Major Music Labels Promote New CD Format
Fri Aug 30, 1:35 PM ET
James Maguire, www.NewsFactor.com
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 ( news - web sites), 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 ( NYSE:
SNE - news) and Philips ( NYSE: PHG - news) 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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