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Super Audio Shocker: Universal goes hybrid!?! (1 Viewer)

Lee Scoggins

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Friends,
Exciting breaking news here:D: There is a confirmed by several sources story (datelined for tomorrow, reported by Peter van Willenswaard) on Stereophile's website that Universal is going to cease production of regular CDs and start producing hybrid discs for all NEW titles.
See www.stereophile.com/shownews.cgi?1353
This is definitely great news for those of us who love the format.
It is speculated that the strong copy protection of SACD played a role here. (sort of a mixed bag for sure on this specific issue)
This has got to mean that...
(1) Universal is going to focus on catalog titles more for SACD, and
(2) another blow has been dealt to DVD Audio
(3) prices will drop with more capacity and Sony plant additions ('bout time!)
What are your thoughts?
Administrator: Can I edit the title to "shocker"?
 

Lee Scoggins

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Well it looks like a solid story based on my readings so far on the chat sites (I know dubious at best most places) but Stereophile has the lead in on the website still saying unconfirmed. The story itself speaks to several confirmations, however.

So I guess we should be a bit cautious here in things don't pan out.

I'm clearly excited about this news as you can guess. This would be a huge step forward for the format. Universal is a huge label and a collection of many quality boutiques.

Thanks for your interest...
 

Lee Scoggins

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Rachael,
I'm glad part of the SACD crew is still up. ;) My wife is screaming for me to come to bed.
There is also a bit of discussion at Audio Asylum, but we know how that software is!
This is really great news and clearly hits your "hybrid issue" button.
:)
 

Rob Roth

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Interesting and very hopeful. Lee, since you are in the industry perhaps you can provide some insight. I was wondering how the economics of SACD production work out. Obviously CD production is now hugely commodified, with a direct production cost of $.60/recorded cd. What are the numbers for SACD? Is the cost of a SACD pressing plant all greenfield (new construction) or can a CD line be refitted?
I know DSD mastering gear can be pricey, but I thought Sony was subsidizing that.

All this goes to the ? of when the majors might move in a big way. On the one hand they may have some big investments to make, but on the other hand they have copy protection and the chance to reinvigorate sales.
 

Lee Scoggins

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Obviously CD production is now hugely commodified, with a direct production cost of $.60/recorded cd.
Actually this can be as high as $1.20 to $1.50 depending on artwork for independent label. Figure several dollars of profit to label, several in artist royalty and you get to $8-9 that Tower pays and then marks up for you and I to buy.

I am not aware of SACD economics as much since it is new-I suspect retrofitting the lines is not that difficult but I will look into it.

As a management consultant, I understand some things about entertainment companies (this includes opinions):

MY PHILOSOPHY ON WHY THE MUSIC INDUSTRY IS BROKEN

(1) accounting is often flaky and does not represent true cash flow - they obscure results and bury certain costs in hardware related business units. This is similar to Hollywood accounting for movies.
(2) stock investors have caught on and most smart institutional investors are very leery of music companies so their total return to shareholders often is terrible. This further hurts investment efforts
(3) management team quality is very low and turnover is high, often based solely on short term results and not building a long-term franchise
(4) majors tend to reward a few artists with obscene contracts, witness $20 million for Pariah Carey, a non-singer if there ever was one. This causes better and real musicians to have a harder time to get noticed and create more original work. By the way, the majors get to send more votes to the Grammies, so that award becomes just a popularity contest largely tied to sales and publicity, even more so than the Oscar lobbying
(5) radio play reinforces these aweful economics by going more and more to a top 40 format
(6) jazz and classical are dying right now, despite some really quality work being done.
(7) upcoming engineers get taught in school to use big mixing boards with lots of sliders and put a damn mike on everything. All these extra circuits take a big chunk out of a quality sound playback. Classical and jazz engineers and better pop folk understand this "less is more" philosophy but most pop recordings are terrible
(8) consumers have on average very poor sounding CD players so there is more listener fatigue and less interest in long listening sessions and less money spent on music
(9) As a result of the large contracts and "diva ready" entourages, less focus is spent on developing quality young talent.

But capitalism is a wonderful thing. As music sales decrease, there will be shareholder pressure to re-examine the whole ball of wax. Let's hope this happens sooner rather than later. This is where people like Michael Hobson and David Chesky can make a difference - they show that good music can sell and people seek out better recordings. Maybe the answer is to form innovative "SWAT teams" that develop talent in cells for lower costs but get more attention from labels instead the same retread major acts.

By the way, isn't it nice that Michael Green of the Grammies got canned for sexual harassment?

And why did he not suggest that poor quality music led to the drop-off in sales, not file sharing?

This is highly opinionated stuff no doubt, but I formed this opinion working in the industry and working as a strategy consultant the past four years.
 

Mike Broadman

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For what it's worth, Lee, I formed the exact same opinion as a music lover, not working in the business. Some of it is so absurd that anybody who cares a little about what they're listening to can see some of what's wrong.

Frankly, I hope CD sales do go down, forcing a change of direction in the business.

