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How MP3 Will Save High-End Audio Print E-mail
Thursday, 01 June 2000
I received an e-mail from a reader on the topic of why Generations X and Y are not audiophiles. There are many reasons. Baby boomers practically invented audiophilia in the late 1960s and 1970s. When Boomer men went to college, the first thing they did was to buy the biggest, badest hi-fi systems they could afford. From there, the addiction for hi-fi gear and new music only grew. In the following years, the high-end companies that own most of today’s market share developed from paternalistic, one-man operations into multi-million dollar companies. This business model lasted nearly until the end of the 1990s, seemingly catering well to an affluent male audience who kept buying more and more audio and video equipment, as well as software.
Generations X and Y are a whole other story. Being the children of baby boomers, Gen Xers grew up with MTV, Nintendo and CDs. Our attention span is way shorter. Seeing a man walking on the moon isn’t quite as thrilling to us as it was to our parents. For Gen Xers, life moves at a much faster pace and we are much harder to impress with technology. For most Gen Xers, the idea of sitting down and listening to a high-end, two-channel system requires too much imagination and patience. That’s not to say Gen Xers don’t appreciate a nice system or musical experience – we do, but it takes much more for us to get off on AV as compared to our parents. Gen Xers constantly have music in our lives, but tend to enjoy it more while playing with their computers, driving or as background ambience filling the needs of their ADD afflictions. To sit down and be captivated by music, Gen Xers demand more amazing resolution, a more encompassing sound and better songwriting.

When Generation X and now Generation Y get to university, the first thing we buy is the biggest, baddest computer system available, complete with a CDR, a HDTV-ready 17-plus-inch (possibly letterboxed) screen and a super high-speed Internet connection right in the dorm room. With MP3 downloads taking mere seconds and software/sites like Napster opening up the entire musical back catalogues of every major record company, Gens X and Y have access to music in ways that no one has ever had before. With CDRs costing less than $1 and parents willing to pick you up a 30-pack at Costco, an album that cost $16 a year ago can now be reproduced for 79 cents. Granted, the quality of MP3, with its lousy compression, is far less than that of a 16-bit 44.1 CD. However, the power of MP3 downloads is the most significant development in the entertainment industry in 40 years.

How MP3 and DVD Audio Will Change Everything – For the Better
MP3 will save high-end audio. MP3 and other future download formats are the driving forces behind Gens X and Y learning to love more and more music with greater access than ever before. Due to the industry’s consolidation, American radio is far from the musical proving ground it used to be in the ‘60s and ‘70s. New artists are rarely heard. The same artists appeal to the same categories because the same power structure exists. Countless sites exist to promote unsigned and never-heard-of bands. Universal Music Group and Sony recently have announced that they are working on sites for music downloads. Napster has all sorts of catalogue items. The effect of all this is tremendous access to new music. Even keeping in mind all of the hype and lawsuits over Napster in the past few months, this has still resulted in a three percent increase in record sales in Q1 2000 in the US. MP3 is not harming music sales - it is helping them, just as VCRs didn’t hurt movie ticket sales.

Downloadable music is now unstoppable. In 1999, "MP3" took over for "sex" as the number one search word on the Internet. Downloadable music will also shatter the business model that has dominated the now-monolithic music industry. The record industry has been based around the concept of the album for nearly 75 years. Music publishing royalties are paid based on how many albums are sold. Many Gen Xers don’t want to buy the whole album. Downloadable music allows listeners to take only what they want, which will promote better songwriting and more cohesive records – guaranteed. Record companies will think twice before releasing an album loaded with filler. In a break with the past, customers will now have a choice to buy just the single on MP3.

How will record companies continue to sell new albums along with their back catalogue albums, which make up over 80 percent of the industry’s revenues? They will need to up the ante. There will be good money to be made for the record companies in the not-so-distant future with downloadable music. However, they will be slow to give in on the album concept. MP3 and its power to change the music industry’s business model will force the record companies to look at ways to add more value to the physical disc, be it CD now or DVD audio later. What will they add? Expect 5.1, 20-bit DVD audio to be played in the 50 million-plus home theaters worldwide. How could the market grow even more? Imagine that the big three U.S. auto makers decide to build in a $12 5.1 processor in their car audio systems. How hard would it be to switch out an in-dash CD player for a DVD audio and/or video player? Not hard and, most likely, not too expensive. One can quickly see that DVD audio is going to succeed in ways that even the mighty Dolby and DTS could not, thanks largely to the invention of MP3.

In a few short years, high-end audio will be driven by a new format, with economic might and mainstream acceptance behind it. It will bring ultra-high resolution music to Gens X and Y in ways that their parents could have only dreamed of with a drag from the hookah and ‘Dark Side of the Moon’ blasting. Downloadable music will increasingly become the means by which people find new music over radio. DVD audio will quickly become the way people invest in their catalogues. DVD audio, with 24/96 resolution and 5.1 surround, will have the power to capture the attention of a generation that is jaded with technology, because DVD audio technology brings people closer to the emotional power of music. This is exactly why we got into high-end audio and video in the first place.

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