SACD & DVD-Audio: The Pre-Launch Mess

Audiophiles have a mess on their hands. In a somewhat surreal press conference in May, a half dozen audio luminaries—representing Sony, Philips, and several titans of the high-end recording business—stood on a HI-FI '99 stage looking awkwardly at the audience.

They couldn't agree on what the public should and should not know about Super Audio CD. Yes, they were firm on the October 1999 US launch date for Sony's SCD-1 SACD player, but Sony Senior VP-A/V Michael Fidler, hedged that it was a bit too early to talk about software prices. Telarc's Bob Woods blurted out an intended price of $24.95/disc—maybe falling to $19.95 soon after the launch—while apologizing to the Sony suits in the room. And it is not yet clear that the first generation of US-market SACD discs will play on regular CD players as well as the new high-resolution machines.

One phrase popped up several times: "This does not have to be a format war" between SACD and the DVD-Audio medium, scheduled to be launched soon after SACD's planned October 1999 US launch (footnote 1). But we all know what that probably means: Peace on our terms will prevent further conflict; see it our way, and all will be as smooth as the DSD-derived analog waveform we're betting on.

But in almost every meaning of the phrase, a classic format war is what this will likely become. It's wearisome to trot out once again the precedents of VHS vs Beta, or even DCC vs MiniDisc, but the pattern is too obvious for the public to ignore. And although hardware manufacturers will escape serious wounds by ensuring that their players will play both formats, record labels and retailers will have to choose sides.

This drama is currently of interest to only a few scattered audiophiles—that endangered species lamented of late in these pages and elsewhere—but it contains all of the elements that lie at the heart of today's mainstream technology brawls. Like Microsoft vs everybody else, this struggle is the quintessential feud of the modern media age writ small in the audiophile microcosm.

First, the purported format war between SACD and DVD-Audio is rooted in two incompatible digital approaches to recording and processing sound: Linear PCM vs DSD. Second, a race is underway for the best copy-protection scheme possible to appease the gods of music publishing. What—you want full-bandwidth digital outs with that machine? Unacceptable! And although the discs will look fundamentally the same, each is based on entirely different assumptions about what the listening public actually wants.

Sony/Philips claim that the high-end audio audience needs only two channels (at least at the beginning), and utter simplicity as well—no fancy data, menus, or video features. DVD-Audio has gone the low road and added everything from a dozen bandwidth/channel variations to video, Internet connectivity, and maybe even an audio game or two. In other words, the battle involves one choice for a few select individuals vs all things to all people. And no, DVD-Audio is not going to get off easy in this scenario. Using a shotgun to clear the field can sometimes be far less effective than a few well-placed shots.

Then there's the issue that seemed most important when SACD was first announced: back-compatibility with the existing population of CD players. Sony's and Philips' position is that for the public—and, possibly more important, for retailers and record labels—to accept a new high-end format, it must play on what folks have today, while patiently holding its true treasures in reserve for those ready to invest in the future. This makes it easy for the record labels—who can press only one dual-layer version of each new release—and less of a headache for retailers, who don't have to make the difficult choice of which version to stock.

There's only one problem: Sony's own record labels don't yet appear to be playing along. Perhaps due to the greater manufacturing cost of a hybrid disc incorporating a "Red Book" CD layer, the software companies have so far waffled on their commitment to make dual-layered discs that will play on both legacy CD players and new SACD machines. The SACDs launched in the Japanese market are not back-compatible, and, at press time, the issue had not been settled for the US. The fact is, although Philips stands by their claim that dual-layer discs are not inherently more expensive to manufacture than a single-layer disc, putting both layers on a single disc might still increase the price enough, due to copyright issues, that regular CD customers will be scared away, making dual retail inventories a likelihood after all—or triple inventories if you consider DVD-Audio.

Where is DVD-Audio in all of this? The day after the Sony press conference, Jordan Rost of the Warner Music Group stated at HI-FI '99 that if the public wanted back-compatibility with CD players (and, he hedged, if this was technically feasible), DVD-Audio could provide it. [He also hedged on the issues of an exact US launch date for DVD-A and the watermarking/copyright issues.—Ed.] But the DVD-Audio camp would be wise to wait and see what happens to Sony/Philips.

We are witnessing a subtle but grim struggle to control the economic linchpin that always determines who supports what in the technology and media worlds: licensing. If the world adopts DVD-Audio for all things audio, Sony's and Philips' vested interests in CD-platform royalties dwindle with each DVD convert. But if SACD can be successfully positioned as the audio format of the next century, then the licensing cycle starts anew, with Sony/Philips once again in the driver's seat. (As Sam Tellig mentions in this issue's "Sam's Space," the licensing rights for CD are about to run out.) Don't expect Sony/Philips to lie down and let DVD-Audio happen, and don't expect the DVD-Audio folk to abandon the fight for the keys to the digital kingdom without a fight.

In the end, one has to wonder if the parties involved have even attempted to understand what consumers desire, audiophile or not, and if the economic, political, and social forces can ever be in alignment with these wishes. If Sony/Philips wins, do audiophiles win or lose? If DVD-Audio wins...same question. Perhaps neither faction needs to produce a winner; perhaps surviving together in the digital miasma is, these days, victory enough. But if both formats gain a toehold, do consumers win or lose? Does one format sound better than the other? Two channels, or five, six, seven channels—or more? Perhaps a future variant of the renegade MP3 format will sweep all aside and the inmates will take over the asylum.

The DVD-Audio Forum says the door for SACD is open within the DVD-Audio specification, and Sony/Philips strongly state that there doesn't have to be a conflict. But does that imply that Sony/Philips and their shareholders don't care if the high-end audio software market is shared with DVD, or that they're merely bluffing about early victory, hoping that DVD-Audio gives up before too many shots are fired?

If this isn't war, then those casualties you'll soon see lining the corporate halls will require some explaining. But we consumers must remain on guard; early-adopter audiophiles could be the next victims.

Footnote 1: According to a story in the May 17 issue of industry "bible" Audio Week, Matsushita will be bringing Technics- and Panasonic-branded DVD-Audio players to the US market in the fall of 1999, with retail demonstrations scheduled to start in the "late summer."—John Atkinson