View Topic "Option to Purchase both 5 Channel and 2 Channel DSD files."

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Total Posts: 15
Joined Date: 13 May 2012
Hello Tom

Thank you very much for such a detailed reply. For those who have no idea about business costings, it is a very full and honest answer. Prices from all studios offering DSD downloads seem to be very similar after converting the currency.

I asked the question as I am a great believer in DSD and really want this format to take off. The studios offering this are few but the number is slowly growing. One thing I cannot understand is why the likes of DG (and Decca) who produced such good vinyl offerings now only offer a CD quality download – such a retrograde step and one they should be ashamed of! I have written to them but got a typically dismissive answer.

It is unfortunate that younger listeners have only predominantly had the quality of CDT to listen to and have got used to this or even worse MP3.The demise of vinyl over CD was a very sad affair but with high-res downloads I sincerely hope that accurate reproduction of hard working musicians efforts and the studios expertise will come back. For me the CD was never good enough. SACD seemed to miss out and again the hardware to play it is not abundant and few matches the quality of the sound that can be reproduced. My recent experience with DSD, and I started hearing about this some two years ago, has led me to believe this is the format of the future for those who seek natural high quality sound – to me it is vinyl in digital form. I owned a Linn Sondek LP12 with an SME arm and a variety of expensive cartridges and so whilst there are only a few DSD DACs around at the moment, the prices are really no more expensive in real terms as the LP12 set up was originally, or others like it. The beauty of the DSD format is there are no clicks or pops that you get with vinyl nor does it degrade with use. Storage takes up no room but for those who like to fiddle, and I was one of those, it is not quite the same, however, one can sit back and listen to the music in a much more relaxed fashion.

I anyone has not heard a DSD rendering I strongly urge you to do so. If you have a trained ear you will hear a difference. It has a truly natural and spacious atmosphere about it

On the question of DSD capable DACs it seems that manufacturers really have nothing to lose in providing native replay of DSD files as they all can work with PCM as well. There was one supposed to be coming out from Japan but that seems to have stalled as I have heard nothing from them for some time. One was supposed to be going to Channel Classics for test, I was told. There is another coming to Europe very soon and that is the Exasound e20. Come on guys, let us see more of them!

Once again many thanks for your reply and once I get my e20 I shall be increasing my DSD library!

Andrew Tilley
Posted : 9 Dec 2012
Posted By: Tom Caulfield
Total Posts: 12
Joined Date: 19 Apr 2012
Hello Andrew

I'm not speaking for Jared, but I do have some insight into the business. The short answer to yours and Robert's logical pricing question of DSD downloads, verses the same content contained on an SACD, is that they are entirely different businesses, with different cost structures, and are priced below competitive DSD downloads.

To explain, as a label, the first things you need to do are to produce or buy a recording. Then, when complete, sell/distribute it. Traditionally, with CD/SACD/optical media being the primary distribution, the label's costs ended at the production of the optical media. The label's gross income per disk averages about $6US, from which it pays all recording production and post processing costs, the costs of inventory, plus about $1.50 for SACD pressing/jewel box assembly and booklet. Record distributors manage the selling of the disks, and profit from the retail price. It's a very thin margin business.

Each recording project contains a sunk production only cost ranging between $10,000 to potentially above $100,000. This includes the costs of the recording, the musician(s) and conductor royalties (and other mechanics), and post production. The end result is an Edit Master that can be distributed by several means. These production costs must be amortized over several years. This is because the actual release of the recording is typically a year from the recording date (when many of the recording costs are actually expended), and the fact that recordings are sold over a period of time from release. The $1.50 cost of manufacturing the SACD is in addition to the recording production costs

A typical independent label classical music recording sells around 2,500 copies over its lifetime (some allot less), with the more popular exceeding 5,000. Very rarely does the sales volume exceed 10,000. You can do the math.

The problem that all labels are facing is declining optical media sales. Many labels have abandoned the SACD for the 3X less expensive pressing costs of CD. Many, including Channel have entered into additional ways of distributing their product.

Enter downloads. Logically, this is pure profit. The Edit Master is already complete from the SACD production, and the internet is free. Great! Unfortunately, there's more to it. With optical media production, the distribution job and expense, is born by a long established system of distributors. With a label owned download service, the costs only start when the recording Edit Master is complete.

While I'm not personally privy to the actual numbers, I can assure you the download sales volume will have to grow by at least a factor of five for all formats before this download venture breaks even. There are no investors, and all costs are born by the declining margins of SACD sales. These costs include file preparation/Metadata for upload to the server, server and internet upload charges, the cost of a custom Java based download manager (because of the very large file size), and its maintenance, and largest of all, customer support. Since I'm one of them, I can tell you that it takes on average four hours a day communicating with customers who are having difficulty downloading their purchase to their unique computer type and system software components. All recording download services have this overhead.

So, what's a DSD download worth? And is it price sensitive? If it were to cover the actual costs of the share of volume of the download site, they would be priced far higher. Should they be competitively priced with other DSD download sites? They are already two thirds of other equivalent DSD download offerings. Blue Coast just announced the download availability of the San Francisco Symphony DSD recording of Mahler 1, for $50. The far better recorded Grammy nominated Channel Classics BFO Mahler 1 is $33.16 in either stereo OR multi-channel. Would significantly lowering the price of a DSD download increase volume? Maybe, when the number of DSD over USB/Firewire DACs significantly increases. But in the near term, the volume of free DSD sample downloads Channel offers indicated very few available customers.

This is an early adopter business where Jared has balanced the price of DSD downloads between what's fair to customers, verses the cost of growing this new venture. I hope you agree. Thank you for your question Andrew.

Tom Caulfield
Posted : 9 Dec 2012
Total Posts: 15
Joined Date: 13 May 2012
I am wondering why the price of DSD downloads are more expensive than SACDs and I think there are a good number of interested parties would like to know the answer to this. If DSD downloads were less expensive, this format would get going faster than it is.

There is no question in my mind that this is the format to listen to despite opposition from some quarters. If you are a musician or have a trained ear you can hear the difference between PCM and DSD, it is far closer to being at a live performance. You do need, however, some good quality equipment - a player that will play native DSD such as Audirvana Plus if you have a Mac and of course a DSD DAC.

I have just discovered the Exasound e18 DAC which gives surround sound and the new e20 which is a stereo DSD DAC. Does anyone have one of these?

Posted : 9 Dec 2012
Posted By: Robert Fernandes
Total Posts: 6
Joined Date: 12 May 2012
It seems likely that there will be a 5 channel streamer in the next couple of years. If so, I would be very interested in having my SACD collection in 5 channel DSD. Would Channel be willing to provide these files for the Channel SACD's I have already purchased and do so at a reasonable price? This affects my purchasing strategy going forward.

Simiilarly, would it be possible to start offering the entire content of your SACD's (5 channel layer and the 2 channel layer) in DSD format at a reasonable premium?

It seems the 2 channel DSD should be the same price as the SACD. Although never one to confuse the price with the cost, I cannot justify buying the 2 channel DSD for more than the SACD, or more than the 2 channel PCM for that matter. It seems that getting the both layers in DSD futureproofs my music collection and allows me, for the cost of the software involved, to convert the files to the format that suits the technology I prefer or have at my disposal. That would be worth some premium.

Throw in the SACD at some reasonable premium and I might even buy that for use in the car and to bridge the gap to time when there is a 5 channel streamer.
Posted : 15 Nov 2012

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