars. In the nineteen eighties, Gibson was in danger of going out of business itself, but then some entrepreneurs bought the company, reportedly for like five million dollars, and Gibson began to climb out of the hole in a found itself in and in the process began to acquire other companies. So the thought was that diversification was

a great idea. It would help Gibson remain relevant even as tastes were changing in the music industry and people were kind of migrating away from guitar driven music at that point. An Kio was one of the investments that Gibson made around this time. Well, that would end up being a bad move, and I'll explain why in just a moment, but first let's take one last break al right before the break, I said that Gibson would make an investment into a Kio and that would end up

being a bad move. What did I mean by that? Well, Gibson, for many reasons, was again finding itself in financial trouble a few years further in the line, So in two thousand eighteen, the historic guitar company, which had been in operation for more than a century, had to declare bankruptcy.

Gibson would refocus on making musical instruments once it emerged from bankruptcy, and it had to liquidate other assets that had not been profitable and had been outside of that that laser focus, and that meant that, uh, you know, Gibson would actually emerge from Chapter eleven bankruptcy in two thousand eighteen, but in the process, the relationship between Gibson and on Kio was severed, so it only lasted from two thousand twelve to two thousand eighteen, But that also

meant once Gibson went away that on Kio was finding itself in uncertain financial territory. It was really dependent upon UH these relationships it had with Tashiba and with Gibson. So the company made the tough decision to sell off its European operations, the ones that were centered in Germany. They sold it to an Austrian company called a Kipa a q I p A. Akipa is best known for

selling accessories for various electronics. Now, between the time that Gibson purchased a steake in on Kio and the time where Gibson went bankrupt, so two thousand twelve to two eighteen, on Kio also made an investment. On Kio purchased Pioneer Home Entertainment. Pioneer is another famous name in the a VY equipment industry. Pioneer would actually take a nearly fifteen percent steak in on Kio in return. It is customary,

or at least it used to be. I'm not certain if it still is, but it was customary with Japanese acquisitions for each company in a merger to purchase shares in the other company. That's kind of how Japanese mergers work. It's a little different than what we typically see in other markets. So on Kio and Pioneer plan to keep both brands alive. It weren't going to have Pioneer just get folded into on Kio and everything be cave on Kio products. You would have both on Kio and Pioneer

on the market. Now, I'm not sure if this would be the right place to say that this was the beginning of the end for on Chio because on Kio was struggling with something that was affecting the entire audio equipment industry. It wasn't just unique to on Kio's situation. That thing was more and more people were starting to migrate away from stereo systems and stereo system components as they were listening to music because the way they listened

to music was changing. Digital music and streaming were completely transforming the way music works. Uh. Over time, things like smart speakers were taking the place of high end audio systems for pretty much everyone except audio files. Audio files obviously they're obsessed with getting that perfect sound, so a smart speaker is not gonna cut it. Like even the best smart speaker on the market can't even can't even

remotely compare to a well put together music system. But for the mainstream, for the majority of people, that wasn't the case. It was convenience and accessibility and connectivity. Those were the things that were really important, and a lot of companies in the A V industry were struggling to deal with that. You saw companies rushed to try and incorporate various new components in their systems, like Bluetooth connectivity capability,

but they were they were trying to catch up. They weren't staying ahead of the changes in ways we access music, and the problem was that, you know, they couldn't really catch up at that point. There was there were already alternatives on the market that people were gravitating towards. So companies like a Kio, we're really struggling to stay relevant. It wasn't just on Kio that this was affecting. A lot of a V company were seeing massive drops in revenue.

In twenty the rug was pulled out from under on Kio once again. So in the spring of twenty nineteen, there was a company called sound United. Uh. Sound United is kind of like a holding company for several notable

audio brands, including Polk Audio. I would argue Polk Audio is probably the most famous of the brands that Sound United owns, and so sound United was wanting to expand its portfolio of high end, well known a V brands, and it announced its intention to acquire on Kio, and that would include brands like Pioneer and Integram, so all of these were kind of under the Onchio umbrella. Many news outlets actually just went ahead and reported that the deal was essentially done and that was just a matter

of time for the deal to close officially. But this story is one that reminds us that just because something is announced, like an acquisition or a merger is announced, doesn't necessarily mean it's going to go through. Because come October,

all of that changed. Sound United abruptly pulled out of the deal, and in a statement, the Sound United Company essentially said that the two parties were unable to satisfy all of the requirements that were necessary for a deal to go through and ultimately decided to terminate the proposed acquisition. The Pandemics certainly made things even more complicated. It shut down show rooms and stores so revenue took yet another hit, and in twenty Chio made the decision to shut down

on Chio USA. If you remember, that's the division responsible for distributing on Kio products in North and South America.

So instead, on Kio would outsource that job to Vox International Corporation, which is the parent company of Clips k l I p s H. It's a company famous for speakers in Vox International and Sharp Corporation created a joint venture named Premium Audio Company or p a C. Now, through that joint venture, Sharp and Vox acquired sev of on Kio's home audio video business, and that meant the brands, including a Kio and Integra would end up changing ownership to p a C. P a C also negotiated with

the Pioneer Corporation for the right to produce a V equipment under the Pioneer brand as well, so at that point on Kio equipment was actually being under the ownership of p a C, not on Kio itself. Then this year two on Kio Home Entertainment Corporation, which was really the last surviving component of the company that takesh A. Godai founded back in declared bankruptcy. Now this does not impact the Onkio brand, because again P a C now

has ownership of that. In fact, p a C released a statement saying that at the time on Kio went bankrupt, it was essentially performing only as a licensing company, that it was licensing the I P two p a C. And and other than that, it really wasn't doing anything. Well now it's not doing anything, or it won't be doing anything at all because it's declared bankruptcy and I do not expect it to emerge from bankruptcy. I expected to essentially have liquidated all assets to pay off as

much debt as possible. And that's it. So the Onkio brand lives on, but the company that spawned the brand is no more. So here's to you on Chio and your contributions to making audio equipment that raises the performance bar we hardly knew ye, And that's it for this extra long episode of tech Stuff. Actually debated at one point of dividing this into two episodes, and I wait to hear from my producer Tari about whether or not

she's going to make me do that. So if you've listened to all of this in one go, Tari did not make me do that if you have suggestions for future episodes of tech Stuff. There are two ways that you can get in touch with me. One is you go you download the i Heart Radio app. You navigate to the tech Stuff podcast page of the iHeart Radio app. There's a little microphone icon on there that if you if you tap on that, you can leave a thirty second voice message and you can give me a suggestion

for a show, or comments or anything. If you want me to include the audio into an episode, just say so. I prefer opt in. So if you say that you're cool with us using it, then I will use it. And if you don't, then I'm gonna assume you would rather I not. The other way to get in touch, of course, is over on Twitter. The handle for the show is tech Stuff H s W and I'll talk to you again really soon. Tech Stuff is an i

heeart radio production. For more podcasts from my Heart Radio, visit the i Heart Radio app, Apple Podcasts, or wherever you listen to your favorite jokes.