NP: Bill Bruford's Earthworks, CD
 

Jeff Keene

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Wow, this is the coolest news I've heard in a while. I thought it was interesting that the Stereophile article said
As Sony cannot as yet produce hybrids...
Does this simply mean that Sony has no factory that has Hybrid capability? Surely it doesn't mean they made some agreement with someone NOT TO, but only that it was cheaper to produce non-Hybrid discs. Right? Anyone know?
I've been saying for AGES that Sony should have produced Hydrid SACD's only, for big new titles and for the older titles they are already producing. Maybe someone at Universal was listening to me. You're welcome. :D
 

John Kotches

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Given Stereophile's recent track record on news -- and a very serious factual errors on some items posted here with respect to Meridian and SACD players, as well as supposed missed appearances by Bob Stuart, one has to wonder if this is accurate or wishful thinking.

Frankly anyone considering Stereophile as an accurate source of news is mistaken.

Given the huge disclaimer
now for the unofficial news
I for one am discarding rose colored sunglasses until after Universal makes an announcement themselves.

Regards,
 

Lee Scoggins

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I contacted a source close to Philips, who, when asked, confirmed our conclusion. We then confronted Sony and Philips press people with our information. This stirred a few nerves and inspired evasive answers, but no hard denials.
Several sources and no hard denials except from a Universal PR flack?

About as good as journalism gets these days for tracking down sources.

But we will have to see. As my friend Steve says it almost makes too much sense for the format.
 

John Kotches

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Lee,
I'm sorry, I don't buy this argument here:
It is speculated that the strong copy protection of SACD played a role here. (sort of a mixed bag for sure on this specific issue)
Since well over 99% of all titles would be sold to users with traditional CD and/or DVD (without DVD-A or SACD), the argument for greater security is at best a red herring. Greater security only comes in to play on the SACD layer.
Couple that with the ability to create very good analog to digital copies from the SACD layer, and you find that argument very weak.
Then again, we haven't really touched on whether the hybrid plant capacity has improved enough to allow Universal the ability to deliver all new titles as hybrids and it makes for a very shaky piece of information at best.
At worst, it is (once again) inaccurate reporting.
Regards,
 

Lee Scoggins

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At worst, it is (once again) inaccurate reporting.
John,

You say their argument is weak - fine, that is your opinion. BUt you do not know all the facts as do any of us and you assume it is inaccurate reporting.

Let's let the facts come out and judge Peter Van Willenswaard at that point. Even if you got it wrong, based on the Philips and Sony contacts confirming his conclusion, that is fairly powerful evidence.
 

Lee Scoggins

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Then again, we haven't really touched on whether the hybrid plant capacity has improved enough to allow Universal the ability to deliver all new titles as hybrids and it makes for a very shaky piece of information at best.
Why? Sony and Universal are big boys. I am sure they could create the hybrid capacity quickly. The story states that Sony will open a hybrid plant soon in the US. That could certainly handle North American output. Why wouldn't JVC want to get in on this. All you need is higher margins and CD pressers will be all over it.
 

John Kotches

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Lee,
To answer your question: my source on Stereophiles shoddy reporting is what I would consider to be authoritative. It came from within Meridian. Whether you consider my source at Meridian authoritative or not is your business.
Folks from Meridian read the original thread with your passing along the Stereophile misinformation, but chose not to participate. The companies unhappiness exists for several reasons.
1) The information is wrong. There, I said it. Flat out, wrong. No SACD plans, no missed appointments by Bob at the AES in Munich.
2) This could very easily impact Meridians sales negatively --- as people hold off on purchasing an 800/861 combo while waiting for SACD capability which is not forthcoming.
3) Since the information was not properly verified, it should never have been published.
I hope that answers the "what is my source" question.
Will you be posting about Stereophiles retraction and or apology if/when it appears in print?
So, let's talk about security, shall we?
You said:
Sony and Universal are big boys. I am sure they could create the hybrid capacity quickly.
3 years after SACDs introduction, you can count on zero fingers the number of hybrid titles that Sony has delivered. If it were important to Sony, it would have been done already. So it's either unimportant, or they show disdain for their customer base, take your pick.
For those that wonder, I like Lee's passion, and I find him to be an interesting and articulate jousting partner :D
Regards,
 

EricK

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Maybe Sony should reconsider the "SACD" brand....SUPER AUDIO DVD ;)
"SADVD" :D
Seriously...anyone think if it was called SADVD...it would generate more interest...??
Eric.
 

Lee Scoggins

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Security for SACD will be cracked, it is a matter of when not if. Keeping the information close to the vest is a good practice. Once SACD is cracked, it will only be a short period of time before this information moves around the world.
I never said it would be secure. Nothing is secure and I am sure SACD will fall fairly quickly given the climate of copy protection. And I want it to fall if it allows me to retain my fair use copying rights. The issue is the timing. The timing of this could greatly impact Sony's strategy.
 

