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24.13.232.127
It seems that one in twenty threads on this board (and about one in ten at DVD-Audio) involve a vacuous debate about whether one format or the other is "dead" or succeeding. The debate is vacuous because there is no attempt to define success meaningfully. Let me offer a definition that has some merits and go from there.As a professor of business strategy at a leading business school, I can tell you that the basic rule of thumb we teach students is that a firm or an industry will endure if the value it creates for consumers exceeds the costs of creating that value (at least until something comes along that has a larger value/cost gap.) For those buyers and sellers involved, the market is a success, as they enjoy part of the value that is created.
Does success mean the same thing as size? Well, more people may be enjoying the value in a larger market, but to those reaping the benefits of the smaller market, it makes little difference. For example, the market for fine dining in Chicago is a success, even if way more money is spent at McDonalds. It would be idiotic to claim otherwise. Now on to hi-rez.
I bought into hi-rez because it gives me the greatest opportunity to enjoy classical music. There are already more good recordings available than I have time to listen to, and the gap between what I will consider buying and what I will end up buying keeps growing. If there enough folks like me out there to enable record labels to make a profit and continue to widen that gap, then the format is sustainable. This appears to be the case. Frankly, I don't care if seven hundred bezillion consumers buy into some other format. The SACD format, big or small, is meeting my needs and the needs of dozens of wonderful record labels. That makes it a success.
Follow Ups:
It is called "The Long Tail." It is about the Internet and how changes in Internet retailing have changed business models for media. They are going to post the article tomorrow on their website, I'll post a link when they do.The article is about how music, books, and movies that are not "hits" generate significant profits for media entities. Also about how the model has been changed by retailers such as amazon who link items together (i.e., "people who bought this also bought this...."). It is really interesting stuff and has direct implications for niche formats such as sacd (and for niche music in general).
I really think that SACD and DVD-A are going to be pointless in a few years. As broadband increases, and storage and memory prices keep coming down in price, the whole medium for sound will change. Where the market goes, so too will follow Hi-Rez.I think the whole DSD PCM debate is stupid. Each has its strengths and weaknesses. In the right hands a rcording can sound excellent, even on redbook.
.... how do you analyse the profitability AFTER having spent all the dollars on marketing etc? Seems to me that Sony will be hard pressed to recoup their investment on the retail SACD but the other side of the coin is that DSD was invented in the first place as an archiving medium. So how are those research & development costs allocated between the two?So, I imagine "sucess" could only be guaged by viewing sales of SACDs covering the costs of production. For those like Pentatone who are (very successfully) recycling older analog material those costs are not prohibitive but the costs from zero to completed of a new recording could be difficult to recover in many cases, particularly if dual layer disk production is expensive.
IMO the video future for HD discs is taking the focus off audio. It appears the Sony group are spending up very big on developing their Blue Ray technology with determined efforts to convince a fairly disinterested Hollywood to go their way. Hollywood appears disinterested at the moment because they are doing very well from DVD thank you and see it as a profitable medium for a few years yet.
Contrast that to audio with declining sales all around and it is easy to understand the business decision by Sony to minimise SACD promotion. As far as they are concerned, it has been promoted and released already so it is up to other companies whether or not to hop on their bandwagon.
It is a crying shame DVD-A had to soil the nest for them, just as the DVD-A camp are not pleased with the emergence of SACD. I can handle both formats but for me, SACD has been relatively more successful. However in general audio sale terms and from the point of view of public acceptability, both have failed. Few people even know (or care) they exist :-(
Who knows the future. Sadly it will most likely be resolved by the HD video - Blue Ray struggle with audio being an offshoot rather than the focus.
John
Interesting times
you say, "It is a crying shame DVD-A had to soil the nest for them, just as the DVD-A camp are not pleased with the emergence of SACD. "I dont see how DVD-A can be described as spoiling anyting (except for Sony), it represents a *natural* progression from the CD format (nominally 2ch lossy 44/16.....to mch+2ch 192;96/24 lossless) as opposed to SACD which represents a natural progression of *licensing* revenue for Sony/Philips when their patent on CD expired ca 1995-2000 which had nothing to do, to begin with, with sound quality. It's (SACD) now essentially too different (for patent purposes) to be compatible with the existing PCM infrsctructure (players, production, DSP, etc.) and thus to be of any pratical use to set a sucessfull standard format.
the logic is that *SACD is the spoiler*, i dont know how one could argue otherwise but ill listen.
