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Monster Cable Products Inc.
Company typePrivate
IndustryConsumer electronics
Founded1978; 46 years ago (1978)
HeadquartersBrisbane, California, U.S.
Key people
Noel Lee (Founder & CEO)
ProductsCables, HDMI cable, headphones, audio equipment
Number of employees
600+
Websitemonsterstore.com

Monster Inc. is an American company that manufactures and markets about 6,000 products, but is best known for audio and video cables. It also produces speakers, headphones, power strips, mobile accessories and audio devices for automobiles. The company was founded by an audiophile and engineer, Noel Lee, in 1979 by experimenting with different ways to build audio cables. It grew by doing demonstrations to convince the industry that audio cables made a difference in audio quality and by establishing relationships with retailers that were attracted to the cable's profit margins.

Over the years it created new divisions like Monster Music, Monster Game, Monster Mobile, Monster Photo and Monster Power. In the 2000s, Monster had legal trademark disputes regarding other companies or products that have "Monster" in their name, such as Monster.com and the Pixar film Monsters, Inc. Monster said it needed to defend its premium brand, while critics said it was pursuing litigation against companies that did not have confusingly similar products. It began manufacturing headphones in a partnership with Dr. Dre in 2008, which ended in 2012, and it created other celebrity branded or Monster-branded headphone products.

Tests done by audiophile publications, news reporters and academics reached conflicting conclusions on whether more expensive audio or video cables like those from Monster make a difference in audio or video quality when compared to generic cables. Instead of advertising, Monster offers incentives to retailers and their salespeople to sell the cables. Retailers bundle high profit-margin cables with larger purchases that have smaller margins in order to improve profitability.

History

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Origins

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Monster was founded in 1979 by Noel Lee as Monster Cable Products.[1] Lee, an audiophile and engineer, was experimenting with different copper qualities, wire constructs and winding methods of audio cables in his family's garage and comparing them while listening to Tchaikovsky's 1812 Overture.[2][3][4] He became convinced that audio cables could be engineered to improve audio quality by conducting electricity more efficiently.[5][6] Using a borrowed portion of somebody's booth at the 1978 Consumer Electronics Show, he did demonstrations of his cables in comparison to standard wires. After a positive reception at CES, he quit his job at Lawrence Berkeley Lab and started Monster Cable Products with $250,000 in bank financing.[3][5][7] Monster's first cables were manufactured by Lee by hand and sold door-to-door.[5]

Initial sales were slow, because at the time electronics retailers provided low-cost lamp cords to consumers for free[1][5] or at low prices and audiophiles didn't believe audio cables made a difference in the sound.[6] Monster is credited with creating the market for high-end audio cables in the 1980s[6][8] through Lee's "marketing prowess".[5] He did demonstrations comparing the audio of standard cables to Monster cables for retailers and trained their salespeople to do the same for customers.[3][5][6]

Diversification

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In 1980, Monster Cable Products moved out of Lee's garage and into a San Francisco facility. It also introduced its second audio cable, Interlink. The company grew through word-of-mouth and an increasing number of retailers that carried Monster products. It attempted to enter the market for audio devices for automotive briefly, but withdrew to focus on home entertainment. Its first product intended for the mass-market was introduced in 1987.[9]

Monster re-entered the auto audio market in the early 1990s with a new line of speaker cables and its first speaker product, the Persona One.[2][9] Its high-end M-series product line was introduced in 1992. It also expanded internationally, especially in Asia. Monster had a Taiwanese distributor file its trademark in the region, which led to the distributor continuing to sell products under the Monster brand after their agreement with Monster was terminated. This led to a lengthy legal battle and eventually a settlement.[9] Monster acquired the Entec in-car audio brand in 1998.[7]

Monster's program for retailers was formalized in 1993 as the M4 Dealer Success Program. The "M4" stands for four "M"s: Mix (product mix), Merchandising (displays), Monsterization (training) and Management commitment. In the 1990s, the business grew from $20 million in annual revenues to $100 million.[9] By 1998, Monster was producing 1,000 different products out of a distribution and manufacturing center in Brisbane, California, that was established that year. It had created a record label company, Monster Music, in 1989,[2][7] which was followed by Monster Power for power products such as power cords and surge protectors, in 1998, Monster Game for video game accessories in 2000 and the Monster Mobile division, which markets cell phone and digital camera accessories, in 2001. A Monster Photo product line was created in 2003 that includes power cells, cables and bags for digital cameras, followed by Monster Signature Series Power. In 2004, it created a spin-off called M-Design, run by Lee's son, which sells furniture with electronics built in.[7]

