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Apple, Amazon to Pay Correct VAT Rates in EU Countries?

An article in The Guardian this weekend claims that the recently announced UK budget includes a provision “making sure that internet downloads are taxed in the country where they are purchased, meaning web firms such as Amazon and Apple will have to charge the UK’s 20% rate of VAT. At the moment they are allowed to sell digital downloads through countries such as Luxembourg, where the tax rate is as low as 3%.”

Currently, all major companies that sell digital content in the EU siphon that money through the complicit little country of Luxembourg to save a lot on VAT. According to the budget document, “…the government will legislate to change the rules for the taxation of intra-EU business to consumer supplies of telecommunications, broadcasting and e-services. From 1 January 2015 these services will be taxed in the member state in which the consumer is located, ensuring these are taxed fairly and helping to protect revenue.”

There’s something I don’t get, however. As far as I understand EU taxes – and I collect and claim VAT for my professional expenses, so I do know how it works – no single country can decide what will happen in other countries. So if this change were to be made, it would have to be an EU decision, not one made by a single country.

Intra-EU goods are charged the rate of VAT of the country where a business is based, and there happen to be lots of businesses in Luxembourg. However, the 3% VAT rate in Luxembourg only applies to books; other digital items are taxed at 15%, and that rate is increasing to 17% in 2015. Amazon UK has a help page about VAT rates which states:

Sales of digital products and services including Kindle content, Amazon Apps, Software & Digital Games (including prepaid gaming cards), MP3 downloads, Cloud Player, and Cloud Drive are shown inclusive of Luxembourg VAT rates of 15% (3% for e-books).

Unfortunately, The Guardian chose to simply say “as low as 3%,” rather than to go into detail about the actual VAT rates charged.

So there’s no worry that music or apps will cost 20% more, as some news outlets are claiming. If anything, they may see a 5% increase, but it’s more likely that large companies, such as Amazon, will just eat the difference for now, to not disturb the round numbers they use as prices.

As for Apple, it’s a different story. They charge 23% VAT on certain purchases:

The VAT rate for Apple customers who purchase Electronic Software Downloads or other Apple products which are classified as services under EU VAT law will be 23% Irish VAT. This is because the place of supply of these products under EU VAT law is Ireland as the country from where Apple Distribution International makes these supplies.

However, this only applies to items Apple sells through their online Apple Store, not the iTunes Store, which is taxed via Luxembourg. For example, if you purchase a developer account, or iCloud storage space, you’ll be billed at 23% VAT. But all iTunes Store purchases get the Luxembourg rate; at least until next year, when they’ll be billed at the local rate.

It’s worth noting that Luxembourg is one of the countries with the lowest VAT rates on ebooks. Most countries – including the UK – charge VAT on ebooks as though they were apps or music, not the same rate they charge on physical books. However, ebooks should soon cost less in the UK. They currently get hit with 20% VAT, and an EU rule is harmonizing VAT rates for print and ebooks in the near future.

But it’s certainly a good thing that these companies will pay VAT in the countries where they make their sales. This is logical, and it should never have been otherwise. Now, if only governments can get these companies to pay income tax on the profits they make in each EU country…

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Streaming Silence and Scamming Spotify

An article in the Guardian today explains how Vulfpeck, a funk band from Michigan, has released an album of silence, in order to scam spottily.

Their new album Sleepify consists of 10 songs of absolute silence, each clocking in at either 31 or 32 seconds long (tracks need to be listened to for 30 seconds to register as having been played). All they ask is that their fans stream it overnight on repeat while they sleep, in order to produce enough royalties for the band to go on tour.

While there is a certain elegance in this idea, it’s also quite pathetic. If they need to nickel and dime Spotify – or, more correctly, play them for tenths of nickels – to have enough money to tour, they should probably go into another business.

Apparently, this is a thing: asking fans to play your music in loops to get money from Spotify. This is akin to putting Google Ads on your site then having all your friends click on the links, over and over, so you can make some spare change.