Hi rez PCM is still PCM. Even my SACD hi-rez PCM transfers have that same old stridency, (slightly reduced), that makes me clentch my fist during massed string passages. The whole point behind SACD is to get *away* from PCM. DVDA is not the most natural of progressions anyway: people *still* have to buy the new players.
Your take on PCM is a remnant of early days CDs and players. Looking at digitized waveforms, and filters output, builds this preconceived idea of PCM "harshness" and what not, it was a result of analog "resistance" when the LPs to CDs shift occured. these ideas take shape because we're wiredup to built consistent theories, at the expense at looking at contradicting facts or staring at ignorance.You hear it but its not in the sound. Ask John if he hears PCM dependent harshness/shrill/"stridency"/blablabla. wakeup Daniel, this is the 21st :-)...unless you want to join other quacks like Meitner and Levinson who claim PCM is deleterious to your health...lol.
Um, no; I didn't realize PCM was harsh until recently when I bought a more revealing system. I have a few 24/96 PCM SACDs that are only slightly smoother. With all your talk about conspiracy theories, natural evolutions, etc; you're quite forgetting that SACD *sounds* better. DVDA should have been a shoe-in but the fact that SACD took hold against the odds proves that both listeners and engineers actually *will* go that extra mile better sound.
what "conspiracy theory"? dont misrepresent what i wrote. And, no, in general for equally well produced SACD and DVD-A, SACD does not sound as good, as it is less accurate, etc.
Conspiracy theory that Sony and Philips are trying to make a little (or a lot of) money. Secret dinner parties in Los Angeles where people get DVDA epiphanies. Dastardly I tells ya--I've never heard of such a horrible thing! Well, at least you didn't use the tired old "Sony's paying everyone to use the technology, etc." With regard to SACD sounding better, my ears are the only ones that count, though I'll trust Renner and Woods over Nona as well. No offense.
DSD Mastered and Analog mastered SACDs are the best. However through my tubed Xindak SCD-2 even SACDs from low resolution PCM can sound quite wonderful though with less realism.Happy listening,
Teresa
as I noted in another post, I wonder if DVD-A and SACD will get passed up by some coming high resolution A/V disc. I'd only consider DVD-A and SACD a "success" if future players still supported those discs, in the way that DVD players still play CDs.
A solid-state plug-in would be more my guess...no moving parts, no "transport" complexities etc. Shoot, the only reason I think it won't be a "download" is that folks want documentation (liner notes, photos etc.), along with the collection/library element. Now, I've got a TON of 'em -- and they will constitute the backbone of my music appreciation at home for my lifetime -- but the future for rotating discs is grim. And that's just the "supply" side. This gets especially complicated when the "demand" side of things comes into play. MP3's and internet downloads have created a paradigm shift for the enjoyment of music in the "emerging generations". Young folks are less likely to take on the habit of purchasing and caring about a "home music collection" the way many of us did in the past.Just my opinion, but in the not-too-distant-future the definition for a "successful format" may become "no format at all".
There will likely be no technical reason to use any discs or mechanical devices. Smartcards and music servers may take over soon.Just got a thought: is this patent related? Will we get a new format five years before the SACD patent expires?
and I also don't know what "component(s)" of the "SACD format" are included. In other words, what is "SACD"...the file format, code algorithm (remember, this is all digital), method of storage "onto a particular style/format of disc"?Whatever the case, perhaps there are a number of patents that could be associated with the "next thing" -- plug-in chips, memory sticks, micro-marbles (joke)...whatever they come up with. But, there is also the coolest patents of all. Namely, the patents around the science of working in the digital domain to get as close as physically possible to the SOURCE, and this would probably center around complicated code algorithms, recording technologies and, ultimately, the ability to "prove" that the most subtle of improvements is, indeed, "patentable". The race to reality...
Unless 100% of all music listeners worldwide use a format exclusively, that format is declared a "failure" and "dead". That's the definition we use around here. Get with the program.
nt
Best Regards,
Chris redmond.
you can measure it by the number of responses you receive to your post.--Jim
*** the basic rule of thumb we teach students is that a firm or an industry will endure if the value it creates for consumers exceeds the costs of creating that value (at least until something comes along that has a larger value/cost gap.) For those buyers and sellers involved, the market is a success, as they enjoy part of the value that is created. ****So let's see if this works:
- the marginal cost to invest for a higher resolution format release (sacd or dvd-a) is $25,000 to $50,000 (depending on MCH mix, authoring, pressing costs, etc). This could go down with ramp up production, but mixing and mastering (and authoring, for dvd-a), is a one-time cost that cannot be reduced
- the median sale of high resolution formats is 3,500 to 5,000 units at best in the current environment
Hence, best case scenario: the increased value perceived by the customer should be $25,000 / 5,000 - or a minimum of $5 per unit purchased.
