PASC & Philips' DCC Barry Fox interviews Philips

Barry Fox interviews the principals at Philips on DCC

Since taking over reins and reign at Philips, Jan Timmer (previously head of PolyGram, then head of Philips's Consumer Electronics Division) has given no personal interviews. The only exception was for the official magazine of the MIDEM music industry conference held in January at Cannes, in the South of France.

It would have been hard for Timmer to refuse the MIDEM organizers' request. This year was the 25th anniversary of the event, where record companies, music publishers, distributors, and music-industry trade bodies meet to do deals and sell each other the rights to sell records. This year MIDEM made Timmer "Man of the Decade," in recognition for his work in railroading through CD, and thereby revitalizing the record industry.

MIDEM is the world of the ever-young or the ever would-be young. Balding men with pigtails abound. Translated, "revitalizing" means a return to those halcyon days of the '70s when money for the record companies just grew on trees.

The journalist who interviewed Timmer in November had to undertake not to sell the story to any other newspaper. There was nothing particularly hot in the story, and no hint of the bombshells Timmer would drop when he gave the Keynote Speech at Cannes.

But first the background, which explains why what Timmer said has gone largely unreported.

Most of the deals made at MIDEM hinge on the rights to distribute music or music video recordings made by independent companies too small to have distribution networks of their own. The official venue is now the Palais de Festivals, home of the Cannes Film Festival, but much of the business is done at restaurants and bars around the small town.

This year the Gulf War took its toll. The major record companies—BMG, CBS/Sony, MCA, EMI, Virgin, and Warner Chappell, and many visitors from Japan—stayed home. The PolyGram stand was manned by a skeleton staff. A contingent from Sony's UK Broadcast Division arrived before an edict from Japan said "no flying." The Sony Brits showed DAT and HDTV but could not run the radio studio they had planned. And they had to hire a car and drive home, rather than fly.

Final figures showed that attendance was down from 8200 in 1990 to 6475 in 1991, with US participation down by at least 60%. Japanese attendance was also sharply down. Thirty stands remained shut or unoccupied. Organizer Xavier Roy admitted that he had thought of canceling.

But MIDEM went ahead. A posse of top brass from Philips and PolyGram flew in with Timmer for his Keynote Speech on "New Technology and the Market," with an introduction by Sir John Morgan, President of IFPI. Earlier, a panel of ten experts and lawyers chewed the fat on the rights of authors (music composers) and what the industry calls "neighboring rights" (those of record companies). Most took far too long to repeat the same common claim—that there should be a tax on blank tape, to compensate for losses claimed due to home taping.

Timmer has clearly not forgotten how the record companies were either apathetic or actively opposed the idea of CD, ten years ago. CBS wanted to revitalize the LP with the CX noise-reduction system. CX sank without a trace and so, to all intents and purposes, did CBS.

At the dinner given in his honor, Timmer said he "forgave" those who had opposed CD. He also graciously acknowledged Sony's work in making CD a world standard.

Timmer's new mission is to sell the industry on DCC, the Digital Compact Cassette. Here history repeats itself. This time around CBS, now owned by Sony, is pushing DAT as the digital tape medium of the future. In his advance interview, Timmer had said:

"Now that we have the success of CD, the time has come to upgrade the good old cassette, which dates back to 1963. I believe a better digital version is what both the music and hardware industries need, and I am convinced this is going to happen. A digital tape can take off pretty quickly because a lot of the basic material is available in digital recordings anyhow. It's only a matter of updating the machinery of the tape duplicators, and there we go..."

In his keynote speech, Timmer abandoned his script and paced the stage like a caged lion. He talked of "windows of opportunity" and how DCC offered a new one, like CD ten years ago. He then spoke his mind on home taping. Everything points to the fact that now that Timmer has joined Philips, he has finally lost patience with pigheaded attitudes in the record industry:

"The copying feature on a tape recorder is of benefit to both sides of the industry, hardware and software," said Timmer. "Copying stimulated sales of hardware. So more prerecorded cassettes could then be sold. Recording represents not only a threat but an opportunity as well.

"We can't put the clock back 30 years to a time when there was no cassette recording. Studies have shown that those who record the most also buy the most music. I believe that the advantages of the compact cassette in terms of copyright income far outweigh the disadvantages. Last year 1.6 billion blank cassettes were sold round the world, and 1 billion prerecorded musicassettes."

Timmer spoke of the "spirit of Athens," the IFPI meeting in 1989 when the hardware and software industries finally agreed on SCMS, which (as Philips's Solocopy) the record industry had previously rejected.

"The agreement proved very difficult to implement in the USA. The songwriters and music publishers (who have sued Sony for selling DAT) want to prevent the introduction of DAT. Personally I question the wisdom of that. I regret it. We must keep seeing things in perspective, not just in terms of how we divide the cake but how to make the cake grow.

"I have doubts about the wisdom of carrying the campaign to the extremes it has been carried. I hope my remarks will bring a sense of realism which is today missing. This futile debate overlooks the key issue that the ties between hardware and software must remain intact.

"It is also important to look at new technology as a way of giving a boost to business.

"I believe in the twin carrier concept, one a disc and one a tape. I believed that there was room for the LP and musicassette. I am convinced that the twin-carrier concept also applies to video. I am disappointed that the film industry missed the window of opportunity on video disc. But it is not too late. I now believe that in these times of digitization the good old compact cassette will increasingly be looked on as old-fashioned. The market is now ripe for the digitization of the cassette.

"Ten years ago, if we had listened to the skeptics on CD, the record industry would have missed its most important window of opportunity ever.

