History (1999): Hints of Allocation for CD-Rs

Companies are pounding at the gates to produce CD-R devices.

While it’s true the market is explosive, for the first time there are signs of allocation, which in turn means price stabilization (around 65 cents unit price in spindle quantities).

And there’s yet another European newcomer, MMORE International in Diemen, the Netherlands, a former video cartridge manufacturer which currently claims to produce 3 to 5 million CD-Rs per month.

But above all, Taiwan is now the center of this market, with roughly a dozen manufacturers, and big ones among them.

We list them here, without offering any guarantee that all really make their products, since certain Southeast Asian firms have at times been known to print up glossy brochures about their products, billing themselves as a manufacturer, when in fact they’re really resellers: AMS Technology, Byteck (unlikely manufacturer), CIS Technology, CMC Magnetics, Digital Storage Technology, Fornet Technology (also in Singapore), Gigastorage, Lead Data, Media Press Data (unlikely), Megamedia, Postech, Princo, Prodisc Technology, Ritek, and Unidisc.

For these manufacturers, the problem of royalty is cropping up more and more often. According to Asian sources, foreign companies, including Ricoh, TDK and DVA, have started asking for fees, but failed to reach any agreement. CMC Magnetics and Ritek said that they were willing in principle to make such payments, but that at roughly 8 cents per media shipped, the fees were too high, amounting to 13% of their export price. Philips and Sony alone (including the patents held by Taiyo Yuden) demand on an initial licensing payment of Y3 million ($25,000), plus 3% of the net selling price of each disk with a minimum of YI0 (8 cents).

For the moment, only six Taiwanese manufacturers have signed with Philips (licensing.philips.corn): AMS, CIS, CMC, Megamedia, Princo and Ritek.

So many companies have tried to skim royalties off CD-R technology, that today, anyone wanting to manufacture them has no way of knowing exactly what to pay whom.

The situation is all the more dangerous because there’s no way of knowing that tomorrow, nothing is to prevent a company, armed with its patents, from showing up after the fact, and claiming royalties on past sales.

Furthermore, it seems likely that in certain countries, such as France, a special tax will be levied on CD-R, which will be earmarked to support authors and musical composers in order to offset eventual losses, as is currently the case for the taxes on photocopying, which goes towards publishers.

This article is an abstract of news published on issue 135 on April from the former paper version of Computer Data Storage Newsletter.