PRESSING PLANS

Will there ever be enough Compact Discs? The number of discs produced each year keeps growing--but so does the number of CD players the CD pressing plants have to feed.

By the end of 1986, enough new plants were scheduled to have come--on stream, and enough old plants expanded, to yield a capacity of about 266 million discs per year. That figure includes about 144.7 million per year from Oriental plants (all Japanese, except for Korea's Sunkyong), 37.9 million in the U.S. and Canada (about 9 million fewer than had been projected in early 1986), and 83.5 million from Europe. This is a substantial jump from 1985, when the total was only about 82 million CDs (45 million from Japan, about 5 million from the U.S., and about 32 million from Europe). Because of the rapid buildup in ownership of CD players, even this expansion may not ensure enough CDs to satisfy all buyers. But even if it doesn't, more plants should mean more titles.

Some CD plants are working at or about 100% capacity during the present shortage. PolyGram's plant in Hannover, West Germany, for example, has gotten special permission from the German government to operate on Saturdays and Sundays. The government granted this permission on condition that PolyGram would give the extra shifts to previously unemployed workers and give those workers preference for regular-shift jobs.

By 1990 or so, supply could outpace demand. If all the projected CD plants and expansions that have been announced come through, production capacity three years from now could be nearly 900 million discs--about 200 million in the Orient, 265 million in Europe, and a whopping 435 million in the U.S.

Fewer discs than that will be produced, of course. Except in times of shortage, like the present, few factories ever work at full capacity. So actual production will probably be less than plant-capacity figures would suggest. PolyGram predicts that worldwide CD sales (as opposed to raw capacity) will be only 700 million by 1990.

Even so, and assuming that plants not yet publicly announced will be balanced by announced plans that do not reach fruition, tomorrow's capacity for pressing CDs will probably be greater than today's LP production. In the banner year of 1984, according to the Recording Industry Association of America (RIAA), about 205 to 210 million records were pressed in the U.S., and another 18.2 million LPs were imported-accounting for about half of all recorded music sold here, when cassettes and that year's handful of CDs are counted. So if CDs were to take over the entire recorded-music market by 1990, there would be just about enough domestic product to go around. Even if CD does not take over, CD-ROM and CD-I may account for any excess production capacity.

Several factors could limit CD's growth, however. One is the imminent competition from DAT, a more pocket able format that answers the demand for a digital medium which home users can record on. Another factor is the number of CD players in use, still far fewer than turntables, though gaining rapidly.

The major roadblock is that CDs cost far more than LPs, but this may soon change. A number of companies (such as Comdisc, Polyform and LaserLogic in the U.S., DocData and Teldec in Europe, and Matsushita in Japan) are working on new, lower cost production systems. Even without new systems, normal manufacturing advances should lower the cost per disc. With increased experience, manufacturers learn how to make more good discs per run, with fewer costly rejects. In addition, as the capital costs of starting up each plant are amortized, less overhead is added into each disc's price.

Increased experience should also lower the price of CD manufacturing equipment, reducing the capital and overhead factors for discs from future plants. Already, at least one label has announced budget CDs with list prices of only $12 or $13-still high, but markedly lower than the $25 or so charged for CDs a few years back, or the $15 to $17 "discount" prices charged for most CDs today.

So there probably will be enough CDs. With luck, we'll even be able to afford them.

(adapted from Audio magazine, Jan. 1987)

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