The CD-R Media Shortage

by Katherine Cochrane

Lately CD-Recordable users have experienced difficulties obtaining the quantity and sometimes the brands of media they have become used to. Some suppliers have been out of stock altogether, and no one has very large amounts of media available. Inevitably, costs are rising (although not as fast or as much as might be expected), and some people are questioning whether the shortage is a strategy to recover from the precipitous fall in prices for what has become a sought-after commodity. We don't think that's the cause.

Is the shortage real?

Yes, there is a real world-wide media shortage. Distributors have been on allocation for several months now. They can only get a limited number of discs, on unpredictable schedules. The manufacturers are trying to spread supplies around in order to support the largest number of users possible.

This is really good news for the industry as a whole, since it clearly shows that CD-Recordable has been successful in the marketplace, but it is an awkward growing stage that users and suppliers alike are finding very inconvenient, and in some cases costly. Some projects have experienced delays, and some potential profits have not been realized because of the difficulty in obtaining media. Some companies may lose customers as a result of not being able to supply their needs, and almost all suppliers have been required to turn away business, painful as that may be.

What caused it?

The number of users has grown along with the large number of inexpensive recorders sold this year, and more applications for the medium are being developed all the time. The systems are easier to use than ever before, and more people are finding out how convenient putting their data, music or video on CDs can be.

The problem is that demand grew much faster than anyone anticipated (well, ALMOST anyone -- there were a few people who predicted this problem), and it takes a long time to bring a CD-R media plant online. Manufacturing blank CD-Rs is much more complex and costly than making "normal" CDs or CD-ROMs, and before making the commitment to start a plant (costing upwards of $30M USD just for the equipment and site prep, not including training, consulting, labor costs, etc.) companies had to know the market really existed.

Relief is in sight

However, several new media manufacturing plants will be brought online soon. Some are opening as soon as 3rd Quarter 1996, and others will start manufacturing by 2nd Quarter 1997. Also, existing plants are stepping up production to address the high demand. Some new manufacturers are also expected to begin production by early next year. Michael Warman, National Sales/Marketing Manager of CD Recordable Media for MTC America, predicts that the shortage could be eased as early as July or August, although others are saying that October or November is the soonest consumers will be able to notice a difference.

Strategy suggestion

My recommendation is to try buying in several small lots from different suppliers rather than placing large orders with single resellers, but be prepared to change that strategy when supply starts to catch up with demand. And stay cool. Everyone is in the same predicament, and it is going to get better soon.

Since this article appeared, I've been asked about a list of media resellers or distributors. There is no such list as of this time in our site, but some places to find companies who sell media include advertisements in magazines such as CD-ROM Professional, NewMedia, Tape/Disc Business, Multimedia Producer, Macworld, Multimedia World, and others of that sort, as well as in the USENET newsgroups that discuss CD-R. These include comp.publish.cdrom.* and alt.cdrom. A Web serach on CD-R media should also turn up a number of resellers.

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