SIGNALS & NOISE (Letters to Editor) (Mar. 1990)

CD Costs Redux

Dear Editor:

I would like to respond to J. Michael Gatien's letter ("Signals & Noise," June 1989). I have some additional information that may give a clearer picture of the CD cost question raised in this column by reader David A. Morton (October 1988). In his letter, Mr. Gatien paraphrases what Mr. Morton had said previously: "The average cost of these purchases [recordings bought through CD and record clubs] demonstrates overcharging by record labels at the retail level." He further states that Mr. Morton did not have sufficient information on which to base his opinion. Well, I guess that depends on whether you're a record label or a consumer. I recently came across some interesting figures in an April 1989 Mix magazine article. Jack Kiernan, senior vice president of Philips and DuPont Optical (PDO), had presented this information at a meeting of the International Tape/ Disc Association. Unfortunately, the article doesn't name who did the research, but possibly Mr. Kiernan himself, or PDO, did the fact-finding.

For the period 1986 through 1988, retail prices declined 31%; wholesale, 23%, and replicator costs, 70%. For 1986, the shares of CD revenues were around the following: Retailers had a 19% share; wholesalers, 61%, and replicators, 20%. In 1988, it was as follows: Retailers, 17%; wholesalers, 77%, and replicators, 6%. (These figures are only approximations, as I was working from poorly defined bar graphs.) Interestingly, Mr. Kiernan also noted in his article that the replicators' gross margin on CDs was then 4% to 5% lower than on tape or vinyl. The retailers' and replicators' share had dropped, and the wholesalers' had risen 12%. Another fact from this article: Of the 200 million production units in the U.S., 120 million are captured-production, meaning that 120 million CDs a year are produced by replicators that are owned either partially or wholly by the labels they service. This seems to indicate that for those 120 million units, the wholesalers' share is even larger.

Think about it. Out of a $12.98 selling price, a major label is taking perhaps as much as $9. To go further, remove the 65¢ that Mr. Gatien says goes to the artist in question, and there's $8.35 left. Translate that into 500,000 units, and the label gets

$4,175,000, while replicators are getting $100,000 or less, retailers somewhat more. As a consumer, I don't think it's especially fair that price cuts come only at the retailers' and replicators' expense.

As for the music club question, I know nothing about them except that they usually seem to be run by a major label. They charge regular list prices ($15.98 or so) for their CDs, with some kind of bonus for buying at regular club prices (buy one, get one at half price, etc.). With the profit that labels are making at retail (70% or more), they can afford to give away three CDs for every one they sell--and have money left over.

Everyone deserves a profit, and this issue is very complex, but when a CD can be manufactured for $2 (or less, in some cases I've heard of), coupled with a 31% drop in share at retail, I'd say music companies could give us discs for $9.98 or $10.98 and not be hurt too badly. Which leads me to agree with Mr. Morton. I think he has the information to base his opinion on.

-Ron Carlson; Ogden, Iowa

Binaural Oversight

Dear Editor:

Thank you for recognizing my work in "Binaural Overview, Parts I and II" (November and December 1989). However, I'm afraid these articles on binaural technology contained several significant inaccuracies.

First, Myers 3D Audio is a trademark of PM Productions in San Jose, Cal.

The 3D Audio processing computer described as being "as big as a refrigerator" was developed while I was working on my first-generation 3-D audio technology at Myers Laboratories.

We were the first in the world (October 1985) to process sound in real time to create a binaural image by purely mathematical modeling. No head-related transforms were used. The processing was performed by using a mathematical model that I created of the human binaural auditory system.

This work has been embodied in U.S. Patent 4817149 and related international patents, and is now considered to be a fundamental patent in audio technology.

The "refrigerator-size" computer that was mentioned as needed for the sound processing has long been replaced by VLSI chips, and is of very small size and weight.

Also, I am no longer Ralph Schaefer's partner, as the article stated. I knew Mr. Schaefer at Myers Laboratories, but I left there over three years ago to start PM Productions, which has been developing a second generation 3-D audio technology known as Myers 3D Audio. Our work is now complete, and within months, product will be forthcoming on Compact Disc and motion picture soundtracks.

I appreciate the opportunity to make these clarifications. I have been working on developing 3-D audio technology for 12 years now and have pioneered much of the work in this field. It is important to my work and my company that the history be kept clear.

