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Monday, September 02, 2002
Major music labels promote new CD format

Consumers will soon see a new digital music format in their local stores. Called DataPlay digital media, these news discs are smaller than CDs and represent the music industry's latest attempt to distribute music in a copy-protected format.

While this new media is physically small, it is supported by large industry forces. Three of the top five record companies -- Universal Music, EMI Group and BMG -- have already signed on. The list of artists expected to re-release successful albums in the DataPlay format includes Carlos Santana, 'N Sync, Britney Spears, Sarah McLachlan and Pink.

The discs themselves are contained in a transparent plastic shell, and are small enough to fit in the palm of a hand. Consumers will be able to buy blank, recordable DataPlay discs as well as prerecorded, copy-protected discs.

The Big Promotion

Competing against CDs is a formidable challenge -- recent reports estimate that there are 1.5 billion CD players. But DataPlay has features that might allow it to gain a toehold.

These include games and extensive photo galleries, music videos (for which the player must be connected to a PC) and artist interviews. Next generation DataPlay players might be equipped with video screens.

Additionally, both the media and its player are so small -- though still offering CD-quality sound -- that they can be easily transported. And users can download music from the Internet and burn it onto DataPlay discs.

Tough Road

The cost of DataPlay media is causing skepticism among music industry observers. Blank media costs US$5 per disc when purchased as part of a 10-pack. In contrast, traditional CD media costs less then 50 cents per disc and has 150 megabytes more storage capacity. An album released on DataPlay will retail in the $18 to $22 range.

The DataPlay player-burner units are also more expensive than traditional CD recorders. The only player-burner currently available, the iDP-100 by iRiver America, costs $350.

Chance for Survival

Yankee Group media and entertainment analyst Ryan Jones told NewsFactor that the DataPlay format "is going to meet considerable struggle in the marketplace." He said the music industry thought that DataPlay's major label support would give it a decisive edge, but support of this kind is not enough.

Equally important is support from major electronics manufacturers, which DataPlay does not yet have. "Every major media transition in the past 20 years -- it's been Sony and Philips that have done it every time," Jones said, noting that start-ups like DataPlay cannot achieve the momentum of those two giants.

But, he pointed out, "consumer electronics manufacturers will be under increasing pressure to integrate some kind of copy protection into their devices." And DataPlay might be the solution they adopt -- unless Sony and Philips choose one of their own proprietary solutions.

The Future

Further complicating matters is the fact that there is a great deal of competition for shelf space in the media market right now.

"DataPlay is coming on the market at a time when retailers are scratching their heads about whether they should stock CDs, SACDs, DVD-Audio, VHS, DVD -- and the minidisc is still around," said Jones.

As the major labels continue to try to develop a copy-protected format, there will likely be a widespread movement away from the CD format. But until the large manufacturers agree on which new format to promote, the future of media and media players will remain unclear.

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