When asked for their take on the PonoMusic announcement, Sony executives were pleased that Pono will be an open, non-proprietary system. If you purchase a hi-res file through the Pono service, playback is not locked to the Pono player; it will work on any playback device that supports the FLAC format. Sony stressed multiple times during the event that universal compatibility is the key to the success of hi-res components. Don't complicate the process by developing products that are only compatible with a limited number of formats. Sony's current HAP-Z1ES and HAP-S1 hi-res servers will play anything from MP3, WMA, and AAC all the way up to uncompressed PCM and DSD, and that's the company's mantra across the Hi-Res Audio lineup. Let the content producers choose whatever hi-res format they want to work in; the manufacturer's job is to make sure the products can play it.
Yes, the irony is not lost on us that these words came from Sony, a company that has never shied away from a good format war. Even though they won the Blu-ray war over HD-DVD, the SACD v. DVD-Audio war pretty much ended in a draw, as the potential for widespread adoption of either format was crushed by the arrival of the MP3. Sony now understands that the health of the high-end audio industry is dependent upon everyone playing nicely and working together to promote the technology.
But what about the content? Several of the major record labels -- including Sony, Universal, and Warner -- feel that the U.S. market is primed for hi-res audio adoption and have committed to offering more content in these higher-resolution formats. Universal Music representative Jim Belcher provided a very interesting overview on the state of the music industry, both here and abroad, to help explain why. Not surprisingly, most every major market is moving toward digital as opposed to physical discs, but not at the same pace. Of the five major music markets in the world, the United States is the only one where digital revenue (which includes downloads and streaming) surpasses physical disc revenue. I was especially surprised to learn to that, of those five markets, Japan had the lowest amount of digital revenue: 80 percent of Japan's 2013 music revenue still came from physical disc sales, with 16 percent from digital. Compare that to the U.S., in which 30 percent of the revenue came from physical disc sales and 60 percent from digital. Within that huge digital market in the U.S., 67 percent of revenue came from downloads, 19 percent from subscription streaming services (the largest growth area), eight percent from ad-supported streaming services, and five percent from mobile streaming.
Given how mature the U.S. digital market has become, Universal and Sony's digital divisions both feel that the market is ready for the next evolution in digital - namely, hi-res downloads and especially hi-res streaming. Internally, the companies are educating producers, engineers, and artists about hi-res audio's benefits and its potential as a revenue stream. But that's where we run into the age-old "chicken versus egg" challenge. To prove to the content producers that embracing hi-res audio is a worthy endeavor, the market needs to generate revenue. But how does the market generate revenue without mainstream content to sell? The hi-res download sites I mentioned above are great, but they aren't exactly loaded with offerings from today's hottest, most mainstream artists. What the category needs is for even a couple major players to have that hi-res audio epiphany and encourage their fans to do the same. Someone get Jay-Z on the phone.
A recent post on MacRumors also suggests that Apple may add hi-res audio downloads to the iTunes Store very soon, which would obviously be a huge boon to the category if it proves to be true.
Sony referenced a CEA study conducted a few years back in which 90 percent of consumers said that sound quality is the most important thing to them, and 60 percent said they would be willing to pay more for it...but not at the expense of convenience. In the past few years, we certainly haven't seen those statistics played out in the marketplace, where audio has taken a back seat to video (perhaps "tied up in the trunk" is a more accurate description). Can hi-res audio successfully combine quality and convenience at prices that will spark meaningful change? We must hope so.
Sony is trying to do its part with a diverse Hi-Res Audio lineup targeted at a wide range of price points. We've already seen from them higher-priced products targeted at the enthusiast market, like the $1,999 HAP-Z1ES or $600 PHA-1 headphone amp. During the event, the company introduced two new AV receivers to the Hi-Res Audio line, including the STR-DN1050 ($599) that supports playback of resolutions up to DSD and the STR-DN850 ($499) that supports up to 24/196 WAV/FLAC. These 7.2-channel receivers are fully loaded with the latest video, audio, and networking features, including hi-res-capable USB ports, built-in WiFi, AirPlay, and Bluetooth. You can get more details here.
It's been eight years since Sony refreshed its Core Series speakers, and the new lineup includes the floorstanding SS-CS3 ($239 each), the SS-CS5 bookshelf speaker ($219/pair), the SS-CS8 center channel ($169 each), and the SA-CS9 subwoofer ($239 each). The company utilized technology from the higher-priced AR and ES lines for these lower-priced designs. We received a demo of both hi-res audio and Blu-ray movies using the STR-DN1050 receiver and a complete CS speaker system, and it was quite impressive for the price. All the new products will be available this month. Needless to say, we'll be reviewing some of them to provide a more comprehensive evaluation, but it certainly seems like the company is on the right track in its goal to introduce hi-res audio compatibility and performance to a wider audience.
What do you think about hi-res audio? Have you embraced it? If not, what's holding you back? Do you think it can become a mainstream option? Let us know in the Comments section below.