I predict that Spotify will introduce a limit to payments because of this type of scam. They could limit the number of plays per 24 hours by each user, and a lot of bands would lose out on real income.

Oh, and, I wonder: has Vulfpeck made a high-resolution version of Sleepify to play on Neil Young’s Pono?

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Sony’s Web Content Claiming High-Resolution Music Sounds Better than CDs Banned in UK for False Claims

I recently explained how high-resolution music is a marketing ploy to get you to pay more for the same music you’d get on a CD. I noticed an interesting ruling recently by the UK’s Advertising Standards Authority, banning content on Sony’s website which claimed that high-resolution audio sounds better than CDs. The content includes some of those stair-step graphs, which are often used to “justify” high-resolution audio, with the following text:

Simply, it gives you digital audio formats that deliver better than CD quality sound to your ears. That’s because it converts analog music to digital at a higher rate than CDs. CDs are standardised at 16bit/44.1kHz, while high resolution sound is normally 24-bit/192kHz. The result? You get to hear performances exactly as they were recorded, without any sound compromise.

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The ASA rejected the ad, saying:

Whilst we acknowledged that the technology used in HRA allowed more data to be captured and greater frequency range and wider dynamic range reproduced, we had not been provided with any evidence that the differences were perceptible by the average person. Although we considered that whether or not different sounds were better or more pleasant to listen to was a matter of subjective opinion, we considered that the graphs implied that the sound quality produced by HRA was perceptibly different to CD audio quality. Because we had not seen evidence that was the case we concluded that the ad, and in particular the graphs, misleadingly exaggerated the capabilities and benefits of high-resolution audio.

The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation) and 3.11 (Exaggeration).

The ASA cited the following action to be taken:

The ad must not appear again in its current form. We told Sony Europe Ltd to ensure that any use of the graphs in their advertising did not exaggerate the capabilities and benefits of high-resolution audio.

As of this writing, the Sony website still has the offending content online.

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Neil Young Is Confused

Okay, I swore to a friend that I wouldn’t keep harping on about Neil Young. I have nothing against the guy; he made some great music back in the day, even though I’m not especially a fan of his music.

But this 68-year old musician, who suffers from tinnitus, and most likely some hearing loss, thinks he can tell everyone that only he knows how music should sound. I’ve written about Pono – his new high-res music service and player – and pointed out how some of the numbers cited are bogus. I’ve also explained why high-resolution music is a marketing ploy.

But today I read an interview with Neil Young which suggests that the guy really is confused. Speaking with Spin magazine, Young discussed his forthcoming album, A Letter Home:

Well, A Letter Home is going to be very confusing to people because it is retro-tech. Retro-tech means recorded in a 1940s recording booth. A phone booth. It’s all acoustic with a harmonica inside a closed space, with one mic to vinyl. Directly to vinyl.

An interesting approach, and one that a few other musicians have used in recent years. But here’s where Young seems to lose his grip on reality:

You can make a lo-fi, analog record, direct to vinyl, transfer it to 192 [kHz], and you have a high res copy of a lo-fi vinyl record.

There’s a word for this, Mr. Young: bullshit. Neil Young is suggesting that by up sampling a poor-quality recording, you can somehow magically transform it into high-resolution audio. Nope; that’s not how it works. In fact, that’s what audiophiles – the ones who believe there is a difference between CD-quality audio and high-resolution audio – are worried about. There have been many cases when retailers claimed they were selling recordings in high resolutions, yet these were simply upsampled from CD quality, or even worse.

To understand what this means, let me give you an easy-to-understand analogy. Unless you’re sitting far from your TV, you can see the difference between DVDs and HD videos. Imagine upsampling the DVD video from the DVD quality – 480 or 576 lines, depending on whether the DVD is in NTSC or PAL format – to 1080p, or HD. The video won’t look like it’s in HD; it will still look like a DVD (albeit a bit better). But with audio, it won’t sound any better at all; it’s simply using more bits for the same music.

If Neil Young thinks that’s how high resolution music works, he truly is confused.

