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1989: Record Labels Diss DAT While Handheld Video Emerges

New digital formats got a tryout, alliances formed to develop an HDTV standard and the Walkman celebrated its 10th anniversary in the year that the people of Eastern Europe tore down the Berlin Wall, China crushed its democracy movement in Tiananmen Square and Iran’s Ayatollah Khomeni sentenced author Salman Rushdie to death for blasphemy.

Rushdie is still alive, but many of the new formats making their way to market in the penultimate year of the 20th century haven’t been so lucky. One of them was DAT, which would eventually go the way of 10 percent mortgages, yellow power ties and pullout car radios.

In the consumer market, DAT recorders failed to sell in volume despite the grand agreement struck in mid-1989, by the international music and consumer electronics industries, to end the DAT recorder impasse. The agreement called for legislation mandating royalty payments on future digital audio recorders and mandatory inclusion of a copy-control system, later known as SCMS (Serial Copy Management System), in digital audio recorders (but not in PCs, to the later chagrin of the music industry).

SCMS would allow direct digital CD-to-DAT copying but would prevent digital copying of a digital copy. It would also prevent a third-generation digital copy of a digital recording made by consumers from an analog source or at a live performance.

It would take about two years, however, for the industries to agree on royalty rates for blank digital recording media and for digital audio recorders, paving the way for Congress to enact the 1992 Audio Home Recording Act (AHRA).

A TWICE editorial noted at the time, “By raising a stink over DAT, they [the music companies] are setting the stage for future disputes over the next generation of audio and video recording products.”

With DAT’s future uncertain, Dolby Labs sought to extend the life and enhance the sound quality of the analog cassette with the introduction of Dolby S noise reduction, which reduced noise and expanded dynamic range. It never took off.

What was all the home-recording fuss about anyway? Not much, according to a 1989 report by the federal Office of Technology Assessment (OTA). It concluded that the economic loss to software suppliers from casual home taping was far outweighed by the benefits. It found that 73 percent of all home recordings aren’t made from prerecorded material and that at least 75 percent of the tapes made at home would not be replaced by purchases of prerecorded material. People tape, OTA said, to make custom mixes, preserve vinyl albums and to get longer playing times.

Tussling over the creation of an HDTV standard and an interactive multimedia standard resumed with the two largest sellers of TVs in the United States, Philips and RCA, joining to develop a U.S. widescreen HDTV standard. Also part of their Advanced TV Research consortium was NBC and Sarnoff Labs.

In the other corner, Zenith teamed up with AT&T to develop its own HDTV system.

To coincide with the 50th anniversary of TV’s U.S. debut at the 1939 World’s Fair in New York, two American companies — NBC and Sarnoff Labs — staged an over-the-air demonstration of their format, advanced compatible TV (ACTV). The programs were beamed from WNBC in New York City to Sarnoff’s Labs in Princeton, N.J. and used existing 6MHz TV channels. For true HD, the companies’ ACTV II format required additional spectrum.

Also forming in 1989, alliances over the new interactive multimedia format CD-i. Matsushita, Philips and Sony announced their support which would deliver interactive multimedia entertainment, including full-motion video and still pictures, to a TV. The first players would be targeted for industrial use and were forecast to cost about $1,000. Consumer products were to come in 1990. Intel targeted 1990 for its competing format.

Although CD+G hardware and software missed their December 1988 launch, JVC and Warner Records announced plans for a joint promotion of the format, which added text and graphics to a music CD.

Handheld video and home videophones were also entering the industry’s consciousness in 1989. Atari unveiled the industry’s first color-screen handheld video game machine to compete with the black-and-white Nintendo Game Boy. The Lynx would ship in limited quantities in September before a planned nationwide rollout in early 1990. The next-generation model, said Atari president Sam Tramiel, might incorporate a TV tuner.

Other news of the year:

  • At the beginning of the year, the rising strength of the yen forced many video suppliers to plan for price hikes of 1 percent to 5 percent.
  • According to the precursor of the Consumer Electronics Association, factory-level CE sales grew 3.5 percent to $32.2 billion,
  • Philadelphia-based Silo acquired 26 Federated Group CE stores from Atari, which could not find a buyer for its Federated subsidiary.
  • New York’s Crazy Eddie announced plans to file for Chapter 11.