Cost Efficiency of 7.1 analog

I have come to the realization that while digital technology is always changing, the computer industry and consumer electrics who manufacture the source players (like Pioneer, Panasonic, Samsung, Oppo) have always been in the forefront. There is one thing that never changes, and we know that as analog -- and frankly, this is what the audiophile companies are good at. I have been wrestling with this idea for a while now, and now that a couple key components have come out, I've settled on my perfect solution for leading edge technology (that I care about) and cost efficiency. That is, simply, to decode HDMI in the player and leave everything else in the analog domain.

Now I can find any discounted, yet still very decent, pre/pro of yesteryear with 7.1 analog passthrough (with a good analog stage, lacking in many receivers today), and use a good USB DAC for 2 channel. All this, including the amp, are static, but necessary, technology that will never change. Only my sources, the computer and the Oppo blu-ray player -- the most inexpensive of the components -- will be following the trail of technology.

Consider a few years down the line when they invent, arbitrarily, an HDMI2. Many people would be forced to upgrade both their players and pre/pros; but I... only the player.

The drawbacks are well understood. First, I don't get any post processing in the pre/pro. That's important for some people (and I wish they would make an outboard upgradable post processing machine), but I've always found that while THX improves dynamics, it came at the cost of a collapsed soundstage. Personally, I'd rather use an EQ; then, at least, I would see what's being changed. When I had to use my old Pioneer receiver, I found myself using Pure Direct mode most often. Post processing is nice to have when the mood arises, but not necessary for enjoyment.

Second, many receivers today have room correction, such as YPAO or Auddysey. It should be pointed out that not many higher end pre/pros do as of yet, so if you're interested in this, you've got a very limited selection. In my opinion, the cheap plastic microphones are flawed anyways, and in this case, there is the option for a dedicated outboard unit. I understand many see this as essential; when I've used it, there's always something funky going on with the soundstage and timber of the speakers that I've came to expect.

Third -- and the most common argument -- is that the DAC in the pre/pro is mostly better than the DACs implemented in the player. While this is true, for 2 channel, you could always run optical to the pre/pro, or get a outboard DAC. That leaves the movie soundtrack, and admittedly disappointing, an occasional blu-ray concert. I'd hope that I could run optical on 2 channel PCM mode to the pre/pro (instead of the DAC, to access the post processing), and take advantage of PLII for crowd ambience.

The advantages, though, in summary, are:
1. Cost efficiency - not having to upgrade most of your equipment in every iteration of new digital technology.
2. Better analog stage - Receivers and lower end HDMI pre/pros are not built with analog in mind.
3. Ergonomics - you get to keep the pre/pro interface that you've came to love and you don't have to reprogram all your remote codes, or relearn new remotes.
4. Less hassle - buy the best of what you could afford in terms of analog and just leave the box there. There is never a reason anymore to keep switching out units.
5. Less operational quirks - in my opinion, audiophile companies who chase technology cannot compete with the mass-produced brands in engineering. Consumer electrics had a major headstart in programming for HDMI, so that while their receivers and players are functioning, for the most part, flawlessly, audiophile units like NAD and Cary are still plagued with bugs, noises, and dropouts. The old tried-and-true units like the Proceed, older Classe, bel Canto, and many others, were the pinnacles of quality before the HDMI age. They don't pop. Neither do the players when they switch chapters, or during fast-foward or rewind.

Proposed arrangement would be:

Blu-ray (multiple formats) player --> Analog 5.1 --> Pre/pro

Computer/Squeezebox solution --> Optical --> DAC --> Pre/pro

PS3 --> Optical* --> Pre/pro
*I don't need lossless playing video games

For concerts:
Blu-ray player --> Optical (2 channel mode) --> Pre/pro (PLII processing)

And then: Pre/pro --> Outlaw ICBM (analog bass management) --> Amp -- Speakers

The only thing I would be FORCED to change EVER would be the source players (i.e. the computer, the PS3, and the blu-ray player). The rest remains in the chain as far as I could foresee in my lifetime. Note that when I say "forced", what I mean is forced when new technology arises. I am not immune to upgrades when a deal comes along :)

I'm sure I'll have my eye on the Classe ssp-800 a couple years (say 4-5) down the line when it comes down in price, although, with analog passthrough, I am not sacrificing any obvious qualities. I should say that, in principle, I'd prefer to keep things in the digital domain. Sadly, in practice, it doesn't quite work out that way due to how the industry works.

Any thoughts?
Wow, you've got a lot to think about. I'm lazy I guess, three power cords, three $6 HDMI cables, and eight speaker connections, done. I bought three Pioneer Elite pieces and added two more speakers for a dedicated HT. The surprise was how much I like multichannel music through this system.