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Streaming Music and More on This Week’s The Committed Podcast

The Committed Podcast Icon 1400x1400 01On this week’s The Committed Podcast, in Schray, Rob Griffiths and I talk about streaming music: iTunes Radio, Spotify, Pandora and others. We also look at the latest iOS update, version 7.1. We notably look at a number of hard-to-find accessibility features in iOS 7.1.

Check out episode 26 of The Committed Podcast, “Islands in the Stream.”

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Music, Not Sound: Why High-Resolution Music Is a Marketing Ploy

High-resolution music has been in the news over the past few days. Neil Young’s Pono, recently announced, is a new music player designed to play high-resolution music files.[1] Pono will also have a music store; users will be able to buy high-resolution music files and sync them to the Pono Player, in a process that could be as seamless as using iTunes and an iPod.

High-resolution music files cost more than other digital downloads, and cost more than CDs as well. But are they worth the money? Can you hear the difference between a CD and a high-resolution music file?

The answer is most likely no. While there may be a small number of people who have the necessary audio equipment and good enough ears to hear this difference, those people are few and far between. Most people cannot even tell the difference between a high-bit rate MP3 or AAC file and a CD, let alone a high-resolution file.[2]

But digital music purveyors market high-resolution music in an attempt to make purchasers think that they are special, that they may, indeed, be one of the few people who can hear the difference between CDs and high-resolution audio files.

So what exactly is high-resolution music? Why couldn’t it sound better than CDs? And why doesn’t it? You can’t test the subjective experiences of listeners, so how much of that experience is just an expensive placebo effect?

Some Terminology

For any discussion of high-resolution music, it’s important to clear up some terminology. When you see high-resolution music files, you may see them described as, for example, 24/96. This means the music in the files is 24-bit, and 96 kHz. While high-resolution music comes in a number of different levels of quality[3], I’m going to focus here on the most common high-resolution files, which are 24/96.

Let’s begin by explaining the specifications for audio CDs. The Red Book standard[4] specifies not only how CDs are manufactured, but also how recorded music is formatted for them. Audio CDs contained two-channel linear PCM audio [5] at 16-bit and 44,100 Hz; this is commonly abbreviated as 16/44.1. There are two elements here: the bit depth, which is 16-bit, and the sample rate, which is 44,100 Hz.[6]

Bit depth affects the dynamic range of music as well as the signal-to-noise ratio. The dynamic range of music is the difference between the softest and loudest parts of the music. A good example of music with a very broad dynamic range is Mahler’s third symphony. Listen to the final movement, and you’ll hear some very soft sounds as well as an extremely loud sounds. Or listen to Led Zeppelin’s Stairway to Heaven; it starts with a soft acoustic guitar and builds up to a fuzz-box crescendo.

The bit depth is essentially the number of variations a recording can choose from in a given slice of time. 16-bit audio allows for a range of 65,536 possible levels; 24-bit audio increases that to 16,777,216 levels. However, between the threshold of hearing and the threshold of pain, humans cannot distinguish enough of these volume differences for this to be noticeable.[7]

The second number in our pair is the sample rate: this is the number of “slices” of audio that are made per second, and are measured in Hz (Hertz). 44.1 kHz means that the music is sampled 44,100 times a second; 96 kHz means it is sampled 96,000 times a second. The sample rate primarily affects the range of frequencies that can be reproduced by a digital music file.

And the combination of the two determines the size of audio files. A CD can contain up to around 80 minutes, but if it were encoded at a different bit depth or sample rate, it would contain less music. A four-minute piece of music on a CD takes up 41.1 MB; at 256 kpbs (AAC or MP3), it takes up 7.5 MB. But jump to a 24/96 file and it is around 138 MB, though, using lossless compression, it can be shrunk by about 1/3 to 1/2 of its original size.

Is Bigger Better?

This is where the marketing comes in: bigger is always better. It could seem logical that higher numbers would result in better sounding music, but this isn’t the case. Let’s take the bit depth. 24-bit music, according to the marketing department, sounds better than 16-bit music. Yet 16 bits are more than enough to cover what human beings can hear.[8] Too broad a dynamic range can be harmful; if you set the volume to hear the quiet parts of the music, the loud sections could burst your speakers, and hurt your ears.

