If he has something to add here, that would be great.
But, what I have described above is the simple, basic model used for decades now commercially in movies and Mch music recordings. There is nothing radical or extremely high tech about it, other than that it throws stereo-centric audiophiles into extreme agita and disbelief. I have thousands of music and video recordings employing the concept, some with the sometimes questionable embellishment of added mic channels in the mix, but subjectively not too many bad ones. And, on playback all it takes as a minimum is a cheap AVR and 5 or more speakers replicating the angular channel layout of ITU for those recordings.
Even better potential reproduction of the sound field in the hall is theoretically possible with "Immersive 3D" codecs, extending the xy space vertically into z, or height space. My experience so far with that is there are sharply diminishing returns, as would seem logical, given the geometry of our binaural hearing. We have empirically more aural acuity, localization, etc. in the xy space and much less in the height dimension with only two ears and a brain. So, I am not waiting around for Immersive 3D to establish itself as a commercially viable format, one which is demonstrably here to stay with a critical mass of convincing recordings. For me, even simple xy, 5/7.1 Mch offers significant advantages over stereo, which is just one dimensional x, width, with added phantom depth behind the plane of the speakers. But, Mch has that, too, as a starting point, plus a whole, 'nother added dimension.
Sorry to keep harping on this Mch stuff, guys. The topic is the audibility of distortion. While traditional distortion as frequently measured is THD, IM, etc., and those traditional measurements are vitally important, but it seems to be increasingly difficult, though not impossible, to find components that grossly violate the norms of accepted audibility. The emphasis of those traditional measurements is the purity of a mono channel, or two to see if they match adequately. Even if the problems of traditional distortion are not quite totally solved, there remains the question of why doesn't the very best stereo in the home, awesome and low distortion though it might be, sound more like live?
My answer to that is the spatial distortion produced by only 2 channels, which simply discards, truncates or distorts via redirection much useful information in the sound field we naturally hear live, pure and simple.