The (Eventual) Return of Hi-Fi

The success of Pono’s Kickstarter campaign has spurred a debate as to whether or not a sufficient market exists for high fidelity music players. As of this writing, the campaign had raised over $5,800,000 with 3 days to go. Neil Young’s passionate promotional speech at SXSW gave Pono a nice lift. It would certainly appear that they’ve had a tremendous launch, considering their stated goal was $800,000. Pono looks poised to carve out a nice niche for itself from those consumers who have always demanded high quality audio. Most of us who are passionate about music would love to see high fidelity make a triumphant return. However, it will take more than Pono to change the market and improve sound quality for the general consumer.

While Pono will be examining its profit to measure its success as a company, Pono’s influence on the standard of audio quality for the masses will be better calculated by measuring the number of units sold. According to Apple press releases, the iPod sold 600,000 units in the first two years, and a total of over 10,000,000 units by the end of the 4th year. The iPod, an absolutely wonderful innovation in terms of storage and access to music, was disastrous for fidelity. Its massive market penetration moved MP3 from a convenient storage format to the common denominator of expected audio quality.

There are a couple of reasons it is unlikely that Pono will be able to find the kind of market share required to raise the standard. As Troy Wolverton points out, one of the key issues is that iPods have been absorbed into iPhones. People rarely carry a separate device for listening to their music now. The idea that the average consumer will return to carrying two pieces of equipment seems highly implausible. Another is that usage patterns have changed, with most casual music fans utilizing streaming audio and cloud storage. The new normal is one client device and a cloud, not multiple hard drives carried on your person.

So, in the face of such audio downers, why is it that the dream of Neil Young and Pono will eventually be realized?

The first reason is that a person can only logically listen to one song at a time. This means that while there is still room for growth in the streaming audio market, sometime quite soon the competition will be far too bloody to survive on access alone. Competitors will be trying to find ways to differentiate themselves. We already see this in the efforts of streaming services such as Beats Music and Songza, which promote curation (basically human DJs instead of algorithms) as their principal value add. If you’ll notice, Beats is also a leader in the headphone arena. This is no accident. This is savviness, recognizing that a return to high quality audio is coming, while also understanding that the usage pattern of listeners has changed dramatically. Just wait. Before you know it, future providers will be marketing themselves as if they invented the kind of audio quality that’s been around for decades.

The next reason audio quality will improve is less obvious. All signs point to a return to patronage in the music industry. For most artists, crowdfunding services, such as Kickstarter, have become the new record labels. While casual music listening will be done through streaming, true fans of a particular artist demand a personally meaningful experience that services like Spotify will never be able to supply. If we accept the premise that listeners are only going to carry one device, the logical encapsulation of that special relationship will be through apps. These “Album 2.0s” will merge the power of musical expression with all the benefits of software, such as dynamism, updates, and interactivity. Whereas record labels are motivated most intensely by profit, artists want you to hear the best version of the art they create. As music apps become a successful source of revenue for companies such as Apple, that community of artists and true fans will push such device makers to improve their digital to analog conversion, and add a framework to nurture that marketplace.

A final, fairly simple reason, is Moore’s Law. Essentially, this is the observation that computing power increases exponentially over time. This means costs per units of both memory and processing speed get dramatically less expensive, and come in much smaller packages. While some say we may hit limits of physics before long, betting against this exponential growth has been a losing proposition for over half a century. This is the part of the equation Pono is counting on, and it’s why Pono is just now becoming a viable, if niche-focused, product. While Pono has probably got it wrong that consumers will carry around an extra device, they are on the right side of history in being optimistic about processing and storage. As soon as it is painless for the average studio to do 192kHz/24-bit recording, as well as cheap to store tons of files at that resolution, and improving networks make it fast to steam and download these files, why wouldn’t everybody use them? It becomes a very easy way to differentiate yourself from the competition. Whether or not the average listener can tell the difference, all it takes is somebody marketing MP3 as the format “your parents listened to”. Sure, 8-bit graphics are nostalgic, but nobody accepts them as a standard anymore. In a sense, Pono’s vulnerability is that Apple will just absorb the technology into the iPhone (or whatever comes after the iPhone).

Take heart, musicians and audiophiles. While Pono may not survive the battle, there are larger forces at play, and higher fidelity rides the wind.

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