Dr. AIX's POSTS — 05 July 2014

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I have limited expertise in the area of marketing. Since I started my little label back in 2000, I falsely believed that if you made something really great AND different than what existed before that it would be accepted by the market and succeed. For the longest time I subscribed to the “Field of Dreams” model…”build it and they will come.” AIX Records was unique and remains unique to this day. Our recordings are captured during a single session in an acoustically rich auditorium. There are no overdubs, post processing, equalization, mastering, or artificial reverberation applied to the tracks that we release. AND we include video of the sessions on our DVDs and Blu-ray discs (a fact that has never really noted in the reviews that we get…and which has rarely been duplicated by other labels). We include multiple mixes, lots of extra features and charge roughly the same as vinyl LPs. I’ve managed to carve out a little niche in the audiophile world but the success of AIX Records hasn’t been as over the top.

It’s all about marketing. It’s not whether you produce something really special or not. I received a lengthy and very thoughtful email this morning from a reader that introduced me to a few fundamental concepts about marketing. The opening paragraph describes what it takes for a product to be successful:

“For a product to achieve successful market penetration it must provide the customer with a 3-fold perceived improvement over the “old” product, vs. a single-fold detriment (usually price). That’s easy if the product is in a totally new category, but if not, it’s a struggle. The CD achieved faster than expected market penetration by providing the buyer with 1. Improved sound quality 2. Improved durability and 3. Ease of use. The detriment was only price, which eventually came down in hardware, and became the default for software.”

The writer then evaluated the HD-Audio initiative against the above criteria:

“Unfortunately, HD audio suffers from the lack of a 3-fold improvement. The audible improvement is often questionable (for all the reasons you know too well), and it’s the only improvement. Detriments include higher cost (not only the files but the necessary hardware), the difficulty of utilization (“it don’t play on my iPod!”) and a confusion of file formats, and sampling rates, and production chain integrity.

From a purely marketing standpoint, HD Audio can’t ever achieve general acceptance, and is probably destined to a splinter market at best. Particularly in the US, general purchases are made based on cost, not quality. Not to say you can’t make it in that market, but until Apple’s product fully support high-res files, AND Apple provides them by default, or at least user choice at very modest price points, in the iTunes store, the idea won’t become main-stream.”

I think he got it about right. That’s why I’ve pushed so hard to make sure that high-resolution audio really does offer something dramatically different than the existing norm. But I’ve missed the mark with regards to the other factors.

I’m beginning to envision an alternative strategy to the whole high-resolution challenge. I’ll talk about that tomorrow and beyond.

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About Author

Dr. AIX

Mark Waldrep, aka Dr. AIX, has been producing and engineering music for over 40 years. He learned electronics as a teenager from his HAM radio father while learning to play the guitar. Mark received the first doctorate in music composition from UCLA in 1986 for a "binaural" electronic music composition. Other advanced degrees include an MS in computer science, an MFA/MA in music, BM in music and a BA in art. As an engineer and producer, Mark has worked on projects for the Rolling Stones, 311, Tool, KISS, Blink 182, Blues Traveler, Britney Spears, the San Francisco Symphony, The Dover Quartet, Willie Nelson, Paul Williams, The Allman Brothers, Bad Company and many more. Dr. Waldrep has been an innovator when it comes to multimedia and music. He created the first enhanced CDs in the 90s, the first DVD-Videos released in the U.S., the first web-connected DVD, the first DVD-Audio title, the first music Blu-ray disc and the first 3D Music Album. Additionally, he launched the first High Definition Music Download site in 2007 called iTrax.com. A frequency speaker at audio events, author of numerous articles, Dr. Waldrep is currently writing a book on the production and reproduction of high-end music called, "High-End Audio: A Practical Guide to Production and Playback". The book should be completed in the fall of 2013.

(8) Readers Comments

  1. Dear Mark,

    Unfortunately, I agree with the comments made by the marketing person. I speak from years of practical experience, I had a long, rewarding career in marketing as well as technology. I studied marketing and electrical engineering at Drexel U in the 1960s. Went on to hold a line position as Technical Director and Manager of the Photonics Instruments Group at EG&G/Perkin Elmer and a staff position as Technical Marketing Manager.

    Here is an example of the discussion in your post. I developed an instrument for measuring the dispersion of light in optical fibers that was 10 times better and 10 times faster than anything else available at the time, but at approximately the same price. NBS adapted my patented technique as the measurement standard. And still, not being an established player in that market at the time, it took a monumental effort to break in.

    I have been an audiophile since my college days. Was willing to spend big bucks on the best phono cartridge at the time, an Ortofon. I am always seeking better sound and the emotional experience it bring me. When CDs were introduced, I had such high expectations and then such a letdown. They took off because they are small, durable and very convenient (3 advantages), not because of better sound. What a setback for audiophiles!

    The introduction of DVD-Audio and SACD was exciting and rewarding. I bought a Pioneer Elite player and for the first time enjoyed digital audio. Per your analysis, I found the DVD-Audio superior to SACD. Unfortunately, those formats did not take off because, in my opinion, most people don’t have the “ears” or the equipment to appreciate the difference. Also, most music is not listened to in a critical listening situation.

