Readthis!
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NY Times
October 25, 2001
A Gadget Inadvertently Saves MiniDiscs From the Scrapheap
By MICHEL MARRIOTT
An odd thing happened to the MiniDisc player on its tumble toward the ash heap of failed electronic products. The devices, developed by Sony (news/quote), began getting popular. Very popular.
Ultimately MiniDisc technology, which Sony had spent years trying to find a market for, escaped the fate that claimed the company's Betamax video format in the 1980's. The story of how it did so offers a peek into the way electronics companies can reshape a product to fit changing consumer tastes and needs.
It also illustrates the role that serendipity can play. Help for MiniDisc came unexpectedly from a small Australian video graphics card company with an outpost in Texas whose product made it possible for MiniDisc owners to transfer music from their computers. And it involved a music compression format that Sony had long avoided: MP3.
As a result, MiniDisc owners now had a device that offered the same ease and convenience of other digital music devices like MP3 players.
"The PC interface has given new life to the MiniDisc category," said Jim Hirschberg, director of consumer electronics research for NPD Intelect, a market research firm.
Last year, sales of MiniDisc players, which had never been strong in the United States, began to pick up. North American sales more than tripled in the first half of 2000 from the comparable period in 1999, retail tracking figures show. And even during this year's general slump in sales of consumer electronics, MiniDisc's popularity has remained high, industry experts said.
"MiniDisc is the leading digital music player on the market," said Robert Ashcroft, senior vice president for the personal mobile products division of Sony Electronics. Market statistics for the digital music industry appear to support that.
Among portable digital music players, a category that includes MP3 players and other devices made by companies like Rio, Iomega (news/quote) and Creative Labs, Sony MiniDisc accounted for about 40 percent of the market in July, according to NPD Intelect. That is more than any other kind of device, and more than twice the share held by Sony MiniDisc in June 2000.
Downloading music into a MiniDisc player represents a big change from the way the device was originally intended to be used. MiniDisc recorders were designed to record and play CD-quality music digitally on removable magneto-optical discs that were about half the diameter of CD's. Sony saw the palm-size devices as the natural successor to the portable cassette tape player, a category that the company invented in 1979 with the introduction of the Walkman.
MiniDisc matched the chief strength of tapes in that it was an inexpensive medium (the discs cost less than $2 each) that could be recorded and rerecorded on many times over from just about any source. But Mini Disc also offered many of the advantages of CD's, including excellent sound and the ability to listen to songs in any order. MiniDisc players were smaller than CD players, too, and the sound was skip-free.
While the players quickly became successful in Japan and in Europe, MiniDisc was widely regarded as little more than expensive exotica in the United States. (The first models cost $700 to $800.) Many casual consumers seemed content with their portable cassette players, and the popularity of home CD players signaled that if they did buy a new kind of portable device, they would opt for a technology that allowed them to use the same discs they were playing at home. Despite its compact size and other convenient features, the MiniDisc player was largely ignored.
"In North America it just didn't do very well," said Bruce Kasrel, a senior analyst focusing on consumer electronics for Forrester Research (news/quote) in Boston. "Americans said they have CD's! what need do I have for this thing?"
The player, which relies on a proprietary Sony compression format called Atrac, also began to face competition from players that used the MP3 format. Music lovers on college campuses and in wired workplaces and homes began discovering MP3's and what seemed like an endless supply of downloadable, often free music on the Internet. Plugged into MP3 music-sharing sites like the old Napster, people were cramming their computer hard drives with thousands of their favorite tunes.
Soon companies like Rio were introducing MP3 players so that all of that music could be shifted from a computer to a portable device. The players offered a new set of advantages: because the music was stored on chips, there were no moving parts and power consumption was minimal. They were also skip-free.
Then out of nowhere came an accidental innovation for MiniDisc. Xitel, an audio technology company based in Canberra, Australia, with a marketing branch in Austin, Tex., was making specialty internal sound cards for computer game players who wanted to create a surround-like sound with two speakers rather than four. As the company developed and refined its sound cards, it added a digital optical output port on a new model in 1998 for connection to high-end audio components.
"While there was never really a demand for something like that from gamers, we saw it as another check mark no one else had," said Graham Neall, Xitel's manager for United States sales. Then, he said, something surprising happened.
"MP3 became popular in the U.S. market," he said. "A good percentage of our market actually starting buying our sound cards not to reproduce this great 3-D surround sound but to download MP3 files to their MiniDisc recorders."
All MiniDisc recorders have optical input ports that allow audio recording from any device with an optical output port without loss of sound quality. It quickly became apparent to Xitel executives that while consumers had their music-filled personal computers and Sony had the MiniDisc, "what Sony didn't have was a piece of conduit to attach the two," Mr. Neall said.
Sony and Xitel worked out an accord to create a linking device. But first Xitel had to address Sony's concerns about how a new device coupled with MiniDisc might invite trouble with copyright violations involving music downloaded from the Internet.
The solution, said Mr. Neall, was first to produce a Xitel connector called an
MD-Port (DG2)
that would transfer music to MiniDisc recorders in analog form only not digital copies. But by early 2000 Xitel was making an MD-Port that could transfer digital music files and was also able to incorporate a chip that halted transfers of music that is not authorized for copying.
The MD-Port costs about $40 (wholesale), and today, Mr. Neall said, Xitel sells more than 100,000 of them a month. Sony includes the connectors, which it calls PC Links, with each new MiniDisc player. (Sharp (news/quote), the only other maker of MiniDisc players for the North American market, includes a digital optical link with some models.)
"We knew it was the right direction to move in," said Tracy Farrington, the marketing manager for portable MiniDisc players at Sony, of the decision to link the MiniDisc to the PC.
What makes using a MiniDisc recorder rather than an MP3-like audio player particularly attractive is the cost of the recording media. A blank MiniDisc costs about $2 and can hold 74 minutes of CD-quality music. * Chip-based memory cards that MP3 and other digital audio players use can cost up to about $100 and hold an hour to two hours of CD-quality music.
Yet MiniDisc recorders have a major disadvantage that most digital players do not: music can be transferred to MiniDisc recorders only in real time, meaning that if a play list of music on a PC is 74 minutes long, it will take 74 minutes to move that collection onto a MiniDisc. **
Bob Scaglione, vice president for marketing at Sharp Electronics, said that new technology was in the works to solve that problem by early next year. And Sony has announced plans for an interface format called Net MD that will allow faster downloads.
"When we first launched MiniDisc we were targeting higher-end consumers, somebody in their 30's and 40's and predominantly male," said Ms. Farrington of Sony. Now, she said, Sony is able to market the MiniDisc recorder to a much younger consumer.
Ms. Farrington said she knew that MiniDisc had finally arrived when she heard a new generation talk about it as if it had no bumpy past. "They just think of MiniDisc as the newest thing," she said.
Copyright 2001 The New York Times Company
*NOTE: New MDLP (MiniDisc Long Play) technology now allows that same 74-minute disc to hold nearly 5 hours of great sounding stereo music!
**NOTE: The new NETMD models now allow computer-to-MD downloading at speeds up to 32x real time!
