Digital Leads The Way In Blank Media Formats in '01
By Penny Gill -- TWICE, 1/6/2001
If one wanted to summarize what will surely be the overriding trend for blank media in 2001, it could be done in a single word: digital.
It is not news that the digital revolution in electronics hardware has spawned a variety of new blank media formats, running across the spectrum of video, audio and data. But as that hardware picks up even more momentum in consumer acceptance and in distribution, it is pushing demand for recording media, particularly of the digital type, on a strong upward growth curve.
"Unlike hardware, which really advanced from analog to digital several years ago, media is finally catching on," said Joseph Stinziano, marketing director for Oradell, N.J.-based Sony Media Solutions. "It is now going through the same transformation in the 2000-2001 time period. In 1999, less than 15 percent of blank media was digital. But now, for instance, we've seen triple-digit growth in CD-R four years in a row, and digital video media is climbing in the 40 to 60 percent range."
Peter Brinkman, marketing director for the Fair Lawn, N.J.-based Maxell Consumer Products Division, concurred. "The growth of digital hardware and the corresponding connection with digital media has now influenced all product categories significantly. Those media products are now also becoming fully seated with broad-scale mass distribution, which signals the widespread success of a format. For example, you're now finding CD-R Music not just in specialty audio stores, but fully entrenched in every channel from mass merchants to chain drug stores."
Virtually all formats of digital blank media are enjoying blossoming sales, with one particular highlight being in the camcorder market, where falling hardware prices have been stimulating sales of analog media as well.
As Terry Dennelly, product manager for audio, video and accessories at Port Washington, N.Y.-based TDK Electronics, put it, "DV media is growing at high triple-digit rates as worldwide capacity increases, but at the same time, VHS-C and 8mm are still growing by 10 to 15 percent. As hardware retail prices have come down and economic growth has continued, camcorders of all types continue to increase in sales and penetration. As a result, we see camcorder tape still on the up-trend in its product life cycle."
John Bock, sales and marketing VP for the Elmsford, N.Y.-based Fujifilm Magnetic Markets Division, agreed. "Probably the biggest growth category for blank media remains camcorders, and we're seeing healthy increases in 8mm tape, at 8 to 10 percent, and in VHS-C, at 12 to 14 percent," he said. "At the same time, DVC is tripling in size in sales, and we anticipate it will at least double again in 2001."
In the midst of the stampede to digital, the VHS videotape category continues to at least hold its own, thanks to the enormous installed base of VCRs and the lack to date of a true alternative for off-air taping. And while audiocassettes have been in something of a decline for several years now, in sheer volume they still account for a huge portion of the business.
There's no denying, however, that the real excitement and sales potential are clearly falling in the digital domain, with the only dark cloud being the tremendous price-cutting that some suppliers see continuing into 2001.
"Especially in CD-R data, prices have been pretty volatile," said Gary DeFeo, merchandising manager of the Wayne, N.J.-based JVC Recording Media Division. "Every time you go to the store, it seems that you can get a 50-pack spindle for a few dollars less than the last time. CD-R Audio has been somewhat more stable up to now, but we're seeing a gradual drop in price there now as well."
Chris Bailey, TDK product manager for digital and optical products, also finds the issue troublesome. "In general, the past year was very difficult in blank media with regard to price," he said. "We try not to be a leader in promoting price erosion, although we have to stay competitive. And while I expect that erosion to continue into 2001, I think it will bottom out.
"Right now, you're seeing the majority of CD-R business being done on ad, at a range of 30 to 60 cents per piece retail for branded product, and maybe 15 to 30 cents for nonbranded. I don't think it will go much lower than that. And actually, I think the coming year will see a shakeout, with some of the imports disappearing and the survivors being those brands that have been in the media business for a long time."
Of course, growing volume in many aspects of the blank media business is helping retailers make their numbers, even with the lower price points. Plus, the burgeoning consumer demand is inspiring many dealers to give the products front-and-center treatment in their merchandising.
"Consumers have multiple uses and multiple applications for blank media, which puts tremendous responsibility on retailers to utilize effective merchandising, not only to make clear what they have but what it is appropriately used for," said Jeff Ash, marketing VP for Fujifilm's Computer Products Division. "That's only going to increase in the months ahead as demand for storage products continues to explode. This is based on what people are able to do with their PCs. Whether it's downloading music from the Internet or downloading photos from a digital camera, consumers have more and more digital data that they need to store."
Added Mike Golacinski, president of Santa Fe Springs, Calif.-based Memorex, "This year, we've seen our customers buying hundreds of CD-Rs for their computers, and their appetite for a higher-capacity recordable media format is growing.
"With the proliferation of hard-drive TV entertainment devices, available streaming audio and video from the Internet, better-quality digital satellite and HDTV content, and competitively priced digital cameras and camcorders, demand for this product will expand even more dramatically over the next few years."
One other format that must be mentioned is DVD, which is making its presence felt across the board in video, audio and data. The picture, however, has not yet crystallized in terms of its full impact, particularly when it comes to rewritable DVD media.
