Electronics Firms Settle Differences in Design of New CD

By Evan Ramstad
Associated Press

September 15, 1995

NEW YORK (AP) -- The electronics industry on Friday agreed to a common design for the next generation of compact discs, eliminating the risk that consumers might buy a product that becomes obsolete like Betamax videotape players did.

The new CD will be the same size as the one now commonly used in stereos and personal computers. But it will hold about eight times more data, meaning a full-length movie or all nine Beethoven symphonies could fit on one disc.

The agreement marks one of the few times that a standard has been set for an electronics product before it even reached customers. The same thing happened with the original compact disc in the 1980s, allowing CDs to quickly surpass vinyl records as the preferred format for recorded music.

"When you put standardization together with a great product, the consumer embraced it," said Warren Lieberfarb, president of Warner Home Video Inc., one of many companies that plans to have movies on the new CDs by the 1996 holiday season. "I think we're on the same pathway here."

Moreover, the new CDs may further reduce the differences between machines that play them. It is already common, for instance, to play music CDs on personal computers and many believe the same thing will happen with movie CDs.

The debate over the new compact disc design has been unusually public. The success of previous CDs means billions of dollars in future royalties are at stake for the next version.

Since last December, electronics companies have been lining up behind the competing designs of Toshiba Corp. and Sony Corp., which co-created the original CD with Philips Electronics NV.

Toshiba's key backers were Time Warner Inc. and Matsushita Electric Industrial Co., the world's largest electronics company. It also won support from many Hollywood studios. Sony's chief backer was Philips.

While both sides for months said they would be willing to compromise, there was little progress until summer when a group of computer makers and software producers stepped in. A breakthrough came when IBM, the largest computer company, made recommendations on several details last week.

Companies wanted to avoid a format war of the kind that divided the videotape market 15 years ago. At that time, Sony promoted a format called Beta and Matsushita touted VHS, which eventually became the standard for consumers. As more pre-recorded movies were made for VHS, owners of Betamax products were left behind.

Consumers will have to buy new equipment to play new CDs. The new equipment will be able to run the old discs as well. In the case of personal computers, manufacturers are likely to update to new CD drives as easily as they change to new hard drives or other components.

While many details separated designs for the new CD, the main difference was that Toshiba favored a design putting data on both sides of the CD while Sony wanted to use just one side, the way existing CDs do.

In the compromise, the companies will use Toshiba's idea for obtaining more data space by bonding two ultra-thin discs together but they will rely on Sony's idea of principally reading data from one side. The result is the new disc will hold 4,700 megabytes of data, less than Toshiba's idea but more than Sony's. Current CDs hold about 600 megabytes.

The companies said it will still be possible to put data on the second side of the new CD, expanding its capacity further. For instance, a movie studio may wish to sell a movie on one side and a related computer game on the other.

"If we need two-sided we can do that, but we thought it was very important to preserve the single-sided approach" for future machines to still run today's CDs, said Carl Yankowski, president of Sony Electronics Inc.

The thorniest technical issue was not resolved until IBM last month threatened to throw its considerable support behind the Toshiba design despite its view that Sony had a better way to put data on the disc.

In the end, the companies followed IBM's recommendation that they use Sony's method for converting data.

"We sacrificed a little capacity but I believe we have the superior technical solution by having unified the two formats," said Alan Bell, an IBM researcher who chaired a group of computer industry executives that advised Sony and Toshiba.

With the technical issues behind them, Toshiba and Sony must decide how to divide the money that is expected to be made over the coming years.

"Everyone is cognizant of royalty issues and are comfortable they can be worked out," Yankowski said.