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
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.