Sony & Universal to cease CD production in favor of Hybrid SACD?

Things seemed to be going well for SACD at the 112th AES Convention, held May 10-13 in Munich. The official news, announced at a Sony-Philips press conference, was that one million consumer SACD players have been sold so far. One large Dutch audio retailer even reported to me that they now sold more SACD players than CD players. The prognosis for SACD is total worldwide sales of 6 million players (in whatever form) in 2003 and 13 million in 2004.

As for making the discs, Sony has three pressing plants (in Japan, the US, and Europe), but as yet no facility for making hybrid SACD/CD discs. Sonopress (Germany), which can press hybrids, plans to double its capacity by June, and will start a second production line in September.

Now the unofficial news. I attended the AES Convention with a colleague, Hans Beekhuyzen. We ran into someone close to the SACD fire, who told us that in three months the situation would be totally different—one of the main record companies had decided to stop CD production and switch to SACD/CD hybrids for all new titles. As Sony cannot as yet produce hybrids, we concluded that the label in question had to be Universal. I contacted a source close to Philips, who, when asked, confirmed our conclusion. We then confronted Sony and Philips press people with our information. This stirred a few nerves and inspired evasive answers, but no hard denials. Hans was then contacted by a Universal spokesman, who calmly denied everything.

A few days after the Convention, we contacted someone from the record industry, who finally told us the whole story. He confirmed Universal's switch, but added that Sony Music will soon open a hybrid SACD pressing plant somewhere in the US, which will allow SACD prices to fall to around $23 or even below.

All of this finally explains the official announcement about Sonopress not only doubling its capacity but also launching that second production line. It also suggests that the record companies have decided that the CD copy-protection schemes tried out in the last few years are lost causes, and are turning to the well-protected SACD.

Due to the holiday weekend, we were unable on Friday to get anyone at Sony or Universal in the US to comment on this report. We will update our information as soon as we can do so.—Ed.