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High Res Format Miss Their Sales Goals Because They Miss Their Audience  Print E-mail
Home Theater News Music - General News
Written by Jerry Del Colliano   
Friday, 17 October 2003

One thing that DVD-Audio and SACD have in common this far in their ugly format war is that neither is selling discs in the volumes that they would like to. Some SACD hybrid titles have done quite nicely, like Dark Side of the Moon and the Bob Dylan catalog, as have DVD-Audio titles like Metallica’s Black album, Queen’s A Night at the Opera and The Beach Boy’s Pet Sounds. However, if you walk into most independent record stores and ask for SACD or DVD-Audio they look at you like you are crazy. Literally, a salesman at Rhino Records in West Los Angeles reacted this way just yesterday. He told me as he pointed at the wall of vinyl that he has only had three people walk into the store asking for DVD-Audio or SACD. Every day, he said, “People ask for vinyl.” Little did he know there was an entire Bob Dylan kiosk containing SACDs.

Both sides on the audio battlefield are struggling to get a marketing foothold so that consumers come banging down the door at record stores looking for their new format of choice. At this point, the SACD camp has done a better job promoting their software. The DVD-Audio camp wins in the battle for retailer equipment support. But add up what you have with the progress made so far and you are not reinventing the way music is sold. If anyone is doing that, it is Apple, with their iTunes software and service.

The biggest strategic mistake of both parties at this point is that they are going after the wrong audience. The target audience for the labels so far is a big one in baby boomers, but it is the wrong market if long-term success is measured by which format will triumph. The future of the record industry lies in the hands of the increasingly powerful Gen X and the even angrier (and younger) Gen Y. These youthful, download-loving music enthusiasts spend all kinds of money on modern technology, from cell phones to $50 video games to $22 DVD-Video movies to $25-per-month dating services. What they won’t do is spend $16 on a CD if they can easily rip their buddy’s copy. Everyone agrees the value of the CD has dipped way below the price. The question is what to do about it.

SACD and DVD-Audio make copying music harder, but what incentives do young whippersnappers have to buy their music on one of the new formats? Very little, when the available titles are The Eagles, Bob Dylan, Donald Fagen and The Beach Boys. While historically important, these records don’t exactly speak to Gen Y like Coldplay, Radiohead, Orbital, Paul Oakenfold, J-LO or Jay-Z. DVD-Audio has a heads-up light advantage in accessing this market, because DVD-Audio discs play very nicely in default (DTS or Dolby Digital) surround in X-Box and Playstation 2 game machines. All you need is one digital cable into a home theater (even a home theater in a box) receiver and you are in business for enjoying surround sound music. The SACD camp might want to consider finding a way to make the drive of the next-generation Playstation machine SACD-capable and then releasing titles that reach out to a younger market. The gamer market would be more adventurous in trying a new technology in comparison to many of the lifestyle-oriented Dream System customers who buy an SACD-capable system, but innocently don’t know how good it can sound because they haven’t figured out what SACD is yet.

It is not that Gen X and Gen Y refuse to buy music. The problem is that the music business has not given them the right products to buy and the right ways to buy them. Downloadable music is one step in the right direction, as is the high-performance potential of the new audio formats. What doesn’t help is misguided lawsuits by the RIAA that attack random consumers who were file-sharing in 1999. It just doesn’t endear the music business to its customers, who already think a video game or a DVD-Video is a better value than a CD. With the leadership of the RIAA and all five of the major labels, a movement should be started to woo youthful customers back to buying prerecorded music. Gen X and Gen Y are too big in term of numbers and too young for the music business to focus their attention on continuing to sell new formats to their parents.

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