Rob Roth

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And many of us consider you, John, an informed individual with many valuable contributions to this and other forums. Still, I wonder about your comments that; "The average consumer is satisfied with MP3, its differentiation that is needed. If you think average consumers give a damn about a "better CD", you're misguided. Quality of playback isn't even on the radar screen for average consumers" I disagree; the rapid success of CD- although predicated on largely false claims of superiority over vinyl- is some indication that the average consumer can be persuaded to adopt new formats. Arguably, the case for switching to SACD is even easier: similar format, demonstrable audio superiority on the same material, low switching costs as player prices decrease.

Farther along you argue; "Sony/Philips aimed to produce a "better CD" while the tidal wave of DVD adoption rolls on. CD to the average consumer is dead, long live DVD." Taking this comment in conjunction with the other, you seem to be arguing that there is no special attachment to CD, but the migration from CD will most likely be downward toward inferior formats. As SACD player prices go ever lower- and approach the prices of MP3 players- why doesn't SACD have the opportunity to become ubiquitous in car players and portables as well as in audiophile grade separates?

Lastly, I disagree that Sony effectively twiddled their thumbs by only introducing 2ch SACD. At the same time they were making a concerted effort to line up recording and mastering professionals behind the format.

All angst aside I am quite happy to have access to improved formats- as well as upsampling gear to improve the sound of my legacy collection of CDs. This may not be the best of all worlds, but it is not without some small consolations.

BTW, what have you heard about the new B&K line?
 

TheLongshot

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While I do agree with Lee that MP3 isn't a sign that people want inferior quality (It has always been about portability. Being able to download a song in a meaningful time is a progress, as far as I'm concerned) I agree with John that people aren't looking for a higher quality CD. I think most people are satisfied with the quality of CD, as poor as some of the mixes out there are. They need a reason more tangible that "better quality", since most people wouldn't be able to tell. With CD, that was duribility and being able to track to different songs.

That's where multichannel music comes in. There's one side that says that it is a gimmick, and another that says that it is the best thing since stereo. Whatever you might think of it, it is the big reason to convince people to move to another format, because it is something that people can obviously notice.

Personally, I think Sony has been missing the boat bigtime on this. If they wanted to push the format, they should be putting out hybred SACDs out in numbers, just to get it in the hands of people. Instead, it is relagated to the back of Best Buys everywhere. Also, people aren't buying as many Audio-only players anymore. I bet a lot of people with a surround setup use their DVD players for music.

Meanwhile, more and more DVD players are now capable of playing DVD-A, which are getting in the hands of more and more users. DVD-A (At least in Best Buy) is in the DVD section, readily visible to those who have DVD players. Right now, it looks like DVD-A is positioned far better of the two. Course, that doesn't mean much, since both are still a niche product, but at least DVD-A seems to be trying.

Actually, what will probably be a big push for a new format is the music industry's desire for more "protection" of its product. Course, that will fly with the consumer like a lead balloon by itself. They need a reason to convince the customer. That's where multichannel comes in.

Course, the music industry doesn't want to give the customer what they most want right now: portability.

Jason
 

John Kotches

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Lee,
Let's talk about these, one at a time:
Did Bob give his presentation at AES? If not, why? What happened at AES that Bob Stuart, a big DVDA supporter did not choose to present his case as planned?
I can't find reference to the papers that Bob was supposed to give -- the only thing I can find a reference is to Rhonda Wilson, another one of the really smart people at Meridian, who was participating in a roundtable with respect to DSP. The AES Website is a nightmare to navigate, and the preprints for the 112th convention are not yet available.
With respect to my supposedly "unfair Sony bashing":
Sony sells SACDs hybrid capability very hard. Sony has not yet released any hybrid titles themselves, which is the lion's share of all SACD content. They have had 3 years to develop this capacity themselves and have not. So any customer that wants a Sony title for the house and the car, must buy a copy of both SACD and CD. Too bad that isn't what those pretty, glossy brochures have on them.
So, is it really unfair to compare the results of a company with their audio product, vs the marketing glossys?
I don't think so in fact, I think they should be compared to that claim. I've been saying for 2.5 years that if Sony really believed in SACD they'd be going all hybrid. Based on available evidence, this isn't happening anytime soon.
That's enough typing for now.
Regards,
 

John Kotches

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Rob,

I'll answer your easiest question first:
Taking this comment in conjunction with the other, you seem to be arguing that there is no special attachment to CD, but the migration from CD will most likely be downward toward inferior formats. As SACD player prices go ever lower- and approach the prices of MP3 players- why doesn't SACD have the opportunity to become ubiquitous in car players and portables as well as in audiophile grade separates?
It is possible, but not likely. I keep on hearing about this being the "mass market" phase for SACD, yet there are no SACD walkmen yet, nor are there car SACD players. You can purchase car DVD-A players, and portable DVD-A players.

Truthfully what drives consumers, is convenience. It is not as easy to demonstrate audio improvement as it is video improvement to the average person.

Personally, I think with the availibility of high quality universal DACs the format will become less relevant over time. People will buy the tunes they want and play them back in a universal player. That is, if Sony/Philips deigns to grant licenses for more universal players. They have denied a couple of companies licenses that had intent to produce a universal player, the one that is public knowledge is Denon.

Regards,
 

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