The latest and most outrageous prophecy made for the optical storage market is that 1999 will be the year of CD-ReWritable. But given its restricted functional realities, poor price potential, limited compatibility and existing indifferent market reception it’s hard to believe that anyone would trumpet such great expectations for CD-RW in the coming year.

Will 1999 Bring Success To CD-RW?

By Hugh Bennett
Tape/Disc Business, February 1999

Each new year brings resolutions and predictions for the future. Some are attainable but others are just plain beyond belief. The latest and most outrageous prophecy made for the optical storage market is that 1999 will be the year of CD-ReWritable. But given its restricted functional realities, poor price potential, limited compatibility and existing indifferent market reception it’s hard to believe that anyone would trumpet such great expectations for CD-RW in the coming year.

Wishful Thinking
Over the past two years, proponents have done an excellent job preaching the message that CD-RW will be wildly successful, to the point of challenging CD-R’s hold on the hearts and minds of consumers. Those who aren’t believers just don’t get it.

To CD-R disc manufacturers currently taking a bath on prices, the prospect of producing and selling huge quantities of high margin CD-RW media that brought them onboard was so irresistible that many jumped in with massive equipment investments. Best estimates say that there are now 35 CD-RW media manufacturing lines spread among 10 companies worldwide with the capacity to produce at least 100 million discs per year. However, if something sounds too good to be true it probably is. In a market that currently consumes less than 10 million discs per year, and is only expected to use 100 million discs at its peak in a few years time, the truth is that these media manufacturers may be left holding the bag.

High Media Cost
One significant reason CD-RW won’t likely make significant market headway is that it must contend with high media prices in relation to CD-R. Compared to CD-R discs that are available to the consumer for $1 to $2 a piece, CD-RW discs go for 10 times these amounts. Given the manufacturing realities and foreseeable market conditions, this huge disparity is not likely to change.

The most obvious reason the current situation will continue is simply the shear volume of CD-R media production. In comparison to the projected 100 million CD-RW discs at its future market height, demand for CD-R media will top a billion discs this year, and with further increases yet to come. Lacking CD-R’s huge economies of scale, CD-RW can never hope to come close in price.

Similarly, one of the myths promoted in the industry is that, since CD-RW media is manufactured using a sputtering process, it is very economical to make and easier to produce than CD-R media which is based on tricky thin film spin coating. Eager manufacturers are already comfortable with sputtering and thus are led to believe that cranking out CD-RW discs will be hassle free. What is seldom mentioned, however, is that the multi-layer application of phase change alloy and dielectrics in CD-RW is not like laying down a single aluminum reflector. The process is prone to contamination and other problems that induce production headaches and increase cost.

Another argument is that manufacturers don’t have to recover all of their capital equipment and process development expenses on the basis of their CD-RW disc sales since similar technology will be used to produce rewritable DVD media. All they need to do, CD-RW proponents say, is move forward with the market. Unfortunately, many disc manufacturers have purchased CD-RW media production systems that are not convertible to rewritable DVD disc production, so they are going to be forced to attempt to recover costs on a format with a short market lifespan.

Limitations
In addition to high media prices, CD-RW suffers from poor read compatibility with the existing installed base of hardware. Quite simply, CD-RW can’t be read by most of the installed base of 200 million CD-ROM drives and 600 million CD audio players worldwide which obviously limits its potential use for audio, data distribution and archiving applications. Further standing in the way of CD-RW’s usefulness for even everyday data storage functions are ongoing write compatibility problems between various packet writing software and different combinations of CD-RW recorders.

Convenience and capacity are not CD-RW’s strong suits either. As is the case with many rewritable storage mediums that do not come from the factory prepared for writing, newly opened CD-RW discs must first be formatted before they can be used. However, unlike the quick process of many of the optical systems, formatting CD-RW discs is a time consuming process requiring from 30 to 60 minutes per disc. And, although advertised as providing 650 MB of removable storage space, an unpleasant reality that never makes the ads or product brochures is that CD-RW discs lose almost one quarter of their capacity when formatted for direct overwriting.

As demonstrated by CD-R, the long-term usefulness of an optical storage format should depend upon a forward migration path that protects and expands upon a customer’s technology investments. This migration includes not only read and write compatibility with future generations of hardware, but also high speed reading and recording capability as well. A significant functional shortcoming of CD-RW (that proponents conveniently gloss over) is the problem of reading back data recorded on CD-RW discs at moderate, let alone high speeds. Unlike prerecorded CD and CD-R discs which CD and DVD-ROM drives can read at 24X, 32X or even 48X, reduced reflectivity and diminished servo signals prevent CD-RW discs from being read back at over four or at best eight speeds. As with most things, reading CD-RW discs at higher speeds is technically possible at a price, but in a market where every penny counts, consumers are in reality hampered with limited performance. At the same time, higher speed writing ability (up to 8x currently) has greatly increased CD-R’s overall appeal, value and application use. In contrast, CD-RW writing is limited to 2x and 4x with little chance of performance improvements, again for reasons of cost. Slow read and write speeds may be fine for niche optical storage formats but increasingly higher performance is one of the defining properties and great features of compact disc technology.

Giving credit where credit is due, it’s hard to debate the shear technological achievement of CD-RW, but one of the hardest lessons learned from the evolution of the optical storage market is that ingenuity alone does not guarantee success. Given the realities of high media costs, limited applications, poor read and write compatibility, reduced capacity and disappointing read and write performance the anticipated market breakthrough of CD-RW in 1999 seems unlikely at best.

ABOUT THE AUTHOR
Hugh Bennett, editor-in-chief of Hugh’s News, is president of Forget Me Not Information Systems, a reseller, systems integrator and industry consultant based in London, Ontario, Canada. Hugh is author of The Authoritative Blu-ray Disc (BD) FAQ and The Authoritative HD DVD FAQ, available on Hugh’s News, as well as Understanding Recordable & Rewritable DVD and Understanding CD-R & CD-RW, published by the Optical Storage Technology Association (OSTA).

Copyright © 1999 Knowledge Industry Publications / Hugh Bennett