So if your rule is correct, the customer should be prepared to pay at least $5 more (than a CD) for the additional value. I think this is about right, in Europe at least, where high resolution formats are sold $5 to $8 higher than regular CDs.
Now worst case scenario: If the production costs increase dramatically to $50,000 and the number of copies sold is only 3,500, the company will struggle because the cost of creating this value is 50,000 / 3,500 = $14,29, a cost it cannot pass on to the customer.
This leads to the conclusion that high-resolution formats may be more profitable for smaller organizations, which do not have high overheads, unionized employees, and shareholder pressure. In other words, SACD is more profitable for Telarc or AIX than for Sony.
Just musing
(Err... did I flunk the test? :-)
Best
Eric"Julian Dicks is everywhere.
It's like they've got eleven Dicks on the
field."
Okay. But you are making the same argument that many here have made before you. It is frequently noted that SACD will likely be around as a "niche" market (i.e., meeting a specialized need -- rather than the needs of the masses) for years to come. It is also frequently noted that the small production of SACDs can be profitable for audiophile labels: this is the same as saying the value created for consumers exceeds the costs of production, because "willingness to pay" exceeds production costs (which of course means all costs, including the opp'ty cost of capital) under this condition.However, your definition of success does not mean that every consumer will be able to enjoy this success. A market of two for audiophile rap music will not be served, because it will not be profitable to produce SACDs for them; likewise, the audiophile rap audience has little incentive to spend hundreds of dollars to obtain high-quality playback with no or few offerings. I suspect that your argument will not convince those whose needs aren't met to stop complaining about the lack of software or predicting SACD's demise.
A combination of things:
- Sales: reasonable economy of scale
- Quality: elevate music reproduction to a higher plateau
- SINGLE FORMAT: no confusing competitorsGiven how good the compressed music formats are, hi-rez will never be a dominant format. Nevertheless, it is critical for it to carve out big enough of a market to survive. It must clearly differentiate itself from the compressed formats in terms of quality (not just the specs but also production), no matter how under-appriciated this is in the mass market. Finally, the hi-rez market really can't afford to fragment.
...to even determine whether or not a single format is the rule rather than the exception. I remember when I started collecting in '78, one could choose from the Lp, the cassette, the 8track, reel to reel, or '45's. No one complained, (no internet), so I had no idea what a sick and deviant situation it was for all involved....
For video recording:
VHS killed Betamax.For portable listening:
DCC and miniMD: death to both. (OK, miniMD is still breathing.)For video playback:
Two camps came together and see how successful DVD has been.For Hi-Rez:
SACD/DVD-A: VHS/Betamax or DCC/miniMD (death to both by blue ray something?)
For music, I use CD, SACD, and LP. I buy new releases on all 3 of those formats frequently. It is grossly oversimplified to look at the commercially dominant format and label it the single format.Death of LP has been predicted for 20 years now. There are still plenty of LPs.
I'm perfectly happy with SACD as an audiophile format. In fact, I almost prefer it this way. I know that when I buy a new SACD, there is a good chance that it was produced with care and attention to sound quality. SACD is like a small island of sanity in an ocean of bad production values. If major labels start to release a lot of current popular music on SACD, I expect the quality will be no better than the CDs. Do we really want a bunch of clipped, compressed, Pro Tools processed music watering down the SACD catalog?Dave
We all understand that no two markets are exactly the same, but there is something to be said for seeking underlying principles. Otherwise, we must throw up our hands and say there is nothing to be learned by the study of business in general.However, it is valid to point out that dining does not rely on networks of buyers and sellers who share in a format, but audio does. It is possible that record labels will line up behind just one format if that one has enough installed base. Right now, dozens of classical music labels seem to have lined up behind SACD, and classical music listeners have done the same. So the network effects are very favorable. Besides, with virtually all DVD-A players also playing SACD, and vice versa, the network effects are less important than they were, say for DVD versus DIVX (where only the latter was backward compatible with the former.)
One final thought. Would anyone consider laserdisc to be a failure, just because it had only 2% household penetration? Those 2% enjoyed superior video quality (from thousands of titles) for nearly 20 years. When DVD finally arrived, it offered even better quality, at a lower price. I doubt any laser disc owners felt badly about this.
