In Japan, where the Japanese/Dutch Compact Disc was launched
on 1 November 1982, interest was high right from the start.
However the system’s reception in the Netherlands was more
In 1983 the price of a CD in Japan was 3,800 Yen (about 20
euro), and the price of a player, varied from 165,000 Yen
(Sharp) to 250,000 Yen (Onkyo and Yamaha). The Marantz CD-63,
virtually identical to the Philips CD-100, was priced at 189,000
Yen. These prices were the same everywhere in Japan, because in
contrast to what was customary no discounts were given during
the introduction period.
Comments from record companies and the retail trade showed that
the acceptance of the Compact Disc in the Netherlands was
initially slow to take off. "I am positive about the Compact
Disc, but I’m not yet sure if it’s going to be a success. The
economic situation means everyone has to economize, and the
first things to suffer are luxury products. So I think that
sales will be lower than expected."
Retailers had their doubts about the double investment that they
would have to make in the start-up phase. "It will mean double
stocks of both CDs and LPs. And that will cost a lot of money.
But I think good retailers will get involved right from the
start. They may not have big sales of CDs in the beginning, but
if they have both players and discs on show they will create
interest among consumers as well as increased traffic in their
stores. The latter is always beneficial, while the first will
probably show results in the longer term."
One major record retailer in Amsterdam was much more skeptical.
"I’m not happy with it at all. The small disc means a much
bigger risk of theft. And it also means a lower perceived value
for the consumer. I think it will probably be a success, as long
as the price of the players goes down and the econo¬mic
situation improves. I’m not in a hurry with it, but I will go
along with it reluctantly - even if I have to keep the CDs
locked away safely.”
And as far as record companies were concerned, the most common
attitude was one of ‘wait and see’. "I’ve been to a
demonstration and I have to say it looks promising. We don’t
intend to take the lead with CD, but we won’t be the last to
switch over either. I don’t think the CD will replace the LP,
it’s more likely to displace the Compact Cassette. And even that
could take years. We’re also still considering the CX system. It
really depends on what consumers choose. For the moment we’re
not working actively on either system."
Other companies were just as reserved. "We’re following the
developments closely, but for the time being we remain cautious.
My fear is that if it isn’t handled correctly it could be just
as short-lived as the eight-track cassette. We’re studying CD
internally, but we still have too little information about its
acceptance. In think it is promising in principle, especially
because of the big cost savings that it offers."
Two years later...
Although demand for CDs and CD players at first looked like
making a slow start after the introduction in Europe, that all
changed rapidly at the beginning of 1985. Demand for CDs
increased so quickly that PolyGram had to make a big effort to
meet the exploding demand. Based in Hannover-Langenhagen, the
company had started CD production in 1982, making 400,000 discs
in that year. The following year that had increased to 6
million, in 1984 it was 13 million, and in 1985 output reached
25 million. With a further doubling of production in 1986,
PolyGram accounted for around one-third of world CD supplies. In
mid-1985 PolyGram was the largest CD producer, and in second
place was CBS/Sony in Japan.
Player sales increased faster than the most optimistic
expectations, with the 1985 figure of around 5 million players
being more than doubled in the following year. A growth which
meant that every self-respecting electronics company was making
preparations to enter the market for ‘the audio product of the
future’, if it had not already done so. And while this began to
lead to a surplus of players, the opposite was true for the CDs
themselves. Throughout 1986 the disc producers were unable to
meet the fast-increasing demand, despite a world production of
some 60 million discs. Some labels even said they could sell as
many as thirty per cent more discs if only they had enough
production capacity. And with companies around the world
building new disc factories at full speed, it took until late
1987 before output was able to match the market demand.
End of the LP era
The same could not be said of the LP record, for which demand
was declining at almost the same rate. One of the first
companies to stop production was Deutsche Grammophon (DDG, now
DG), announcing in September 1989 that it would issue its new
releases on CD only. Other labels also reported a shift to CD
for their classical repertoire, but continued to issue some new
releases on LP. But expectations were that the LP would largely
have disappeared within another four years. By that time 32 per
cent of households had a CD player, and that figure reached
around 45 per cent in 1990.
As far as the acceptance of the CD was concerned the Netherlands
was still ahead of the rest of the world. While some 390 million
CDs were sold worldwide in 1988, 56 percent more than the year
before, the growth rate in the Netherlands was more than 100 per
cent. Research showed that CD player owners purchased 16 CDs in
the first year of ownership, and around 9 or 10 discs in the
following years. By 1989 CD sales had reached a share of 80 per
cent of the total audio carriers market, while that of LPs had
declined to only 12 per cent.
Ten years after
In 1993, ten years after the European CD introduction, music
lovers in the Netherlands were still the biggest spenders. After
a slight dip in 1992, sales of CDs and other audio carriers were
showing a recovery, and with total sales of 500,000 euro the
Netherlands held the world No. 8 place for overall sales, and
the No. 6 place for CD sales.
Music buyers in the Netherlands were spending an average of 34
euro a year, by far the highest in the world. In the USA the
figure was about 29 euro. The country had 11,000 record
retailers, and 75 per cent of households had one or more CD
players. Some 85 million CDs had been sold in the preceding ten
years, with the average price declining from 23 to 14 euro over