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Serious Hurdles For DualDisc’s Successful Launch This October Print E-mail
Thursday, 02 September 2004
DualDisc seems to really have the attention of the four major record labels as the next physical format they want to use to sell their music, having beaten out SACD and potentially incorporating many of the features of DVD-Audio onto the DVD side of the half-CD/half-DVD “dual disc.” According to a release from a number of big record companies a few weeks ago, as many as 50 DualDiscs will be released this October, just in time for the holiday selling season. On the condition on anonymity, one record executive points out a number of key problems of the new format that have not been dealt with regarding DualDisc. First is a potential legal action from a European manufacturer who is upset regarding his patent on the DualDisc technology. Another issue that could cripple DualDisc is music publishing. According to this industry source, record labels currently have no deal in place to pay people or companies who own music publishing for the content that goes on both sides of the disc. A music publisher might expect a mechanical royalty on one side of the disc, but do they get paid a second time for content like a surround or high-resolution (24 bit 192 kHz) mix on the DVD side? This could be a billion-dollar question that may become super-heated. If music publishing companies wanted to get litigious (and what self-respecting record executive doesn’t?), they could try to get an injunction to stop the sale of the discs before or right after they hit store shelves.

Another potentially huge problem is illustrated in the DualDisc market study report, conducted by KL Communications for the major labels, is the failure of the discs in many customers’ systems. According to the report, 21 of 145 discs failed for one reason or another, based on the response of customers who bought the discs and then filled out a response card. Problems included trouble playing in DVD players (3%), computers (3%), complaints about DVD-Audio quality (3%), problems with packaging (3%), troubles playing in cars (2%) and troubles playing in CD players (2%). 145 respondents isn’t a huge sampling, but a 10 percent failure rate (or even one-third of that) could be a huge defeat for DualDisc, causing widespread returns for record resellers.

DualDisc has a lot of potential to be the physical technology that bridges the gap between the now outdated compact disc and other more “vapor ware” technologies like Blu-Ray. However, the idea that DualDisc is going to have an easy time taking over for the CD is a flawed concept. Consumers seem to like the idea of video on their music discs, but complain about the price of the discs (some are as high as $18.99 in the test markets) and the lack of artist variety. There are major hurdles in the way of making this hybrid disc the next CD, but with the current revenues and long-term success of the shrinking music business on the line, expect to see labels do the hustle to make this format fly.

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