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Yet to Be Heard, 'QSound' Gets a Mixed Review : Investors Lend an Ear to Archer's New Technology; Others Wary It Will Pay Off

September 11, 1989|KATHRYN HARRIS | Times Staff Writer

Can the contents of the black box really be worth $200 million?

That's the big question for "QSound," a three-dimensional sound technology being developed by a tiny Canadian firm called Archer Communications. Although the company has yet to ship a product or record revenues, it has attracted prominent Hollywood investors and its stock has soared to a market value of about $200 million.

The investors include Hollywood's most powerful talent agency, Creative Artists Agency Inc., and a respected post-production firm, Todd-AO Corp., as well as individuals such as movie producer George Folsey Jr. and record producer Jimmy Iovine. Folsey and Iovine have accepted corporate titles at Archer, which maintains a Los Angeles office although most of its 30 employees are in Calgary, Alberta.

The high-flying stock has also attracted the scrutiny of Canadian and U.S. regulators. At its current price, Archer is one of the most highly capitalized firms on the Vancouver Stock Exchange, which is known for "chicanery," as Forbes magazine recently observed. A number of traders have taken "short" positions, betting that the price of the stock will tumble.

If QSound works, and works on a cost-effective basis, it will enable engineers to "place" sound wherever they choose when a master is in the final stages of preparation for a movie, television show or recorded music. There are other sound-placement systems, but Archer claims that QSound is unique because the listener won't need to sit in a predetermined location or to use special equipment to hear the resulting effects. Any set of conventional stereo speakers should do.

The premise has been received cautiously in some scientific circles, because no independent evaluation has been allowed. Eyebrows shot up when Archer sought introductions through a Hollywood talent agency instead of the scientific community. Even sympathetic technologists warn that while QSound may prove to be brilliant, there is no assurance that tough-minded record companies and movie studios will pay license fees and royalties large enough to assure Archer of big profits.

Unless Archer can persuade such companies that its technology will boost sales significantly, "I don't know if anybody is going to pay anything," says Bob Buziak, president of the RCA Records label.

Twelve days ago, Archer scored its first tentative deal with a video game manufacturer when it announced that Nintendo signed an agreement to license QSound if certain conditions are met in 90 days. Nintendo also said it would invest about $5 million in exchange for Archer stock as part of the deal. Neither the conditions nor the licensing terms were disclosed, however, and since the announcement, Archer shares have declined $2.125, closing Friday at $17.25 in over-the-counter trading in the United States.

Meanwhile, some scientists continue to say they're perplexed by descriptions of QSound.

"I don't know how this can be done, from what we everyday scientists know about how people hear and how sound propagates in a room," said Floyd E. Toole, senior research officer of the division of physics at Canada's National Research Council.

"The history of audio is just littered with gimmicks. It remains to be seen whether this is a breakthrough," said Toole, who, like Buziak, says he has not heard a QSound demonstration.

Some Are Enthralled

Daniel Gravereaux, who spent 23 years at the CBS Technology Center and is a past president of the Audio Engineering Society, questions how far QSound "can really get in the marketplace" when he recalls the resistance of artists and companies to earlier technological advances. "The sad thing is some of these things sound really great," Gravereaux says, before noting that he, too, has not seen any QSound data.

But some of the Hollywood producers and engineers who have heard QSound are enthralled. Two who may be staking their professional reputations on its potential applications are Iovine, the producer for artists such as U2, the Pretenders and Stevie Nicks, and Todd-AO Senior Vice President Christopher D. Jenkins, who with several co-workers won an Oscar for the sound in the movie "Out of Africa."

Iovine and Jenkins readily admit they haven't had a hands-on experience with the system, but each has made numerous trips to Calgary to see the work in progress.

"I don't like hype," Iovine says, but "I feel that this system does a lot more for the recording industry than the compact disc."

Iovine, who recently became Archer's vice president of music, shrugs off the decision not to solicit academic or scientific opinions. "This is not a cure for some sickness that we have to give to the scientific community," he says.

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