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Although the same physical size as the compact disc, SACD uses a different kind of digital audio signal, Direct Stream Digital (DSD). DSD is 1- bit and has a sampling rate of 2,822,400 Hertz. This gives the format a greater dynamic range and wider frequency response than the CD. At the optical level, SACDs are essentially DVD format, which is why inexpensive SACD-compatible DVD players are on the market.
While the frequency response of a normal CD is technically beyond the typical human's range of hearing, SACD offers an even wider response than CD does. For a consumer level format, it is probably much higher than necessary. However, for music mastering, and intermediate production, a wider frequency range can be advantageous.
SACD disks are required to contain a 2-channel stereo mix. Many also contain a 5.1 surround sound mix.
Hybrid SACDs are dual layer, with a CD layer ( PCM digital audio/16 bits/44.1kHz) compatible with traditional CD players. Using a process called Super Bit Mapping Direct, the hybrid disc's CD layer can approach 20-to-24-bit precision [1]. This means if the format takes off retailers will be able to stock one title that is compatible with the installed base of CD players as well as new SACD players. The disks can also come in Dual Layer (two high density DSD layers) and Single Layer (single, high density DSD layer) versions, both of which are only playable on SACD compatible hardware.
SACD also has copy prevention features at the physical level, which for the moment appear to make this format nearly impossible to pirate. These include 80 bit encryption of the audio data, with a key encoded on a special area of the disk that is only readable by a licensed SACD device.
Currently, there appears to be a high resolution format war between Super Audio CD and DVD-Audio.