1st Quarter CD-R Unit Sales Post Fourfold Rise: NPD

PORT WASHINGTON, N.Y. — U.S. retail sales of blank recordable CDs, including data and audio, have climbed to nearly 1 billion blank discs since February 2000, according to NPD Intelect.

In the first quarter of 2001, unit sales of CD-R blank media jumped almost fourfold and revenues increased 76 percent, compared with the same three months in 2000, said NPD. This growth contrasts with the significant slowdown in the computer business, the data tracking firm said.

However, with such suppliers as Maxell and Memtech expecting additional price increases beyond the 30-percent hikes already instituted by their manufacturers over the past several months, booming sales are expected to come under the gun.

The average cost per disc for CD media moved up 7 cents in March, hitting 55 cents, compared with 48 cents in February, according to NPD statistics. Average retail for a 10-pack of CD-R discs climbed to $11 in March, up about 37 percent from the $8 per 10-pack average price in February, said NPD.

"Even as consumers slow their purchase of technology products, they continue to find the advantages of CD recording compelling, as evidenced in the huge numbers of blank discs being sold each month," said Stephen Baker, director of research at NPD. "The mainstreaming if this function will be tested over the next few months as CD makers and marketers implement recently announced price increases."

One of the factors increasing consumer demand for CD-R blank media is the sales growth of aftermarket CD recordable drives, which grew 136.4 percent during the first quarter of 2001, compared with the year-ago period, said NPD.

Another factor for the rise in CD-R sales is the greater number of computers being sold with a pre-installed CD recordable drive. Sales of these computers grew 15 percent in the first three months, compared with the first quarter of 2000, said NPD. Unit sales of these systems represented 43.2 percent of total retail computer sales during the first quarter, compared with 32.4 percent in the year-ago first quarter, according to NPD data.

"The growing need for more storage — namely downloading music and archiving digital images — is driving sales of CD burners, which, in turn, continues to drive sales of blank discs," said NPD's Baker. "Even as PC sales slow, CD burners are attaining the status of a checklist item for computer buyers. This is demonstrated by the impressive market share held by computers with pre-installed CD recordable drives," he said.

Sales of home audio CD recorders are also fueling the growth in blank recordable CDs. This number is up 71.1 percent in the first quarter, compared with the year-ago period, said NPD.