It’s a three-way race for audio standards: DAT v. DCC v. Mini Disc

A few years ago, Sony unleashed Digital Audio Tape on the world. Technologically, DAT was wonderful. But Sony mismarketed the product as a way to copy CDs and incurred the enmity of nearly all the major recording companies.

Trapped between a powerful lobbying campaign and a total dearth of prerecorded tapes, Sony was unable to bring DAT to the U.S. market. Philips took advantage of Sony’s fumbling, and developed a competing product called Digital Compact Cassette. While technologically inferior to DAT, DCC is compatible with existing analog cassette tapes and, even more important, it has the endorsement of the music industry.

Remember the Betamax! The whole thing is reminiscent of the contest in the VCR world a dozen years ago between Sony’s Beta tape format (which offered higher quality) and JVC’s VHS format (which had longer playing time). Consumers preferred quantity over quality, so VHS won out.

It looks as though the same thing will happen again. Quality (in this case DAT) will lose out to quantity–the titles that the studios have already promised will accompany DCC’s debut.

But wait! It may not be over yet. Sony, having pretty much admitted that DAT isn’t going to make it as a consumer product, is trying again with the Mini Disc. Based on the specs, its quality is lower than both DAT’s and DAT’s. That alone won’t make it a winner; the quantity factor depends on whether the record companies go for it. If they do, it will be VHS vs. Beta all over again.

DAT takes on the music industry
When Sony announced DAT a few years ago, audiophiles were enthusiastic. Digital tape, they said, would combine the quality of a CD with the malleability of a recordable medium, letting consumers record their own entertainment, combine selections from different discs and so on. It would also provide CD-quality sound in cars and while jogging, because a tape is much less disturbed by vibration than a CD player. Computer makers looked forward to gigabytes of cheap data storage as a spinoff from the consumer market.

Yo-ho-ho and a dubbing deck. The U.S. music publishing industry, though, reacted with horror. The problem of bootlegging was already bad enough with analog cassette tapes, said industry leaders. But analog tapes didn’t sound as good as CDs–they have hiss and noise, the high-frequency response isn’t as good–and a second-generation copy of an analog tape sounded worse. So there was some built-in limit to the number of copies of copies that could be made. In fact, a bootleg tape could even sound so bad as to be an incentive to buy the original recording.

Digital tape had no such limits; each copy would be a perfect CD-quality reproduction, thanks to error-correcting codes. The studios said DAT would encourage unlimited pirating of CD music, depriving artists and producers of their lawful revenue. And before DAT products could be developed for the U.S. market, the recording industry began a fierce lobbying campaign in Congress to keep DAT out of the country.

The only reason the campaign never resulted in legislation was that Sony and its licensees decided that discretion was the better part of valor and declined to import consumer recorders. Some “professional” recorders were sold (a few, no doubt, to pirates), but a mass market never developed.

SCMS, the mollifier. The studios relented only when DAT vendors developed the Serial Copy Management System and promised to put an SCMS chip into every consumer-market recorder. SCMS allows you to copy a CD to tape, but it prevents “serial copying,” that is, copies used to make other copies. It represents a compromise between the legitimate desire of record companies to maximize royalties by preventing all copying and the equally legitimate desire of consumers to take advantage of their recorders’ abilities.

SCMS is not the end of the argument, however. The music studios are still trying to get Congress to put a tax on recorders and blank tapes, to be funneled back to a royalty pool shared by all copyright owners. This scheme first arose from the U.S. Supreme Court’s Betamax decision, and despite minor grumbling, it has worked tolerably well in the video world. The arguments would be the same in the audio world.

No titles. The studios’ opposition took one more form, just as deadly: they refused to publish albums on digital tape. (By one industry estimate, there are even now no more than 200 commercial titles worldwide.) This strategy scotched the demand for DAT recorders; outside of a tiny hobbyist market segment, few people would pay just to splice selections from CDs.

You’ve heard of the chicken-and-egg problem: hardware makers won’t tool up to enter a market unless there is software to stimulate demand, but software folks won’t develop titles unless there is an installed base of hardware. Well, the recording studios tried both to strangle the chicken and to cook the egg.

Still wide open. The upshot is that even though DAT was introduced nine years ago, it is still struggling to gain any momentum in the U.S. consumer marketplace. DAT has found some specialized applications in computer backup and in-the-field recording, but otherwise it has remained pretty much a hobbyist’s gadget. It may become a commercial success in some niches, but the audio mass market is still wide open.

DCC enters the maelstrom
Last January, Philips threw its own hat into the digital-recording ring. It announced a new tape format, called Digital Compact Cassette (DCC), and positioned it as the natural successor to the standard audio cassette. (Not incidentally, Philips was also the developer of the cassette.) The first products will begin appearing sometime in 1992.

