Memorex Raises Blank Recordable CD Prices June 1

SANTA FE SPRINGS, CALIF. — Due to increased blank CD-R media costs — influenced by the tightening of worldwide supplies, worldwide manufacturing consolidation and strict enforcement of royalty agreements — Memtek Products will increase the prices on many of its CD-R blank media offerings as of June 1.

Memtek, the U.S. distributor of Memorex-brand computer, audio and video recording media, said the per-disk cost of blank CD-Rs has increased more than 30 percent, compared with prices paid at the end of 2000. With the enforcement of royalty fees, disk prices are scheduled to be increased again.

During the past year, the environment for CD-R media distribution and manufacturing has changed dramatically, Memorex said. Since the beginning of 2000, many small- and medium-sized manufacturers have closed their doors. Last year, manufacturers without a consistent channel for their CD-Rs sold their inventory on a spot-type market. As a result, inventory was often sold drastically below manufacturers' production costs.

In the future, Maxell said, CD-R patent holders will aggressively enforce their licensing agreements and collect their royalty fees. Due to the enforcement of royalties, major overseas manufacturers are unwilling to produce disks without executable purchase orders in hand.

Memorex, however, said it has made significant commitments to ensure a steady stream of product availability for 2001 and beyond.