Recent history

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In September 2004, Monster paid $6 million in an agreement with the San Francisco 49ers and the city of San Francisco to rename the football team's home stadium from Candlestick Park to Monster Park for four years.[6][10][11] $3 million of it was given to the football team and the other $3 million to the San Francisco Recreation and Parks Department. Critics of local politician Matt Gonzales said it was inappropriate for the city to sell the name of a public facility to a corporation, and a ballot was passed ensuring that the name of the park reverted to Candlestick Park in 2008.[5]

Monster's first wireless products, a receiver and transmitter for connecting televisions and devices, were introduced in 2008.[12] In 2012, the company changed its name from "Monster Cable Products" to "Monster Inc.".[13]

Following the collapse of the Beats deal with Apple, Monster has sought a new sales strategy, forgoing traditional retail chains in favor of experiential sales at non-traditional spaces. Company founder Lee said [We're looking at] “alternative venues – like Barclays’ Center, stadiums where players can wear the headphone when they go in, and talk about how great the headphones sound. [We can] bring great-sounding music to a sports venue. We’re looking at cruise ships, stadiums, EDM concerts."[14]

Monster changed their business model from selling high end audiophile products to licensing their name starting in 2018. After years of sales declines, Kevin Lee (son of Noel Lee) took the helm.[citation needed] As of 2021, their work force was down to less than 10 people from a height during the Beats days with over 850 globally.[citation needed]

Trademark disputes

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As of 2004, Monster owned about 300 trademarks,[15] 70 of which are related to the word "Monster".[16] By 2009, the company had made 190 filings with the U.S. Patent and Trademark Office.[16] Most filings were to delay potentially infringing trademark applications so Monster could study them. Some were formal oppositions[15] and about 30 resulted in lawsuits.[16][17][18] Most lawsuits were settled with non-disclosed terms.[16] Critics and defendants say that Monster is too aggressive in pursuing trademark protections against companies that do not have confusingly similar products and that it is trying to own a common word, not protect a brand. Monster representatives say they are doing what most "premium" brands do to protect their marks and that their products include things like clothes, mints and music.[16][17]

In the 2000s, Monster had legal disputes over its trademarks with the Discovery Channel for its show Monster Garage.[15] Monster also had trademark disputes with Bally Gaming International over its slot machines, Monster Slots, with Hansen Beverage Co. for its Monster Energy drink, and the Chicago Bears, who use the nickname "Monsters of the Midway".[17] Other trademark disputes include a 2001[19] lawsuit against The Walt Disney Company for products related to the film Monsters, Inc.,[16] and a claim against an online used clothing retailer, MonsterVintage LLC.[16] In 2004, Monster filed a complaint about the trademark application from Snow Monsters, a video website with skiing content for kids. The Snow Monsters owner initiated a lawsuit against Monster pre-emptively.[15] It has also had a trademark dispute with the job site, Monster.com.[17]

In 2006, Monster brought a suit against Monster Mini Golf, a company selling franchise Mini Golf locations throughout the US and Canada. After an unsuccessful legal mediation, Monster Mini Golf launched a grassroots campaign against Monster Cable on the Internet. As a result, Monster received more than 200 complaints from the public. Monster Cable dropped the lawsuit and agreed to pay up to $200,000 of Monster Mini Golf's legal fees.[16] In 2009, Monster Cable CEO Noel Lee said on Fox Business that the company has had to balance their trademark protection efforts with the public's point-of-view.[20]

In March 2008, Monster sent a cease-and-desist letter[21][22] to Blue Jeans Cable, claiming that the "connector portion of the..cable infringes a variety of our client's design patents", relating to a variety of Blue Jeans Cable products. On April 14, 2008, Kurt Denke, the owner of Blue Jeans Cable, sent a public response letter to Monster Cable.[23]

Headphones

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Monster DNA headphones

Monster established a partnership with rap mogul Dr. Dre and Interscope Records in 2007 to design and manufacture the Beats Electronics line of headphones called "Beats by Dr. Dre".[13] This led to a trend among headphone manufacturers to create celebrity-endorsed products.[13][24] Monster created similar partnerships with Lady Gaga for the Heartbeats brand of headphones in 2009, P. Diddy's Diddybeats in May 2010 and LeBron James later that year.[25][26] In 2010, Monster began developing a series of products for the Chinese market that were co-branded with basketball player Yao Ming.[27] According to analyst firm NPD Group, the Beats brand that Monster distributed exclusively grew to own 53 percent of a $1 billion headphones market.[24][28] A 51 percent interest in Beats was sold to HTC in August 2011.[29] At the end of the five-year agreement between Monster and Dr. Dre in 2012, Dre decided not to renew. According to Bloomberg, both parties said the separation was "amicable" but they had disagreements on who deserves credit and the share of revenues. The partnership was responsible for a substantial portion of Monster's revenues. After the split, Monster created its own headphones product line and other celebrity-branded headphones with music groups Earth, Wind & Fire and Miles Davis.[13][24]

