From The Editor...
June / July 2005
By Robert Harley

All Dressed Up And No Place To Go

  In the previous issue, I mentioned that the forthcoming HD DVD and Blu-ray Disc formats, designed as the high-definition replacements for DVD, each have the capability of delivering high-resolution multichannel audio. This ability, along with the fact that DVD-Audio and SACD have not become mass-market formats, led me to speculate that either HD DVD or Blu-ray could be the long-awaited replacement for CD.

Although employing HD DVD or Blu-ray Disc as a music-only carrier is fairly simple from a technical standpoint, it's unlikely that well ever see a packaged high-resolution music format in HD DVD, Bin-ray, or whatever else the consumer-electronics industry invents. Here's why.

The four major music labels, which now control more than 75 percent of the market, have lost their way in the face of piracy, file sharing, electronic distribution, and a consumer base that has rapidly grown to view free music as a right rather than as theft. The music industry's old business model is gone, and it has no vision for how to create a new business platform that addresses 21^st century realities.

Such behavior by an entire industry isn't without precedent. Railroad companies failed to respond to the threat posed by long-haul trucking simply because railroad executives had an emotional attachment to rails and train whistles, and felt impervious to a challenge from a fledging, unproven industry. Kodak's strategy to confront the rapid disappearance of its market for chemical-based film was, until recently, to close its eyes and hope that digital photography was a passing fad.

Similarly, the music industry wants a return to the simpler days when it sold pieces of plastic by the hundreds of millions, and unauthorized duplication meant a kid with a cassette deck. It should be an embarrassment to the music business as a whole that it took Steve Jobs, of all people, to show it the model for distributing content, generating a revenue stream, and serving consumers the way they want to be served. I'm talking, of course, about Apple's enormously successful iTunes.

The music industry's myopia prevents it from seeing an improved product higher sound quality and multichannel audio in a single, universal format — as a platform for a 21^st century business model. Rather, the industry is pursuing even further consolidation (Sony Music and BMG merged late last year, bringing the number of major labels down to four), along with a strategy that believes music-only formats are commercially disadvantaged in a world in which DVD movies sell for under $10. They think music alone isn't enough — to compete, formats have to deliver "added-value content" in the form of video.

I'm no business analyst, but it seems to me that it would be in the music industry's best interests to embrace a new music carrier that delivers improved sound quality, multichannel audio capability, and advanced copy protection to prevent ripping and file sharing. The launch of such a format would need to be accompanied by a committed marketing campaign to educate the general public about the benefits of high-resolution multichannel audio. Something on the scale of CD's "Perfect Sound Forever" would suffice.

I believe that people will respond positively when high-resolution multichannel audio is adequately demonstrated and explained. Let me give you an example. As an anonymous customer off the street, I was given a first-rate demo of high-resolution multichannel audio at... an Acura dealer! Sitting in the TL, the first cat with DVD-Audio playback, the salesman played from a special demo disc a stereo track at CD resolution, and then the same track in high-res multichannel. He first clearly and accurately explained what differences I would hear in high-res multichannel. The entire disc was filled with these paired comparisons. The improvement was so compelling that I can't imagine anyone, no matter what his audio sensibilities, being unmoved by this presentation. In fact, this was the best-performed demo of high-resolution multichannel audio I've witnessed. What does it tell you about the music and consumer-electronics industries when a car salesman delivers the most convincing audio-technology demonstration an industry veteran has ever experienced?

Technology companies can develop advanced, high-resolution platforms for delivering the best possible experience to music listeners. But ultimately, by embracing or ignoring new technologies, it's the music industry that decides how we access music. Unfortunately, that music industry is struggling to find its way in a new world and can't see that the solution is tight under its nose.