Letter from the President

Thank you for visiting our Internet site. Thanks to the talent of one of our oldest (in terms of time with the company) employees, Mark Larson, we have what most say is an excellent site. We hope that you browse our offering and take advantage of our monthly special, the CRI-ROMster. The Romster is a $995.00 2X CD-ROM recorder which is a complete package for either the MAC user, a Windows NT, Windows 95 or Windows 3.X user. Imagine, a complete CD recording package for under $1,000.00!

When CD ROM, Inc. was founded in 1988, after we had spent over two years studying this new idea called “compact disc read only memory”, my wife and I started to consider the market opportunities that “CD-ROM” offered. The idea was driven by the capacity discussions at the time. Imagine, it was said by visionaries in the industry like Jerry McFaul of the USGS office in Reston, Virginia, what it means to the federal government and to commercial enterprises to be able to place 300,000 pages of text and data on a CD-ROM disc whose information will remain virtually intact for over 100 years! It was from this early exposure to people with vision that prompted us to jump in head first into this exciting and fast paced technology.

At that time, our first “catalog” was a single photocopy with 6 CD-ROM discs and two CD-ROM drives. The drives were single speed Hitachi CD-ROM drives which sold for $995.00 for the external model, CDR 1503, and $895.00 for the internal model CDR 3500. The discs included the Discovery Sampler, one of the world’s first examples of audio, animation, text and data on CD-ROM. There were less than 100 companies world-wide who were in the industry whose main focus of industrial activity was CD-ROM.

Now, less than 8 years later, a CD-ROM recorder is under a $1,000.00, about the same price as a single speed CD-ROM drive was then. By the way, for those of you just getting into the industry, a CD-ROM recorder back then was $100,000.00 and was as big as a washing machine!

What has happened, of course, is that the CD-ROM industry has turned into a commodity market. Whereas CD-ROM discs were once a novelty, according to TFPL, there are now over 13,000 CD-ROM discs available in the consumer marketplace and literally thousands more in the corporate and government sectors.

In the late 1980’s, the average price of a CD-ROM disc was about $350.00. The average price today is under $40.00. There are two basic markets for CD-ROM disc publishers. The first market is the Microsoft, Virgin Interactive, Disney-type of CD-ROM market. This market is for those companies, like Microsoft, who can spend several hundreds of thousands of dollars, if not a few million, on a CD-ROM application and then place it into independent distribution and command a higher price. As a result of an already well greased distribution system, this formula works. The second marketplace, and by far the larger of the two, and the one with the greatest long term viability, is the one based on CD audio and the paradigm developed over the years to make CD audio such a commercial success story. This is the marketplace which I have my bet on.

Go to any of over 35,000 retail outlets in the US today and walk up to the “record” section. What do you see? You will find the newest Michael or Janet Jackson CD, the latest release of Bonnie Raite’s hottest hits, and the funky music of Two Live Crew all selling of $12.99. Think about this for a minute in terms of where CD-ROM is headed. If the world’s most famous musicians and singers are selling their products for $12.99 retail, why wouldn’t that model of sales be the correct one for the near term future of CD-ROM? The answer is–it does.

As the market for CD-ROM continues to mature, and as CD-Recording prices become affordable to even a small Ma and Pa shop (usually the most creative and fun) the CD-ROM industry will continue to explode. When I am asked what I think the future of CD-ROM technology is when newer technology like high density CD is looming just around the corner, I offer the opinion that these new developments will only promote and expand the marketplace of today — not replace it as some prognosticate.

Thank you for visiting our Web site. Tell a friend and be sure to “tune-in” every few days in the month of April. You will soon be amazed at the diversity of offerings, the extremely competitive prices, and the ability to order in a secure environment directly over the Web on our CD-ROM Mall!

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