I should add that I don't see any reason why a $500 headphone can't sound as good as a $5000 headphone in principle.

It's just two small drivers and a bit of plastic/metal. Once you get it down pat how expensive can it really be?

Additional price drivers will be cosmetics, etc.

Agreed.  You can always be like the legend Bob Katz and use the EQ to help with the perfect set of headphones for the perfect listening experience (I mean ultimately that is what it's for right?)(obviously subjectively speaking here).

So the general feel I am getting is that while you can get a good amp for not a lot of money, squeezing the last 0.001% out of an amp is going to cost more then squeezing 0.001% out of headphones. Which makes sense to me because amps can have additional components like voltage regulators, constant current sources, balanced operation, etc. Headphones don't really get more components as they improve, it's more of a refinement process.

I should add that I don't see any reason why a $500 headphone can't sound as good as a $5000 headphone in principle.

It's just two small drivers and a bit of plastic/metal. Once you get it down pat how expensive can it really be?

Additional price drivers will be cosmetics, etc.

That reminds me of Sony Playstation 1 and its reputation as an audiophile CD player. When it was new the Playstation was relatively cheap at $250 and sold 250 million units. With those kind of numbers, Sony can afford to put more engineering in their CD player than the typical audio company and get something that performs well. If Sennheiser could sell 10 million I am sure the HD 650 can drop to a sub-$200 price.

Hasn't this been thoroughly debunked over the years?

Yup. Trusted ears and gears found it measured and sounded worse than the hype. My 'theory' was that because it was warm sounding, it made those early lean and analytical CD's sound 'better' or more 'natural'. I never found any talking about super precise the imaging was or how it was hyper clear and transparent. Nope.

Because there's 10,000 times more people willing to shell out $500 than $3000 for a pair of headphones. And similarly 10,000x more people willing to shell out $100 than $500. Assuming general population gets a glimpse of good sound and like it (may be a tall order, but more and more likely all the time with headphones) they'll spend as much on headphones as a good pair of shoes or handbag. Common prices there hoover around $100-$300. If the public demand gets high enough, competitive price pressures should lower prices/improve quality.

Your thinking is very reasonable on this point and I'd like to agree with you. If I remember correctly you posted something along those lines on Innerfidelity a while ago: About the Beats-craze being ultimately beneficial to high-fidelity audio because it got masses of people interested in headphones and willing to spend money on them. Sort of like an entry drug. I can see that, but I'm also sceptical: The reasons people buy Beats are often speculated upon, but they seem to be mostly a mixture of 1.) celebrity branding, 2.) fashion statement (if all the cool kids have it, who are you to walk around with a bland ol'Senn?) 3.) the 'idea of BASS'. Neither of those make it seem likely that the Beats demographic will in numbers upgrade to AKG K7** or Senn HD6** or what have you. In fact I would argue that the very product strategies we have seen from AKG and Sennheiser in the last years indicated their own market research and thinking on the subject: Build good (but not excellent) portable phones that are very fashionable to look at and come with a somewhat pronounced bass response as direct competitors or logical upgrades to the Beats lineup, sometimes with celebrity branding (AKG with all their Tiesto, Quincy Jones etc lines; Sennheiser with their horribly mistaken Adidas branding), sometimes without. None of this competitive focus has however extended to the open circumaural home headphone segment - the traditional concern of audiophiles. If established headphone manufacturers with market and demographics research departements and all that business stuff thought there were a lot of Beats-buyers out there that can be converted to hifi sound at home, surely we would see them release a number of products designed for just such a person: A well designed (both with regards to sound quality and to styling) open-back headphone for home use not more expensive than 500$. So let's see what the big names of the industry have to offer:

Sennheiser: If Sennheiser believed all those Beats buyers were actually audiophiles in the making surely they would have released great new "mid-fi" products to replace the amazing but long-in-the-tooth HD600 and HD650. Alas they did not: The HD700 is considerably more expensive and tuned quite... peculiarly, and the HD800 is >1000$. 0 interesting products for our hypothetical Beats convert interested in the best possible sound out of an open circumaural headphone for home at 500$.

