Rock singer Neil Young has raised US$500,000 from an investment group to launch a high-fidelity format for downloading music.
Ivanhoe Inc, a California-based company that lists Young as chief executive officer, got the money from 12 investors, according to a document filed with the US Securities and Exchange Commission in September.
He patented the name in July, when he said he planned to provide "online and retail store services" for high-resolution downloadable music and "discs featuring music and video of music and artistic performances."
The two-time inductee to the Rock and Roll Hall of Fame, who played in Crosby, Stills, Nash & Young before going solo, plans to roll out an audio system called Pono as a high-quality alternative to digital formats such as MP3.
In Waging Heavy Peace, a memoir released last month, Young wrote that his career had been marked by "big ideas and very little money to show for them" and he intends to finance Pono by turning to investment firms that typically back technology start-ups.
"All I have to do now is navigate the waters of venture capitalism, those treacherous shorelines of commerce, in the HMS Pono," Young wrote.
"I can't tell you how scary this is," he added, saying he has never been "on this vessel, in these waters, with the cargo on board."
The investors,whether friends, family, venture capitalists or angel investors, have not been identified.
Venture firms are professional money managers who invest on behalf of clients. Angel backers use their own money to provide seed capital to technology start-ups and generally invest less than venture capitalists.
Young, who turned 67 this week, has slammed the poor quality of downloaded music and streaming services such as Apple's iTunes and Spotify, writing in his memoir that he is "trying like hell to rescue recorded sound so people can feel music again".
In the book, he says he spoke with the late co-founder and CEO of Apple, Steve Jobs, about promoting Pono as an alternative to MP3.
"As far as a whole new format, I'm not aware of anybody doing what Neil is trying to do," said Michael McGuire, media industry analyst at Gartner, a US researcher into high-tech industries.
Record executive Elliot Roberts, who has managed Young for decades, is listed as an Ivanhoe director.
"It's actually a little early for us to give any information," Roberts said. "When we can comment, we'll be an open spigot."
Roberts said he was speaking on behalf of Young, who couldn't be reached for comment.
MP3 is known as a "loss" format because it compresses digitised sound by stripping out portions inaudible to the average listener, making it easier and faster to download the music and hold more titles on portable players and mobile phones.
With the price of computer memory declining and the availability of broadband internet service growing, the need to compress files has diminished, paving the way for the use of "loss-less" formats such as Pono that retain all of the digitised sounds.
"It's a growing trend among audiophiles, who for a while were in despair that kids were listening to these low-resolution sound files," said Ralph Graves, a US music blogger. "Now there are all kinds of technologies that are moving toward loss-less audio formats so you don't have to make bad compromises with the sound."
"He has a neat idea," said patent and trademark attorney James Powers. "The demand for greater sound quality is absolutely there."
Young says Pono is Hawaiian for "righteous and good".
Warner Music Group, the parent company for Young's record label, has agreed to make its catalogue of songs available to Pono, the New York Times reported in September.