Spatial hearing enables translation of an auditory scene into a perceived 3-D image by interpreting the acoustic cues related to the sounding objects, their locations, and the physical characteristics of the space. Spatial audio production requires multichannel audio signals in order to convey this information and increase the realism of a real or virtual environment for applications such as the home entertainment, virtual reality, and remote collaboration. As demand to spatial audio continues to expand, efficient coding of multichannel audio content becomes more and more important. This paper provides an overview of some well-known multichannel audio coding techniques and presents a new coding framework for improving the objective fidelity of the decoded signals. A closed-loop encoding system based on analysis-by-synthesis (AbS) principle applied on the MPEG surround (MPS) architecture is described. Comparison results are presented, which show that significant improvements can be achieved with a closed-loop system instead of the conventional open-loop system.