A Push in MiniDisc

(Sony Corp. promotes audio equipment as ideal for recording of compact discs)

Source: HFN The Weekly Newspaper for the Home Furnishing Network, Jan 20, 1997 v71 n3 p67(2). Author: Ed Lieber COPYRIGHT 1997 Capital Cities Media Inc.

LAS VEGAS -- Sony was waving its MiniDisc flag high at CES.

The company has taken an initiative to boost the format, first launched in 1992 as an alternative to the then-fledgling CD, via price cuts and a streamlined repositioning to reflect the product's recording capabilities.

Other suppliers including Sharp and Kenwood, also voiced their support for the format at CES.

"When it first launched, a laundry list of benefits was offered to the consumer," said Robert Nell, Sony vice president in charge of audio. "Consumers thought of it as another music format to fight CD, which was still new."

Now, rather than positioning the format as an alternative to CD, Sony is offering it as a medium with which to record CDs. "Why make a copy when you can make a clone?" is the theme of the advertising campaign, which offers the MiniDisc as a way of protecting your CD collection: Tape your CDs onto the rugged MiniDisc; that way, you can leave your CDs at home when you're on the go.

MiniDisc prices have been cut almost in half since the format's launch. A typical portable player that sold for $800 then sells for about $500 now.

Minneapolis-based consumer electronics retailer Audio King's president and chief executive, Gary Thorne, sees the price cuts as a first step in helping the format finally achieve the desired market penetration.

But "price points need to come down more," he said, adding that MiniDisc pricing must be comparable with cassette-format pricing to succeed. Audio King has carried MiniDisc since launch, in home, car and portable versions.

The format still has a way to go, Thorne said. "In terms of volume, MiniDisc hasn't replaced the cassette," even though cassette sales have been declining, he said.

Thorne believes the format needs to be supported by more vendors for it to catch on. In fact, other suppliers are increasing their presence in the category. One of them, Kenwood, will later this year offer MiniDisc players that contain the company's patented DRIVE sound-enhancement technology.

Sharp, which introduced a handful of MiniDisc products in 1996, will enter the market with a full line this year.

Panasonic sells MiniDisc products in Japan but not yet in this country. "The timing is not right," said Reid Sullivan, national marketing manager for the portable audio division.

He sees MiniDisc as a concept with strong viability, but for now he believes there is too much of a price gap between portable MiniDisc and portable CD players.

According to Sony, factory sales to dealers of MiniDisc units were expected to have risen to 3.5 million worldwide in 1996, compared with 1.2 million in 1995. The company expects this number to rise to about 7 million by the end of 1997.

Sony's efforts to rejuvenate the format seem to be working so far. The company says U.S. factory sales to dealers for its MiniDisc players increased tenfold in 1996 over the prior year.

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