Are "boomers" the key to high resolution audio? I think so... (1 Viewer)

[Michael St. Clair]

Lee,

I'm not accusing you of lying (or otherwise). And I do know you worked as a PA for Chesky. But anything that comes from Sony I regard as pure marketing hype. And anything that comes from any lable that they are only willing to whisper to industry insiders, I don't trust. I'll believe that single-inventory pop/rock discs increase profits when they state it publicly, and quantify it. Or when major labels start releasing unsubsidized single-inventory pop/rock discs...and I don't see anybody pointing out a single title (nor do I see an increase in single-inventory releases).

10,000 or 100,000, it doesnt matter, it's just an example. All logic points to the single-inventory model as not being profitable (whether 1% of sales to to high-res buyers or 10%, it is still a small minority that will be more than offset by increased production costs). That the titles are subsidized only supports this logic.

EDIT: besides, I'm not talking about the single-inventory realm (where you quote pressings of 100,000). I'm talking about the multiple-inventory realm, where the SACD isn't going to sell but a fraction of what the redbook-only version sells. It makes no sense (except in the context of promoting a format) for labels to include an expensive SACD layer that the majority of their buyers don't care about.

There's nothing wrong with multiple-inventory releases, and there's nothing wrong with (for the cause of increasing format awareness) subsidizing releases that would otherwise be less profitable.

 

[Michael St. Clair]

Not true, there is no requirement that the CD be taken out of print. The definition is that it be the only issue of a remastered album.

Those are contradictory statements. By your definition, all hybrids of previously-issued albums are single-inventory. Even SACD mouthpiece Brian Moura doesn't categorize them as such.

 

[Lee Scoggins]

There's nothing wrong with multiple-inventory releases, and there's nothing wrong with (for the cause of increasing format awareness) subsidizing releases that would otherwise be less profitable.

You have done nothing to show that hirez releases are unprofitable and I know otherwise.

Let's just put the argument aside and recognize that we will never be able to gather publicly all the facts that show per disc profitability-that info is too proprietary.

The main subject at hand is that of boomers supporting hirez and I see a lot of merit in that idea and a lot of evidence that Sony is following the strategy and that it will lead at least to a successful niche business.

 

[Lee Scoggins]

Even SACD mouthpiece Brian Moura doesn't categorize them as such.

Brian's not a "mouthpiece", he is just an enthusiast who is the Super Audio REPORTER for HFR. His reporting is quite good and accurate since I have been following it for two years in some detail.

Is Stuart Robinson the DVDA mouthpiece for the same site? No. He is just reporting the facts and some opinions on sonics like Brian.

 

[Michael St. Clair]

Lee,

This is a sad, sad joke.

You never address anything directly. Constant misdirection.

You have done nothing to show that hirez releases are unprofitable and I know otherwise.

I have never, ever made such a silly blanket statement. Please don't put words in my mouth.

 

[Michael St. Clair]

Brian's not a "mouthpiece", he is just an enthusiast who is the Super Audio REPORTER for HFR. His reporting is quite good and accurate since I have been following it for two years in some detail.

No, he isn't just a 'reporter'. He has his own fanboy SACD site on Compuserve. He seems to live to promote SACD. To me, that's a mouthpiece.

Regardless, if the label keeps a separate Redbook-only in print for the CD bin, the high-res disc is not single-inventory.

 

[Lee Scoggins]

You have done nothing to show that hirez releases are unprofitable and I know otherwise.

Okay let me rephrase the statement...you have done nothing to show that any type of hirez release is unprofitable including single inventory, or that going just redbook on single inventory titles would be more profitable.

 

[Glenn Overholt]

I think this whole thing is starting to stink!

From the consumer's end, the selling price isn't +$1.00 - it is $7.00 ($25 compared to $18).

Cute. No wonder their profits are up - and to top it off, this is the same industry that has been having a DECLINE in sales for the last few years.

And no, we can't put SACD in another category. They are CD'a that contain music.

As I said before, if they want to dump the CD's, price them at $2.00 and get rid of them.

I also still can't imagine anyone going into SACD based upon their current audio/HT setup. The SACD's would have to mix the bass sounds over to the sub, because the other 5 can't handle the low sounds. If you think they can, maybe you too can be a BOSE customer.

Glenn

 

[Doug Pyle]

I have a slightly different take on this whole issue, and it is not authoritative - just speculation. I suspect that the baby-boomers in the Music Industry understand well the baby-boomer consumers, but completely misunderstand the Generation Y consumer. So, if I am the target for the hi-rez marketing, they got me in bulls-eye:

I'm just old enough as a 40-something who:
1) won't download compressed music because to my generation it isn't ethical, it takes time I don't have, and it sounds awful.
2) paid extra for half-speed mastered LPs, and now pay extra for SACD
3) sometimes interchanges the words "hi-rez" and "hi-fi"
4) still hears pretty well & want to enjoy the detail of fine music the few years before my hearing actually declines
5) can't fathom using a computer to listen to music
6) recently assembled my home theater
7) may re-purchase the best of classic rock I enjoyed while young, while broadening out my collection into jazz and classical music, and
8) can afford it.

