More on MusicGiants By Jason Victor Serinus June 21, 2009 — On June 2, Stereophile reported that HDGiants.com, formerly known as MusicGiants.com, had filed for Chapter 11 bankruptcy. The future of the high-quality music and video download site that had most recently begun offering "Super HD" 24-bit surround-sound downloads was unclear.

Close to two weeks later, we were finally able to connect with HDGiants CEO Scott Bahnemann and get a clearer picture of HDGiants current situation and future plans.

"We were in the midst of an internal recapitalization," Bahnemann explained by phone. "HDGiants needed to restructure between debt and equity, and we weren't able to make some of our existing shareholders happy with the new structure. We needed more time to bring in additional capital, and Chapter 11 was the only way to buy time and keep going."

Nonetheless, Bahnemann acknowledges that restructuring and refinancing are difficult to pull off in these tight economic times. Come fall, he expects that HDGiants will either be out of Chapter 11, or purchased by one of the many parties who have shown interest in acquiring the company's assets.

Meanwhile, the company is neither taking on new customers nor adding new content. It is down to a skeletal staff that is maintaining customer support, serving existing customers "and keeping the lights on."

History and goals: When MusicGiants launched six years ago, its goal was always to feed home equipment users in the US rather than compete with iTunes, Wal-Mart, or other major music distributors. The plan was to embed its media store into hardware that went into people's homes in the form of media servers, thereby creating a base of customers who put a premium on high-quality music reproduction.

At its peak, HDGiants was working with 60 different server models, mostly plugged into house entertainment systems that put a premium on sound quality. It had 1,000,000 titles available for download, the majority of which were from major labels. It was also preparing to finally make its downloads available to Mac users. Given the change in its financial situation, however, the company's current offerings are mostly from what Bahnemann dubs "independent outfits," and plans for DRM-free, cross-platform downloads are on hold.

Bahnemann is certain that HDGiants' basic orientation was correct. What is necessary for the future of the download industry, however, is universal adoption of a single high-quality format.

"People around the planet have proven that higher quality will sell," he says. "But there are too many different formats, too much confusion. As an industry, we have to settle on one high-quality format and a single lossless or compression-less technology, and get everybody on board. If we don't provide a quality experience, and sell a premium product at a premium price, I don't see people paying for it ever again."

As for whether audiophiles will continue being able to pay for content from HDGiants, stay tuned.