A Message From Marshall - Audio Fidelity to Close Shop

[bmoura]

The key will be mattresses. Once they start selling mattresses, they're a goner.

The good news for Best Buy is that their move beyond consumer electronics is going well.
As Sears and others in the Department Store world continue to close, it makes a lot of sense.

 

[markshan]

The good news for Best Buy is that their move beyond consumer electronics is going well.
As Sears and others in the Department Store world continue to close, it makes a lot of sense.

I hope it's going better than HH Gregg.

 

[quicksrt]

I just sent Marshall a note. I really hope that the M/C series of SACDs were not a major cause of AF's downfall. That would be a shame. A real shame.

I believe that having an additional quad or 5.1 layer on a given disc did in fact create additional interest and sales. These sales happened quickly which was fine but limited to about 500 extra units per release. And the cost of adding that surround layer was not recouped by 500 or so additional copies sold. Marshall told me that the cost of bringing an SACD with all the trimmings to market was.... guess how much???? $30,000. I don't know how much of the was due to surround layer being included. But the 30K tab on a reissue disc is interesting.... and high!

I think that 4.0 was no help to them. But the bigger reasons for closing shop are declining sales of physical media and difficulty of getting A-List titles licensed.

 

[bmoura]

The bigger reasons for closing shop are declining sales of physical media and difficulty of getting A-List titles licensed.

Agreed. We have seen past examples of this - and will see more - as physical media sales decline.
Much as the Naxos CEO predicted just over a year ago.

 

[4-earredwonder]

I believe that having an additional quad or 5.1 layer on a given disc did in fact create additional interest and sales. These sales happened quickly which was fine but limited to about 500 extra units per release. And the cost of adding that surround layer was not recouped by 500 or so additional copies sold. Marshall told me that the cost of bringing an SACD with all the trimmings to market was.... guess how much???? $30,000. I don't know how much of the was due to surround layer being included. But the 30K tab on a reissue disc is interesting.... and high!

I think that 4.0 was no help to them. But the bigger reasons for closing shop are declining sales of physical media and difficulty of getting A-List titles licensed.

30K smackers per disc is excessive. You'd have to sell 1K at FULL retail [$30 each] to break even without knowing how many copies AF ordered/licensed and I'm sure the cost of having them pressed in Austria didn't help, either. I can only imagine how much the double Dylan bootleg QUAD license/royalty payment was....for them to charge $60 for this disc. And when you factor in the wholesale price [40~45% off] to the Amazons, Music Direct, Acoustic Sounds, Deep Discount/Import CD, that $30 list suddenly becomes almost halved. And I'm sure adding a QUAD/5.1 layer WAS more as there is the cost of licensing the stereo as well as the surround layer and of course the RBCD layer. And then there's the cost of transferring these layers to the SACD and authoring the disc. Not to mention the custom packaging and slip covers which graced EVERY AF digital product.

One only wishes that ALL those fantastic artists/bands which AF released as Gold RBCDs could've been higher res STEREO and/or QUAD SACDs instead.

 

[bmoura]

30K smackers per disc is excessive.

Most of that figure is the license/guarantee payment for the recording artist and record label.

They can make even more $ by licensing one song for TV or movie use.
Those licensing fees start in the low 6 figures and in some cases exceed $250,000!

 

[4-earredwonder]

Most of that figure is the license/guarantee payment for the recording artist and record label.

They can make even more $ by licensing one song for TV or movie use.
Those licensing fees start in the low 6 figures and in some cases exceed $250,000!

Which is REALLY ironic since the movie companies own the record companies....or vice versa! Marshall & Company didn't have a chance! At least MoFi and AP are buffered by parent companies Music Direct and Acoustic Sounds which both sell equipment and TONS of custom VINYL and allow minuscule discounts on their music products as opposed to AF's generous wholesale price to retailers. Analogue Productions, MOST especially, had very few offerings EVER on discount websites such as Deep Discount and/or their sister company ImportCD. EVEN Amazon charged retail [and sometimes HIGHER]. And SO many of their recent SACDs allow for NO further discounts........so it's $30~35 ..........which is a king's ransom for Oversea's music enthusiasts with s/h and Import duties added.

As a point of reference, Brian, do you know what Acoustic Sounds' licensing fees are for downloads....and are DSD download licensing fees HIGHER?

Speaking of covering ALL bases.....just received a 2L Disc today: Besides including both a SACD/BD~A, the RBCD layer on the SACD is MQA~encoded and the BD~A sports LPCM 2.0 24/192, DTS HD MA-5.1 24/192, DOLBY ATMOS and Auro 3D! The disc is entitled WOVEN BRASS: https://www.hraudio.net/showmusic.php?title=12782#resolutions Best of ALL: Delivered Price from Deep Discount: $18.65! [AmazonUS price: $35 + tax].

