There’s been a bit of a paradox in the world of consumer audio for the past few years. Customers are springing for pricey headphones and wireless speakers that are capable of providing great sound. But at the same time, they’re ditching CDs and high-quality digital downloads in favor of streaming audio, which can be lower quality, from services such as Pandora and Spotify. Audiophiles have rebelled and are now embracing new high-resolution digital-audio formats and players that are promised to deliver greater fidelity.

So what does it all mean to the everyday music lover willing to spend a little money to get great sound but confused by all of the formats, services, and crazy lingo of the audio world? We’ve crunched the numbers on streaming services, found some great gear, and tested standard music files vs. fancy new formats. We also had experts and amateurs listen so that we could bring you some answers.

Audio streaming services have become enormously popular. Streams rose almost 55 percent last year, while sales of CDs and digital downloads fell 15 percent and 13 percent, respectively, according to research firm Nielsen. And streaming can be a pretty sweet deal. Instead of the limited number of songs that fit in your phone’s memory, a streaming service can run in apps on your phone, tablet, or computer, and put millions of tunes at your fingertips at little or no cost (See our Streaming music services comparison chart).

But streaming audio raises a serious question for music lovers: Are you sacrificing quality for convenience? Some music fans—including rocker Neil Young, who’s backing the Pono high-res player and service—believe that sound quality has been on the decline since the CD replaced the LP. Others consider that shiny disc the benchmark for top audio quality because it was designed to capture all frequencies to the limits of human hearing.

Check our buying guide and Ratings for Wi-Fi and Bluetooth speakers and headphones.

Both camps agree that streaming music and highly compressed AAC and MP3 files—the most commonly used download formats—generally don’t measure up to CDs (or, some would argue, vinyl) for sound quality. Compressed files remove data, and with music files the more data you lose, the less audio fidelity you get. That has spawned a push for high-res audio that promises a better-than-CD listening experience. But embracing high-res audio isn’t simple or cheap. High-res files tend to cost at least twice as much as regular downloads, and you need a player designed for the format. But even without investing in high-res audio, you can improve your listening experience with the right equipment.

Even if you’re not interested in buying in to a new audio format, you can still improve your listening experience. One of the most effective steps you can take is buying new headphones or speakers. (See The right gear for your ear.)

Just $10 or $20 can get you earphones that did well in our tests, offering a big upgrade from the cheap earbuds that come with many devices. For $100 or so, you can get headphones with excellent sound. Just don’t get suckered into buying special “high res” headphones; any great-sounding pair will do.

A good wireless speaker system will range in price from less than $100 to several times that. But you don’t need to go too high-end to get high-quality sound. A few of the models we recommend are modestly priced.

There are two types of wireless speakers: Bluetooth and Wi-Fi. Both will let you play music from mobile devices, and some provide direct access to streaming services and Internet radio stations.

Each type has its advantages. Bluetooth speakers have a 30-foot range. Many have rechargeable batteries that let you take them almost anywhere. All smart phones and many tablets support Bluetooth, and some have NFC (near field communication) technology for pairing devices simply by tapping them together.

Wi-Fi models are designed primarily for home use and are able to play songs from multiple devices on your network. Wi-Fi speakers have a greater range than Bluetooth models, and you can send music to several speakers at once, even in different rooms. But configuring a Wi-Fi speaker to work with your network isn’t as easy as pairing Bluetooth devices. Also, there are competing and incompatible wireless standards (Apple’s AirPlay, Sonos, and proprietary systems from LG and Samsung), and once you buy in to one, you’re stuck with it.

In the end, there is no perfect audio source or setup (except, perhaps, a band sitting right in front of you). Just spend your money wisely, and have faith in the best audio equipment you already own—your ears.

Choose the right device and streaming service to match your audio profile.

Listening lifestyle

Top speaker

Top headphones

Top streaming service

Sound hound
You know the type, still weeping into the protective covers of their 180-gram, remastered vinyl over how bad MP3s sound. If that describes you, you might well be among the first to get a high-res audio player. Pair it with a Sony speaker that supports 192-kHz/24- bit high-res audio via its USB port. The over-ear Grado headphones top our Ratings with excellent sound, and Tidal is a new service with CD-quality streaming.

Sony SRS-X9 Wi-Fi and Bluetooth speaker, $700

Grado Prestige SR325e, $300 Streaming Service:

Tidal, $20/month

Deal hunter
Do you get as much of a kick from a great deal as you do from a great song? TDK’s rugged speaker is our highest-rated Bluetooth model that costs less than $100. Another deal: Panasonic in-ear earphones, which o¢er very good sound for about the price of two lattes. Pandora’s free ad-supported streaming service is a great way to discover new artists similar to those you like. (For $5 per month, you can skip ads.)
 

TDK Life on Record Wireless Weatherproof Speaker (A33), $90

Panasonic RP-TCM125, $10

Pandora, free

Tuneful traveler
This Bluetooth speaker from Bose, offered in five colors, o¢ers good sound and surprising power, and is small enough for your carry-on. The SMS Audio over-ear noise-canceling headphones have very good sound and excellent noise reduction for about $100 less than bigger-name brands. Beats Music is a great on-the-go choice. There are no ads, and you can download songs to enjoy when you’re not near Wi-Fi.
 

Bose SoundLink Color, $130

SMS Audio Street by 50-ANC, $180

Beats Music, $10 per month

Casual listener
If you’re not an audiophile but still care about sound, here’s your game plan. The Sonos speaker sounds great, and you can add speakers to create a whole-home system. The Onkyo earphones are well priced and o¢er very good sound. The free version of Spotify is great; the premium version has no ads and better sound quality, and lets you play songs on demand.

Sonos Play:1, $200

Onkyo IE-FC300, $100

Spotify, free or $10 per month

This article also appeared in the May 2015 issue of Consumer Reports magazine.

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