Party Like It's 1979

Having just spent the last four days at the 2004 Audio Engineering Society conference in San Francisco, I was struck by the sunny enthusiasm shared by many industry professionals for 5.1-channel surround-sound music.

We've got a smattering of provocative multichannel releases trickling out on SACD and DVD-Audio, and hordes of 5.1 home-theater systems sold, but I don't remember seeing a survey anywhere, ever, that said that the greater music-buying public would purchase more discs if someone would only add surround. Nor do I remember ever seeing information anywhere that the public at large (the small population of audiophiles aside) would buy more music if it were in higher resolution. That was a lesson learned the hard way.

I do remember seeing several surveys, including ones we've conducted on our own website, that reveal the two primary reasons music fans aren't buying more discs: price (they're perceived as too expensive unless they drop to under $10 per disc) and a dearth of inspiring new releases. Plus, modest but increasing numbers of consumers are abandoning discs altogether for music servers, iPods, and such services as iTunes—none of which will offer multichannel potential anytime soon, and the future popularity of which is supported by plenty of data.

Nonetheless, the music industry's hunch is that surround sound is a compelling feature. It was a big theme at AES, with seminars devoted to optimizing center-channel use in music, mastering for surround, celebrity surround panel discussions, and more. To make this happen, many of the event participants say they will now be pushing DualDisc; as a Warner Special Products producer noted during one of the panel discussions, "DVD-Audio will disappear."

However, there may be real trouble already festering in DualDisc paradise. First, the obvious: The slightly thicker discs will get stuck in some slot-loading CD players. Any customer who has to have his car dealer extract a DualDisc from his car system is a customer lost forever.

Let's also reflect on why the playing time of a DualDisc's CD layer is limited to 60 minutes. To enable the disc to have two readable sides and still remain slim enough to play in most machines (except as noted above), the substrate layer of the CD side must be half the thickness (0.6mm) of the "Red Book" specification (1.2mm). The trouble with a thinner CD layer, though, is that it will generate a higher error rate for a significant number of players, which will not be able to precisely focus their lasers on the now closer pits. The workaround for this is to stretch out the data pits, which forces the player to spin the disc faster, hence the shorter playing time. "Red Book" CDs can cram up to 80 minutes of music onto a disc—a full 20 minutes more content than the CD side of a DualDisc. Beethoven's Ninth will now have to be sliced and diced.

Here's the interesting part: Industry insiders admit that, even with the pit fix, a DualDisc CD layer causes the error correction of your player to work overtime while deciphering the slightly fuzzy pits and lands on the disc. The CD layer of a new DualDisc is basically equivalent to an unwashed and somewhat slightly dazed regular CD that's five years old.

You read right: A new DualDisc begins life as a scuzzy pre-aged CD and goes downhill from there. Two major equipment manufacturers have already sent out service bulletins warning about their players' potential compatibility problems with the thicknesses of DualDiscs and CDs.

Then there's the brilliant management folk at Philips, who are seemingly proud of the fact that an SACD layer will never, ever be able to play on any computer. As the youth market zigged to the desktop PC, portable players, self-made mix discs, and media servers, Philips decided to zag in the opposite direction, full speed ahead—and, in the face of abject failure, continues to do so. At the San Francisco AES conference, a famed recording engineer and equipment manufacturer summed up the impact of SACD over the last five years thusly: "Sales did not happen." Note the past tense.

Here's what the music industry is currently thinking: With SACD and DVD-Audio down for the count, let's launch the DualDisc and hope that gluing surround sound and video onto a CD will do the trick. And still these formats sport restricted content (labels are increasingly monkeying with the CD layer to severely limit how you can use it), are not "portable" enough to use in any player you might want to play it in, not compatible with media servers, can't be easily iPodded...

What gives? Who thinks up this stuff? Who then decides that the public will embrace it? Are record execs living in 1979, when portable players, the Internet, and easy-to-use-and-copy CDs didn't exist? This is also the generation of the 1984 Betamax case, in which the movie industry fought VCRs tooth and nail, only to discover that they created more wealth than they could have imagined. If the Betamax case and its outcome prove anything, it's that embracing a media revolution is the better long-term strategy, even if the old business model must be changed or even abandoned. As John Atkinson is fond of saying, "The business model is not the business."

Here's the surefire strategy for staying in the game: Figure out what folks will want and create a great way to provide it at the right price. Here's the doomed strategy: Focus on what you want, and keep foisting it (or its next variation) on the market, piling failure upon failure.

This is obvious to a lot of people, but apparently not to the music industry. My suggestion to record execs: Listen to the music you're producing and listen to the formats you're choosing. But most important, listen carefully to your customers.