So, if I'm typical, maybe Lee's right about the industry knowing what this niche will buy, and continue buying.

But for the Y-ers, here's my different take. I think we baby boomers or -tweeners are at a total loss for comprehending the depth of cultural revolution that has come with the PC age. Gen Y-ers and younger are growing up in a world that communicates, works, thinks and values differently than those of us for whom a pocket calculator in high school was a cutting edge (if geeky) technology. Technology has changed everything - except the thinking of baby boomers. Among those of us who don't grasp the revolution, are the music industry, whose lawsuits against file downloaders is a doomed attempt to halt the revolution, based on values that are absurd when applied against a PC age.

Few people my age are quaking in their boots over the lawsuits. We're happily paying premium to wonder at the fidelity of hi-rez sound. On the other hand, can a whole community of younger consumers be criminal or civil violators of law and ethics?

Of course, this is overgeneralizing - some baby-boomers do understand the age, and many twenty-something consumers appreciate great music in SACD / DVD-A hi-rez sound. But it is not an insignificant thing, that file-sharing networks of college-age friends could be worried about a lawsuit, a kind that was technologically impossible when I was their age. It isn't so much that I wouldn't have done the same, but that I couldn't. Maybe I wouldn't, but I didn't grow up in an age where communication - desirable or undesirable - was instant, everywhere, and unstoppable.

Maybe rap remains popular in part, because it reflects that - it's so much incessant talking - precisely what I and many boomers dislike about it.

Kind of related to the downloading controversy & to boomers not fathoming a wired youth generation, is the recent turmoil at a private high school locally. Accusations were made public that some students videotaped having sex in the school's parking lot, and shared the video with schoolmates. When I was in high school, people had sex in their cars, maybe even in the school parking lot, but nobody had a handycam. The same behavior was possible (sex in the school lot) but the public turmoil was technologically impossible. Same difference in the sharing of music. We shared music in the 60s & 70s by borrowing, maybe even cassette-recording for friends. But what a difference in scale that is from file-sharing.

I suspect the music industry has some painful adjustments to make to succeed in the new age, and the fault is not youthful infringers of copywright. The 'fault' is technological and sociological change to which it will adapt. That adaptation, along with more recent music & more accessible prices, may help success of hi-rez formats with post boomer generations. Love of music, after all, is one thing the generations do have in common.

 

[Phil A]

Why when these discussions are going on does someone feel the need to down someone else or what someone else does. Whatever someone's take is on the boomer's preferences, they should not need to resort to attack someone personally. Brian Moura is merely a reporter for highfidelityreview.com which is probably among the most fair and balanced sources for news on hi-res. I think that given the nature of the format war, it is only natural that the publication would separate who covers what format. I'm sure they want someone who is enthusiastic about SACD or DVD-A and develop a relationship with Sony or Warner or whoever in a particular camp supports one of the other. It allows them access and to get information that may otherwise not be available to any of us. I've not seen anyone call Stuart Robinson names, nor should they, since his roll seems to be reporting on DVD-A. He does a fine job as well.

It is obvious to anyone not living in a closet by looking at the sales nos. for DSOTM that spiked with the SACD release to thousands of more copies per month. I think I remember reading somewhere that at least in the first several weeks it was something like 9,000 additional copies sold. So at least in the back catalog stuff, there is definitely extra profits available and as clearly noted in the AARP article I linked to this is why hi-res marketed to boomers is a good way to keep the niche market going and profits rolling in enough to keep the formats alive. What happens with current artists to current music buyers may be a different story. Neither format will be considered mainstream until current releases are in the format on a regular basis and sell.

 

[Lee Scoggins]

The 'fault' is technological and sociological change to which it will adapt. That adaptation, along with more recent music & more accessible prices, may help success of hi-rez formats with post boomer generations.

I believe that proper education, a love of music, and added features may entice some portion of Generation Y to "graduate" to hirez sound, particularly as price and availability issues get easier or resolved. Single inventory resolves the availability issue, for instance.

Thanks for the comments Doug.

 

[Lee Scoggins]

So at least in the back catalog stuff, there is definitely extra profits available and as clearly noted in the AARP article I linked to this is why hi-res marketed to boomers is a good way to keep the niche market going and profits rolling in enough to keep the formats alive.

I agree and I don't understand why this is disputed.

I think there is a real good case that boomers are playing and will continue play a big role in the format's success and longevity.

