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CD-R prices on the up

Price hike for CD-Rs as patent-holders twitch

Prices for CD-Rs may be about to increase, as a result of royalty demands from the recording medium's patent holders. But name-brand disc sellers like Memorex and Verbatim say they don't believe price increases will be significant.

Ritek and CMC, the two major CD-R manufacturers in Taiwan, have come under the eye of the CD-R technology patent holders, Philips, Sony and Taiyo Yuden. An increase in royalty enforcement and a decrease in the number of smaller competitors has changed the way the disc makers sell to disc middlemen like Maxell or Memorex.

Last year manufacturers could sell excess inventory on the 'spot market' (whatever the CD-Rs could sell for at any particular moment), often dramatically below production costs. This lowered overall prices, said Memorex spokesman Brad Yeager.

Today, though, disc makers are more reluctant to churn out CD-Rs without a sales contract in hand, because a royalty must be paid on every disc sold, Yeager said. As a result, Memorex's per-disc cost has increased more than 30 percent over prices since the end of 2000.

Memorex announced an increase in costs to retailers from 1 June, but wouldn't say how much prices will go up. Consumers should expect to see a price hike too, but Yeager said the increase will probably not be severe.

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