Capacity, not price, keeps CD storage sales spinning - compact disc

Discount Store News, Jan 3, 1994 by Pete Hisey

In CD storage circles, quantity is quality.

First, the little silver discs took over the living room; now, they're taking over the house.

When CDs first came on the market, their tiny size compared to vinyl LPs made them seem rather innocuous. "Until you get up to 100 or so, you don't really notice them taking over your life," noted Mark Chatow, vp of sales and marketing with Santa Monica, Calif.-based Roundhouse Designs. At about 120, though, they become a major storage issue, and with players now routinely priced under $100 and CD rack systems starting at well under $200, nearly anyone can get into the technology and, even at $15 a pop, many consumers now have 300 or 400 discs in their collections. And, noted Clifton, N.J.-based Gemini vp of marketing Michael Schwartz, "CDs are an odd size; they don't fit conveniently onto existing shelves, like records do, or into drawers the way cassettes do."

Additionally, the home CD player has been augmented by truly affordable portable units (for as little as $79), which in turn has created another major storage problem: unlike cassettes, CDs don't fit into a pocket, and it's unwise to leave them in a suitcase or glove compartment.

No surprise then that the fastest-growing categories in CD storage are high-capacity home units, soft and hard, and carry-along wallet packs, some of which can hold a portable CD player and 10 or 20 CDs. London-based Bib has a leather unit that contains cloth sleeves, avoiding any melting problems from plastic. And even in portable units, bigger seems to be better.

According to Kevin Mendel, senior buyer at CE specialty chain, Best Buy, "people are really in tune with storage as a piece of furniture. You see the success of something like Tree Dimension's bookshelf, or the Case Logic CDT-240, which holds 240 discs and costs about $60, and it's obvious that space, not price, is the major issue."

The same holds true for portable units, he said. "It used to be that the case that held 12 CDs was the bestseller," he said. "Now it's 24, 48, even 96. People spend a lot of time in their cars or on business trips, and they want their music with them."

Ross Pollack, electronics accessories buyer at Florida's hard goods discount chain, Luria, agreed. "We're probably over-assorted in the category, but everything's doing very well. We completely sold out of a Laserline 200-piece tower in 30 days, way ahead of our expectations, and fortunately got a reorder back out to the stores just in time for the Christmas rush." Added Luria's Jeff Bayer, executive vice president of marketing, "The category is really coming on strong, and towers, which have only been on the market for a year or so, are leading the way. But we're doing a lot of business in other formats, like the CD-3 jukebox. The category, because of its high margins and appeal to the self-service shopper, is ideal for our new superstores."

And, of course, dozens of vendors supply these categories. Major mass market accessories suppliers like Gemini, Bib and Allsop have full lines on the market, Creative Point's Laser-line, Los Angeles, is recognized as an innovator in the category, Memtek has entered the market with a cleaning/storage kit, and Case Logic, Longmont, Colo., arguably the originator of the category back when cassettes ruled the music world, has become increasingly dominant, in part because of its rapid proliferation of new products. While the soft black fabric pack with the hard plastic interior first introduced for cassettes still dominates the market, towers that can hold up to 300 discs and desktop "jukebox" units through which a consumer can flip, are quickly becoming major components of the business, as are soft-sided wallets, which store only the discs themselves.

Which leads to a major storage trend: Getting rid of the jewel box altogether. Most of the bulk and nearly all of the weight of CDs comes from the jewel box, and new flip units that provide scratchproof plastic sleeves for the cover booklet and CD are a hot trend. Roundhouse Designs was perhaps the first into this category, and now has an inexpensive mass market line called FlipFile Compact, which includes a unit that will hold 300 CDs or 150 CDs and 150 cover booklets. And Case Logic will introduce its version of what it calls a "jewel boxless transportable and home storage system" at CES. According to marketing vp Randy Lervold, Case Logic's ProSleeve system will incorporate a "file cabinet" central System and matching wallets with varying capacity, along with interchangeable plastic sleeves. "With average-size inserts, the Prosleeve system can store four discs, inserts and spine labels in the space that one jewel box would occupy," Lervold said. Weight savings would be comparable, he added.

Roundhouse's Chatow noted that, at least in his experience, higher capacity outsells lower capacity, despite large price differences. A unit that stores 200 discs and sells for nearly $50 is outselling a 40-disc unit that sells for well under $20 by better than three to one, he said. And a new portable unit that holds a player and 50 CDs is outselling a smaller and less expensive unit.