You are using two different measurement criteria: profitability (ojective) and quality (subjective). There is value in both but from a business point of view surely the first ultimately determines success or failure. Only individuals, governments and charities can measure success by the second. I do not know the economics of the Laser Disc Venture, but a search came up with this: there are more than 1 million players in home use in the US (85 million VCRs and who know how many DVD's. DVD must be in 70-90% of households), and more than 4 million in Japan (10% of households). Source: totalrewind.orgMaybe the Laser disc has earned its initial development cost back, maybe it broke even. I think it probably generated a loss for the industry as a whole when you add everything up.
Jw
The distribution and availability of sacd's and fine dining aren't comparable. The cost of creating value for one industry isn't the same as the other and so I think your comparison is tenuous (the method of distribution, marketing, etc. are so very different). More importantly, competitor effects aren't the same either. I would agree with you that as an industry sacd's may continue as a niche player (ala' Freeman & Carroll or Baum) but the problem is for an individual firm and its likelihood of survival.So while I agree that the format may survive in some form, it is hard to predict which labels will continue to produce. This is especially tough considering the vagaries of uncertain markets and technologies. Personally, I think sacd will die out as a format or be relegated to such a small niche as to be esoteric and unlistenable for most of us (how many Akagi sacd's do we need?). Has that stopped me from buying a rather expensive sacd player? Nope -- assuming that these poor discs survive play and storage then my small collection (roughly 60-70 discs) will still give me great listening pleasure for the next decade to come.
I cannot argue with your definition of 'success' - well I could, but I won't :-)However, the Chicago fine dining market does not have the same cost-benefit ratio's of major corporations like Sony and Philips. Nor does it have the characteristics of a high volume/low margin market. I would say that we do have a stake in whether 'bezillions' buy into the format because it drives costs down and it determines whether large corporations deem it interesting enough to stay in the game. Not only do they depend on license fees, but the disc manufacturers business model is based on high volume as well. Not on low volume/high margin models. That suggests that SACD could still fail if, say, the original prediction of the DVD-A audio camp prevails, meaning that the installed base of DVD players provides the better market condition to sell music on physical media.
I would say that whether Groovenote or Telarc or High Note can deliver a profitable run of 5000 SACD's does not mean anything for the format as such I means something for these companies for sure. And for us. But this is a high volume/low margin game in my estimation. And in the end that will decide what gives. Enter non-physical distribution of music...and now the entire ball game has changed again.
Best regards,
Jw
just like the vinyl biz depends on bezillionsmethinks your arguments are quite muddled
The record business used to be a volume business. It is no more. Hence it can be successfull in the way that the Chicago fine dining market can be successful. The original poster's argument is not a bad one in that sense.
Jw
Have you checked the cost of new Red Book Cds lately? Hardly a case to support your position regarding mass support. It actually shows what a monoply can impose.
...a while ago - I believe it was Universal? - the idea was tested to drop the price to 10 dollars or so in order to generate volume. That obviously did not work or it was never properly executed. Not sure what exactly happened. People are increasingly using mp3 nowadays, completely upsetting the tradional business. And I also think that there is a lack of genuine supergroups. There may be a few global marketing campaigns that happen to feature a singer (m/f) :-), but the absence of groups in the style of say Genesis, Pink Floyd etc are felt. Hell, even Wacko Jacko has deserted the industry. He appears more frequently in front of a judge than in front of a band.I think my volume argument and your point about monopolistic behavior are not mutually exclusive. The music industry is a volume business, especially the majors.
Jw
Agreed, what is popular and successful and what is 'good' and successful can be two different things. I believe SACD is successful because it fulfilled a need of a particular group, (audiophiles have been clamouring for such a thing since the CD came out), and was targeted towards that group. 60+ different labels are using the technology and profiting with smaller production runs. DVD is successful because of the media it carries: movies. DVDA marketers made the fatal mistake of believing that success of DVD = success of DVDA, without ever asking themselves if that casual consumer even wanted hi-rez; then even more fatally, indroduced DVDA to that consumer at the very time IPODs were becoming ubiquitous. The rest is history.
... and you can hear a clear improvement in sound over the CD version on each one, an investment in an SACD player is worth while.After 3 years and 250 SACDs, I'm getting close. Only about 60 to go...
I thought the same thing.I looked at how many CDs I had collected from '85 to '00 (maybe 850) and figured that if I got 100 SACDs that I really loved to listen to more than a few times, I'd be fine if the format stopped being pressed. Obviously, I need a player to play the discs.
I can really think of only a couple dozen, out of my 180, that I wouldn't miss if you came in and snatched them from me, so I'm there at this time.
To answer the question, at least in Sony/Philips' eyes, I would think that as long as companies are making SACD players in numbers greater than a few and record companies are still pressing SACDs, then they view it as a success.
Take care, Chris
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