And that sample rate? Interestingly, CDs use a sample rate, as we saw above, of 44,100 Hz; not a random number at all. This number was chosen because the highest frequency that humans can hear is around 20,000 Hz. According to the Nyquist theorum[9], the sample rate of music must be at least twice the maximum frequency that humans can hear. Since it’s best to leave a little bit of wiggle room, audio engineers took 20,000 Hz, multiplied it by two, and then added bit of padding, just in case.[10] Most of us don’t even hear up to 20,000 Hz: and, as we age, our hearing deteriorates. I can’t hear above around 12,000 Hz; you can test your hearing here.

Yet high-resolution audio files at 96 kHz can reproduce sounds up to around 48,000 Hz. Dogs can hear sounds that high; but not humans. In fact, it’s very likely that your stereo system cannot reproduce sounds at such levels. Most standard stereo equipment reproduces sounds from 20 to 20,000 Hz. So for ultrasonic sounds to be reproduced, every element of the audio chain needs to be able to reproduce these sounds. If your amplifier can go up to 40,000 Hz, but your speakers or headphones cannot, no amount of voodoo or magic can make high frequencies audible.

While it is certainly possible to have stereo equipment that can reproduce ultrasonic frequencies, you’ll never hear them. Yet, very high sample rate music files can actually cause distortion. As an article on xiph.org[11] says, “If the same transducer reproduces ultrasonics along with audible content, any nonlinearity will shift some of the ultrasonic content down into the audible range as an uncontrolled spray of intermodulation distortion products covering the entire audible spectrum.” There are a lot of $10 words in a sentence, but what they mean is that very high sample rates — in this case, 24/192 – can actually make music sound worse; harmonic distortion can occur when the ultrasonics intrude on audible frequencies.

On top of that, hardly anyone can distinguish music at high sample rates from CDs. A number of blind studies have proven this, time and time again.[12]

“Music as It Was Intended to Be Heard”

One of the biggest marketing arguments for high-resolution music files is that “this is how music was intended to be heard.” Pono Music says, “[Musicians] want their music heard and experienced the way they brought it to life with great care and commitment, in the studio.”[13] This is how the music was recorded; this is how engineers heard it when they edited the music. Therefore, this must be better.

Two elements separate the recording studio – or, more correctly, the engineer’s control room – and home listening spaces. First, control rooms have high-quality monitors (speakers) which are neutral, and which are designed to provide the best possible audio fidelity. Second, control rooms are completely soundproof rooms with no parallel surfaces and completely absorbent walls. Again, they are designed to have no obstacles to reproducing the music as it was recorded. But you won’t have that at home, unless you have a very expensive listening room (and there are some people who go to this expense).

Some websites sell high-resolution files under the moniker “studio masters.” And, in fact, these files are studio masters; what engineers used in the studio. But that doesn’t mean that these are files that we should use when listening to music, and it certainly doesn’t mean that they’ll sound the same on home audio systems.

There is a very simple reason why engineers use high bit depths and sample rates when recording music. Digital music involves a lot of calculations; when you make changes to music, with equalization, speed changes, etc., you are multiplying and dividing numbers. When mixing and mastering an album, an engineer performs thousands of operations to alter sound. Each one of these calculations — to simplify — leads to numbers being rounded off. The bigger the numbers, the less of a chance there is for rounding errors to affect the music. But this doesn’t mean that we, as listeners, need the same types of files. We don’t manipulate these files; we may change volume, or even use some subtle EQ, but that’s it.

In some ways, suggesting that listeners need studio masters is akin to saying that instead of eating sausages, we should get all of the ingredients put together ourselves. Nevertheless, you will find many vocal audiophiles will provide a number of reasons why they need to listen to music files that contain sounds that they simply cannot hear.