In announcing DCC, Philips took great care to avoid the mistakes Sony made with DAT.

Support of the music industry. Philips says that it involved representatives from the record companies at an early stage in the design of DCC. At the product announcement, Philips had already lined up endorsements from PolyGram (which Philips owns), Capitol-EMI and the German entertainment conglomerate BMG. These firms will release a range of titles, timed to arrive in the stores when the recorders do. In contrast, not even Sony Music Entertainment (the former CBS Records) endorsed DAT.

Copy protection. No law requires the SCMS copy protection scheme; the manufacturers are building it into consumer DAT recorders “voluntarily.” The music industry must remain ever vigilant against vendors that try to cut costs by quietly dropping the extra circuitry that it entails. But Philips has embedded SCMS in its DCC data-format standard. Thus, every DCC machine will necessarily have SCMS, assuaging the fears of copyright owners.

Existing software. A DCC tape drive can play today’s analog audio cassette tapes. Both the physical dimensions of the drive and the mechanics of the read/write head are compatible with existing tapes. The player uses separate electronics for analog and digital tapes, but that adds little to the manufacturing cost–an extra chip or two.

Philips notes that the average U.S. family owns some 60 prerecorded cassettes. There are about 25,000 titles available, and total worldwide sales exceed 1.5 billion cassettes each year.

The sound quality of existing analog tapes will, of course, be no better on a DCC player than on any other player. To make sure that it is no worse, Philips plans to include Dolby noise reduction circuits in the analog playback section of its first DCC products.

On the other hand, you can’t play a DCC tape in an analog cassette player. Digitally coded data is pure noise to analog circuits. Besides, the casing won’t fit.

Shirt-pocket size. A DCC cassette is almost the same overall size and shape as a standard audio cassette. The holes in the casing for the motor spindles and the read/write heads are protected by a sliding metal cover (similar to the shutter on a 3.5″ floppy disk) that keeps dirt and fingerprints away.

Neat features. The cover is flat, so it can easily be printed with album graphics. Philips says this design makes it easy for a motorist to pick the right tape without taking his eyes off the road for more than a second. Even more important (to retailers, anyhow, not to safety advocates) is how the product looks on display on store shelves.

Prerecorded digital tapes will have a table of contents that lets the drive fast-forward to any selection on the tape. Just as you can now do with CD players, you’ll be able to program a DCC player to play selections in any order, replay favorite cuts and so on.

It is also possible to pack some extra information with the audio. At the Consumer Electronics Show, a Philips player had an LCD display that showed the lyrics of a song as it was being played.

At first, 90 minutes. The first tapes on the market will have a playing time of 90 minutes. Actually, that’s two sides of 45 minutes each, but auto-reversing is a standard part of DCC drives, so the hiatus at turnaround will be less than one second. The DCC specification provides for increasing the playing time to 60 minutes per side.

DAT has an advantage here: it already delivers 120 minutes of sound, uninterrupted, in standard recording mode.

Prices and licensees. Tandy has announced that it is Philips’s first DCC licensee. Matsushita is also believed to have a license, though official Philips statements refer only to “a large Japanese manufacturer.” Philips stated that it would offer DCC manufacturing licenses to all interested parties, just as it did with CD years ago.

No recorder prices will be announced until products start appearing next year. However, Philips notes that most of the technology on which DCC rests is a simple extension of current audio cassette manufacturing techniques. The only novel component is the read/write head, which uses integrated thin-film technology pioneered by the Winchester disk makers. Thus, machine prices in the range of $500 to $600 are likely for the first year. Prices should fall rapidly as manufacturing volume rises.

As to media cost, DCC uses the same formulation as VHS videotapes. It is the same width as current analog cassette tape, so manufacturing DCC cassettes is just a matter of putting the right material into existing slitting machines. Unlike DAT, DCC tapes are amenable to high-speed duplication. Therefore, prerecorded albums are likely to be priced somewhere between analog cassettes and CDs.

Minor problems. As with any tape, DCC’s access time is limited by the fast-forward or rewind speed. The tape will take lots longer to seek to the desired track than a CD player. In addition, the data rate coming off the tape is too low to be interesting to the computer industry, so don’t expect to see any spinoff benefits here.

On the other hand, DCC does a lot of things right: it works with your old tapes, the record companies will be issuing new digital tapes, a strong retailer is backing it and the expected prices are right for the consumer market. Even before any products have arrived, it looks as though DCC has already sounded a death knell for DAT.

Sony tries again with Mini Disc
As reported last month, in mid-May Sony announced a new optical disc format, a mere 2.5 inches in diameter, that supports both recordable discs and CD-like prerecorded discs. The Mini Disc (MD) is clearly designed to displace cassette tape in Walkman-style portables, boom boxes and car stereos.

