Marantz to Break Impasse Over Digital Audio Tape
Marantz Co., a small manufacturer of audio components based in Chatsworth, has created a stir at the Consumer Electronics Show here by going where the Japanese giants have feared to tread.
By becoming the first manufacturer to announce plans to ship digital audio tape recorders to U.S. retailers, beginning in October, Marantz has broken a months-long logjam between U.S. record manufacturers and Japanese electronics companies that has kept the new format in the political arena and out of consumers’ hands.
“We’re going to market come hell or high water,” James S. Twerdahl, president of U.S.-owned Marantz, said Monday in the company’s booth in massive McCormick Place. “Somebody had to take the lead.”
Marantz, which has taken a beating in the marketplace in recent years, announced plans over the weekend to ship a limited quantity of machines in October. They will go primarily to high-end stores geared to audiophiles and are expected to sell initially for between $1,500 and $2,000.
Digital audio tape, a technology that only recently went on sale in Japan, advances traditional cassette tape recorders much as compact disc players did the LP turntable four years ago. Both DAT and CD take advantage of a digital format that affords much clearer, crisper sound than the older analog technology.
However, DAT has caused a monumental rift between hardware manufacturers and record companies, which fear widespread piracy of copyright material.
Strong lobbying by the recording industry gave rise to proposed Senate and House legislation that would force equipment makers to install an “anti-copying” chip in DAT recorders to be sold in this country. (Members of Congress who participated in a DAT panel here said they expect the legislation to die in committees, where it is now stalled.)
Should Congress ultimately require the so-called spoiler chip, Twerdahl said, “We will probably put it in, but then file suit, saying it is a violation of our First Amendment rights.”
The proposed legislation, along with recent anti-Japanese sentiment among Washington trade officials, has kept Japanese manufacturers reticent about exporting DAT.
Even so, a couple of major Japanese manufacturers--Onkyo and Sharp--indicated that they were “chomping at the bit” to follow Marantz’ lead and take orders for DAT recorders before the trade show ends today.
But the recording industry was refusing to back down.
“We look at this as a classic hardware technology introduction without software support,” said Emiel N. Petrone, an executive vice president of Polygram Records in Los Angeles. “If I was a consumer, my first question would be: What do I do with this machine?”
Jack W. Eugster, chairman and chief executive of the 540-store Musicland Group record chain, sees the absence of software as a major hurdle.
“DAT could exist without software, but it will be a very slow start,” he said, adding that software prices of $14 for blank digital audio tapes and higher for recorded versions, along with the hefty cost of the player, will make for a “tough start.”
Twerdahl acknowledged that his company, which was bought late last year by Chicago-based Dynascan, is “American born and bred and therefore doesn’t have to worry about protectionism.”
This isn’t by any means a totally made-in-America deal, however. The products will be manufactured by Marantz Japan, which is half owned by Philips of the Netherlands and has no corporate relationship with Dynascan.
It is, however, a splashy beginning for Twerdahl, who took the helm at Marantz in May. The company has been struggling in recent months because of the demise of a big customer, Pacific Stereo, and because of the increased strength of the yen, which raised the cost of Japanese products.
Southern Californians are likely to get the first crack at DAT. Twerdahl said Marantz is committed to shipping the first units to Dow Stereo & Video, a four-store chain in San Diego.