However, if someone really wants to provide “music as it was intended to be heard,” they’d do a lot better to look at the mastering process that’s been destroying music in recent decades. Colloquially known as “the loudness wars,” music producers, prodded by record labels, use dynamic compression to increase the overall volume of music, making it sound horrendous. Since, in general, louder sounds better, or brighter, when you compare two songs, producers have been cranking up the volume to make their songs stand out. But string together an albums worth of overly loud tracks, and it’s fatiguing. But it’s a war of attrition, and our ears are the losers. No high-resolution files will make this music sound better, ever.[14]

Also, mastering is often done by someone other than the recording engineer, and someone who may not have been involved in the recording process. So is this music truly the way the artists and engineers intended you to hear it?

Listen Better

As I said in the title of this article: music, not sound. There is a small minority of music listeners who are obsessed by the idea of obtaining “perfect” sound. They go to great lengths, and great expense, to try and reproduce the sound that one hears in a concert hall. By focusing on sound quality alone, it can be easy to neglect the music. Such people may get frustrated if the music doesn’t sound good enough, and find it hard to become immersed in great music.

I’m a music fan. What I want most of all, is good music. Some of my best listening experiences have come on tinny record players or booming car stereos. If the music is good, then the sound quality is less important. This said, without getting obsessive, there are a number of ways you can make your music sound better without maxing out your credit card.

For portable listening, start by getting rid of those white earbuds in a bundled with your iPod or iPhone. Get better earbuds, or get proper headphones. With headphones, you get what you pay for, up to a few hundred dollars. After that price point, it gets a bit iffy.

If you listen to music on your computer, get rid of those little desktop speakers and hook up a real stereo. I strongly recommend getting a good DAC — a digital-analog converter — because the sound card in your computer is probably not great. (Though no DAC will help if your amplifier and speakers are poor.) I have a DAC between my Mac and my amplifier; I find that it does make a difference, providing a more detailed soundstage.

And if you’re listening to digital music — you’re reading this article, so I assume you are — make sure it is at sufficiently high bit rates. Apple’s iTunes Store sells music at 256 kbps, which, for nearly everyone, is indistinguishable from uncompressed music. If you use MP3 files, go for 320 kbps; it should sound just as good as CDs as well.

But unless you’re willing to spend as much money on your stereo system as you do on your car, and set up an acoustically-controlled room, there is simply no way that high-resolution files will make any difference to the music you listen to. Lots of people try and convince you that there is a difference, but most of these people simply want to take your money. And you have to ask yourself: of the ones who aren’t asking for your money, how many are desperately seeking validation for the very large sums of money they’ve spent on something modern science tells us they cannot hear.


  1. http://www.mcelhearn.com/whats-the-point-of-pono-and-why-are-ponos-numbers-bogus/  ↩

  2. I consider high bitrates to be at least 256 kpbs for AAC or 320 kpbs (or VBR V–0) for MP3 files. Check whether you can hear the difference: http://www.mcelhearn.com/can-you-really-tell-the-difference-between-music-at-different-bit-rates/  ↩

  3. The most common high-resolution music files are 24/48, 24/88.2, and 24/96. Pono will offer files up to 24/192, and some companies sell files up to 24/384.  ↩

  4. https://en.wikipedia.org/wiki/Compact_Disc_Digital_Audio  ↩

  5. Linear pulse-code modulation: https://en.wikipedia.org/wiki/Pulse-code_modulation.  ↩

  6. One must not confuse bit depth and bit rate, which is used to describe how much data is in a music file per second. For example, 256 kbps means that there are 256,000 bits of data per second of music.  ↩

  7. See Is Bits Really Bits?. And, how about a test? Check whether you can hear the difference between music at 16 bits, and the same music downsampled to only 8 bits: The 16-bit v/s 8-bit Blind Listening Test. I got 7 out of 10 when I did the test; that’s better than random.  ↩

