Overview of CD-R Industry Trends

based on an email interview with Katherine Cochrane
conducted by Lisa Caricaburu of the Salt Lake City Tribune
July 16, 1996

Overview of CD-R Today

Lisa: Can you provide a general overview as to the current status of CD-R technology? Why is CD-R a viable data storage solution for softwarepublishers and others? What are its primary benefits? What are its shortcomings?

Katherine: At this time CD-R is emerging from the early-adopter/enthusiast market into the beginnings of mainstream applications. In 1992, when I started my One-Off CD Shop (the first in the US for that chain), not many people had used or even heard of CDROM, much less CD-Recordable. Now most people, and certainly all computer users, know what CDROM is, and everyone who keeps up with technology at all is aware of CD-R, even if they're not sure how it works or what it's good for. I still see press accounts referring to this "brand new technology" though. At least they've heard of it. My first year in business I think most of the work I did was to educate my market. As you know from reading my website, it got to be a habit, and is certainly one of my favorite passtimes. (BTW, I closed my one-off CD service bureau about a year ago in favor of concentrating on electronic publishing, research and educational activities.)

CD-R gives its users a number of advantages over other storage media. It is inexpensive, costing less than $.01 per megabyte for the media and under $1000 for the recorders. The ISO9660 standard format is cross-platform, which means you can make a disc using that standard on a PC and then read it on a UNIX machine or a Mac or other operating system without any conversion required, and vice versa. The media is durable and more forgiving of mishandling than most other data storage devices. You can even have minor scratches on the data surface and still be able to read it without errors in many cases, and they are more tolerant of humidity and temperature extremes than other media such as tape or magnetic disks. You might even get away with spilling your coffee on a disc, wiping it off (carefully) and using it right away without any other recovery efforts. Naturally, magnetic fields don't bother them at all since they are totally optical, and you can even throw them around without worrying about shock as long as you don't scratch them or slam them into a hard surface with such force that the very durable polycarbonate shatters. Since the material they're made from is the same as that used to make high-quality shatterproof eye-glasses and windshields, they can take a lot of abuse and still work. Not that I recommend it, of course!

CDs and CD-Rs are light-weight and small, and given their durability don't need a lot of protective packaging, so shipping and storing them is quite inexpensive. In all these areas -- cost per byte, capacity, size & weight, durability & handling requirements, the optical compact disc is the most efficient and least costly of any data storage medium. It is also possibly the most reliable, or at least one of the most reliable. Several layers of error detection and error correction encoded on the discs and implemented by CDROM readers contribute to the low failure rate of properly made recordings.

Finally, the materials used in making CDs and CD-Rs are benign to the envirornment, and discs can be recycled even if this isn't an economical thing to do. The materials used in CDs are all non-toxic -- polycarbonate plastic, gold or a silver alloy, an organic dye in the case of CD-R (which is related to that used in common photographic process), and a tiny amount of acrylic UV-cured lacquer are the only ingredients. Even the supplies used during the manufacture of CDs and CD-Rs are relatively "green" (a few inert gases and deionized water) so it's possible to set up a plant to meet the most stringent enviornmental protective regulations without a lot of extra effort.

One shortcoming, the write-once nature of the medium, is also a strength in some contexts. While it might seem wasteful to never be able to overwrite disc space, at the same time you can't accidently lose data by doing so. This makes it an excellent medium for archiving and for version control, where it's necessary to show the real state of a collection of data at a certain time with no possibility of it having been changed deliberately or accidently after it was recorded. Some courts in the US and a few other countries have even allowed CD-R discs as evidence in trials based on this unchangable quality.

Probably the most serious shortcoming is the requirement to use special recording software and to set up the files before recording them, and even this is not always the case. There are some recording solutions, such as JVC's CD-R Extensions (software actually written by a company called Smart Storage) or Moniker's Spira, that allow a disk cache to be created on one's computer and automatically written to disc when it reaches a certain size or upon demand, so that it appears as if the CD-R is being used like a big floppy disk. This is called packetwriting. At present all the packetwriting programs are proprietary and don't follow the open, industry-accepted ISO9660 standard, but work is ongoing to create a standard-compliant packetwriting format and have it adopted by the entire industry. Once that happens CD-R will become even more popular than it is now.

