Because of an editing error, in an article in last Sunday's Show section by Thomas P. Friel, chairman of the Home Recording Rights Coalition, a proposed antitaping encoding system for digital audio tapes was incorrectyl described as "inaudible." Friel contends that the proposed encoding is audible and therefore causes distortion in the music. (Published 7/9/87)
Music lovers should soon be enjoying the newest advance in consumer audio technology -- the digital audio tape recorder, or DAT. Like the standard audio cassette, the headset cassette player and the compact disc (CD), the DAT will make listening to music more pleasurable and more convenient. And like the last big development in video recording -- the home VCR -- DAT should be good for everyone, including the entertainment industry.
The DAT format puts into a compact and flexible package the technology that consumers have been enjoying for years. It uses the same recording method as the VCR to achieve high recording density -- lots of music on a little tape, so any portion can be located quickly. It uses digital electronics, like a compact disc player, to avoid problems of the standard "analog" cassette -- hiss, flutter and limited dynamic range.
But bills -- H.R. 1384 and S. 506 -- are pending in Congress to make it illegal to make or sell a DAT unless it includes an antitaping chip. The chip would automatically shut down the DAT's recording circuitry when it detects a certain inaudible signal, and so would prevent home recording of any records, tapes, discs or radio broadcasts that have been encoded with this signal, or "notch" in the audio spectrum. Essentially this legislation would ban, or severely limit, the DAT only because it is a superior consumer product. There is no justification for such an unprecedented measure.
Home taping is legal. Ever since the Sound Recording Act of 1971 first extended copyright protection to phonograph records, the legislative history has been clear that private, home audio taping by consumers is entirely legal and unobjectionable. And in 1984 the U.S. Supreme Court confirmed, in the famous "Betamax" case, that home video taping by consumers is legal as well.
DAT is a major opportunity for recording artists. Demonstration or limited-production DAT tapes will sound just as good as the biggest record company's compact discs. This also opens a whole new world for broadcasters, devoted to quality, who wish to feature new artists.
Despite the dire predictions about home taping, record companies are making record profits. According to Billboard magazine, in 1986 CBS Records, Warner Bros. Records and Polygram all achieved their best years ever, with each company recording sales of more than $1 billion and profits of more than $100 million. And as Forbes magazine observed: "It's like this all over the record industry."
New consumer audio formats have always helped, not hurt, the recording industry. The familiar audio cassette was developed by Philips as a business dictation medium. Record companies tried to ignore it. But now, with the Walkman, "boom-box" and car stereo fulfilling the potential of this format, prerecorded cassettes are outselling vinyl records 3 to 1. Last year the audio cassette generated more revenue for the recording industry than any other product. The Walkman -- personal headset stereo player -- according to some experts, did more than anything else to put the recording industry on track to its present prosperity. Yet without home recorders, there could never have been a Walkman.
The campaign to ban or curtail DAT was started last summer by the International Federation of Phonogram and Videogram Producers (IFPI), a worldwide association of record companies based in London. IFPI officials came to Washington to lobby the administration and key members of Congress. Last December, at a meeting in Vancouver, IFPI attempted to persuade potential DAT manufacturers based in Japan that antitaping chips should be "voluntarily" put in DATs. But the manufacturers didn't want any part of a system that so limits consumers.
The proposals before Congress are backed by IFPI's U.S. affiliate, the Recording Industry Association of America (RIAA). Following are the major arguments RIAA has made against home taping and the DAT, and why, in the view of the Home Recording Rights Coalition, they are insubstantial:
"Home taping costs record companies $1.5 billion per year in 'displaced sales.' " Nonsense. Every consumer survey has shown that home tapers buy more records, tapes and discs than anyone else, and the more they tape, the more they buy. More than half of all home taping is from albums the taper already owns. Why? Portability, editing, record preservation.
The 1983 RIAA study that generated the $1.5 billion figure asked tapers if they "would have" purchased any album from which they recorded. Of course they answered yes -- they already had! And the RIAA made no attempt to weigh the enormous stimulus tape recorders have given to music sales.
