Recording industry to continue fight against DAT recorder sales - digital audio tape

Discount Store News, May 9, 1988

Recording Industry to Continue Fight Against DAT Recorder Sales

Just when consumer electronics manufacturers thought they had won their battle to market unrestricted-use digital audio tape recorders in the United States, the recording industry has begun preparations for Round 2 of its fight to keep the new technology off the market.

Many industry observers felt that DAT recorders had the "green light" to be sold here after the recent release of a National Bureau of Standards study reporting that the CBS chip-designed to prevent duplication of prerecorded software-does not work well and diminishes quality.

Despite the report, however, the Recording Industry Association of America vowed to continue its efforts to protect the sales of prerecorded tapes, records and compact discs. Earlier, the RIAA had reached an agreement with the Electronic Industries Association to let the National Bureau of Standards decide on the viability of the CBS copy-code system. However, the RIAA never said it would drop the fight for copyright protection, said Trish Heimers, vice president, public relations for the Washington D.C., lobbying group.

"We are prepared and have set up a legal fund to sue on charges of contributory copyright infringement any hardware manufacturer who markets a DAT recorder in the United States before a resolution is reached," she said. "We are and will continue to push for a legislative solution."

Nevertheless, Casio, Dover, N.J., has announced it will ship DAT recorders to the United States by late April or early May, and Harman America is pressuring suppliers to make good on orders it received from retailers for delivery this summer.

But, indicative of manufacturers' reluctance to market the DAT recorders here before some mutually agreeable solution is adopted by all parties, Chatsworth, Calif.-based Marantz has backed off from its assertion that it would sell DAT recorders in the United States this year. The firm has not been able to get prime manufacturers to supply Marantz with the units, said Sam N. Rosenzweig, senior vp, sales and marketing.

Ordering DAT Recorders

Crazy Eddie, the Edison, N.J.-based CE chain, has ordered the Casio and Harman Kardon pieces. It was given a tentative date by Casio to expect the unit by the end of April and the Harman Kardon unit possibly by July. Crazy Eddie hopes to sell the Harman Kardon unit for $1,999 and the Casio for $1,399, said David Pardo, director, marketing and merchandising.

Most CE manufacturers are not committing themselves even though they have DAT recorders ready to ship. "Everyone is talking about it but no one is supplying a definite date of availability," he said.

Panasonic and Technics told Pardo they will start shipping their units 30 days after they see other major CE manufacturers entering the business.

Greg Maanum, merchandise manager, audio for Best Buy, Minneapolis, said most national sales managers at the CE firms he talked with said they wouldn't ship DAT recorders until 1989.

The Recording Industry Association of America said it is willing to work with hardware manufacturers to come up with a mutually agreeable solution but vendors will not cooperate with them. Mainly, manufacturers said they do not want to hamper the performance of the "most exciting technology to be developed in the last 10 years."

Others believe that the recording industry is not the main obstacle to marketing the DAT recorders here. The crux of the problem, said Wayne Inouye, vp, audio merchandising for Good Guys, San Francisco, is that while manufacturers are equipped to produce software, the cost of the hardware is too high. He feels it won't be a software-driven market until the hardware becomes more reasonably priced. "The vendors I talk with are not encouraging us to bring in the piece at this time for this reason," he said. Also contributing to the reluctancy to market DAT recorders here, he said, are reports of disappointing sales in Japan.

Maanum of Best Buy said that the introduction of the new technology into this country would worsen trade relations between the United States and Japan.

Added Rosenzweig of Marantz, "The Orient is so sensitive due to dumping charges that no one wants to do anything to rock the boat."

After Woodbury, N.Y.-based Harman America sent a demo of its Citation Line No. 26 DAT recorder for $2,199 to retailers around the country for review, it received orders from a major portion of its distribution for summer delivery, said vp, Mike Russo.

"We are not afraid of being sued," Russo said. "How can they [RIAA] sue us for bringing to market a consumer product? There is no legislation against this. There is too much momentum building especially with the number of gray market DAT recorders now available in the United States," he added.

One alternative system that is being considered, several sources said, is an anti-copying device that would restrict recording usage to one copy per compact disc.

Pardo of Crazy Eddie suggested that a surcharge or royalty charge be instituted on the sale of blank DAT software or DAT hardware so artists would benefit from sales.