My Tenor player brought over the first pass of some of our post production work on his MacBook USB'd to his new Wavelength Brick DAC out to my two channel system. This DAC is a major improvement in digital playback. Aside from the LP's that didn't make it to digital my analog setup is in grave danger. I'm glad I didn't go nuts on digital playback. It's almost like my player has a VHS logo on it.
If your pre/pro has bass management then you might want to go optical from Blue-ray to the pre/pro. Bass management can be just as important as eeking out that extra wee bit of clarity that you might get by running analog from your oppo (and avoiding jitter issues with the digital interface)

I run a separate PEQ to control the subwoofer but you could use your pre/pro to do that and most pre/pros do processing in the digital domain (better and cheaper to implement)
The new Oppo Blu-Ray player is supposed to have 7.1 analog outputs. The 300 and 600 series Arcam receivers have good sound. I would bypass the video switching in the receiver and use a learning remote to sync the audio and video. HDMI compatibility is a PITA. A properly functioning HDMI audio hookup may not sound as good as the analog connections.
Vicdamone, I agree! Analog IC's are going to be a pain in the ass, and are going to cost me some. Fortunately, I'm not a big proponent of expensive cables; I'm looking at Blue Jeans Cables 6 1m lengths for about $100. I got a Cobalt cable, I think, and another one, so I could do a quick comparison to see if I'm missing anything. On the other hand, the advantage is once I set it up, leave it there, for the entire length of the blu-ray technology, and whatever other digital source -- the only way I'm moving it is if in the distant future, they don't make DAC's anymore. Highly unlikely!

By the way, I'm eyeing the Tadac, myself.

Shadorne, that wee bit of clarity is a big difference to me. Luckily, I have a Outlaw ICBM-1 from way back that I had no use for (I don't know why I bought it, but now I do). It basically handles bass management (crossovers) and mixes the LFE channel in the analog domain.

I'm not sure how big of an issue jitter is -- I'm sure my current AVP2, and a Classe or Bel Canto that I'm planning on replacing it with, has better DAC's than the Oppo -- but I'm sure it doesn't make a big enough difference in my home theater enjoyment. Maybe it would 2 channel (doubt it), but the movie would have to suck majorly if that's what I'm paying attention to. To me, DAC's are like the icing on the cake.

What kind of P (Parametric, I'm assuming?) EQ do you have? Do you find adding additional boxes in the chain obscures soundstaging or imaging?

Dotsystem, I'm not sure if analog would sound better, but I certainly can't find any reason for its detriment (besides DAC's...)
A properly functioning HDMI audio hookup may not sound as good as the analog connections.
Anything's possible but this generalization is no more valid than its converse. There are, simply, too many variables for any such determination to be more than specific to the particular test context.

OTOH, it is clear that there are operational differences to the two hook-ups and they have consistent advantages and disadvantages.

My thoughts exactly!!

Since I have an outboard video scaler, I don't need my pre/pro to do any switching or scaling. No chasing after the latest HDMI formats. I rather spend my money on a decent yesterday (yesterday year even) pre/pro with excellent DAC and analog outputs and feed it with (i) 7.1 inputs for movie and (ii) digital input for music using the same DVD/BluRay Player. I also have a Mac for MP3 and internet radio feeding the same pre/pro. Down the line, I might even get a separate highend CD player. For me, movie soundtracks are for fun but 2-channel music is where I focus my attention.

At the end of the day, it is just hard for me to justify paying the premium on technology that will become obsolete in 1-2 years. Don't get me wrong, I like to upgrade and will in fact be getting the Oppo BluRay player for my Krell HTS7.1 but it is significantly cheaper than going all out on a new pre/pro with HDMI 1.3 or whatever the next decoding scheme they come up with.
What kind of P (Parametric, I'm assuming?) EQ do you have? Do you find adding additional boxes in the chain obscures soundstaging or imaging?

There is no soundstaging or imaging from a subwoofer so I have no worries putting a modest priced Behringer PEQ in front of it. I just use it for room eq. The main speakers run full range no EQ or filters at all.
Shadorne, that's an interesting solution; do you then measure the room response manually with an SPL meter? I suppose if it's only done once, then I could handle that and avoid having to invest in costly automatic room EQ. I've also been researching bass traps lately and it seems some inexpensive batts of recycled cotton would do the trick. I could frame them with pretty fabrics and hang them like wall art. Between that and the PEQ to take care of low end and I'm golden. Thanks!

Kal, could you please elaborate on the consistent advantages and disadvantages regarding the two hookups? I'm afraid there may be some aspect I missed.
Millicurie999, movie players are much more inexpensive than replacing pre/pros, and they are more stable (than newer pre/pros) to boot! I agree that 2 channel is the focus, and even in concert blu-rays, I care most about the coherency of the front soundstage, and less about what the guy sitting behind my vantage point (rear speakers) is screaming.
Actually, the OP went through all these and seems to have a reasonable grasp of them. Things like where the better D/As are, avoiding redundant A/D/A, paying attention to the potential for bass management and room EQ, etc. All well discussed in many forums, including this one.

Shadorne, that's an interesting solution; do you then measure the room response manually with an SPL meter? I suppose if it's only done once, then I could handle that and avoid having to invest in costly automatic room EQ

Yes I have done it that way (with a ratshack meter) but I prefer to use a measurement microphone with a program like Room Eq Wizard or Fuzzmeasure because you can also do waterfall plots (look at al important decay times). Fuzzmeasure allows sweeps of 10 secs and allows me to stack the results - this helps in getting an accurate waterfall plot and accurate RT60 even down to 20 Hz (hard to achieve due to background noise). I posted a few example plots on my virtual system. Good Luck!