"The DAT is a threat because it makes perfect clones." It doesn't. Record companies were concerned that if a consumer had a CD player with a digital output (most don't), he or she could make a digital tape every bit as good as the studio master. But DATs can't do this -- they use a different "digital sampling rate" from CDs, and matching the rates would require a $10,000 converter. DATs also cannot make direct recordings from other DATs (or from CDs) if the master tape was recorded with a signal that only the digital input of a DAT will recognize. Commercial digital master tapes already contain this signal.
What DAT can do is record the "analog" output your amplifier hears from any component, including your CD player. The result is an excellent recording, but not a "perfect clone." If you want a "pure digital" recording, you will have to buy a prerecorded DAT tape or record your own performance.
"The DAT will promote commercial piracy." Whenever arguments against private consumer home taping grow thin, we hear objections to "commercial piracy." But when commercial pirates make illegal copies of albums, they don't use consumer equipment. And when a consumer buys a pirated album -- knowingly or unknowingly -- all he or she needs, to listen to it, is a player, not a recorder.
"No prerecorded DAT software." The record industry says the DAT doesn't offer it the advantages of other formats because there is "no prerecorded software." This is not so. Commercial duplicators are already available, and ultrahigh-speed duplicators will be available in about a year.
What the record companies don't discuss is that, according to Television Digest, at an IFPI conference in London five major record companies, accounting for more than half of the world's production, apparently agreed to a commercial boycott of DAT software. They said they would not issue prerecorded DAT tapes unless antitaping legislation is passed. Fortunately, smaller, high-quality labels, aware of the competitive advantage of an early start, have already produced prototype DAT albums. They sound terrific.
"New releases are down 43 percent since 1978." Until last year, 1978 had been the industry's all-time boom year. Record companies then cut back when disco died, but release rates have been climbing ever since. The main factor constraining new releases today is limited CD stamping capacity. Record executives will admit in private that if they can obtain only so many CD stampings, it is more profitable to use them for a few major-artist releases than for many releases by minor artists. DAT, by offering additional capacity, will help solve this problem.
If the formal objections to DAT seem thin, is there some other agenda behind this legislation, not so readily discussed? We think so.
For years the recording industry has been pushing for a royalty tax on blank tape and recorders, but has been told by members of Congress that such a levy would be unfair, overbroad and unnecessary. Now the industry might hope that, compared with the antitaping chip approach, a royalty tax would look reasonable by comparison.
When DATs showed up on the horizon, there was genuine concern in the recording industry that customers would fall prey to "format confusion" and stop buying CDs. It seems clear now that this won't happen. But record companies also have enjoyed much greater profit margins on CDs than on other products, because supply has lagged behind demand. Perhaps record companies have supported this legislation because they asked: Why help CD prices come down "prematurely" by putting out a competitive tape product?
What will happen if H.R. 1384 and S. 506 become law? It is, of course, up to individual manufacturers whether they would try to sell DATs that have antitaping chips. But many retailers say they would not even try to sell an initially expensive recorder (about $1,500) that often can't record.
Retailers also could not possibly predict which albums will be encoded and which won't be. The RIAA has suggested that record companies might put out more expensive, unencoded versions of albums, but the prospect of such a dual inventory has caused nightmares for record retailers, who have said the idea is ridiculous. (Even if practical, the effect would be to squeeze marginal artists off the shelves to make room for dual versions ofmore popular albums.)
As for customers, they would return nonrecording recorders or would try to disable the antitaping circuity.
And the consumer loss might not stop there. Tests using the only specifications published by CBS have shown that encoding albums causes audible distortion in the music. CBS claims that these tests are based on an incorrect implementation of its signal, but has refused to divulge the specifications of the signal it says its system now uses. At the request of congressional committees, the National Bureau of Standards will be studying the CBS system, but CBS still takes the position that the new specifications should not be disclosed to the public.
In short, passage of S. 506 or H.R. 1384 or S. 506 would probably be the death certificate for the DAT.