-Pete Myers; Producer/Director PM Productions; San Jose, Cal.

It Happens Every Lirpa

Dear Editor:

As I was reading through the October 1989 issue, I noticed two listings for stereo gear from the prestigious manufacturer known only as Lirpa Labs. Both the IV-XXXI tonearm and the U8-IT surround sound processor sound like unique and revolutionary products. I wonder if you are familiar with some of the company's other stereo equipment.

The Lirpa Labs Model M-666 turntable is the only table specifically designed to play records in reverse. Its unique pentagram-shaped platter helps reduce vibrations to the stylus.

The Lirpa Labs Model R-ICBM loudspeaker is also revolutionary in design. It is uniquely suitable for rap music.

Each speaker consists of a satellite enclosure housing a 1-inch cellophane dome tweeter and a separate box for the lower frequencies. The 6 x 6 x 6 foot box has a 24-inch bass drum mounted to an opening in the front, which would normally hold a woofer.

An electromagnet controls a mallet, which strikes the drumhead to recreate those difficult lower frequencies. To keep the sound accurate and balanced, a crossover is included; it has a low-pass filter that cuts off everything above 20 Hz. Another product from Lirpa Labs is their innovative LD/LP/ CD/CED combi-player/microwave oven. This space-saving appliance includes a dinner-music shuffler that randomly chooses songs from an impressive selection of elevator favorites. I was disappointed to find these advanced components missing from your buyer's guide but hope to see them listed in the future.

-Stephen F. McMillan; Athens, Ga.

Club Fan

Dear Editor:

For the past four years, I have been a member of the RCA Compact Disc Club, located in Indianapolis. The Club started much like other record clubs, offering to sell one CD at full price and a second at half. At first, I happily received the catalog (about every three weeks) and had the opportunity to choose the "selection of the month," an alternative, or nothing. The catalog provides a brief description of the work, a picture of the CD cover, and comments from Fanfare, Gramophone, or a newspaper music critic.

My interest in music is classical, with a specialization in the baroque period.

It seemed, as time went by, that the Club's scope of baroque music increased, offering me better and broader choices. Last summer, I purchased the new Penguin Classical CD Guide.

Checking my music library against the Guide, I was very happy to have the selection I had made from the Club each month confirmed independently by the Guide's editors as generally top-level. My classical music background is at the novice level, and I am especially grateful to the Club for starting me off on the right foot by offering classical selections that are outstanding. I know I wouldn't have been able to acquire music of the same quality by browsing at the local record stores, and I would have spent more.

If this is not good enough news, the Club (along with the rest of RCA) was recently taken over by BMG. Since the change, there have been some really important developments. First, the range of labels continues to increase; BMG seems to be able to attract many European classical labels I don't generally see in the stores. Second, for over a year they have been offering, at periodic intervals, opportunities to choose three CDs for the price of one (how can they do that?) and a bonus certificate for a half-price selection.

These incentives have really helped me build up my library with the best, at very low cost. Finally, the level of service is outstanding. Whenever I have a problem, they take care of it effectively, without hassles.

If readers have not considered joining a classical music club to build their libraries, I recommend without any hesitation the BMG CD Club.

-Jack E. Loman; Madison, Wisc.

Polarity Revisited

Dear Editor:

The book review of R. C. Johnsen's The Wood Effect (August 1989) led me to do some experimenting. I inserted a polarity-inverting stage in my stereo system that could be switched in and out instantly by remote control. I listened to various kinds of music from FM and CD and to my own recorded voice. I could not convince myself of ever hearing a difference as I switched back and forth.

Then I decided to use a known wave shape, simulating an asymmetrical transient by injecting a train of pulses 1.2 mS wide and repeating about six times per second. Pulse width was selected to fit into the 30 to 350-Hz range of my woofers, and it produced a radiated near-field pulse shape of about 3 to-1 asymmetry. There was still no effect at the normal listening position, so I moved in close, with my ear about a foot from the woofer face. Now I could hear a difference-or did I imagine it? With the pulse moving the cone toward me, it sounded a bit fuller and a bit brighter when reversed.

What does it mean? Well, not much. But there may be a few souls out there who can hear a difference in their music when the conditions are right. All I know is, I am not one of them. I wonder if any readers have had experience with this subject.

-Kurt Staiger; Indianapolis, Ind.

(Audio magazine, Mar. 1990)

= = = =