06.05.2009 — HDGiants hopes to emerge from Chapter 11 bankruptcy protection this summer, according to Scott Bahneman, who founded the music download service in 2003.

The company, which pioneered high-bit-rate digital downloads, ran into some problems "in the midst of recapitalization," says Bahneman, who personally has more than $3.1 million in the business.

HDGiants -- originally MusicGiants until the company began offering video downloads last year -- filed for bankruptcy on May 18 in Reno, Nevada.

"It gives the company a chance to put together appropriate partners and move forward," Bahneman says.

Is there in fact a market for high-definition downloads, especially audio?

"We would hope so," Bahneman says. "The company is completely predicated on it."

Norman Ingersoll is one loyal HDGiants fan who says, "I can assure you, there are plenty of musicians who recognize the quality of lossless audio."

He has downloaded about 150 lossless tunes, paying about 30% more for them than their lossy counterparts. "They are far better than MP3s," he says.

But how many consumers share Ingersoll's passion for HD audio?

"Consumers are just now figuring out that 'digital' doesn't necessarily mean 'quality,'" he says. "I think the [custom electronics] industry has to realize that if we ever want to make money for downloaded music, we need to provide quality."

Sound quality is a tougher sell than video, Bahneman admits. "A lot of it [HD downloads] will probably be driven by video," he says. "A lot of people can't tell the difference between MP3s and high-quality audio, but a lot of people can tell the difference with video."

In the end, Bahneman is certain that there is a "real interest in having higher quality content out there -- something that is not designed to play on a shiny disc."

http://www.hdgiants.com

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