CD-ROM has another strong year...........................
onlineinc.com
IRMA Expects Another Strong Year for CD-ROM
At least one respected industry source remains bullish on CD-ROM in 1998. In fact, the Princeton, New Jersey-based International Recording Media Association (IRMA) expects a 12 percent increase in CD-ROM replication, while predicting a more gradual growth in DVD-Video and DVD-ROM production, through 1999.
These figures are published in IRMA's first status report on all major manufactured and replicated optical media formats in major regions of the world. Research for the "Worldwide Optical Media Intelligence Report" was conducted on behalf of IRMA by Cambridge Associates of Stamford, Connecticut.
Specifically, IRMA reports a 10 percent increase in worldwide disc replication in 1997 versus 1996, with an increase from 5.84 billion units to 6.42 billion units. Projections for 1998 show an 8 percent increase to 6.9 billion units. The growth in 1997, IRMA says, was fueled by CD-ROM, which represents 34 percent of total units replicated. A 25 percent increase in CD-ROM replication was reported from 1996 to 1997. That increase represents CD-ROM production output growing from 1.74 billion to 2.18 billion units.
The many market predictions that have DVD-ROM overtaking CD-ROM by 2002 are unrealistic, says Cambridge Associates' Dick Kelly. Those exaggerated DVD growth projections, Kelly says, are based on a misinterpretation of current computer sales. Although computer sales are at a high, the bulk of those sales figures come from sub-$1,000 computers that do not have DVD drives. Another reason for the slow DVD-ROM drive penetration, Kelly says, is the turgid pace of DVD title production. Kelly says the continuing ubiquity of installed CD-ROM drives will keep software publishers clear of DVD for a while. "Why switch to a more expensive format if you don't need the storage?" he says, citing a company such as America Online that mails promotion CDs as an example. "Why do it on DVD? CD-ROMs can be played on a DVD-ROM drive anyway."
Charles van Horn, IRMA executive vice president, says, "We perhaps have taken a conservative view of DVD-Video sales in 1998 and 1999. The unknown factor is the retail push behind the new product, particularly when there is an expectation of some 12,000 retailers participating at year's end in the total DVD business, compared with a 5,000-dealer estimate last year."
Inventory build-up is another factor when considering the growth of the DVD business. According to the report, a combined total of 16 million DVD-Video discs were manufactured in Japan and the United States in 1997, with an estimated total sell-through of under 5 million units.
As for DVD-ROM, the ratio of discs replicated per DVD drive is expected to be 25 to 30 percent lower than CD-ROM disc-to-drive ratios due to the significantly greater storage capacity of DVD-ROM, which would require fewer discs for programs needing more than 650MB capacity. The report cites an example of a 2GB software application requiring three CD-ROMs versus one DVD-ROM.
As for CD-R, at 54 percent, Japan continues to be the leader in CD-R replication. Overall, the CD-R market is expected to grow from 205 million units in 1997 to 380 million in 1998.
Overall, the optical replication market should grow through 1999, when it will peak at 7.5 million units. From there, according to the report, the business is likely to remain flat, the result of a gradual decline in audio CD replication and a somewhat steeper decline in CD-ROM.
North American replicators were the busiest in 1997. They produced 2.49 billion discs, but Europe was not far behind. Replicators there produced 2.22 billion discs. Japan replicated approximately 710 million discs.
Approximately 450 international corporations were included in the study, while 50 major optical firms assisted in supplying data, forecasts, and comments that were used in compiling the report, according to van Horn.
|
