At a 9am press conference Saturday, October 12, whose attendance was curiously dominated by Stereophile and our sister computer audio online site, AudioStream.com, Jared Sacks of Channel Classics and Philip O’Hanlon of On A Higher Note announced the November 1 launch of nativedsd.com. A world-wide accessible, multi-label download site dedicated exclusively to native DSD recorded stereo and multi-channel studio masters, the site promises centralized shopping for native DSD recorded Edit Master files, along with information and discussion of both software and hardware. We are also assured of “extensive site-wide search capability through the use of ID3v2 compliant metadata across all labels.”
Holland-based Sacks, who was the first recording engineer to obtain Sony’s DSD editing equipment, and released his first commercial SACD in 2001, promises dedicated pages for each label, with management in the hands of the label. So far, that includes Channel Classics and Harmonia Mundi, with a total of 15 labels in the potential pool. “There are lots of small guys recording in DSD who currently have no place to put their stuff,” Sacks noted.
Labels cooperatively determine the price point, which currently rests at $30 for mother files of a native DSD recording. Sacks arrived at this price by assessing the cost of high-quality vinyl. “Come on, guys!” he declared to anyone who thought the price too high. “You buy two beers at this price and you’re pissing it out.”
The “& Beyond” in the site’s title refers to plans to eventually offer pristine DSD transfers of analog recordings from multiple genres. 96 pages of downloadable material have been designed so far, with downloads including cover art and liner notes. Hardware sites for the 60 DACs that currently decode DSD will also exist, as well as video instructions in multiple languages, starting with English. Sacks noted as well that at least three DACS, from Oppo, ExaSound, and Sony, currently decode multi-channel DSD.
“I want to stop pressing SACDs because there is no margin it,” Sacks told his captive audience. When concerns about piracy arose—these are master files, after all—Sacks noted downloads will be tagged with their place of origin, and notices posted throughout the site. He also emphasized the importance to understand the cooperative nature of the venture, and the goal: to make the highest quality digital music more commercially viable and available.
Sample pages from site included new releases, “Coming Soon,” “Special Offers,” “Hardware News,” “Top 5 Downloads,” and a generous section devoted to Help, Settings, Company Information, and Resources. One Channel Classics page lists album name, genre, subgenre, composer, artists, etc. There’s also a page for customer feedback concerning hardware. It looks really, really good, including the mock page filled with fake Latin. If all goes well, the next phase of native DSD downloads is about to begin.
COMMENTS
The max most people will pay for downloads is 99c. Those are the nice ones ... For the rest, to quote stereophile (Robert Baird 6 Sept 2013): "very few listeners under 35, who’ve grown up in a world where downloading music is free, will ever pay for music again"
I'm a great hi-rez fan, but I can't see myself ever paying for a download file .. but I seem very happy to buy hi-rez physical SACDs ... at least if I don't like them, I can sell them.
Last I heard, the cost of producing a SACD is not much different to a CD these days. So, if Channel can't make a go of it producing SACDs, they can't make a go of it selling CDs either ... which is sad, because they were a cool, niche hi-quality outfit (even if the performers were a bit variable -- sometimes top class, and sometimes not).
What I suspect they really mean to say is that: (a) they WANT to charge more for their hi-rez SACD product, but because they are hybrids, they have to sell them as the same price as CDs. So (b) now they want to stop selling SACDs, so they can sell the hi-res version of their files for even more.
Nice theory ... Alas, what will happen, I suspect, is that their sale will collapse, and the label will exit stage left. Paid downloads everywhere are already on the way down.
I think you're on the money here.
If I want a recording that's on SACD I'd rather buy the SACD than pay more for a download version of it so someone can have an easier time making money.
I like my SACD's but I prefer good vinyl by a wide margin.
Last I heard, the cost of producing a SACD is not much different to a CD these days. So, if Channel can't make a go of it producing SACDs, they can't make a go of it selling CDs either ...
I wrote about CD prices more than a decade ago - see www.stereophile.com/asweseeit/578/index.html. As I said back then, when you factor in copyright fees, artist royalties, amortization of the project's upfront cost (which, with an orchestral project might be >$100k) over the expected sales volume (which may well be <5000 lifetime), and marketing and promotion costs, the manufacturing cost of the disc is basically insignificant. You might as well complain that as the paper on which an issue of Stereophile is printed costs less than 50 cents, we are price-gouging at our cover price of a penny less than $7.
Jared Sacks' point is that pricing a download DSD album at the same price people have already demonstrated that they will pay for a premium LP reissue, will enable a small classical label like his to remain profitable and therefore to continue to record and sell new projects. If you really object to that business model, then don't buy his downloads. That's how the free market works. Just don't complain that you want Jared's recordings but at a price you set. That smacks of undeserved entitlement.
