Aug 2, 2006, 15:13
By Daniel Frankel
After nearly 18 months of mass distribution, the music industry's CD/DVD hybrid, DualDisc, has failed to catch on in a big way with consumers, with major record labels seeming to back off in their support of the product and retailers reporting lukewarm sales.
"At this point, we have not seen widespread acceptance of DualDisc," notes Best Buy spokesman Brian Lucas. "That said, we're continuing to support DualDisc as an option."
Indeed, reports of the hybrid's demise have been somewhat exaggerated.
Sony BMG has more than 100 DualDisc titles planned for 2006, with Bruce Springsteen's "We Shall Overcome: The Seeger Sessions" topping charts. The album, which is only available as a DualDisc, still ranked as a top 10 music-category performer for Amazon nearly three months after its April release.
"We are still supporting the DualDisc format and still dedicate capacity," notes a statement from the replicator Sony DADC.
However, there are clear signs that enthusiasm for DualDisc is no longer shared across the consortium of major labels that banded together to launch the product with a major rollout that began in February of last year.
"It's just about a dead issue," a major label source told Billboard Magazine in February. "We'll put out a few (DualDisc releases) here and there, but it's not anywhere near a major initiative."
According to John Trickett, chairman and CEO of immergent, a Los Angeles-based music label that has been active in support of DualDisc, over 13 million units of the product were sold as of early July and over 300 DualDisc titles have been released so far.
He staunchly resists the notion that DualDisc is "dead."
"Can we say that we are pleasantly surprised with these numbers? Are these numbers successful numbers? The answer is yes," Trickett says.
Still, he concedes that because DualDisc isn't a new format requiring new playback hardware, it has suffered from a lack of major promotional push on the part of consumer electronics companies (consider the amount of money spent by Sony and Toshiba to launch the respective Blu-ray Disc and HD DVD formats, for example).
"That's probably the single biggest reason consumer awareness hasn't happened," Trickett says.
Certainly, given that the core mission of DualDisc is to spark consumer interest in packaged-media music, it's questionable as to whether the product has lived up to the expectations of the labels. The Recording Industry Association of America—which combines DualDisc sales with the broader CD category—noted an 8% drop in disc shipments and sales last year, for example.
Tangentially, music business pundits question whether the hybrid configuration has delivered on its key selling point—added value to the consumer in the form of DVD extras including documentaries and music videos.
Indeed, a DualDisc study conducted by NPD Group last year revealed that nearly half of consumers who purchased the product thought they were buying a standard compact disc.
"We think that DualDisc is confusing to the consumer," says Arnie Holland, president and CEO of Warner Bros. music imprint Lightyear, which will release the upcoming debut CD from controversial pro basketball player Ron Artest. "My impression is that the consumer really doesn't know what it is."
Replication cost for DualDisc typically runs about 70 cents a unit more than that of a standard CD—a bit less expensive than replicating and bundling a dedicated DVD with a CD.
However, to make a DualDisc release cost effective, music producers must plan more carefully than, in many cases, they'd like to. For example, many DualDiscs include a separate surround sound track, which users can hear on their DVD player. The cost and time associated with creating this surround sound mix is minimal if it's done concurrently with the CD stereo mix, Trickett notes—but not so minimal if the decision to release a title in DualDisc is made later, and producers have to go back into the studio to remix a surround sound version.
Then there is the DVD bonus material, a proposition that music artists seem to be generally less enthusiastic about than the major labels had originally hoped.
Labels and retailers have also had to deal with DualDisc returns. Since the product doesn't conform to standard "Red Book" CD specifications, there are a small number of disc players in the marketplace that can't handle the product.
For all of these aforementioned reasons, several labels continue to advocate packaging a separate DVD with their titles instead of combining discs.
"I'd rather just give them a two-disc set with a CD and DVD," Holland says. "It costs a little more to do it that way, but if you're trying to give the consumer value-added, having a second disc is a good way to do that. I'm not saying consumers are stupid, but a lot of it is perception."