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Friday, October 04, 2002
 Media-Tech show report
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Message Text: The first Media-Tech Showcase in the United States, featuring a tabletop exhibition of replication and duplication equipment alongside the co-located IRMA Technology & Manufacturing Conference, couldn’t be described as either a complete success or failure. Everyone TDB spoke with on the first day of the event used the word "slow" to describe the show floor. By the second day, however, attitudes seemed to have been propped up by some degree of business taking place – some exhibitors reported that they had made at least one sale, or had a serious meeting with one important customer, that made it worthwhile to travel to the low-key event.

Mostly, the show floor reflected the state of the industry – optical-disc technology is mature, for the most part, and because it is used to manufacture commodity products, the level of real excitement was rather low. However, a few new companies were visible among the industry stalwarts, notably Ireland’s Xonen Technologies, which used the show as an official launching pad for its fully-automated Quad laser beam recorder, which it refers to as a "variable density recorder," or VDR. Xonen claims the Quad is capable of creating up to 960 glass masters per day with upgrades.

ODME showed its new DEX DVD-9 replication line, bringing cycle times below 3.5 seconds. ODME said it decided to introduce a new line at this stage of the game in order to take advantage of what it has learned by way of marketing its previous manufacturing lines for pre-recorded and blank media.

Packaging companies — both those who make the boxes and those who provide automation equipment -- were extremely well represented and, while replication was still the star of the show, the duplication-equipment manufacturers in attendance came on strong. Primera, for instance, showed its new Bravo Disc Publisher, a desktop DVD-R duplication and inkjet printing system that handles 25 discs at a time and lists for $2495. (One dealer immediately issued a press release offering the system for $1999.) Primera is already pushing the new unit to the so-called "prosumer" market with a full-page ad in PC World magazine.

The expo itself was relatively light on audio, not surprising given statistics presented by IRMA’s Charles Van Horn in his opening remarks. After noting a drop in music CD sales, with declines of about five percent globally and even steeper in the U.S. market — as well as a drop in CD-ROM replication, as well — Van Horn summed up 2002 as "definitely a lackluster year for the CD." Further, Van Horn commented that the long-vaunted but market-challenged DVD-Audio format was unlikely to gain any real market traction in the near future, predicting that it won’t make any significant inroads before 2005, if ever.

On the other hand, with home theater sales nearly doubling year-to-date, the audio component of DVD, specifically its surround-audio capability, is expected to help drive that market even faster.

Tom O’Reilly, VP of marketing for replicator OEM, pointed out another way that audio can affect the industry. O’Reilly began his presentation by noting that over $50 million has been awarded in judgments against replicators stemming from litigation by the RIAA, and that the most recent infringement action resulted in a staggering $136 million judgment against a Southern California replicator. O’Reilly pointed out that some resources are developing other than IRMA’s voluntary Anti-Piracy compliance program, such as Audible Magic’s RepliCheck database for music titles, and Disctronics’ similar venture for ROM. While noting that audio and ROM formats are both declining, O’Reilly echoed the historical mantra of mature format markets, urging replicators to seek out "nontraditional" avenues for CDs, such as advertising and premium/promotional markets.

That notion was taken further by Dick Kelly, president of market research firm Cambridge Associates, a primary supplier of data to IRMA. "The real issue is to replace print," he said, in applications such as brochures and promotional materials, a redux of IRMA’s similar tertiary-stage strategic responses for the analog audio cassette and VHS formats. "Unless proactive steps are taken to stimulate CD/DVD, the industry will continue to languish," Kelly stated.

Audio got its liveliest venue at a series of conference presentations by Sony, representing SACD; Imation, a partner in the oft-delayed DataPlay venture; and Dolby Labs, which licenses the Meridian Lossless Packing compression scheme that was the last technical cog (save the ever-elusive Grail of copy protection) needed to launch the DVD-A format officially.

With the introduction of players for less than $300 and an expanded title list in excess of 500, fewer than half of which now come from Sony Music and its affiliates, David Kawakami, director of Sony’s Super Audio project, asserted a bright near-term for SACD. Kawakami said that all major labels now contribute to the SACD pool, save Warner Music, which is championing DVD-A.

Responding to a question, Kawakami estimated that global capacity for SACD manufacturing for the hybrid version — the one which Sony expects will be the big driver of the format, highlighted by a 22-album SACD compendium of Rolling Stones titles — is 30,000 units per day on the two lines at SDM in Japan, 65,000 per day in Terre Haute, to be buttressed by Crest’s estimated 15,000 to 18,000 per day on each of its two imminent lines.

Imation’s business development manager, Jackie Hart, noted that Imation’s Wahpeton, ND, facility now has an integrated domestic manufacturing line in place, and that titles from BMG are in the pipeline, with more expected from Universal this fall. (Both labels, along with EMI, are stated supporters of the format.)

Hart stressed that DataPlay, which has had several false starts over the last 18 months, will roll out on schedule later this year. She also conceded that the few retail players already in the market cost above the magical $300 price mark. "We know we have to get that down and we’re wrestling with that," she said. She also said that DataPlay will accommodate new optical disc technologies in the future, including Blu-Ray, by varying materials such as substrates.

Dolby Labs applications engineer Gene Radzik said DVD-A’s camp will emphasize both its scalability, allowing content owners to determine such things as higher resolution and multichannel options for higher-end markets, and compatibility with DVD for additional video content. (Although he did concede that DVD-A’s 9.6 Mbs transfer rate needs to be upgraded to 13.2 Mps to achieve full 24-bit/96-kHz operation.) He also stressed the familiarity of the format’s PCM base technology to replicators, as well as revisions which allow for multimedia options such as web linking.

Both DVD-A and SACD have announced recent retail price cuts for their discs. But what was equally interesting in Las Vegas was that spokespersons for all three formats emphasized the cross-marketing potential for them, such as the give-away sampler DVD-A disc made by the DVD Entertainment Group, a consortium of nine record labels and five consumer electronics manufacturers, distributed to buyers of home-theater-in-a-box buyers this year.

Asked what the dynamic will be of three major new audio formats all trying to hit the same market at about the same time, all three speakers were predictably sanguine, though not just about their own formats specifically but also about the potential synergy of diversity. "In other industries you’ll find an array of formats and products," said Hart. "Why shouldn’t the music business do the same?" Kawakami added that each format does have a relatively specific niche, with SACD devoted solely to high-resolution music, DVD-Audio offering a multimedia experience, and DataPlay pursuing portability. "There’s room for all three of these formats in the market," said Radzik.
 
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