The fact that CD-R is a complex technology with very stringent requirements has come as a bit of a shock to some users. It is necessary to set up the computer system that controls the recorder to meet these requirements, and many users have had difficulty doing this. CD-R software uses low-level programming to control the bus interface and the recorder, and other processes running on the platform at the same time can interfere, resulting in unreliable recording performance or even the inability to record at all. A recording system also has certain minimum performance requirements in terms of processor and throughput speeds and system memory. However, careful users who have good equipment and follow manufacturers' guidelines have been very successful in implementing the technology, so it's not impossible. When I first set up my recording workstation, for example, I never had a recording failure that could be attributed to setup problems (only a few operator errors.) It's a good thing, too, since at that time (in 1992) we were paying almost $40 per blank! (CD-R blanks generally cost between $6 and $8 now, depending upon brand and supplier.)

The Market for CD-R

Lisa: Where do you see the primary market in this industry? Is it in the typeof services The One-Off CD Shops offer? In mass replication of CDs? In mass marketing of CD-recorders?

Katherine: I think the largest market segment is going to be in business applications, particularly in the conversion and storage of records. This will not only save a lot of storage space, but by converting paper records to digital form (or simply recording them digitally in the first place) it renders them more useful since they are searchable using software tools, and capable of electronic distribution and replication. These capabilities are important in many fields, including all kinds of information management, medical, legal, and financial recordskeeping. Every town has banks, CPAs, lawyers and doctors, and eventually most of those firms will be using digital recordskeeping. Since CD-R is cost effective and reliable and follows established standards, many of these digital records will be stored on that medium.

Although I've been out of their chain for a year, I am aware of several of The One-Off CD Shops who do the kinds of records conversion and storage I've just described, but it is not the core technology of the business. Imaging and COLD (computer output to laser disc), which is the term that describes the class of applications I've just described, is really a different thing from simple CD recording, although it can use CD-R. You should contact The One-Off CD Shops directly to find out more about what they do since I don't represent them.

Mass replication is still an important business, although in the past year many replicators have had lean times. Many new companies have gotten into it, and in some areas, particularly audio CDs, they have seen declining sales while the newer CD-ROM customers generally have higher quality requirements and smaller jobs, making that work more expensive to do. Whenever someone needs more than a hundred or two hundred identical discs, it's more economical to have them replicated than to use CD-R, even with the CD-R duplicators that have become popular in the past few years. There is an article about CD-R duplication versus one-off CD-R versus mass replication in my website, incidently.

"Mass marketing" of CD-Recorders is probably going to happen in 1997, if it isn't already. Several major PC manufacturers have announced that they will include CD-R drives instead of CDROM readers in their higher end machines, which is pretty close to becoming a mass marketing effort. Computer superstores such as Fry's Electronics and CompuUSA sell recorders over the counter now, although I wince to see it -- most users still need some help getting started with this technology, and they are unlikely to get it from non-specialty merchandisers of that ilk. Instead, these customers wind up in droves on the internet newsgroups or Compuserve CDROM forum (or in my emailbox) asking "newbie" questions, if they're lucky enough to know about the online resources. This would be a good time to mention the existence of the CD-R FAQ (list of Frequently Asked Questions -- with answers -- that's in my website. It's compiled from traffic in the USENET comp.publish.cdrom.hardware/software/multimedia newsgroups by Andy McFadden, and updated monthly.

Future

Lisa: A January 1996 Dataquest report says CD-recordable drives will reach apeak revenue of $300 million in 1997 and then begin to decline whenCD-erasable drives begin shipping. The report says CD-R will never be amainstream data-storage peripheral because of limitations. Do you agree with the assessment?

Katherine: In a way I agree, but in another sense I disagree. At the present state-of-the-art CD-R is a bit too complex for many non-geek users, but there are some new things on the horizon, such as packetwriting, which will make it much easier to use, more like writing to a floppy disc, and computers that come with recorders already installed will eliminate the setup problems that plague many users now. There will always be applications that are better handled with a write-once medium rather than an erasable one, such as archiving and version control. But rather than CD-Rewritable (the current term that's recently been handed down by Philips to replace "CD-Erasable" because some people thought that term implied you could lose data), I think what's going to replace CD-R will be DVD-Recordable with its greater capacity of up to 4.7 Gigabytes per disc. However, CD-R and CD-Rewritable will be popular for most applications until DVD-R's prices come down. DVD-R will probably be just as expensive as CD-R was in the early days (around 5 years ago), and many people will not need the larger capacity, so they will stick to the older format. DVD drives will read CD-R discs that use the new CD-R II media as well as CDROM, CD-audio and native DVD discs, so it's the readers or players that will be replaced before the recorders are. It's simply an extension of the same standard that defines CDROM and CD-R though, and so is CD-Rewritable -- not really a complete replacement. They're all recordable optical compact discs that follow the standards created by Philips and Sony, and adopted by the entire industry. It's an evolutionary process that was anticipated and is welcomed.