    I eventually bought an Oppo BDP-103 SE because my Pioneer did not play Blu-Ray. When hi-end audio started moving to files, I moved up to an Oppo BDP-105. But what percentage of the music purchased is by people like me. I am afraid it is very, very small. Knowing the sales figures for hi-end players would be part of my market analysis.

    I wish you well in your quest for better sound. But I am afraid your efforts may be quixotic. I visit so many web sites and hear so many podcasts that claim HD audio is a fraud, even lower quality than CD because of too much bandwidth. I am afraid they may win the battle. Hope not, but folks like you and the Cheskys may always be stuck with a niche market.

    Looking forward to your further posts on the subject!

    Rog

    • Thanks for the comments. It is very common for the press to get the whole HRA thing wrong…even experts are unable to understand it. I’m not sure I understand the comment, “podcasts that claim HD audio is a fraud, even lower quality than CD because of too much bandwidth.” What is too much bandwidth and how would that contribute to a lessening of fidelity?

  2. Hi Mark,

    A very intersting post and a very necessary topic. Although I too agree with the observations regarding marketing, I believe at least the price factor could be tackled when it comes to downloads. The price of making recordings would not necessarily be higher unless we are talking about financing gear that can really record according to HRA standards. When I say standards, I obviously mean your definition and not the fraudulent one you’ve recently been covering.

    If we take into account that we are no longer dealing with physical CDs and their cost of production and copying, jewel cases or digipacks, printing, booklets, transportation costs and all the cost of a brick and mortar store, then HRA downloads should definitely cost less than a CD… a lot less.

    The margins could still be better than those of CDs by just keeping current CD prices or even a bit smaller than CD prices as an incentive. This would also positively address the problem of HRA not necessarily being perceivably better than CDs, but still costing the double. I would sell HRA downloads for the cost of CD downloads, and CD downloads for slightly more than MP3s, and I would eliminate MP3s altogether, as they make no sense whatsoever anymore.

    There is NOT a more expensive production chain behind HRA downloads, unless other labels get to filling an entire Bluray disc like AIX records does, with all possible formats, video and bonus material, etc. This means camera crew, more equipment and more jobs. Otherwise, one of the positive aspects of HRA downloads is that they come at a lesser cost, and with a much smaller footprint. And about the footprint, the more environmentally friendly part of downloads has never been a marketing strategy as far as I know.

    The other big issue that has to be addressed, in my opinion, is how to attract musicians to record with a label like AIX, Soundkeeper, MA recordings, etc. I am a musician myself, but I have the firm impression from other musicians, that they are so used to the predominant multitrack and compressed sound that most of them are very unlikely to find 5.1 HRA or pure stereo recording attractive, even if they hear it in the best conditions possible. They are already biased as to how recordings should sound, and what a “good” recording sounds.
    To me this is the biggest impasse: getting musicians to see and understand the benefits of HRA and other formats like 5.1, 7.1 or stereo recording with 2 mics.

    I think the minor quibbles of figuring out how to play a HRA download is a very basic learning curve, and not more complicated than that of learning how to play LPs and use a turntable, etc. When we migrated to CDs we had similar difficulties understanding things, and that didn’t deter us from getting to where we are. Today most people who consume music are familiar with using a computer and can certainly figure out how to use a dedicated audio player. I personally think it’s a lot more hassle and hassle getting your music onto an iPod and figuring out how it works. Today many have smartphones with complex apps that represent more difficulty than using a portable or desktop DAC with a computer.

    My belief is that musicians will at some point catch up with the HRA train – as it develops as a market -, and that people will learn how to use a USB DAC and a computer as their stereo, which also lowers the costs considerably vs a conventional stereo rig. But I believe the most decisive change would be to sell HRA downloads at CD price or a bit less, which is only fair.

    Cheers

    • You’re right that most high-resolution audio should be priced much lower. Things are going to change in this market because so many companies want to do what HDtracks has done.

  3. A great post and very interesting marketing comparison between CD and HRA. I have found it difficult to convince the doubters of the benefits of HRA over other music formats and if you do some Google searches you will come up with a lot more articles & threads that suggest there is no real improvement in sound quality with HRA files. Maybe we need a definitive advocacy statement published on the issue that is based on proven scientific facts and is written in language that most people will understand. I am trying to beat the HRA drum but my drum is not very convincing and a professional advocacy statement for HRA would be a real help.

    • I’m hoping to do the rigorous study that needs to be done to establish the value of HRA. It may be that people can’t tell the difference OR…and I believe it much more likely…that they can’t tell the difference of the usual commercial release and an HRA version of it.

  4. Hi Mark,

    I’ve just read your interesting article and thought I’d give you my perspective on new Hi Res audio recordings.

    Although I’m a big fan of technology and computers, I like to keep my hifi system totally separate and still play my CD collection on it.

    I started building my CD collection (which I love!) in early 1990s – I was in my late teens. These days I’m still only interesting in buying CDs and maybe soon start moving towards to hi res blu-rays etc.

    Therefore in my opinion, new recordings should always be available on hi res optical disks as I’m sure I’m not the person that still values these physical formats.

    Thanks for your interesting article on the world of audio.

    • Nick the future of physical media is not bright. If you can have everything you ever wanted in the best quality available in an instant at any place you wanted, wouldn’t that be a treat? AND have the compete visual experience too.

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