Dr. AIX's POSTS — 13 September 2014

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I try to read most of the articles that focus on high-resolution audio, download and streaming, and have recently been paying attention to the all things relating to the Pono initiative. I lost my connection to the inner workings of the Pono machine when John Hamm was replaced by Neil Young as CEO and I haven’t been able to get in touch with him since mid summer. I have made inquiries about the Pono equity raise that is currently happening through the Crowdfunder website. I’ve read the executive summary, gone through their analysis, and reviewed the numbers. I don’t plan to plunk down $5K. I didn’t get pre-order one of the Pono players back in April. The numbers just don’t add up.

I was hopeful back in April. But what happened to “redicovering the soul of the music”? All that’s happened in the last couple of months is a massive downgrading of expectations. Pono lost its way in search of big dollars. Isn’t it always about the money?

Here’s some Pono numbers:

$399 is the cost of a first generation Charles Hansen (Ayre) designed Pono player

$6.225 raised during the Kickstarter Campaign

15,000 First Generation Players pre-ordered during the KS rewards-based funding

10,000 Pono players will ship by the end of October according to Pedram Abrarm Pono’s EVP of Technology

5,000 Pono players will ship an additional 5,000 units by the end of December with attempts to make a pre-Christmas deadline

$5,000 is the minimum amount that qualified investors can spend on equity in the company

$75,000 is the level of investment required to get a special perk…4 VIP concert tickets and backstage passes to the Bridge Concert in October

$7,000,000 valuation of Pono at the opening round of investment

$20,000,000 valuation of Pono after the KS raise.

$50,000,000 valuation of Pono enterprise for the Crowdfunder equity raise.

2,500,000 the number of tracks promised to be available at the opening of the Ponomusic website in late October.

15,000 – 20,000 is the number of tracks that will be available on the Ponomusic website at launch that have been transferred at 192 kHz/24-bit from analog tape to PCM digital. Most of these recordings are already available on HDtracks, SuperHighRez and ProStudioMasters…with hit and miss fidelity due to the fidelity of the masters.

99.5 % is the percentage of the available music on the Ponomusic site that will be at standard CD quality

35 million tracks are being prepared by Omnifone, Pono’s backend provider of content, in FLAC at one resolution. All of these files are standard resolution.

44.1 kHz is the sample rate of all of the music in Omnifone’s Music Station catalog

1411 kbps is the bandwidth of a standard resolution CD rip that Pono and Neil Young have described as existing 200 feet below the surface of the water in their illustration of relative fidelity levels.

9216 kbps is the bandwidth of a 192 kHz/24-bit music file that Ponomusic will offer for its highest resolution content, which originates from standard fidelity sources.

15 % is the percentage of actual sound information in a typical 192 kHz/24-bit “high-resolution” FLAC audio file. Pono music purchasers will be downloading a lot of empty zeros and ones.

85 % is the percentage of the 192/24 FLAC file that will contain nothing but silence

$15 is the price of a standard CD “lossless” resolution file on Ponomusic according to the website.

$25 is the price of an ” ultra high-resolution” analog to digital transfer on the Ponomusic website.

64 GB is the storage capacity that comes with your shipped Pono player

128 GB is the maximum storage capacity of a Pono player

5000 is the number of CD “Redbook” tracks that can be stored on the Pono player

800 is the number of Ultra-high resolution recordings (192 kHz/24-bit) that can be stored on the Pono player

So there you have it…enough numbers to make even a CFO gasp. The reality is becoming clear. Pono will be a very good portable audio player capable of playing FLAC files at 192 kHz/24-bits down to 44.1 kHz/16-bits. The availability of real “high-resolution” content of the type that will allow you to experience real HD-Audio will be limited to around .5% of the entire catalog. And even then, it’s not really high-definition but rather the fidelity of the original source.

Ponomusic has described and is raising millions of dollars for a business that won’t achieve the stated goals of the company…”allowing you to rediscover the soul of the music”.

What they are doing is elevating the standard at which you can download music. Instead of “lossy” compressed files from iTunes of the other music sites, Pono will be offering uncompressed CD standard fidelity (a fidelity level that Neil Young has been railing against for decades…but now seems ok with).

They don’t own any disruptive intellectual property, they don’t own the content that they’re going to be selling, they’ve stated that they’re not going to be remastering any of the content on the site, and they are ignoring the whole issue of audio provenance. In reading their Executive Summary, they can’t even get the basic facts about high-resolution audio correct. There are whole paragraphs that are just plain wrong.

Here’s an example:

“The PonoMusic Store sources and offers for sale only studio master quality recordings.” Since when is a ripped commercial CD a “Studio Master”?

Pono will launch on time. Supporters will get their autographed players this fall and the website will offer just short of 2.5 million uncompressed CDs for your “high-resolution” Pono player. What’s to get excited about?

They had a chance to do it right…but they caved. There’s an open playing field for the real thing. The world wants quantity over quality.

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