06/11/2001 - Updated 10:50 AM ET

Music downloads breathe new life into minidiscs

By David Lieberman, USA TODAY

Quick quiz: What's the most preposterous statement on this list? (a) Coming this fall, The Russell Crowe Comedy Hour; (b) Seals & Crofts surely can sell out Madison Square Garden; (c) let's vacation with the kids in Nepal this summer; (d) minidisc recorders are the hot technology among Gen Y digital music downloaders. Not so fast on (d). Though repeatedly decked in showdowns with CDs and, to an extent, cassettes, the decade-old format that uses digital discs encased in 2 1/2-inch plastic squares is back.

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Analysts say that minidisc recorders are finding fans among young folks who want an economical, portable device for music stored in their PCs.

A new generation of the recorders, just hitting the shelves, could be intriguingly attractive rivals to MP3 and recordable CD players. Sony and Sharp, the leading makers of minidisc recorders, now offer units that squeeze 5 hours of music on a disc.

"It's hitting all the sweet spots at once," says analyst Richard Doherty, director of The Envisioneering Group. "Five hours on one disc for $1.75? That fits the wish list of travelers, commuters and students. We've been surveying like crazy since April. The trend looks very, very good."

Doherty says he has a disc with everything The Mamas & The Papas ever recorded

If he's right about the future of the minidisc and it's still a big if then it would be an amazing story. Consensus has been that Sony bungled the U.S. minidisc launch in 1991. It introduced the format to affluent consumers as a sexy and sonically clear recordable digital alternative to clunky analog audiocassettes, to CDs and to digital cassette tapes.

But few record companies, besides Sony, jumped on the bandwagon. And the format cost too much. Portable recorders initially cost $750; blank discs cost $14.

While prices have fallen considerably since, they never dropped enough.

Sony, which remains the minidisc's leading evangelist, attacked that problem last summer. It slashed $100 off the price of its most popular portable recorder bringing it down to about $250 (others fell into the $100-plus range). It also started to bundle units with attachments so users could port music directly from their PCs.

That was part of a larger campaign to change the image of the minidisc. Sony bought ads on MTV and in Rolling Stone to persuade college students to look at the discs as a cheaper and more flexible alternative to the influx of new MP3 players.

Minidiscs already had a cadre of nearly cult-like supporters among music fans who record concerts, often surreptitiously. Many turn to the Internet to share advice and war stories about how to hide the Post-it Notes-sized recorders from watchful security guards. (It apparently helps to attach stereo microphones to the ends of eyeglasses and snake the wire through Croakies or other eyewear retainers.)

Tracy Farrington, Sony's marketing manager for minidiscs, says young people "automatically got it. It was a product that was ahead of its time. In the past, we targeted a higher-end consumer. Maybe that consumer wasn't ready or didn't understand it."

She says, citing data from NPD Intelect, that sales of minidisc players and recorders leapt 17% in the year ending in March vs. the previous year.

But other NPD data suggest that minidiscs still haven't caught on. The researcher says unit sales of players and recorders at retail stores fell 31% in the first 4 months of 2001 vs. that period in 2000.

That worries Sharp, which is still trying to decide whether to bundle its recorders with PC hookups.

"We've been trying to jump-start minidiscs for years," says Art McKinnon, Sharp's audio product marketing manager. "We're watching the market. It's been in what we think is a down-spin. But I wouldn't say we've given up."

Some analysts, though, say the recent figures are deceptive. The sales data don't include e-commerce, a significant factor among minidisc's new target audience. And it's unclear whether sales for all portable recorders were affected early this year when it became apparent that Napster, beset by court challenges from record companies, wouldn't survive as a cornucopia of free downloadable hits.

NPD Intelect consumer electronics director Jim Hirschberg says that, even with the sales decline for the first 4 months, he's struck by the huge increase during that period in the number of people buying recorders with PC connections.

"It's a decided trend," he says. "The PC interface has given new life to minidiscs. It's an alternative to silicon memory, and the cost is more attractive than a memory card, which might be $100."

Joe Palenchar, senior editor at TWICE (This Week in Consumer Electronics), agrees. "A year ago, retailers were saying that portable CD recorders would leave minidiscs in the dust," he says. The yearlong growth in minidisc sales "surprised me, and it surprised a lot of dealers."

So you never know. Russell Crowe might one day crack a smile. Nepal might become a vacation haven. And minidiscs could become the Next Big Thing.

But don't worry. Seals & Crofts will never pack Madison Square Garden.