  8. Dynamic range is quite complicated. See this article for more detailed information than you probably want.  ↩

  9. https://en.wikipedia.org/wiki/Nyquist_frequency  ↩

  10. There are also some other technical reasons why that specific sample rate was chosen. “Professional video recorders were originally used to prepare CD master tapes because they were the only recorders capable of handling the high bandwidth requirements of digital audio signals. Because 16-bit digital audio signals (and error correction) were encoded as a video signal, the sampling frequency had to relate to television standards’ line and field rate, storing a few samples per scan line. […] With three samples per line, 490 x 30 x 3 = 44.1 kHz, it is just right. […] Therefore, 44.1 kHz became the universal sampling frequency for CD master tapes. Because sampling-frequency conversion was difficult, and 44.1 kHz was appropriate, the same sampling frequency was used for finished disks.” Principles of Digital Audio, Sixth Edition, Ken C. Pohlmann. (Amazon.com, Amazon UK)  ↩

  11. https://people.xiph.org/xiphmont/demo/neil-young.html  ↩

  12. See, for example, The Emperor’s New Sample Rate.  ↩

  13. http://www.ponomusic.com/#faq Or Try for yourself.  ↩

  14. See The Future of Music and, for a more technical explanation, ‘Dynamic Range’ & The Loudness War. And The Dynamic Range Database is a list of more than 50,000 albums, showing their relative loudness.  ↩

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Another Pono Post: Where’s the Classical Music? and How Can Anyone Trust Neil Young’s Damaged Ears?

I’ve written about Neil Young’s Pono recently (here, here, here), and a commenter to one of my posts made me realize something. While Neil and his friends are waxing so effusively about high-resolution music, why are they ignoring what is probably the largest segment of the high-res sector: classical music?

Pono seems much more interested in studio music, and the testimonials in the promotional video all discuss how much better things sound, but often compared to what the musicians are used to hearing in the studio, on the type of audio equipment that few people own. What about classical music? Here, it’s not at all about the studio, but live recordings in concert halls. I would think that, given the classical music market and high-resolution music, this genre wouldn’t be slighted.

Also, why is the video on the Pono Kickstarter page showing people listening to Pono in a car? Seriously? They’re all so excited listening to the music, but in an environment that is totally unadapted to listening to serious music. It makes no sense. And the testimonials of the musicians in the video sound just like something on the Home Shopping Network. We have no idea what they were listening to, what formats were used as comparisons to the Pono sound. And did they do blind tests, or were they simply told which is which, so they could be prepared to think that Pono was better?

Also, Neil Young is known to have tinnitus, and some hearing loss; so how can he hear the differences in these different formats? As he has said, “I hurt my ears and they’ll never be the same again.” I’m sure that many of the aging rock stars in the promotional video also have hearing loss; it’s what happens to musicians. So people should trust what they say?

See also: Music, not Sound: Why High-Resolution Music Is a Marketing Ploy.

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The Pono Kickstarter Campaign and Neil Young’s Fans

I’ve written about Neil Young’s Pono here and here. I mentioned that the use of a Kickstarter campaign suggests that investors aren’t ready to put their money into something like this.

However, in just 24 hours, the Kickstarter has exceeded its funding level. Asking for $800,000, it has already gotten pledges, as of the time of this writing, of over $1.3 million. That’s pretty impressive.

However, when you look closely, you see that what is driving this interest is Neil Young himself. It’s likely that most of the pledgers are hardcore Neil Young fans. Look in the right-hand column at the different Pono models available. The Neil Young and Crosby, Stills, Nash & Young “signature” models are sold out; only one the other artist models has sold more than one hundred (Pearl Jam), and the next highest is Tom Petty with with 104 sales. It’s odd, though, that the Crosby, Stills & Nash model hasn’t been popular, with only 34 sales.

Also, while those numbers look impressive, it only adds up to – again, at the time of this writing – around 3,000 units sold. There’s no limit to how many of the standard units will be sold, and it will be interesting to see how many people go for this device at the end of the Kickstarter. Even if 10,000 people buy it, that’s still just a blip in the larger market of music player sales.

See also: Music, not Sound: Why High-Resolution Music Is a Marketing Ploy.

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