Excellent, thanks for the detailed information!
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What creates sound stage on regular CD's????
Most all recordings are done in studios using separate tracks and blended together to make a complete song. Artists my record on separate days, some together, some not, but most often not in the position that we 'seem' to hear them in via our speakers. That is to say, we hear a sound-STAGE, but the cd was recorded in a recording-booth.
Track separation: namely the difference in volume between left and right. The brain hears it as "stronger sound from the left", for example, and ends up putting a picture that side. Theoretically the higher the bit depth (thus the higher the dynamic range), the greater the potential soundstage. Of course, the audibility hugely comes into question at that point. Rarely will you actually have a sound from the left actually be a 100% pan - a 100% pan is actually painful to listen to on headphones IMO (try an old coltrane album to hear this for yourself). There are also issues like reverb and treble response, but I'd say they're less responsible than the headphones. You can test the track separation idea by using a software DSP for total crossfeed (mono) and turning it down slowly.
Binaural recording uses the same principal but I think it takes into account locational HRTF. I'd actually really like to try recording some of my music binaurally.