DataPlay Plans Hardware, Music Promo Push

Boulder, Colo.— DataPlay plans to launch a consumer promotion campaign in late May and early June to coincide with the launch of the first DataPlay-format portable music players and prerecorded DataPlay music disks, said Todd Oseth, senior VP of corporate and business development.

Oseth said he hopes 50 titles will be available for the launch. They will include albums from Zomba, which markets such stars as Britney Spears and InSync, Oseth said. BMG titles, however, might also be available at that time. A BMG spokesman told TWICE that a summertime launch is planned but declined to be more specific.

DataPlay, which is seeking a third round of funding, also has commitments from Universal and EMI to market prerecorded disks, but those companies haven't revealed their timetables. Both didn't respond to requests for an update.

Although four music companies have made prerecorded commitments, at least one of the companies suggested that its involvement is more of a defensive move. "Will it be the next big thing?" the executive asked. "We have to be in it should that be the case."

As for pricing, said Oseth, "We expect disk prices to be similar to CD prices." He expects the companies to skew their selection heavily toward Billboard hits and make the titles available initially only through their brick & mortar retailers.

DataPlay will manufacture and author the disks for the music companies, he noted.

Two DataPlay-enabled headphone portables will benefit from the promotional campaign: Evolution Technologies's MTV-branded model, due May 1 at approximately $359-$369, and iRiver's iDP-100, due June 15 at a suggested $369 (see page 92).

Samsung, an investor in DataPlay, is targeting Sept. or Oct. shipments of its own DataPlay-enabled portable, said marketing manager Russell Bleeker.

DataPlay-enabled CE products other than music portables will be available sometime in the second half in the United States, Oseth claimed. The format's multipurpose disks can also be used for data storage, digital cameras, portable game machines and the like.

During CES in January, however, DataPlay had targeted Sept. 2001 shipments of devices and prerecorded music.

Music companies can fit up to four albums per 500MB disk, plus MPEG-1 music videos viewable on PCs, select portable devices and connected TVs, Oseth said. Consumers who pay up front for one album on a disk could later pay a reduced fee to unlock the additional albums after they download a decryption key from the Web, with music retailers participating in the additional profit.

For prerecorded music, Universal will use Q Designs' QDX codec, BMG will use AAC, and EMI will choose either AAC or QDX, Oseth said. Each prerecorded disk will be encrypted, and the files locked to the disk.

For consumers who want to burn blank DataPlay disks, supplied PC software will encrypt the music as it's transferred from a hard drive to a DataPlay disk. The music will also be locked to the disk, but each disk will be playable in any DataPlay device.

Blank disks will retail for a suggested $12 if purchased one at a time, while three-packs will go for a suggested $9.99, and 10-packs will go for $4.99 (or 50 cents/disk).

Low media prices, small disk and player sizes, and prerecorded media are among the reasons the DataPlay format will compete despite the success of MP3-CD portables and the declining prices and growing capacities of portable hard-drive music players, claimed Oseth and iRiver (Korea) president Joon Yang.

Oseth also claimed DataPlay music portables are more suited than hard-drive portables for active users. "No one recommends a hard drive for walking, running or biking," he said. "The head is too close to the media. A jar could cause it to crash. Our disk is an optical technology with no mechanical heads and 1/2mm of space [between the laser mechanism and disk]."

Most hard-drive portables are twice the size of DataPlay-enabled portables, he said.

Although Joon admitted that the "the DataPlay engine price is high," he called it comparable to hard-disk engine prices.

Prices of hard-drive portables fell to as little as $199 (after rebate) for a 6GB Creative Labs model late last year, and new 10GB models from companies such as RCA and Archos will retail for a suggested $299 and $325, respectively. In contrast, DataPlay portables are targeted to retail for a suggested $369, plus 5GB of media at a suggested $4.99 if purchased in a 10-pack.