Multichannel audio from one wire

I've got multiple headphones and I would like each earbud to play it's own sound file.

Now my computer can play multiple music files with no problem. Of course all these signals are added together and pumped out of my stereo speaker as noise.

However, what if my computer played those multiple files, combined them into that audio wire (through frequency division multiplexing like cable tv does or other carrier systems), send that off to a black box that will process that signal, and split it to each headphone where you would head a different song on each earbud. To say it differently, each earbud is "tuned in" to a specific song that was combined with other songs and sent down that one wire coming out of my computers audio jack?

Is such a system feasible?

Yes but not with an arduino, it is not fast enough.

If cost is not an issue, there is a pro audio interface standard called [u]ADAT[/u], which is similar to S/PDIF.

You'd need software and an ADAT interface for the computer. On the headphone-end, you'd need an ADAT decoder/DAC and headphone amps.

If you want a cheaper idea, maybe get several cheap USB soundcards. But, it could be tricky making sure the right application & audio file are directed the the right set of headphones. And, at some point with too many interfaces running you will "overload" your computer and the sound will get glitchy.