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I was thinking of a digital speaker solution only yesterday so this is timely.

Given that the time information is at issue here I was wondering whether dedicated speakers for each instrument might not be more practical. These could be either designed only to reproduce certain instruments (separate designs for violin, cello, guitar etc.) or be modified in their output through software depending on the use case.

Each speaker, (say typically four for a pop band or chamber orchestra) would recieve a digital stream time synced to each of the other streams. As the speakers themselves could be placed as desired the effect for the listener would be much more directional without the need for stereo capture/reproduction.

IE each instrument is recorded as a mono source, but the physical spacing of the individual speakers provides the reproduction of the sound space.

It might be more practical to arrange a number of panel speakers across a wall and assign them as required to allow maximum configurability with minimal physical intrusion.