John Atkinson
Editor, Stereophile
(1) I completely agree with you that the cost of a SACD (or CD) is mostly irrelevant to the total cost of production. But unfortunately that is not what the article intimates, namely: "“I want to stop pressing SACDs because there is no margin it,” Sacks told his captive audience".
JA wrote:
> Just don't complain that you want Jared's recordings but at a price you set
(2) I don't think the issue here is about the price that Channel sells their downloads for per se; the issue is their stated purposeful intent to shut down their own successful physical SACD sales – in the hope – that people will buy the download version of same for twice the price. No-one will buy these downloads when they can buy the SACD (with the identical DSD file) at half the price.
So Channel's business model is to stop producing the SACD products that people actually want to buy, and instead start selling a product people don't want to buy (the downloads at twice the price, that have zero resale value). I don't think one can seriously call this a business model ---> it is more like corporate suicide.
[BTW, I have more than 25 Channel Classics recordings in my collection, so I suppose I am a fan and supporter.]
I don't think the issue here is about the price that Channel sells their downloads for per se; the issue is their stated purposeful intent to shut down their own successful physical SACD sales – in the hope – that people will buy the download version of same for twice the price. No-one will buy these downloads when they can buy the SACD (with the identical DSD file) at half the price.
Except you are disregarding the fact that Channel Classics sells its discs to a wholesaler who then sells to a retailer. Jared Sacks said there is nor margin on physical SACD sales. Even if he sells directly to the retailer, that sale will generate around one half the retail price in revenue. If he sells via a wholesaler the revenue will be perhaps one third the retail price. Neither scenario generates enough revenue for Channel Classics to make any profit. Hence without downloads, the company's future could be negatively affected.
John Atkinson
Editor, Stereophile
John Atkinson wrote:
Except you are disregarding the fact that Channel Classics sells its discs to a wholesaler who then sells to a retailer.
Except you are disregarding the fact that Channel intend to continue to sell traditional CDs through those very same wholesalers / retailers. Either the model works or it does not. The only reason Channel want to stop selling SACDs (not CDs) is because no-one wants to buy their hi-rez downloads when they can buy the hi-rez SACD instead.
In brief: Deleting the SACD product that people DO WANT to buy, and only selling the product they don't want to buy (the download version) === a path to financial ruin.
Without a margin, no new music will be created. $0.99 downloads supports the hardware manufacturers, not the labels. By the way, iTunes is not profitable if you consider the costs of distribution, marketing, etc (even without producing the music). Apple Computer, selling iPhones, is extremely profitable.
Cookie Marenco
Blue Coast Records
Who is your source for the (sorry, I am calling a spade a spade), absurd claim that CD and SACD manufacturing costs are so close to each other as not to make a difference? Because that is what you are implying.
I happen to be in the record business. I can get a raw naked CD pressed from an existing glass master with a 2-color label for about 65 cents each in lots of 500 on spindles in cake boxes. The price that was quoted for me on SACD replication was $2 each. I am sure that there are quantity discounts available--but not down to zero difference.
Compatible SACDs will ALWAYS be more expensive than POCDs (Plain Old CDs) because they can't be made on a standard CD manufacturing line. That is why the above example is based on two different vendors--one made the decision not to invest in new lines for SACD manufacturing.
At the outset, Sony tried keeping costs down by selling single-layer non-compatible SACDs with no CD layer. That was a marketplace disaster.
It costs about the same to press a short run of 500 180-gram LPs as it does to press the same quantity of compatible SACDs--leaving out SACD's higher mastering costs and leaving out packaging costs. The usual price for a 180-gram LP reissue is $25 to $30, so why should people be surprised that an SACD should cost a lot more than a POCD?
So, please help us all out--tell us exactly who your source was for your claim that "Last I heard, the cost of producing a SACD is not much different to a CD these days." And what that person's source of knowledge was.
And if you think the cost difference between 65 cents and $2 is trivial, that shows that you have never run your own business.
This may or may not, with a nod to Steely Dan, be the day of the expanding man, but, it is the era of instant gratification. People seem to want downloads for many reasons, and getting it right away is one of them. The other problem issue is that there are probably less than a dozen deep-catalog brick and mortar record stores left in the US. For Channel Classics to sell physical product in the US, the other parties most likely make more money in total than the guy whose capital and talent made it all possible. Not a result you see in too many other businesses.
JM
For Channel Classics to sell physical product in the US, the other parties most likely make more money in total than the guy whose capital and talent made it all possible.
My experience with the Stereophile CDs bears that out. Back in the late 1990s, we experimented with selling our CDs though bricks'n'mortar retailers (which existed back then). Our cost structure back then was based on sales in the first few years of 5000. Unfortunately, that meant that our unit cost per disc, amortized over those 5000 units, was about a dollar higher than the price we would receive from the wholesaler if the retailer was to sell the CD at the regular price of $15.95. :-(
Obviously, if we were to sell 50,000 CDs in the same time period rather than 5000, our unit cost would drop dramatically, even if we were to pay the same cost per pressed CD and booklet. But the music I chose to record wouldn't have that kind of mass appeal.