 

[bmoura]

Which is REALLY ironic since the movie companies own the record companies....or vice versa! Marshall & Company didn't have a chance!

The licensing costs are the key reason why reissue companies are so careful with which albums and artists they select.
Because they owe the guaranteed payment amount regardless of how well the reissues sell - or don't.

And in some cases, the sticking point isn't the record label but the recording artist.

I remember cases where artists, not even big name artists, wouldn't agree to a Stereo or Surround reissue without a guaranteed payment that was 2x or even 4x the going rate.
In those instances, no matter how good the album or the sound quality, the reissue label has to say next....

 

[4-earredwonder]

The licensing costs are the key reason why reissue companies are so careful with which albums and artists they select.
Because they owe the guaranteed payment amount regardless of how well the reissues sell - or don't.

And in some cases, the sticking point isn't the record label but the recording artist.

I remember cases where artists, not even big name artists, wouldn't agree to a Stereo or Surround reissue without a guaranteed payment that was 2x or even 4x the going rate.
In those instances, no matter how good the album or the sound quality, the reissue label has to say next....

Unbelievable: 2 or 4x the going rate????? Probably a reason AP reissues older jazz/classical titles....the artists are presumably deceased and they mostly have to deal with the Record Companies and NOT the artists, themselves, unless of course the artist's recordings have reverted to a family trust, et alia.

And of course it also explains why a LOT of artists have never been represented on high res physical discs: G R E E D!

But Brian, you never answered my question: Do high res downloads incur the same licensing/royalty fees?

 

[bmoura]

Unbelievable: 2 or 4x the going rate????? Probably a reason AP reissues older jazz/classical titles....the artists are presumably deceased and they mostly have to deal with the Record Companies and NOT the artists, themselves, unless of course the artist's recordings have reverted to a family trust, et alia.

And of course it also explains why a LOT of artists have never been represented on high res physical discs: G R E E D!

But Brian, you never answered my question: Do high res downloads incur the same licensing/royalty fees?

Yes, I was surprised by the 2x and 4x requests. And that they came from artists that I wouldn't consider "superstars".
Oh well. That's the way it goes in some cases.

AP's focus is also due to Chad Kassem's love of Jazz and the Blues.
They are his favorite genres of music.

High Resolution Downloads are provided by the record labels to the music download sites. The reissue labels are not involved in the process.
(Although a small number of the download music files are sourced from the reissue label remasters.)

So there are artist royalties involved, like any other album release.

 

[soundboy]

Most of that figure is the license/guarantee payment for the recording artist and record label.

They can make even more $ by licensing one song for TV or movie use.
Those licensing fees start in the low 6 figures and in some cases exceed $250,000!

This is going way back....back when the actual recording of a classic pop/rock song don't showed up on a TV commercial. I remember Graham Nash was interviewed about having "Teach Your Children Well" played during a Fruit of the Loom TV commercial, he said something to the effect of:

When someone offer me a million dollars to use a song I wrote a couple of decades ago, what am I suppose to do?

Not sure whether "a million dollars" part was true, or just a figure of speech. You get the point, right?

 

[bmoura]

This is going way back....back when the actual recording of a classic pop/rock song don't showed up on a TV commercial.

No, it's still the case today.
An artist or group can make much more $ from licensing one song for TV or movie use than for a reissue.

 

[fredblue]

i don't want to go further off topic and i don't condemn artists for maximising the money they can make from their music at all but as someone with little to no idea how the business side of the music industry works, i have to say it puzzles me somewhat; does licencing a track out for use in a movie or tv show etc prevent it from then being licenced for CD reissue?

can an artist not make a big chunk of cash out of licencing their music for use in a movie/commercial and then (albeit less lucratively) licence the music to a label to reissue it for their fans and other music lovers without having to rely on that reissue to make a ton more money?

or are artists happy to say; forget the fans, i'll keep my music out of print and just take the money and run from Wrigleys or Pepsi or whoever else has the means to pay a large sum to an artist for use of their work in a commercial..!?

can anyone here give any insight into how it works?

 

[bmoura]

i don't want to go further off topic and i don't condemn artists for maximising the money they can make from their music at all but as someone with little to no idea how the business side of the music industry works, i have to say it puzzles me somewhat; does licencing a track out for use in a movie or tv show etc prevent it from then being licenced for CD reissue?

Licensing a song for movies or TV doesn't prevent a reissue on LP or optical disc.
But it does influence how much money an artist expects to receive when an album of say 10 or 12 songs is licensed for a reissue.
Raising the question, why is the license for 10 or 12 songs less than for one for TV or movies?

It also helps to explain why some albums are available for TV or movie licensing.
But not for reissues.