For one thing, there are a number of different-and incompatible-versions of rewritable DVD, including DVD-RW, DVD-RAM and others that are vying for position, and no one is sure which will become established as a standard.
There is also an issue of backward compatibility, and even the notion that another technology may leapfrog DVD to render the matter moot. That leaves blank media companies having to choose which format or formats to support with product, or whether to wait until the situation is closer to being resolved to offer any rewritable DVD product at all.
"We're currently selling DVD-RAM because we feel we need to stay on the cutting edge," said Fujifilm's Ash. "But there are so many battles going on regarding standards that for the immediate future, we see the volume and the mainstream staying in the CD-R arena."
Said Maxell's Brinkman, "From a blank media standpoint, DVD-R is still premature. On the video side, we're just beginning to see a little influence, and there will be hardware manufacturers showing versions at CES. But there are format wars to be battled on the hardware front before it can go forward, and I see that only beginning to unfold in 2001."
On the other hand, there may be no need for those battles to be won, according to TDK's Bailey, who said, "We're working on a technology to triple the capacity of CD-R through a multilayer technique. We had a black-box version at Comdex and expect hardware to be introduced at the end of 2001. So with that type of tremendous capacity for a CD, we may not need recordable DVD."
All these companies are showing new products or packaging for their blank media at the International Consumer Electronics Show in Las Vegas this week. Here is a sampling:
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·Fujifilm is introducing new packaging for its data products for 2001, with more spindle-package options to offer variety to consumers wanting to purchase different and higher numbers of discs. The company is also adding higher-speed products in CD-R and CD-RW, as well as looking to expand its DVD offering beyond the DVD-RAM discs it currently sells. On the CD-R Audio side, Fuji has launched 30- and 50-pack spindles and is offering a number of display innovations, including tray packs that retailers can open and place on a shelf, and prepackaged displays of three- and six-packs for use in side panels. In video media, the company has expanded its DVC lineup to include 90-minute product.
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JVC is launching digital MDV-60 versions of the transparent color cassettes it brought to market last year. In high-tech, translucent colors, the products will be available in a number of package configurations and will have similar pricing to the existing cassettes.
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Maxell is debuting four blank media products, including CD-R 80-minute discs in color, making it easy for consumers to organize their music, and CD-R Music Pro discs, intended for consumers who want the finest in blank recording media for their music. Also being unveiled are DVD-RAM video discs for use in new DVD recorders that are expected to be shown at CES, and DVD camcorder discs designed for use in the new DVD camcorder that Hitachi will show this year.
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Memorex has entered the DVD arena with both DVD-R and DVD-RAM blank media offerings. The DVD-R versions will hold 3.95GB and 4.7GB of data, packaged in single configurations with a suggested retail price of $24.99 and $39.99, respectively. The DVD-RAM products will hold 2.6GB, 4.7GB or 5.2GB of data, packaged in single configurations and carrying suggested retails of $24.99 for the 2.6GB and $29.99 for the 4.7GB and 5.2GB versions. To keep up with the new, super-fast CD-R burners emerging as the next standard in CD-R data recording, Memorex has introduced 16x media, featuring 700MB of storage capacity (80-minute record time) and 100 years of archive life. Backward-compatible with 4x, 8x and 12x writers, the 16x CD-R discs are available in a full-size jewel case, several slim jewel-case packs and large-quantity spindle configurations. Also newly introduced are rewritable CD-RW discs compatible with the new "High Speed" 8x-10x CD-RW drives. These offer 650MB of storage capacity (74-minute record time) and are packaged in jewel-case five-packs with a suggested retail of $19.99.
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Sony Media Solutions is supporting the Mini DV format with the introduction of its second EZEditor product, containing an IEEE1394 PCI board, editing software, a cable and two Sony Premium Mini DV tapes. The package enables consumers to easily edit, enhance and duplicate their digital video recordings. To breathe new life into standard VHS products, Sony is expanding on its well-received Write 'n Swipe rewritable labels, which are currently included in its T-160 and High-Grade multipacks. Similar to the old Magic Slate boards, the reusable labels will also be packaged and sold separately this year. In addition, Sony is in the process of redesigning its blank media packaging, with an eye toward lessening consumer confusion among the various digital formats. To be unveiled midyear 2001, the package fronts will clearly and completely spell out what the media is, for what application(s) it is intended, and which product is best suited for each application.
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TDK is introducing a new CD Labeling Kit that includes software, labels and applicator, allowing consumers to design their own labels for their recorded CD-R discs. Also available will be replacement product including a 100-pack of Matte Labels and a 20-pack of Gloss Labels. The company is also introducing color CD-R discs, as well as continuing an emphasis on its proprietary CD storage products, including Pouch CD-R storage sleeves and Stack CD-R storage trays. The Stack trays can be nested together vertically or hung individually with integrated hooks molded into each tray, doubling the CD storage space compared with jewel cases. Pouch storage sleeves provide five times the amount of storage space as traditional jewel cases, and provide ongoing protection from dust, dirt and scratches, TDK said.
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