Gambling

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In October 2017, plans by Lee and Monster to enter the online gambling space were revealed in an exclusive story by Digital Trends.[30] Citing a new sales strategy[14] for alternative retail venues such as concert stadiums and sports arenas, Lee said a casino would generate revenue while allowing the company a place to sell its electronics. The casino deal[31] connects Monster to the Iowa Tribe of Oklahoma and was signed June 20, 2017, bringing controversial figure Fred Khalilian to the company as the new COO. The gambling site PokerTribe.com will launch on or before December 15, 2017, Khalilian said.[30]

Products

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As of 2010, Monster manufactured 6,000 different products,[4] including headphones, speakers, surge protectors, televisions, and accessories for cars and mobile devices.[32] The company is best known for its speaker cable.[6] It created the market for high-end audio cables in the 1980s. According to a reporter from SoundStage Network, it "has retained a huge lead" for high-end audio cables ever since.[6]

Monster also makes cables for TVs, DVD players, computers, printers, gaming consoles, and cameras, and for audio equipment in cars.[5] As high-definition televisions grew in popularity, the company expanded into HDMI and high-def cables,[33] including a lower-cost HDMI Basic[34] and HDMI cables with five different speed ratings.[35] It also produces cables intended for specific gaming consoles[36][37] and Apple products.[38]

Monster began manufacturing and marketing USB and Ethernet cables as well as power strips and power management products in 2009.[39][40] It's been producing its own line of headphones since 2012[41][42] and also manufactures celebrity-branded headphones.[25][43][44][45][46] Monster sells speakers under the Clarity[47] and Katana[48] brands and mobile accessories like an iPod dock and a line-up of Tron-branded products.[49]

In the 2000s, it entered into markets for "lifestyle products" like amplifiers, speakers and furniture with electronics built-in, as well as wireless products.[6][50]

Pricing and performance questions

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Monster audio cable

Tests by Stereo Review Magazine in 1983 concluded that Monster cables did not make a difference in the sound and were "indistinguishable" from 16-gauge lamp cord. Whether someone claims they can hear the difference varies from person to person.[51] Many reporters and audiophiles have done double-blind A/B listening tests and are unable to hear the difference.[52] According to PC Magazine, Monster is "often accused of selling over-priced cables that you can buy elsewhere for a fraction of the price".[39]

Wired magazine said "with Monster, you pay a staggering premium for durability and good looks".[53] Many reviewers stress that Monster HDMI cables are not needed for lower-resolution televisions[54] or over short distances[55] and that the difference in audio quality is not substantial enough.[56]

Relationship with retailers

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Monster Cable and similar "boutique" cables are a substantial source of revenue for retailers of electronics, such as DVD players and TVs. While the profit margins of DVD players and TVs may be low, the profit margins of Monster Cables and similar products provide supplemental revenue for these retailers. Employees of such retailers are trained to market and bundle Monster Cable and similar products in order to increase profitability.[57]

According to The New York Times, profit margins for retailers can be 40 percent or more[58] and The Consumerist reported that one retailer was selling some cables at an 80 percent markup.[59] This has led to criticisms that sales staff are motivated to sell high-end cable products to customers that don't need them and to be aggressive in order to obtain incentives.[5][6] Monster has responded by saying that markups are determined by the retailer and are usually less than those found on clothing, jewelry and furniture.[55]

As of 1998, Monster spent $13 million a year in training and incentive programs for salespeople. The sales staff are provided data on their performance in selling the cables and top-performers are sent on all-expenses-paid vacations.[60] Monster also hosts its Retailer Awards at CES each year, which the Las Vegas Sun called, "one of the biggest events on the CES party circuit".[44][58][61]

