It seems that consumers are not very enthusiastic over the DVD audio or the new Super Audio CD products that are starting find their way in to store shelves.

SACD players are $5000 which is substantially more than early compact disk players. DVD players can play DVD audio but very few such disks have come to retail.

The main problem with SACD is that it uses an unorthodox encoding that is incompatible with PCM. This is an attempt to prevent extraction and MP3 encoding.

SACS uses a technique call direct stream digital (DSD) which is far different from conventional PCM.  In a pulse density modulation (PDM) signal, the relative density of the pulses corresponds to the analog signal amplitude. The output of a 1-bit DAC is the same as the PDM encoding of the signal. 

This pseudo code example shows the way that SACD convert analog to a pulse density stream.

function pdm(real[0..s] x, real qe = 0) // initial running error is zero
    var int[0..s] y
      for n from 0 to s do
        if x[n] ≥ qe then
            y[n] := 1
            y[n] := −1
        qe := y[n] − x[n] + qe
      return y, qe                 // return output and running error

Hybrid SACD’s also feature a 700MB CD layer placed behind the SACD layer. These can be extracted but the SACD layer is still inaccessible. SACD hardware should be available in 12 months or so. Given that it is hostile to MP3 I cannot see it succeeding.