Naxos Leaps into the Hi-Rez Stream

Naxos stands poised to release its first 24-bit/96 kHz high-definition audio download. On October 2, one of the label's most important orchestral recordings for the fall quarter, conductor, arranger and composer Peter Breiner's new orchestrations of Mussorgsky's Pictures at an Exhibition, Songs and Dances of Death, and The Nursery, will become available, not as a physical CD, but rather as high-resolution and MP3 downloads. Expect the link to appear on iTrax, eclassical, classicsonline, HDTracks, hiresaudio.com, theclassicalshop, and Ariama, with Linn and Onkyo coming on board soon thereafter.

The announcement comes in the same week as Klaus Heymann, who founded the budget label 25 years ago, told National Public Radio's Anastasia Tsioulcas, "I think in the long run, [streaming] will be the way people consume music&3151;classical music and other music. And if I look at my crystal ball, I would say that in five years, 50% of our business will be in all kinds of streaming."

This is quite a turnaround for Heymann, whose Naxos of America is both the #1 independent classical music distributor in the U.S. and Canada and North America's largest digital distributor of independent classical music. (Naxos supplies a catalog of over 30,000 albums to hundreds of digital download and mobile outlets worldwide.) In several interviews Stereophile, most recently in August 2010, Heymann continually affirmed his belief in physical sales, and seemed reluctant to move into other realms too quickly.

Download Strategy
In a chat with Jim Selby, CEO of Tennessee-based Naxos of America, he affirmed that Naxos "believes in high-resolution downloads so much that we're making it a major fourth quarter priority." While the Mussorgsky disc is one of 8–10 "high priority" fourth-quarter releases on the Naxos label, it is the first Naxos priority release that will appear solely in download format for the first year. The physical version of the release will not appear until September 2013.

The decision, says Selby, is calculated to "show the market that we're serious about digital, and that it's a big part of our future. Naxos is moving into this world, and downloaders who want this product have a year's head start."

This major change in strategy will be celebrated in a free special event, open to all, on October 10, from 6–9pm at Manhattan's Bohemian National Hall, 321 East 73rd Street. The evening will include a panel discussion about using digital downloads to promote classical music, a film screening on the making of the recording, drinks, and hors d'oeuvres.

"Now that download sites offer booklets, artwork, and good delivery services, the format is becoming far more acceptable to consumers," says Selby. "We believe in it so much that we're making a move as bold as the auto manufacturers who are now taking CD players out of their new cars, and instead offering Bluetooth sync, iPods, USB in, and satellite streaming. This is how people want to consume music now."

The Naxos label's other priority releases for the fall quarter will appear simultaneously in both CD and download formats, with options of either 24/88.2 or 24/96 downloads for many of them. Although the oldest recordings in Naxos' current batch of releases are still limited to Red-Book (CD) quality (16/44.1), Selby pledges that, from here on, all of the label's projects, approximately 120 releases per quarter, will be recorded in 24/96. In addition, some of those, mainly the big orchestral recordings, will be recorded in surround and slated for Naxos' continuing series of Blu-ray audio releases.

Given Naxos' more that 150 distributed labels, Selby predicts a total of 400 non-Naxos releases in the 4th quarter, 45 of which are real priorities. Some of these, including titles from Chandos, BIS, and Sono Luminus, will also be available as high-resolution downloads.

"At some point, let's face, it's going to have to come, digital will outpace the physical world," says Selby. "We want to make sure we are not just standing on the sidelines, watching it happen, but are instead participating in it."

Streaming
"We're seeing a heavy trend into the streaming services, far greater than the CDs we would have sold in the old model, Selby acknowledged. "We used to sell millions of CDs a year; now we stream hundreds of millions of streams a year. It's an argument of access over ownership.

Since the launch of Napster 15 years ago, things have changed dramatically in the record business. Retailers have closed in waves, and the market has been changing rapidly.

"We lost Tower, then Borders, then independent retailers, and the ones that remain are also losing interest," says Selby. "Spotify and Naxos Music library seem to be the next wave of music business models that are emerging. By going from selling round silver discs for the Naxos price to streaming, we are is no longer bound by the gatekeepers of Tower and Borders, who only stocked a fraction of out catalogue."

The Naxos Music Library, which streams music to its subscribers from 350 labels at the low rate of 128kbps, mainly caters to colleges, institutions, libraries, music schools and the like. Selby claims it is very sophisticated in its metadata and underlying data, and is an incredible resource for students. If all the metadata is really there, including recording dates, venues, and personnel for historical tracks, it is one major step ahead of virtually all other metadata libraries.

"128kbps is low by today's standards," Selby acknowledges, "but it wasn't when Naxos Music Library launched. The next step is to ratchet it up. We have all the files in their native format, and are collecting as high bitrates and sample rates as we can. There are also plans to move towards a more consumer-friendly product. This should take place within a year, with an affordable consumer based subscription for all 350 labels. The ultimate determinant of where we end up will be what the consumer wants and what they are willing to pay for it."

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JasonVSerinus's picture
Sales feedback from Klaus Heymann

 

Follow-up stats from Klaus Heymann: "Downloads are slightly up this

year, streaming up strongly and physical down slightly.

Last year, for the first time, physical and digital sales in North

America were 50/50.  This year, I expect the ratio to be 60/40 in favor

of digital, not because physical is declining more rapidly but because

digital is growing strongly."

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