If all goes according to plan early next year, the Washington-based Digital Music Company will contribute a new wrinkle to the home-taping issue: the "Home Music Store," in which master-quality, digitally encoded, satellite-broadcast signals will be delivered directly into the home through a local cable television station. The station's 16 audio channels will create 8 stereo pairs: five for continuous music (in rock, country, classical, easy listening and jazz-r&b-disco formats), one index-preview" channel featuring cuts from upcoming albums, and two recording or "sales" channels that "will be encrypted so that you can't listen to them without doing something special," says William Von Meister, Digital's president.
Consumers will be able to choose what they want to tape -- at savings of 40-50% from the retail price -- from a monthly "Home Music Guide." They'll order by calling a computer on a toll-free number and dialing in account and album numbers; the signal will be channelled through a system's pre-amp, decoded and activated by the computer. The digital-quality recordings, according to Von Meister, will be made in real-time from original studio masters: "the difference in quality is astronomical."
This new system of distribution directly into the home will obviously bypass traditional outlets, so the retail side is less than enthusiatic about the idea. But, according to Von Meister, the record companies with whom he's negotiating lease agreements are "extremely positive. We're getting to a new market that's supplemental, not displacement." He points out that Home Music Store's natural audience will be over-35 audiophiles with substantial disposable income who don't go to record stores anymore and are disillusioned with the quality of vinyl and prerecorded tapes. This group represents "50% of the population, but only 16% of [record and tape] purchases. To the record companies, it's genuine new business."
Von Meister, whose most recent entry in the high-technology communications business was The Source (a computerized information service recently sold to Reader's Digest), points out that records companies will save on pressing, printing of album jackets, shipping, returns and so on. "And we'll be paying all the mechanical royalties and rights so that the artists and people along the line still get what they're getting now." There's even a security device -- "signature insertion technology" -- that "will encode a customer's serial number into the tape when you record the music. If you try to sell or copy it, a special machine will identify you." Billings will be made directly to a customer's credit card, with royalties computed at the same time. Record companies may even benefit from instant sales feedback from the computer. Digital Music will benefit from rentals of decoders, as well as receiving a percentage of the taping fee. The company plans to open five test markets in April of 1982 and is currently negotiating for access to satellite space.