RIAA President Hilary Rosenís NARM DVD-Audio Presentation
The following is the presentation made by RIAA President and CEO Hilary Rosen at the Opening Session of the1999 National Association of Record Merchants (NARM) convention (March 8-11) in Las Vegas, Nevada on Tuesday, March 9. The subject is an update on the progress of DVD-Audio. Thank you very much. Thank you Rachelle Friedman and thank you Pam Horovitz and NARM for inviting me to address the convention this morning. These are certainly exciting times in the music business. In most respects, business has never been better. We are now selling twice as much music as we did just ten years ago. Every survey we do reinforces the fact that music continues to be an incredibly important part of peopleís lives. Of course times have also never been more uncertain. Technology is creating opportunities for new and unbridled forms of consumer access to an artistís work. It is our job - all of us in this room, to keep up. To develop new artists, to promote and market their work, to find new fans and to continue to realize economic value for those efforts so that we can start the cycle all over again tomorrow with more artists. We will talk a lot about how the Internet will play into those opportunities over the next few days. And of course, I am always willing to give a spiel on unauthorized MP3 sites, and how the music community must develop the legitimate marketplace to combat this very real problem. But I am here this morning to talk about a new product - one that will actually be in your stores soon and provides a wonderful evolution in digital music. DVD Audio The five major record companies announced last week that they will support a DVD Audio format and will have titles in the stores by the end of the year. The short story of DVD Audio invites comparison with DVD Video. Just as DVD Video has improved quality over the laserdisk, DVD Audio will be an improvement over the Compact Disc. It is a CD for the next generation in several very important ways, beginning with sound quality. With a vastly greater digital information storage capacity than CDs, DVD Audio discs will deliver faithful sound reproduction with unparalleled clarity, space and atmosphere. In addition to 24-bit high quality stereo, DVD Audio discs will offer up to 6 channels of high fidelity surround sound, compared to 2-channels on CDs. This will give music creators new freedom to explore exciting frontiers of artistic innovation. DVD Audio discs can hold a rich mul-titude of valuable information above and beyond the music. This might include album lyrics, liner notes, artwork and more. These can be displayed on a TV or computer screen as text or interactive menus. Full-motion video, still images and com-puter data all are a part of this core music product. Recording time depends on the configurations used, but even at the highest resolution format a single-sided, single-layer disc can carry about 74 minutes of program content. Artists will flourish with the unprecedented amount of program creativity allowed by this product There is even enough room on a DVD Audio disc for Internet home page addresses, so your customers can access information such as a performerís biographical data and their concert schedules. Youíll be glad to know DVD Audio discs will have a robust copy protection system to guard against illegal copying and pirate editions. In my view, nothing is more important in todayís environment that combating the notion that all music should be free for the taking. This is the first product ever that the music industry has been able to produce that will be protected. CDs remain our core consumer product, but given the fact that there are several billion CDís out in the marketplace that are completely unprotected technologically from copying and available for electronic uploading on a whim, DVD Audio is the first opportunity we have had to sell value for the consumer and not worry about the devaluing of the work. DVD Audio accomplishes copyright protection with encryption and watermarking. Compatibility is important. As for existing CDs, they will be playable on DVD Audio players, just as they do on all DVD Video players today. Let me say this again. CDs will not be made obsolete by the new format. In all, I think youíll agree that developing and marketing DVD Audio discs is a great thing. As with new product however, there are some subtle bumps in the road and I wonít sugar coat them today. Anthropologists have a theory that human beings in identical circumstances, having the same raw material and the same problem, will solve the problem in the same way. I suppose anthropologists have not studied consumer electronics manufacturers, because they always seem to solve problems in two different and incompatible ways. As I speak, two alternative proposals for high-density audio discs are fighting a battle of the bands for industry approval. The DVD Audio group consisting of companies like Toshiba, Matsushita, IBM and Intel is promoting one. That is the format that the record companies committed to support last week. Another high-density disc, the Super Audio CD is being developed and promoted by Sony-Philips. It will also have copy protection and the support of some record companies. The RIAA has urged the hardware manufacturers to agree on a single standard for the next generation music carrier. I know that this audience strongly agrees with me. If we have incompatible players and discs, consumers will be confused, record companies and retailers will have increased costs and the DVD Audio will not be successful. Iím confident that, in the end, both camps will do what is right for artists, retailers and consumers and - at the very least - equipment will seamlessly play either the DVD audio disc or the Sony Philips disc. DVD Audio music promises to sound better than anything you or your customers have heard on a CD. It is difficult to describe a higher quality audio experience in words alone. Sound engineers and audio critics point to two telling specifications that you may well be familiar with frequency response and dynamic range. Frequency response is the ability to accurately reproduce a range of tones. CDs have a frequency response of 0 to 20,000 Hertz. DVD Audioís frequency response can be 0 to 100,000 Hertz depending on artistic decisions in the studio. Dynamic range measures the range of program material, from softest to loudest. DVD Audio discs can have a dynamic range of about 140 decibels (dB), compared to 96 dB for a Compact Disc. If you have no idea what I just said, just go to exhibition area of this convention and hear this thing for yourself. I promise you will be impressed. These specifications mean DVD Audio discs will be capable of delivering the highest audio fidelity ever devised in either a professional or a consumer audio format - fidelity that is beyond the performance of current recording and playback equipment. After all, why would the consumer electronics computer industry invent a new technology but for to sell new machines! Nonetheless, we will all be the beneficiaries. The look and feel of a DVD Audio disc is very much like a CD. Its disc diameter and thickness are the same as a CD. It will fit nicely on your shelves and extend to your most fervent music fans the excitement many of your stores are already finding with DVD Video. So when will this happen? A lot of people are working very hard on aggressive schedules to get hardware and software ready for a modest launch by yearís end. There will be titles for your stores by the end of the year but the hardware industry needs to start an aggressive schedule for manufacturing the equipment. Most of the industryís marketing push for DVD Audio wonít be felt until early next year. Is there a down side to DVD Audio? Only that once DVD Audio has a definite introduction date, sometime in the third quarter, there is the possibility a few high-end audiophile consumers may hold off their CD purchases in anticipation of the new format. It is up to all of us to prevent that through our marketing and promotional efforts. Letís start by building enthusiasm for the transition that is being developed ñ the compatibility of new equipment with CDís and careful planning for the productís launch. We look forward to working with you to assure the success of this promising new format. Thank you for your attention, and have a great convention.