Optical Disc Prices Rise as Market Matures

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Robert Wong, chairman of Taiwan-based optical disc producing giant CMC Magnetics, said that optical disc prices might see a big increase by the second half of this year. According to Wong, prices of this media are forecasted to shoot up by more than 50%.

Wong also pointed out that the surge in optical disc prices are mainly due to scores of medium-thru-small manufacturers, facing the brunt of unfavorable economic conditions, either closing or scaling down production. Manufacturers in Japan as well as in Taiwan have stopped producing since 2012 and the stoppage will continue into the first half of 2013.

Prices are expected to jump as soon as the demand for optical media catches up with and surpasses the current supply. What’s more, a lower market demand for CD, DVD and Blu-ray recordable discs and optical media in general are expected—another reason why manufacturers stopped producing.

In a report released by the Santa Clara Consulting Group, it has been found that optical discs are rapidly replaced by other storage technologies or other ways of accessing data or files, like streaming. According to the organization, Compact Disc Recordable or CD-R, the oldest recordable optical media, decreased in revenue by 6% in the third quarter of 2012; thus making its market a measly $90 million.

CD burners, dubbed as obsolete technology, are rarely sold as these are replaced by DVD and Blu-ray writers. Meanwhile, sales of products reliant on DVD recordable technology have also decreased by 1% in the third quarter of 2012.

On the bright side, that demand for optical media is not exactly on a dive. Emerging markets such as South America and some parts of Asia have intensified keenness on DVDs, while Blu-ray discs are gaining popularity in Europe and the United States. This means that the demand may decline, however, at a lower rate than expected.

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