[AV Media Matters] memorex cd-r price increase

[mickelmor@yahoo.com]

from what i'm hearing, more actions like these are on
the way. philips et al. is still in the midst of
setttling the months-old royalty flap with the
taiwanese cd-r suppliers-- infringing product has been
seized in europe and, rumor has it, even the u.s.....

terence keegan, medialine
tkeegan@uemedia.com

Memorex News
For Release 4/26/01

Subject: MEMOREX ANNOUNCES CD-R MEDIA PRICE INCREASES
JEFFERSON/ACKER PR CONTACT: Jim Noyd,
jim_noyd@acker.com, 310-374-5904
MEMOREX CONTACT: Brad Yeager, byeager@memorex.com,
562-906-2800

Memorex the #1 supplier of CD-R Blank Media to the
Retail Channel Sites [sic] Reasons for CD Recordable
Media Price Increases in 2001
-Increased Blank media costs and future price
increases on the way
-CD-R Worldwide Supplies tightening significantly
-Worldwide CD-R Media manufacturing has been
consolidated
-Patent holders to strictly enforce royalty fees

April 26, 2001-Santa Fe Springs, CA - Memtek Products,
Inc., the U. S. distributor of well-known MEMOREX®
branded computer, audio and video recording media,
announced price increases today, effective June 1,
2001 on many of its popular Compact Disc Recordable
(CD-R) blank media offerings. The reasons for the
price increases are, increased blank CD-R media costs,
the tightening of worldwide supplies, worldwide
manufacturing consolidation, and strict enforcement of
royalty fees by patent holders. The overall effect of
these market dynamics is a price increase for Memorex
branded CD-R media.

Last year, slightly over 1 billion blank CD-Rs were
imported and sold in the United States. During 2001,
the U. S. sales forecast is for 1.46 billion units to
be sold. A significant portion of future growth is
attributed to sales at retail.

In the short term, per disc cost has increased by over
30% based on prices paid at the end of the year 2000.
With the enforcement of royalty fees, CD-R disc prices
are scheduled to increase again. Memorex has made
significant commitments to ensure a steady stream of
product availability for 2001 and beyond.

The environment for CD-R media distribution and
manufacturing changed dramatically over the last year.
Since the beginning of the year 2000, many small and
medium sized manufacturers have closed their doors.
Last year, manufacturers without a consistent channel
for their CD-Rs, sold their inventory on a "spot" type
market. As a result, excess inventory was often sold
drastically below manufacturer?s production cost.

Going forward, CD-R patent holders will aggressively
enforce their licensing agreements and collect their
royalty fees. Due to the enforcement of royalties,
major overseas manufacturers are unwilling to produce
discs without executable purchase orders in hand.

Memtek Products, Inc. president Michael Golacinski
stated, "In light of increased blank media costs, the
tightening of worldwide supply and strict enforcement
of royalty agreements, we will increase pricing for
our CD-R product offerings. We are working closely
with our manufacturers to insure that we have
sufficient product available for our channel and
retail partners to maintain significant growth in the
category." Mr. Golacinski further stated, "We fully
expect to build upon our retail market leadership in
the CD-R media category in 2001."

Memorex is an industry leading manufacturer and
marketer of computer media products, computer
peripherals and accessories. In addition to its
computer products, Memorex continues to maintain its
own line of audio and video media products. Since the
early 70?s, Memorex has been one of the most widely
recognized names in the consumer electronics industry.
Today, it remains a well-respected brand in both the
consumer electronics and computer industries. Memorex
is headquartered in Santa Fe Springs, CA, and is a
division of Memtek Products, Inc. For more information
on Memorex products, call 1-800-636-8368, or visit the
company?s web site at www.memorex.com.

###

Memorex and the Memorex logo are trademarks of Hanny
Magnetics (B.V.I.) Ltd.

Source: Memorex