Another disc size? Sony’s market research shows that consumers rarely use CDs in cars or while jogging. For one thing, the size of the disc makes for a much larger player than a Walkman. For another, CD players have an annoying tendency to skip tracks when jostled; cassette tape is nearly impervious to jolts. In addition, tapes are recordable, allowing users to assemble their favorite tunes onto one tape. On the other hand, consumers are enthusiastic about a CD’s sound quality and its ability to go instantly to any selection.

Sony believes that MD is the answer to all these requirements. It’s much smaller than a cassette, yet holds exactly as much music as a CD. Being a disc, it can jump to any selection in less than a second. Like tape, it’s recordable. And like tape, it’s just about immune to vibration.

How Sony did it. Two substantial innovations make these advantages possible.

The first is a low-power optical disc technology that will allow battery operation. In addition, the MD drive will work with both pre-recorded polycarbonate discs (essentially 2.5″ CDs) and user-recordable, rewritable magneto-optical discs.

The second is a data compression scheme that gives roughly a 5:1 compression ratio. Sony calls its scheme Adaptive Transform Acoustic Coding (ATRAC). Like the PASC compression used on Philips’s DCC (see box on page 21), the scheme takes advantage of the human ear’s limitations and sensitivities. This packs the music into a smaller space. But it also lets the laser “get ahead” of the listener.

The player can pull data off the disc at the same speed as a CD–1.4 Mbits per second–but the ATRAC decoder only needs to be fed 0.3 Mbits per second. By putting an ordinary one-megabit memory chip between the laser and the decoder, Sony creates a three-second reservoir of data. If vibration causes the laser to skip a track, it has plenty of time to find its way back and refill the pipeline.

Perfection not desired. MD sound quality is nearly as good as a CD; most people probably won’t be able to tell the difference. (The perfectionists who can are probably already using DAT, anyway.) But Sony makes no bones that it isn’t the real thing. This may actually help Sony’s efforts in gaining acceptance of the new format; the record companies don’t really want a recordable medium that allows perfect copies. Naturally, Sony’s MD player will also have SCMS copy protection.

What’s the price tag? Sony hasn’t said much about the cost of Mini Disc recorders. Based on what Sony has said about the technology, outsiders have estimated that a MD device will be twice as expensive to make as a DCC tape recorder. Assuming that Sony applies the same markup formulas as Tandy, that puts the first MD recorders into the $800 to $999 range.

But Sony has said that the first recorders will not appear until the end of 1992. That gives it more than a year to figure out how to cut costs. It also will put product into the stores almost a year later than DCC. Maybe Sony will be willing to cut margins in order to make up for lost time and market share.

As to the media, the same outsider estimates the cost of blank discs at the high end of today’s quality tape prices. Considering the quality improvement, we think consumers will cheerfully pay that premium.

Cost difference. Prerecorded MD discs use the same materials and technology as CDs and can be stamped out on the same machines. (The bits on the disc are coded differently, but that’s a one-time automatic conversion.) So there’s scant manufacturing cost differential.

The packaging for both media (and for DCC tapes, for that matter) is governed by store display requirements–no matter how tiny the product, the package must be big to make shoplifting harder–and so distribution costs such as handling and shelf space will run about the same. All of which means that retail prices for music discs will probably be the same as for DCC tapes: somewhere between analog tapes and CDs.

Where’s the software? So far, only Sony Music Entertainment has endorsed MD. Whether the other studios get on the bandwagon depends on whether Sony can convince them there is room in the market for yet another format. And that’s not at all obvious right now. Sony will have to do a lot of politicking to get the MD ball rolling.

The days of analog are numbered
The one thing that seems pretty obvious is that the days of analog tape are numbered, no matter whether it is DCC or MD that takes its place. Consumers have already shown that they will pay for CD-quality sound, and that they want the convenience and portability that cassette tapes grant today.

At the moment, it looks as though Sony will have a hard time establishing MD in the market. It’s doubtful that consumers will buy two alternatives to their CD players. DCC will get to market first, at a lower price point and able to play your favorite old analog tapes. Several music publishers have already promised a hefty number of titles for release with the first players.

Lots of ifs. MD’s technical advantages are that it is smaller than a cassette, allowing a smaller Walkman-style player; that it offers much better random (nonsequential) access; and that it is ideal for multidisc “jukebox” players. But the smaller size is a mixed blessing; it will be harder to find what you’re looking for in a pile of discs, because there’s less room for labeling on the edge of the shell.

But we aren’t willing to write MD off before the fight begins. If Sony can garner more endorsements from the music publishers and sign up second-source manufacturers who will broaden the range of price-performance, and if these manufacturers together can create a bandwagon effect, there’s hope.

Peter Dyson