And if you think I was aiming low with my 5000 number, please note that the typical full-price classical CD in the 1990s would sell in its first year of release less than 1000 units (slightly more for orchestral; slightly less for chamber music).
So forgive me for feeling Jared Sacks' pain :-)
John Atkinson
Editor, Stereophile
What implying youska?
Given the importance of a Native DSD download site whose goal is to offer product from a wide number of labels, I would have expected more press to show up. Perhaps the invite did not go out to the entire press list.
Not to forget Blue Coast, who pretty much started the resurgence in DSD downloads a few years back: http://bluecoastrecords.com/
At Blue Coast Records, we realized the demand for physical products is not going away anytime soon. It's a substantial part of our business. That being said, the upfront cost of manufacturing SACDs (and length of time and shipping from Austria to USA) and vinyl can be prohibitive.
Add to that, traditional distribution is revolving door..meaning, the distributors takes the discs for 'consignment' to the stores and report sales after a minimum of 6 months, then takes another 3 months to pay with a 25% hold back (reserves for returns). You're lucky to get paid at all. The distributor doesn't have to pay on the number of units ordered, only on actual sales. The distributor can have the product for years until it's sold.
Trying to get paid is another story. All you can do is threaten to remove the product, hold back product. This goes on for years over a few hundred units. We have one trad distributor in the USA. We consider the product sold through them as "promotion" because we'll probably not get paid.
Direct sales to our customers from our website is pretty good, but not enough to warrant manufacturing a lot of titles. What has been good is working with distributors and resellers who will pay in advance, no returns in bulk quantities. Otherwise, manufacturing makes no sense.
DSD downloads, on the other hand, allow us to release titles nearly immediately without graphics.. we'll add a photo, make up a title (Special Event) and upload. Where the expense for downloads is in the customer service, maintenance of the website/protecting it from viruses/updating for new browsers, etc, adding metadata, fixing the files we get from outside sources.
The cost for this kind of work is labor, not product manufacturing. At the end of the day, the costs for DSD downloads work out to be more than manufacturing an SACD, but it's over a longer period of time and faster to get more music uploaded. Annual costs for maintaining a crew of web and audio people for downloads could manufacture .... oh, geez, don't make me think about this or I'll cry!!! :)
Labor of love...
Cookie Marenco
Blue Coast Records
The comments about costing may be relevant but what irks the most is that we are not talking Apples to Apples here: my LP's or SACD's come with information that is completely missing from the downloads, such as: Engineers, studio recording info and the list of backup musicians. This is nonsense and should piss of all Artists.
HD Tracks and such (to which I subscribe) only give Cover Art and track listings!
The more HD I seem to download the more I fall in love all over with my physical mediums. SO far the future looks grim. Fix it please.
Everyone here sounds old (I am not referring to physical age). Most of you don't get that people like to hear music in many places, not just one - at home, at work, while exercising, while jogging, while commuting.
One is not going to buy multiple SACD players - they are big and bulky, and clunky. One cannot carry them around. and carrying the discs around is ridiculous too.
dsd downloads do three things:
1. You can listen to the best sound (like an SACD) on your best equipment. For this the download is merely an SACD substitute. No loss, little gain. But...
2. You can copy the dsd file to a portable device as is and get that same sound via headphones. One needs a small dsd player. Is there one? yes, the Korg mr2. Headphone amplifier (portable) + Korg - best sound for on the go. You can listen to the dsd on a portable computer, with an external appropriate usb dac and a headphone amp too.
3. In the absence of the portable dsd player, one can convert the dsd download to other hi-res formats (FLAC 48Hz, 24-bit, say) that can be played on a wide varierty of devices, big and small. Do exactly what Sony does (and should do more of) - take the dsd master and make hi-res versions, digitally. There is little loss in audio, big gain in being able to listen to hi-res recordings in more places.
So, dsd downloads are worth more than SACDs, because of the flexibility.
Physical media are Twentieth century, a transition. Forget them - bluray will exit too for video. It's all just files. Just think how stupid someone listening on a portable CD player looks now. They are gone.
People have been willing to give up some sonic quality for portability and flexibility so they can listen more often. With dsd downloads, there is no trade-off.
I make my own dsd recordings and I have purchased dsd downloads from BlueCoast and Channel Classics. I own a Korg, I own a Sony HAP S1; I own a Schiit dsd dac. I'm all in.
I want the entire Sony and Telarc dsd-recorded music available for dsd downlaods, as a start. We do not want dsd to only be associated with esoteric music or no-name musicians (no matter how good). What is this attachment to physical media? a fetish?
Kindle/books;digital RAW video/film;digital downloads/CDs-SACDs-DVDs-Blu-RAYs-LPs.
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