 

[JonUrban]

................High Resolution Downloads are provided by the record labels to the music download sites. The reissue labels are not involved in the process.......

So Brian, why are the pop/rock download sites like HDTracks and ProStudioMasters not hosting 5.1 or 4.0 downloads when the source material is readily available? They could obviously charge more for the download and I am pretty sure folks would pay more, and if they did not, who cares? It's not like they are stocking product in a warehouse.

If's pretty infuriating to go to HDTracks, see all of the former SACD and DVD-A titles listed there in HiRez Stereo only. Seems like a total marketing miss.

 

[DuncanS]

So Brian, why are the pop/rock download sites like HDTracks and ProStudioMasters not hosting 5.1 or 4.0 downloads when the source material is readily available? They could obviously charge more for the download and I am pretty sure folks would pay more, and if they did not, who cares? It's not like they are stocking product in a warehouse.

If's pretty infuriating to go to HDTracks, see all of the former SACD and DVD-A titles listed there in HiRez Stereo only. Seems like a total marketing miss.

Plus in a global market the lack of borderless purchases for downloads, its frustrating I can import a disc from the USA to the UK (say a SACD made in Europe and exported to the USA!) but I can't do the same for a download for the DSD/FLAC of the same disc. I accept that licensing does come in to play, but we now live in a connected world. Many companies across various industries seem to want to buy from a global market but sell into a restricted one The world has changed, we all know physical discs are on the way out (ironically vinyl seems to be on the way up!) but IMHO surely global licensing is the way forward rather than the current divide and fail to conquer.

 

[Jim the Oldbie]

...If's pretty infuriating to go to HDTracks, see all of the former SACD and DVD-A titles listed there in HiRez Stereo only. Seems like a total marketing miss.

The cynical part of me (that's the big, fat part) thinks they just don't want to deal with the inevitable extra customer service hassles with the multichannel formats.

 

[Franklin]

I accept that licensing does come in to play, but we now live in a connected world. Many companies across various industries seem to want to buy from a global market but sell into a restricted one The world has changed, we all know physical discs are on the way out (ironically vinyl seems to be on the way up!) but IMHO surely global licensing is the way forward rather than the current divide and fail to conquer.

Different royalty rates in different countries, different publishers in different countries, different labels in different countries, different copyright laws in different countries...

 

[bmoura]

So Brian, why are the pop/rock download sites like HDTracks and ProStudioMasters not hosting 5.1 or 4.0 downloads when the source material is readily available? They could obviously charge more for the download and I am pretty sure folks would pay more, and if they did not, who cares? It's not like they are stocking product in a warehouse.

If's pretty infuriating to go to HDTracks, see all of the former SACD and DVD-A titles listed there in HiRez Stereo only. Seems like a total marketing miss.

A number of reasons.
Starting with the lower sales of Multichannel downloads - typically 10% of what a Stereo edition of an album would sell.

Add in licensing of albums separately for Stereo and Multichannel downloads by the major record labels, added storage costs (a 5.1 channel album takes up 3x the space of a Stereo edition), extra time in preparing the Multichannel download (extra channels to transfer, master and quality control, etc.).

The good news is that there are music download sites offering Surround Sound music downloads. In a few cases that even includes special combination pricing, pioneered by NativeDSD Music, where you can get both the Stereo and Surround Sound editions of an album for just $2-$3 more than the Stereo or Multichannel edition by itself.

 

[fredblue]

A number of reasons.
Starting with the lower sales of Multichannel downloads - typically 10% of what a Stereo edition of an album would sell.

Add in licensing of albums separately for Stereo and Multichannel downloads by the major record labels, added storage costs (a 5.1 channel album takes up 3x the space of a Stereo edition), extra time in preparing the Multichannel download (extra channels to transfer, master and quality control, etc.).

The good news is that there are music download sites offering Surround Sound music downloads. In a few cases that even includes special combination pricing, pioneered by NativeDSD Music, where you can get both the Stereo and Surround Sound editions of an album for just $2-$3 more than the Stereo or Multichannel edition by itself.

interesting.. and the 10% stats based on sales of what multichannel downloads exactly?

if its Classical and the usual 'audiophile' offerings, that seems to me to be a rather narrow remit on which to base the conclusion the major labels appear to have come to (which seems to be not to bother with surround music downloads of mainstream rock & pop at all.. that's how it looks, is that how it is?).

if UMe, Warner/Rhino, Sony, etc were to release some big name rock & pop 5.1 downloads on HDTracks (i'm thinking of the ilk of Pink Floyd, etc) and none of those downloads sell i'll piss off with my tail between my legs.. but until then it seems to me as a consumer who would like to but cannot currently buy surround music downloads of much of the music & artists i enjoy listening to, the labels have made a judgement call not to offer any for sale, based on supposed poor sales without really even trying.