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Does CD Still Have a Place in a DVD World?

Verbatim White Paper

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For more than five years, the industry has beaten the drums, sounded the trumpets and lined the streets waiting for recordable DVD to change the face of the storage market. The “logic” was overwhelming:

There were many other reasons why the DVD machine would simply crush the CD market; and while DVD is showing exceptional sales growth and potential, the “tried and true” compact disc technology continues to be universally used. As the performance and prices of drives and media continue to improve, PC manufacturers and end users uncover new reasons to justify the co-existence of CDs and DVDs.

Certainly, the consumers’ rush to produce their own custom audio CDs has been an important factor in increasing drive and media sales. However, data transfer, data archiving and storing downloads from the Internet were the applications CD technology was initially developed to support. Data storage remains the primary reason virtually every PC today is sold with a CD-RW drive and the reason many industry analysts feel that CD technology will still be widely used through at least 2010.

Quick Look Back

In the mid-1970s, Philips and Sony joined forces to develop a high-capacity optical storage solution for the then fledgling computer industry. There were no pre-established concepts of the “right” answers; only that the new solution had to provide reliable, long-term storage for digital data and be economical to produce and use.

At the time, the options were pretty bleak:

As the capacity, performance and quality of Winchesters and floppies improved, members of the joint development program adjusted their objectives and applications. In the late ‘70s, Philips and Sony attracted the interest of the music industry; and in 1980, introduced compact disc digital audio. The duo finally had a customer and could focus on developing a universal solution for audio, video and data storage.

With the development of recordable CD technology, other firms joined in developing the universal solution, including Ricoh, Yamaha and Verbatim’s parent company, Mitsubishi Chemical Corporation. In the early ‘90s, when CD-R was introduced with drives priced at $2,500 and 650MB media priced at $50, John Freeman, president of Strategic Marketing Decisions, heralded CD-R as the most significant invention since the creation of paper.

Prices Drop, Applications Grow

The 650MB storage capacity prompted Freeman and other industry gurus to paint verbal pictures of the “paperless” office. By 1996, CD-ReWriteable (CD-RW) had emerged, drive prices had dropped below $1,000 and media was available for less than $20 a disc. The technology offered the low storage cost and content formatting structure for storing data, backups, multimedia images, photos, video and audio files. It also provided a low-cost solution for archiving and data interchange.

Looking into the future, the hardware and media firms joined forces with the computer and motion picture industry to develop the next-generation solution. This solution would provide even better performance, economy and capacity; it would be even more scalable and extensible; and it would be backward compatible with the growing customer base of writeable/rewriteable CD users.

In addition to increasing the storage capacity to 700MB, CD manufacturers focused on improving the price and performance of the drives and media. Despite the fact that OEM drive prices had dropped well below $100 and CD-R media was under $1, industry analysts pointed to the quality, capacity, performance and economies of DVD and quickly predicted that CD, especially CD-RW, would soon become part of storage history.

Impressive DVD Growth Path

DVD has experienced phenomenal success since its introduction in 1997. According to DVD Entertainment Group reports, the one-billionth DVD was shipped to retail by mid-2002 and 40 million households will have DVD units by the end of 2002.

Reporting that digital cameras and camcorders sales have grown to more than 50 million this year and forecasting even stronger growth over the next three years, firms like Jon Peddie Research are quick to point out that recordable DVD is the next big thing. They, and other industry analysts, are basing these predictions on the fact that consumers want to move seamlessly from their camera to their home player.

Video is the key (some call it "killer") application for recordable DVD (Fig. 1). Just as people have shown they want to produce their own audio CDs, they want to produce their own TV-quality movies. With all of the new video production software that is now available, consumers can produce and share videos that have all of the titles, special effects and presentation of theater-quality movies.

Now that high-end home PCs include recordable DVD drives, IDC forecasts that drive sales will be strong for the next five years and will reach 50 million units a year by 2006 (Fig. 2). Pointing to the expanding recordable DVD production capacity and the dramatic drop in end user prices, Peddie is confident that more than 250 million discs will be sold annually by 2004 (Fig. 3).

For Whom the Bell Tolls

While the growing acceptance of DVD appears to dictate the rapid demise of CD technology, SMD’s Freeman and IDC’s Wolfgang Schlichting are quick to point out that nearly 70 million CD-RW drives shipped last year and the installed base is over 130 million units worldwide. Both firms estimate that by 2005, more than 400 million drives will be in use in personal and business computers.

These analysts, and others, emphasize that for most data and audio applications, CD-R/RW will continue to do the job very well. In fact, today's 700MB capacity is more than sufficient for most of our needs (Fig. 4). At the same time, the technology has been continually enhanced and users can be nearly 100 percent confident that they can send documents, data or images to someone and he or she will be able to read them.

Enhancements have included:

While a growing number of high-end computers are being offered with recordable DVD drives, these “video-ready” systems are not isolated solutions. In fact, according to IDC’s research, the entire market is shifting to recording. A joint IDC/PC PitStop study showed that while SOHO and small business have led the CD-RW movement, businesses are rapidly implementing the technology as well (Fig. 5).

Applications Abound

Computer manufacturers have made the transition because CD-RW drives help them improve their product line management by being both a CD-ROM and a floppy drive replacement.

CD-R/RW makes sense for business use because even though organizations work to implement and enforce network and enterprise-wide backup schemes, personal system file backup is still important. In addition the ability to use a bootable CD is extremely appealing as a system recovery tool. The vast installed CD base ensures future availability and compatibility. It also dramatically simplifies data file and volume interchange--both internally and externally.

Today, CDs are used for a variety of tasks such as catalogs, bank and phone billing, engineering drawings, 3D modeling, presentations, sales training, documentation, photo albums, road warrior back-up/recovery, small-sized database distribution, legal documents and yes, music recording.

Ironically, the media has also found growing use for personal and business video archiving and distribution. Users have discovered that the VCD and SVCD formats allow them to store 30 minutes of video on a 700MB disc that can be played back on most DVD players. Most users agree that 30 minutes of watching a ballet recital, HR training course, wedding/anniversary video, product presentation or vacation video is more than adequate for personal or business videos.

End Is Not Yet in Sight

Write-once and ReWriteable CD technology will continue to be a fast, reliable and economical backup and recovery solution for desktop and portable systems. In fact, because of the increased security at airports around the globe, IT and organizational management have begun stressing the importance of notebook users following sound data protection procedures.

By backing up the notebook’s OS, applications and system settings (relatively static data), many business travelers have been relieved to find that even if the system is damaged or stolen, all is not lost. When they perform incremental backups of volumes and files every evening, their mission-critical data can be quickly accessed and their business activities can continue with minimal disruption.

While DVD recording will be attractive for high-end consumer PCs, the mid- to low-end prospects as well as SOHO and business user will continue to find the less-expensive CD-RW drives and media a cost-effective and versatile solution for the majority of their storage requirements. Even consumers who have recordable DVD drives (standalone or included with their new “video-enabled” systems) can lower their costs by writing to CD-R/RW media when only 700MB of storage per disc is required.

Today, people let their applications be their guide in selecting the format they will use. For the majority, that means CD-R/RW technology will be the dominant storage solution for the coming decade and that the reports of the death of CD has, in fact, been exaggerated.

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