History (1994): 11 Million CD-ROM Drives Installed WW in 1993, +159% From 1992

Preliminary CD-ROM sales data from 1993 collected by InfoTech (Woodstock, VT) and published in the Optical Publishing Industry Assessment (OPIA, sixth edition 1993, 150 pages, $500) puts total WW titles in print at more than 8,100 different titles and the total WW commercial installed reader base at 11.4 million units.

These figures represent aggregate totals comprising all market segments in the commercial sector (corporate, professional, library, education, consumer), in addition to the in-house sector (comprised of not-for-sale titles and associated hardware used in corporate and government training, documentation, and data distribution).

Overall, the number of WW titles in print increased by 54% over 1992, while the total WW installed base of CD-ROM readers increased by more that 155%, resulting in a 149% increase in total WW title revenue.

InfoTech had predicted less than half as much growth in title revenue and installed reader base in the previous OPIA 1992 edition, published in March 1993.

“CD-ROM is now moving rapidly past the 10% mark in penetrating the installed base of desktop computers, and has a lot of momentum to move beyond the 5% mark in penetrating the installed base of TV set top machines in 1994,” said Julie B. Schwerin, InfoTech president.

The surge in title revenue and the high growth in reader sales were due to separate phenomena.

Title expenditure increases were attributable primarily to strong sales of more expensive titles sold to non-consumer markets – particularly businesses and professionals in the American, European, and Asian regions – and secondarily to consumer multimedia titles sold in higher unit volumes at lower average prices.

The ramp-up in the installed reader base was stimulated by the emergence of a dynamic OEM business (where desktop and TVs and top machines are sold with a CD-ROM reader) on top of vigorous sales of aftermarket readers, especially in American and European markets.

Schwerin emphasized that CD-ROM’s overall growth in revenue and installed base is derived from strong performance WW across all sectors, markets, regions and platforms: “It is common mistake among analysts to equate the spate of recent media attention about consumer multimedia with its share of the whole CD-ROM industry. Indeed more than 80% of the attention is paid to less than 20% of the sales.”

The original, core CD-ROM markets – library, professional, corporate, and government – continue to achieve steady growth and high profitability, resulting from weighed average prices between $700 and $900 per title. By contrast, consumer multimedia shows high volume growth, but based on weighed average prices in the $550 to $125 range.

Looking ahead to the next 5 years, Schwerin observed: “It is now reasonable to expect that by the end of 1999, nearly every desktop PC and a certain percentage of portables will have access to a CD-ROM reader, either locally, over a network, or both. This represents a dramatic turning point for title publishers, particularly those that have been the pioneers. Publishers will be able to concentrate on the creative development of titles and the publishing business now that the chicken and egg problem is history and CD-ROM is recognized by every computer and video game user – not only a delivery medium for education, reference, and entertainment applications, but for utility products such as software programs and image, sound, photo and font libraries.”

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 75, published on April 1994.