Challenges

Lisa: Is the shortage of blank CDs a threat to the industry? Are there other challenges as well?

Katherine: Yes, definitely. The media manufacturers really miscalculated the admittedly startling growth of demand for their product. With the long ramp-up time required for new and expanded plants, plus the still-growing demand, the shortage has been a very strung-out affair that won't be relieved until early next year, if then. The biggest danger is that customers may be unable to find blank discs when they need them or in the quantity they require or may just be worried that this might be the case, and turn to other media, even if CD-R is the best technical solution for their application.

There is also the danger that prices might escalate as demand grows, and a little of that has happened already at the reseller level, but the manufacturers seem more interested in growing their market share by keeping prices moderate rather than making a killing on the basis of the scarcity. These companies are in this business for the long haul, not to make quick money at the expense of future good relations with customers. And they are all very fiercely competitive with each other, which helps keep the prices low.

Other challenges are mainly in the form of alternate media, but so far nothing else is available that is as cost effective or as reliable as CD-R. The popular Zip drive's media, for instance, costs about $0.20 per MB for data storage, vs $0.01 per MB for CD-R, but the entry price for that technology is lower with drives that cost only $200, and the recording method is easier -- truly "plug and play" instead of requiring special setup, software and procedures. Zip and other new removable media, like their tape, magnetic disk, and magneto-optical predecessors, still use proprietary and frequently single-platform formats, too, unlike CD-R which is inherently cross-platform and follows an open, international standard (ISO9660.)

Another danger to the CD-R industry is that people have in some cases been led to expect CD-R use to be easier than it actually is. Unrealistic expectations have a way of backfiring on those who generate them, and can catch others in the crossfire even when they didn't mislead anyone themselves. A few vendors in the CD-R market have published some overly simplistic ads that imply that using these devices is as easy as using a floppy disk, which simply is not true. It's too bad, since CD-R offers many benefits that floppies can't, and don't need to be oversold like that, but it's done and many users who have believed the ads are now outraged and blame the entire industry, saying the technology "isn't ready for prime time." However, since it IS getting easier to use with new software and formats, this is probably a temporary situation.

Yet another challenge is the ever-present fickle nature of computer users, especially those "early adopters" who have made CD-R so popular already. They are always looking for the next greatest thing, and that's already been announced (DVD-R), so they're liable to convince many more mainstream potential users who listen to their opinions to wait until that's available rather than buying into the now-maturing CD-R technology, even though it will be at least a year, and probably two or three before DVD-R is really ready for public consumption, and even longer before it's cost effective as a replacement for CD-R.

Directions

Lisa: Where do you see this industry moving in the future?

Katherine: I think CD-R will be around for at least another 5 years, perhaps in parallel and eventually merging with the developing DVD-R market. Mainstream users are only now beginning to buy into the technology, so it's just starting to show its real growth patterns. Imaging solutions, using scanning, OCR, indexing and CD-R storage have an enormous potential for applications in a large number of fields. One of the biggest areas is in records storage for financial, medical and legal records (and any other field where reliable, permanent, easily accessible, large capacity record storage is important.) Another application is archiving rare documents, or creating digital collections of representations of collections of artwork. Even if there isn't a large enough market for some materials to justify a full run of CD-ROMs, putting such things on CD-R provides some protection against loss, especially if several copies are made and at least one is stored off-site in a protected enviornment. Even in the case of popular collections that are produced commercially on CDROM, the premasters (files used to create masters and stampers for mass replication) are usually created and tested with CD-R.

Packetwriting, when an ISO9660 format is adopted (current solutions are available but don't comply with the standard), will really make this area take off, and it's already important and growing. Other areas will continue to grow, as recorders become even less expensive and software is easier to use. These include beta test discs for software developers, small-quantity data distribution for demos & presentations, personal backups and data organization, and cross-platform discs for moving large files easily to different operating systems. It would take up to 2 days to transmit a full CD's worth of data using the internet at 14.4K bps, for instance, even without errors. It's simply easier and less chancy to burn a disc and drop it into a FedEx package, and not tie up your datalines and equipment for that amount of time, as well as to avoid adding to the congestion on the 'net.

CD-R may well be the best thing since popcorn and sliced bread, and is likely to hold that distinction for a while longer before the next best thing comes into its own.

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