My only hope is that both DVDA and SACD do well so we consumers have more titles to choose from. Sting may want his MTV, but I still want my beloved Beatles and Van Morrison in high resolution.

 

[Michael St. Clair]

And that does not include the intangible and future tangible benefits of establishing a new format.

Well, sure, that is what I have been saying all along! And who benefits the most? Those who control the hardware and the format royalties. Hence the subsidies!

 

[Lee Scoggins]

By your own example, profits dropped $55,000 by choosing single inventory.

Not true see above.

You have to remember that SACD pricing has some premium in it that is wider than production costs differences.

As for fixed and variable costs, I am no stranger since I model these almost daily for my new insurance ventures. We simply do not have enough data here to make a reasonable stab at them. The numbers here are mostly variable in in nature on a per disc basis, the only major fixed costs are mastering and editing for a remastering release and I know from my production assistant background that the "Other costs" line above includes these on a reasonable basis.

By the way, it is my experience that music executives will look at releases on a standalone basis primarily. There is additional overhead that is factored in, but even a small label like an independent audiophile label will have generally three dozen or more releases to amortize the costs over. So you get a small per disc charge but this is usually single digit pennies on the dollar.

Where the business runs into trouble is the large upfront signing costs for the largest bands and artists. Often the contracts can be complex and may not anticipate easily handling new technology such as hirez. So there can be situations where an artist may be interested but legal and political moves at the label may slow down the process.

I would like to see artists get a percentage of their own cash flow, in part to encourage them to be prolific in releases and more quality conscious, ie. less 2 tracks of 12 are good, etc.

 

[Michael St. Clair]

This is where our analysis differs. On a single inventory release, you will get 100K units at the $10 price, not 10K * $10 plus the redbook totals as you assume.

Wait.

You have to be kidding me.

Your idea of increasing profits through single-inventory titles is to pass the higher costs (and then some) on to the consumer?

Well, that sounds like a smart thing to do in this declining purchased-music market. Raise prices for your cash-cow CD buyers. Decrease your sales.

Pure folly. Fortunately Universal is seeing the light and have cut wholesale prices by three bucks. They want to grow their CD sales, not reduce them.

 

[Chris_Eff]

Not true, there is no requirement that the CD be taken out of print. The definition is that it be the only issue of a remastered album.

I have to clear up one thing in regard to the single inventory tangent that was started. The Tommy and and GBYR were single inventories in that they are the only way to get a redbook pressing of the "Deluxe Edition" Yes there are older versions of these albums but the only way to receive the "Deluxe edition" is to buy the SACD. And they are stocked in standard and Hi-rez section just like Dylan, Stones and Floyd which have already been established as single inventories.

We now return you to your format war debate already in progress.

 

[Lee Scoggins]

Fortunately Universal is seeing the light and have cut wholesale prices by three bucks. They want to grow their CD sales, not reduce them.

I like this strategy, but Universal is also embracing new formats with a gusto as we suggest. I just wonder why Universal is not more aggressive with offering music for sale. Why does it take Apple to figure it out? Maybe Universal can be a supplier to Apple and not have to worry about distribution...

By the way, remember copying songs from LP to cassette tape to create "road compilations"?

I think one can make the case that more music will be sold as iTunes and other services get more titles and compilations are easily created including the songs you want to hear (over broadband for convenience) straight to your PC, laptop, etc.

There are no lines, no filler track material of questionable performance quality, and you burn a CD that you can immediately enjoy in your car. This is possible now and seems like something the music business should get behind (put away the attorneys) and figure out how to profit from.

Maybe the music labels know the content in part better than some consumers and they can create "suggested" compilations...

Charge a $1 or less per song and you get a competitive offering.

Right now I have been frustrated by some songs I like that are not available for download fees...

 

[Michael St. Clair]

I like this strategy, but Universal is also embracing new formats with a gusto as we suggest. I just wonder why Universal is not more aggressive with offering music for sale. Why does it take Apple to figure it out? Maybe Universal can be a supplier to Apple and not have to worry about distribution...

Huh? Pressplay, Emusic....Universal has been in the download business longer than Apple has. They're on Napster 2.0 now, and probably elsewhere. iTunes is getting a lot of press these days, but Apple is not the pioneer, and they aren't leading the more progressive labels, who have been working on making downloading a viable model for years. Of course, lots of people think Apple invented the hard-drive MP3 player. What Apple is doing is providing excellent user interfaces and marketing themselves very well. And kudos to them for it.

 

[Lee Scoggins]

Huh? Pressplay, Emusic....Universal has been in the download business longer than Apple has.

These services were not user friendly nor do they are missing many different titles and tracks of interest to me. Apple's iTunes was the first to get it right. Read my post, I spoke about Apple "getting it right" not being a pioneer.