Digital Disasters
Article By Steven R. Rochlin
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  Amazing the twists and turns as of recent to the high-end industry. Fist we have Sony with their proprietary SACD format. While the software available is very limited, at least there is some software available. Then the long awaited DVD-Audio gets released, or not released, or re-released many months later as copyright holders want to insure the safety of their properties. Watermarking systems that they felt were good were in fact audible and, well, that's a can of worms in and of itself. DVD-Video folks are already in court over a program that allows DVD-Video discs to be played on the Linux system. This same program, however, also allows the copying of the DVD-Video disc's content! Hence the legal action against the distribution, links to, or downloading of the program itself. i will not begin to discuss the whole MP3.com and Napster situations. More than enough ink has been written about those situations in the past months.

Now we have Wadia Digital Corporation selling its assets. A notice of public sale as appeared in a newspaper in mid August and states in part:

...all repossessed collateral security generally described below will be sold at public sale on Monday, August 28, 2000 at 1:30 p.m. at the offices of the law firm of Siegel, Brill, Greupner, Duffy & Foster...

The victims here, besides the employees of the company, are the many dealers and customers of Wadia Digital Corporation. In fact i have heard of a dealer having thousands of dollars of paid audio gear which was sent to Wadio Digital Corporation to be fixed and returned. The dealer now wonders of they will ever see their possessions again. How about Wadia's loyal customers. What would happen if you recently bought a product of Wadia's and it broke? Who would fix it?

Their chief engineer of Wadia left before CES 2000 and some speculate this was the beginning of their demise. With disputes over developing new products with new format capabilities, or to wait it all out. Since Wadia did not develop new gear taking advantage of new formats, well, maybe this was part of their downfall? There are still rumors around that Wadia may yet be resurrected! The sale of Wadia's goods has been delayed two weeks. This is goods and not completed pieces of gear. It is an all or nothing sale. Alas, the planned sale of Wadia Digital Corporation to their management did not go through so who knows. i called a representative of Wadia Digital Corporation and, for the moment, left a message. But this whole story does not just concern owners of Wadia equipment my friends.

Hales Design Group, makers of the critically acclaimed Hales loudspeaker, might also be out of luck. On February 14, 2000 Wadia Digital Corporation bought out Mr. L. Paul Hales' loudspeaker company. What is to become of the owners of these loudspeakers? What would happen if a driver becomes defective (or blown) in your prized multi-thousand dollar Hales loudspeaker? After all, if Wadia goes out of business so does the Hales Design Group... or does it?

Most smart businessmen would at least have a "fold back" clause where if the company that buys them out goes out of business, the business then resorts back to the original owner. Was Paul Hales wise enough to have this clause in the Hales Design Group buyout to Wadia Digital Corporation? Our sources tell us that Paul Hales will effectively buy back his company and continue onward. As for Wadia Digital Corporation, it seems that Wadia possibly will become independent, regaining parts of their staff and may be offering their new 831 sometime this fall. It seems no other magazines, or various employees of the companies concerned, or official dealers of Wadia gear are also not getting their calls returned. Of course the really hot market is not the megabuck DACs my friends, but the relatively inexpensive $1,000 market.

From the likes of the Bel Canto Design who offers the DAC 1 sampling rate conversion/upsampling and other ticks to the new, using old zero oversampling technology we pretty much have not seen since 1983 Audio Note DAC Kit 1.1. A severe splitting of the marketplace with consumers seemingly confused as the Bel Canto Design uses all those new chipsets and oversampling stuff in a solid-state design while the Audio Note uses, well, no new technology at all and employs good old valve technology in the analog output stage. Are you confused yet? Well, so are consumers, the press, editors of major magazines, mass market industry folks, and...

i have been advising people for over a year to not invest in any of the expensive new technologies? Why? Because we are at the very early stages and as we all have experienced in the past, each generation gets cheaper and better. Besides, CDs are going to be with us for a long, long time. So as DVD-Audio players are just now reaching the public there is virtually no software to enjoy this new format. Digital disasters? Maybe, maybe not. The saddest thing is that we might see more state of the art digital technology companies gritting their teeth financially over the next year or so. Those that have braced themselves properly with financial reserves will do well. i predict we will see more new companies like Perpetual Technology creep into the scene with fresh money grabbing a good share of the new digital marketplace about to explode into consumer's homes. Just remember ten year from now that we were here, seeing it all unfold before out eyes. As Tom Petty sings "The waiting is the hardest part." Oh, and before i forget...

Enjoy the music,

Steven R. Rochlin