AKG - It only looks a little brighter for AKG whose modus operandi has been the continued rehashing of the K7**-line - and the introduction of the even more retardedly (compared to the HD800) priced K812. Still they seem to be the only company actively trying to gain favor with the Beats crowd by aggressively adopting celebrity branding (Q701) and Beats-inspired-styling (N90Q). Lets see how that works for them.

Beyerdynamic? - Their home offerings consist of the T90 (obviously not targeted at Beats-converts, either with regards to styling nor to sound tuning) and the T1 (>800$). A true successor to the DT880 is still missing. 0 interesting products for our hypothetical Beats convert interested in the best possible sound out of an open circumaural headphone for home at 500$.

Ultrasone? - Not that they have ever been that great, but they have seemingly completely abandoned the open headphone market, going for ever more expensive, luxurious and bad sounding closed portable headphones (The Edition series, the Performance series etc.).

Grado? - Give me a break. You'd have to go back to the last century if you wanted to find any noteworthy change in their product design. And selling their products to Beats-converts is lets just say a challenging proposition. 0 interesting products for our hypothetical Beats convert interested in the best possible sound out of an open circumaural headphone for home at 500$.

Sony? - Was the SA5000 actually the last open headphone they built?!!! Their product lineup is very mobile-centric as well, with the Z7 being the sole exception. And while I enjoy the Z7 a lot it is clearly not pushing the boundaries of technical proficiency but is still way outside the budget for our hypothetical Beats convert. 0 interesting products for our hypothetical Beats convert interested in the best possible sound out of an open circumaural headphone for home at 500$.

Audio Technica? - Same old same old. Fancy closed woodies for the audiophiles with lots of disposable income, closed portable cans for the rest. Oh and gaming headsets. Thats new... They have the open-back AD-lineup which is said to be reasonably good. I dont know how long ago those were last updated, clearly they are not a point of focus for the company.

Pioneer? - Lots of crappy closed portable and "DJ"-headphones. And the open flagship SE-Master1 for >2500$! 0 interesting products for our hypothetical Beats convert interested in the best possible sound out of an open circumaural headphone for home at 500$.

Audeze? - Well the open-back EL-8 might qualify. Its a new design, open-back, with a focus on styling and elegance. But at 700$ its also quite steep for our hypothetical Beats convert.

Hifiman? - The 400i checks all the boxes (open-back, price range, focus on sound quality), but I dont get the feeling that it's been designed to win favor with the Beats-crowd.

Oppo? - In the same boat as Audeze: The PM2 would qualify in every respect except that the price is a bit too steep.

Philips - Well, hey now there is something! The Fidelio line is well designed both with regard to sound-quality and styling and fits into our desired price point! Yay for Philips!

Did I forget any noteworthy manufacturers?... Anyway, the point I'm trying to make is clear:
If headphone manufacturers (especially the big ones with departements doing market research etc) really thought that the Beats customers were audiophiles in the making ready and willing to be converted to high-quality open-back home headphones, surely we would see a lot of activity in that product segment. The exact opposite is the case. For people looking so get the best sound out of an open-back headphone for home use the options today are the same as they were 10 years ago: The Sennheiser HD600/650, the AKG K701 or the Beyerdynamic DT880(/T90). On the other hand we see tons of fashionable closed sets for portable use with mediocre to good soundquality: It seems to me that the manufacturers themselves have quite clear a perspective on the Beats-crowd. Judging from their product launches and development focus in the last 5 years only Philips seems to be interested in building fresh products for home use not over 500$. Let's pray to god their efforts pay off and other manufacturers follow suit.


Instead I feel like the manufacturers have adopted the following strategy:
Release great sounding and technically proficient headphones for audiophiles at retarded prices (>1000$) and use a tiny little bit of trickle down technology to build numerous stylish closed and portable headphones to compete with Beats headphone s. The 200-600$ home hifi market - formerly the place where flagships lived - seems to have been largely abandoned. Oh... I do hope that I'm wrong and you're right, Tyll...