See also

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References

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  1. ^ a b Safer, Will (April 30, 2009). "How Monster Cable got wired for growth". Fortune Magazine. Retrieved February 26, 2013.
  2. ^ a b c Kessler, Ken (2009). "Monster Cable" (PDF). Hi-fi news. Retrieved October 2, 2013.
  3. ^ a b c Wilkinson, Scott (October 12, 2012). "Monster Founder Noel Lee Gets Geeky About Cables". Home Theater Geeks. Secrets of Home Theater and High Fidelity. Archived from the original on April 3, 2013. Retrieved October 11, 2013.
  4. ^ a b Stevens, Cindy (November–December 2010). "Monster's Noel Lee - Down to the Cable". Vision. Archived from the original on 2013-09-28. Retrieved 2013-09-26.
  5. ^ a b c d e f g h i Evangelista, Benny (November 8, 2004). "'Head Monster's' winning ways". San Francisco Chronicle. Retrieved February 26, 2013.
  6. ^ a b c d e f g h i Kessler, Michelle (January 16, 2005). "Monster Move Puts Name on Marquee". USA Today.
  7. ^ a b c d Naomi Hirahara (2003). Distinguished Asian American Business Leaders. Greenwood Publishing Group. pp. 125–. ISBN 978-1-57356-344-4. Retrieved 2 October 2013.
  8. ^ Goldberg, Ron (January 2004). "Monsterize the Industry". Dealerscope.
  9. ^ a b c d Jay P. Pederson (April 2005). International Directory Of Company Histories. St. James Press. ISBN 978-1-55862-544-0. Retrieved 2 October 2013.
  10. ^ Buchanan, Wyatt; Dan Levy (September 28, 2004). "San Francisco/49ers sell rights to name stadium to Monster Cable". The San Francisco Chronicle. Retrieved October 2, 2013.
  11. ^ Russell, Melia. "A Monster fall: How the company behind Beats lost its way". San Francisco Chronicle. Retrieved 2024-01-09.
  12. ^ "Monster Cable Rolls out Wireless HDTV Connection Kit". Associated Press. June 12, 2008. Retrieved October 2, 2013.
  13. ^ a b c d Evangelista, Benny (January 14, 2012). "Monster drops 'cable' from name, expands offerings". The San Francisco Chronicle. Retrieved October 2, 2013.
  14. ^ a b Kaplan, Jeremy (September 18, 2017). "Exclusive: Beaten by Beats, here's how Monster is reinventing itself". Digital Trends. Retrieved November 26, 2017.
  15. ^ a b c d Blevins, Jason (December 22, 2004). "Clash of the trademarks Monsters battle it out". Denver Post. pp. C-01.
  16. ^ a b c d e f g h Stecklow, Steve (April 4, 2009). "The Scariest Monster of all Sues for Trademark Infringement". The Wall Street Journal. Retrieved September 24, 2013.
  17. ^ a b c d Evangelista, Benny (November 8, 2004). "Monster fiercely protects its name". San Francisco Gate. Retrieved September 29, 2013.
  18. ^ Masnick, Mike (November 10, 2004). "Monster Trademark Lawsuits: Can't use the word Monster". Techdirt. Retrieved September 24, 2013.
  19. ^ "Monster Cables sues Disney". Associated Press. September 23, 2001. Retrieved September 24, 2013.
  20. ^ "Fox Business News Interview with Noel Lee". Fox Business. August 9, 2013. Archived from the original on 2021-12-21. Retrieved September 24, 2013.
  21. ^ Denke, Kurt (2008-03-28). "Initial Letter From Monster Cable (w/o Exhibits)" (PDF).
  22. ^ Denke, Kurt (2008-03-28). "Attached Exhibits" (PDF). Blue Jeans Cable.
  23. ^ Denke, Kurt (2008-04-14). "Blue Jeans Cable Response Letter" (PDF). Blue Jeans Cable.
  24. ^ a b c Edwards, Cliff (January 12, 2012). "Beats Electronics is Breaking up with Monster". Bloomberg L.P. Archived from the original on January 13, 2012.
  25. ^ a b Fekadu, Mesfin (June 25, 2010). "LeBron James to Release His Own Line of Headphones". The Christian Science Monitor. Retrieved May 9, 2013.
  26. ^ Fekadu, Mesfin (June 25, 2010). "NBA star LeBron James to release headphones line". The Boston Globe. Associated Press.
  27. ^ Klosek, Nancy (August 10, 2010). "Monster Counts on Yao Ming to Open China's Market". Dealerscope. Retrieved October 2, 2013.
  28. ^ Barry, Virginia (September 14, 2013). "Urbeats by Dr. Dre earbuds deliver on style, substance". USA Today.
