Address by Shri Anil Chopra at the inaugural
             OPTICAL DISC REPLICATOR Technical Seminar

I would like to extend my compliments to all present for being at the right place at the right time.
Studio Systems and I have in turn been complimented for organising this seminar, which I am confident will prove to be a catalyst and serve its purpose in promoting growth of the optical disc replicating industry in India.
I am glad in introducing the speakers from the leading manufacturers of optical disc replicating equipment. The six reputed companies represent the leading edge technologies in the processes their equipment perform.
We are privileged to have with us excellent and experienced speakers of high quality.
I would like to put the Indian market in proper perspective, from a global viewpoint of the optical disc world wide market.
Even though all of us here are gung-ho and possibly satisfied with the market per se, the Indian situation is nothing to be happy about. Of course we do have production and the CD-Audio, CD-ROM, Video CD has definitely found a healthy market in India.
But what one must not forget is that the optical disc, the CD-Audio, arrived very late into India. As such, the statistics for consumption and production of all optical discs is comparatively very low in India. With regard to statistics, sadly none are available from anybody. So all the figures I can quote relating to India are guesstimates.
We know that for sure in 1998 something like 30 million CDs were replicated in India mostly music CD-Audio. This figure must be compared with the global total for 1998, which is nearly or likely to be 2.5 billion CDs. This is an IFPI figure for music CDs only. What is the % of Indian production - 1.2%. If we consider the production of all formats of optical discs, that is video CDs, DVDs, CD-ROMs, i.e. Multimedia CDs, and Games CDs, and software CDs, then I fear that the % of optical discs replicated in India would be even less than 0.5%. The world total for all formats of optical discs is likely to be close to 6.5 Billion.
There is no argument to justify this extremely low figure of production. Consumption is only slightly higher. Met by the Far East CD replicators, both legally and illegally.
This is a technical Seminar but I will digress and speak only about the market scenario and potential for optical media in India.
One of the chief factors is the % of CD in total music sales. In India, presently the audio cassette accounts for nearly 95%. Elsewhere in the world - in countries such as Hong Kong, Japan and Switzerland, CD accounts for 95% or more of Music sales. These are developed markets. But even in markets comparable to India, CD sales account for an equal share with cassettes already.
So the music market offers, I think the largest growth area for optical discs in the immediate future.
The current production of optical discs in India mainly accounts for music CDs. I would guess at more than 70%.
No statistics are available. As frankly not only is the optical disc industry in India in the initial stages of development, but no association exists at present, which might have been able to provide statistical data.
So what are we looking at in terms of growth in music sales on CD. Nearly 100% in the next one year. I dare say a figure of 50-60 million CDs, just to satisfy the existing demand. Which is definitely not satiated presently. And if CD sales would account for an equal share with audio cassette or 50% of the music unit sales, then we are talking of a figure close to 200 million CDs. Please accept this figure without any exaggeration, as it corresponds to the IFPI published figure for music cassette unit sales for 1997 for India, at 406.5 million. The question raised is by which year the figure of 200 million is to be achieved? I remind you that this technical seminar cannot to tackle this question. That would require, not a seminar, but a conference and with music companies and consumer electronic companies. However we can use this opportunity to throw light not only on the growth potential but on the state of the optical disc industry in India. There are in all eight replicators operating. Within and outside export zones. Between these eight replicators only 10 lines are in operation. Actually with these figures it is not really large enough to be classified as an industry. In 1999, another 5 lines will definitely be added, but that is not good enough. This will give us a production of around 45 million in 1999. I am just painting a situation now. Please do not take me up on this statement. Hopefully the situation at the end of the year will not be so unexciting.
And I trust and hope this seminar will play its role in initiating investment, encouraged by a more learned view of the manufacturing process. We have scanned very superficially the music market. We have to also look at the other formats - Recordable formats as in CD-R, and the prospects of DVD, and ultimately DVD-R, which infact is already growing at a quickening pace in the developed markets, actually only Japan, & the USA.
CD-R. Well, as we all know there are no CD-R plants in India. But there is a certain level of consumption.
A market guesstimate puts the consumption figure for India at 18 million CD-Rs in a calendar year. Almost all the imports originating from Taiwan. The only CD-R project in India worth mentioning is the Moser Baer project in New Delhi, which is a very large project. Reportedly 10 lines or even more.
The world wide CD-R media demand is estimated by IRMA, the International Recording Media Association at 825 million CD-Rs. India's demand will continue to grow on account of increase of CD-R writers in use for commercial and legitimate applications. But with respect to this recordable format, India’s % is again close to 1%.
Frankly with a CD-R available at Rs. 65/- only and prices under pressure, it may not be too surprising that CD-R consumption in India might soon equal that of replicated CD-Audio/ROM/Video CD.
If the replication industry will not respond quickly to the emerging demand, the market could be lost to the pirates.
On the other hand, we see that the Indian market can also absorb CD-R, or CD-Recordable replication. Enough consumption and increasing demand exists for CD-Rs already. It is up to those of you attending this seminar to respond with a decision and investments into replication, which according to us requires to be done immediately.
Every passing day, the CD-Audio format is naturally growing from strength to strength. No doubt that the quality of duplicated cassettes in India too is entirely satisfactory, but as the customer is exposed to the CD the demand will shift, as it has all over the world, and India cannot be an exception as the trend already is strong enough for us to realise that.
As per my analysis, the steady rate of growth of CD-Audio and Video CD consumption witnessed in India in the past few years, without any dramatic influx of CD players, especially low cost CD players, is a very strong signal about the latent potential, which can explode or increase the rate of growth from the present 20 - 30% to even 100 %.
So by my reckoning, the 200 million mark can be achieved by Jan 2002. But we must determine ourselves to this target as a goal. Any achievement is only attained consciously.
We have provided to each attendee a copy of the worldwide Optical Media Market Intelligence Report. But do not take it as the last word. We have to ascertain, and study our own market and respond to its needs.
DVD – this product in fact has been keenly awaited in India. Difficult to believe for the DVD manufacturing equipment suppliers. But this is the truth. DVD does attract attention in India, from the large film catalogue owners, due to the fact that it is in a way a final product as media for movies for the home.
India does not represent a strong sell-thru market for home movies media, but by way of total consumption, there must not be any doubt about the success of DVD in India, and I dare say sooner than later. DVD already a two year old format. Its entry into India is guaranteed in 1999 itself.
It’s very opportune that this seminar is in the beginning of the year and has attracted such a healthy response, from bot the plastic industry as well as from the music/tape/duplicator/replicator industry.
We are all gathered here to listen to the technical information being presented by the six reputed European companies. So I trust and hope the day’s proceedings will be useful and wish all present to become successful replicators.

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