Battle Lines Forming for Fight Over DAT : Makers Ready to Sell Tape System; Recording Industry Threatens Suit

The first shipment of Marantz’s DT 84 digital audio tape recorders could be on their way to U.S. stores by June, the Chatsworth-based consumer electronics manufacturer says.

And the first copyright infringement lawsuit will be filed against Marantz the next day, according to the Recording Industry Assn. of America.

“It’s clearly our intention to sue the manufacturer when they sell the machine,” RIAA president Jay Berman said Tuesday.

Recording industry representatives will watch the stores and buy one of the decks, Berman said. (The decks should retail in the U.S. for about $1,200 to $1,500, Marantz president Jim Twerdahl said.) Once the association has purchased a DAT machine, the RIAA and the six major record labels it represents (CBS Records, Warner Bros., Capitol-EMI, PolyGram, RCA and MCA) will take their evidence to federal court.

“The bluster from the RIAA about their filing of lawsuits doesn’t bluff us at all,” Twerdahl said this week.

For more than a year, the recording industry organization has been lobbying Congress for a law that would require an anti-copying device on all DAT machines imported into the U.S. DAT, which uses computer coding to deliver high-quality sound, has been lauded as the next major advance in high-fidelity technology. According to some audio engineers, DAT recorders are capable of producing unlimited near-perfect duplicates, prompting RIAA fears that widespread home taping could erode the market for recorded music.

But the RIAA’s effort to force manufacturers to install anti-copying devices in recorders was dealt a major blow last week when the National Bureau of Standards found that the device could damage sound quality. The RIAA agreed, at least temporarily, to drop its drive for federal legislation to require anti-copying chips, but promised to sue once DAT machines go on sale.

“We are ready, willing but unfortunately not quite able to go to market with DAT right now,” Twerdahl said.

Like its competitors, Marantz has been handicapped for several months by Japanese component suppliers who are reluctant to import DAT recorders to the United States. They fear further aggravating an already gaping wound in U.S.-Japanese trade relations that was opened last year by the weakening of the dollar against the yen.

“The problem is that our Japanese suppliers are very cautious in light of what they perceive to be an adverse publicity issue,” Twerdahl said. “(The Toshiba case) and the balance of trade have made them very reluctant.”

Toshiba was slapped with U.S. sanctions last fall after revelations that the consumer electronics manufacturer sold defense parts to the Soviet Union. Since then, Toshiba has lost more than $100 million in U.S. sales, Twerdahl said.

“The National Bureau of Standards’ finding is sending a very clear signal that the Congress doesn’t want to get involved in DAT,” Twerdahl said. “On that basis, we have contacted all our suppliers in Japan. If the politics are right, we could be selling them as soon as three months from now.”

New Jersey-based Casio Inc. will have a DAT recorder on the market sooner than that, but only for residents of Nashville, Tenn. According to a company spokesman, the Casio DA-1 will test market for $1,099 in Nashville stores in June.

“I’m going to sue both of them, that’s for sure,” Berman said. “They’ll be fighting to see whose name is on the copyright infringement complaint.”

Berman said several other audio equipment manufacturers have been holding meetings in London, Paris and Tokyo during the last week in an effort to come up with some alternative to the anti-copying device that would “limit the damage that DAT poses through home taping. “

Twerdahl said any self-imposed restrictions by manufacturers on the taping abilities of their recorders would be self-defeating.

“We think that would be a terrible mistake because it would acknowledge restrictions on the consumers’ right to make copies for their own personal use. All the debate that has gone on so far is about consumer rights, not piracy.

“If DAT should be restricted, why not VCRs? And, then, why not (standard audio tape) recorders? The whole thing is silly.”

Twerdahl said he believes the recording industry is simply trying to hold off the inevitability of DAT “so they can milk everything from compact discs. As the price of CDs comes down, their opposition to DAT will ease and they’ll make even more money.”

Compact discs, which use the same digital computer-coding technology as DAT, have been on the market for about seven years but have only made significant consumer inroads during the last two years. According to Twerdahl, the RIAA fears that DAT will make compact disc ownership obsolete before the major record labels have had ample opportunity to make their profits on CDs.

“To me its really hypocrisy,” he said. “It’s a technology whose time has come. The only thing that could supersede DAT is a recordable CD.”

Twerdahl said research engineers are at work on just such a possibility: a blank compact disc that can be programmed and duplicated in much the same way that DAT is.

According to Berman, only about 8% of the nation’s audiophiles now have a CD player in their homes. Most people still use old-style hi-fi and audiotape systems that play vinyl LPs or prerecorded tape cassettes.

“CDs have a long way to go,” Berman said.

He denied, however, that the RIAA’s stand on DAT is a stalling tactic to keep the new tape technology out of the U.S. until the CD market has been saturated.

“Our stand on DAT has nothing to do with anything else except DAT,” he said.