  29. ^ Kan, Michael (August 11, 2011). "Update: HTC invests in Beats for better smartphone audio". Infoworld.
  30. ^ a b Kaplan, Jeremy (October 11, 2017). "Legal online gambling is returning to the U.S., if Monster plays its cards right". Digital Trends.
  31. ^ Evangelista, Benny (October 13, 2017). "Monster Products rolls the dice on gambling technology". SF Chronicle.
  32. ^ Company Website, Monster Cable Products, archived from the original on April 28, 2006, retrieved May 9, 2013
  33. ^ Graham, Jefferson (April 28, 2013). "Monster Cable Lowers Prices During Recession". USA Today. Retrieved May 9, 2013.
  34. ^ Taub, Eric (January 8, 2009). "Monster Cable Sells 'Cheap' Version". The New York Times.
  35. ^ Hachman, Mark (September 6, 2007). "Monster Assigns Speed Grades to HDMI Cables". PC Magazine. Retrieved May 9, 2013.
  36. ^ "Monster Cable GameLink 360 Line-Up Review".
  37. ^ Berardini, César. "Monster Cable GameLink 360 S-Video A/V Cable Review (Xbox 360)". Team Xbox.
  38. ^ Laposky, John (March 26, 2007). "Monster Cables Beat AppleTV To Market". Retrieved May 9, 2013.
  39. ^ a b Ulanoff, Lance (January 9, 2009). "Monster Pulls Out of Audio Cables, Goes Green". PC Magazine.
  40. ^ Then, Ewdison (January 16, 2007). "Monster Cable Outlets to Go". Retrieved May 9, 2013.
  41. ^ Cliff Edwards (2012-01-13). "Beats Electronics Is Breaking Up with Monster". Business Week. Bloomberg News. Archived from the original on January 13, 2012. Retrieved 16 February 2012.
  42. ^ Joe Pollicino (13 January 2012). "Monster and Beats Electronics discontinue partnership, audiophiles rejoice". Engadget. AOL Tech. Retrieved 16 February 2012.
  43. ^ Kepler, Adam (October 1, 2009). "Now Thumping, Lady Gaga Headphones". The New York Times. Retrieved May 9, 2013.
  44. ^ a b Williams, Stephen (January 6, 2011). "Monster Meets Miles, Again". The New York Times. Retrieved January 6, 2011.
  45. ^ Davies, Chris (June 25, 2010). "Monster Signs LeBron James for Customer Headphone Line". Slash Gear. Retrieved May 9, 2013.
  46. ^ Josh Quittner (23 July 2008). "Dr. Dre's Headphones: Chronically Good". Time Magazine. Time Inc. Archived from the original on July 24, 2008. Retrieved 16 February 2012.
  47. ^ Denison, Caleb (January 6, 2012). "Monster Clarity HD Model One Review". Digital Trends. Retrieved May 9, 2013.
  48. ^ Aguilar, Mario (October 4, 2012). "Monster Katana Ears-On: This Sounds Too Good to Be Bluetooth". Gizmodo.
  49. ^ Greenwald, Will. "Monster Cable Tron ID Disc iPod Dock". PC Magazine.
  50. ^ Goldberg, Ron (January 2004). "Monsterize the Industry". Dealerscope. Retrieved October 23, 2013.
  51. ^ La Franco, Robert (December 28, 1998). "Selling Sizzle with Sizzle". Forbes. ISSN 0015-6914.
  52. ^ The Quality of Your Connecting Cables Does it Make a Difference, The Anstendig Institute, 1996, retrieved September 17, 2013
  53. ^ Beschizza, Rob (June 7, 2007). "Should you pay $120 for a 2 meter HDMI cable?". Wired. Archived from the original on 2017-08-17. Retrieved May 9, 2013.
  54. ^ Gaylord, Chris (July 23, 2009). "Why are HDMI cables so expensive?". The Christian Science Monitor. Retrieved May 9, 2013.
  55. ^ a b Beschizza, Rob (February 19, 2008). "Monster Cable Defends Overpriced Cables: The Short Form". Wired. Retrieved May 9, 2013.
  56. ^ Hutsko, Joe (February 7, 2008). "A new cable for your Maze". The New York Times. Retrieved September 16, 2013.
  57. ^ "Packing the Deal". CBC. February 20, 2008. Retrieved July 25, 2013.
  58. ^ a b Wortham, Jenna (11 January 2010). "A Smaller Player Mounts Must-See Events". The New York Times. p. 8.
  59. ^ Popken, Ben (February 8, 2008). "Monster Cables, Mosnter Ripoff: 80% Markups". Retrieved September 16, 2013.
  60. ^ La Franco, Robert (December 28, 1998). "High-wire act". Forbes. ISSN 0015-6914.
  61. ^ Arseniuk, Melissa (January 10, 2009). "CES Brings Shimmering Star Power to Invite-Only Crowd". The Las Vegas Sun. Retrieved May 9, 2013.
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