"In my view, recordable and erasable CD also fall within the scope of the Athens agreement. But there are over 20 different systems. In my view, the time has not yet come. We should not allow adventurers to take non-standardized products to the market. When we start to sell CD-R and CD-E, it must be with a well-thought-out plan on which all parties are agreed.

"I appeal to the publishers and songwriters to sit at the negotiating table and have discussions, not on what divides them but on working together. This is not a time for repeating the arguments of the past."

Why did Philips not name Matsushita as co-developer and co-licensor of DCC when the format was formally unveiled at Las Vegas?

"I don't deny that there were extensive discussions with Matsushita and other Japanese companies. But I don't feel that I should make a statement on their behalf. It is up to those companies to decide when to go public."

It becomes clearer every day that Philips expected Matsushita to make an announcement on commitment to DCC at the Las Vegas CES, but (under pressure from MITI, the Japanese government's trade body) Matsushita held back at the last minute. It is also clear that DCC negotiations with Sony still continue.

"It would be regrettable if we were to confuse the public with two competing systems. The announcement on DAT came too early. DCC is better for the public at large. I still hope that discussions with the Japanese will prevent this confusion."

It also became clear that Philips will launch DCC in Europe ahead of the US, to avoid a lawsuit like that which Sony now faces from the music publishers.

"We live by the spirit and letter of the Athens agreement. CD went late into the USA, after Japan and Europe. I do not exclude the possibility that if the debate in the USA is not resolved, we shall go ahead in Europe."

The music industry will not rest until it has won a slice of the blank-tape action. In Europe the record companies now pin their hopes on the EC, to implement European-wide legislation that will override the decisions of some governments (eg, the UK) not to tax tape. If this happens, it will inevitably put pressure on the US to come into line, too.

At the MIDEM copyright seminar, European Commission Administrator Daniel Franzione confirmed that the EC wants to have a package of legal measures—including remuneration for home taping—in place by the end of 1992.

Dr. Reinhold Kreile, President of the German copyright body GEMA, quoted diaries which showed that Mozart was worried about people copying his music 200 years ago. Kreile regretted that only half the EC population currently pays a levy on tape.

He blames "the battle waged by the electronic, chemical, and hardware industries against the concept of a levy."

"Europe must not split on a levy," said Kreile. "The decision must be communal, on a community-wide basis. Royalties must be harmonized. Culture is putting its trust in the Commission."

Franzione warned that if individual governments could not agree to conform with the Berne copyright convention by the end of 1992, then the Commission might have to step in and consolidate rights throughout the EC. "Harmonization is a necessity," he emphasized.

This was music to the ears of Michael Freegard, Head of the UK's Performing Rights Society. He accused the British government of being "hypocritical" for not having taxed tape when the UK's copyright law was recently reformed.

"Pressure from users swept away all concern for authors on the strength of talk about 'fair dealing.' It is only in the context of Europe that justice will be done. We look forward to the Community."

What Freegard neglected to say was that the UK government had rejected the idea of a tax on tape because it saw no way of ensuring that artists whose work had been copied could be recompensated with the money collected on blank tape (footnote 5). Also, the IFPI's decision to lobby for Copycode (the CBS system which was supposed to prevent home taping) made it nonsense to tax tape to compensate for home taping.

Jean-loup Tournier, Head of the French rights body SACEM, complained that the public were "more stubborn today" over the issue of home taping. He admitted, however, that "We cannot know exactly what the public records. It is an impossible task. But we can make inquiries to find out what category of music is taped."

Michael Freegard added, "This is no different from the situation we have at the PRS over collecting money [from shops and restaurants and clubs that play music for customers]. We can't detect. It's rough justice. But with experience we can make the justice far less rough than it would otherwise have been."

Significantly, not one of the ten people on the panel even mentioned the record industry's idea of using a smart card, or credit card to log recordings made, debit the taper, and route the money to the taped artist.

But in answer to a direct question on debit cards from a Finnish representative of the IFPI, Jan Timmer later made his views on the idea clear:

"I don't see it as a practical proposition. I must repeat my overriding argument that we should not concentrate too much on income that we think rightfully belongs to us, and we do not get. We should concentrate on the income we do get. It is simply not realistic to think of a device, a credit or debit card. It's a technical idea, not a sensible practical solution."—Barry Fox

Footnote 5: The UK record industry seemed to think that allocating home-taping royalties in the ratio of records sold—ie, so that Paul McCartney got a lot and the Clash, for example, only a little—was a good idea. But, as a little thought on the taping habits of teenagers will reveal, this would have been hardly fair.—John Atkinson

Archimago's picture

Kudos Stereophile for the writing all those years back! Great to see the writers really dig into the story and provide the technical details for those curious about the new technology wishing to understanding how these things worked...

A couple of thoughts as they do still resonate through all these years:

1. Lossy audio. Though nobody considers it "perfect" audio, clearly it sounds good. Remember that PASC is essentially MPEG-1 Layer 1 audio at 384kbps. This type of audio compression has been easily superseded by Layer II and III since. As such, a modern MP3 (Layer III) at 320kbps with modern psychoacoustic modeling is significantly more accurate than PASC ever was. Remember, despite all the negatives thrown at MP3 and lossy encoding, save for awful encoding software and low bitrate 128kbps files back in the day, though not preferred if lossless is available, it's important for folks not to be worried about 256kbps AAC (iTunes) or modern 320kbps MP3 music. For portable players where clearly walking around with headphones or riding in a subway to work, surely something like hi-res lossless is a total waste of time and money.

2. Great job Philips for setting up actual A/B comparisons. And even going through the extra mile of rewiring for L-R listening! The obvious modern analogy of a company selling an encoding scheme is with Meridian and MQA. So where is this level of openness with MQA these days? Where is the detailed A/B comparison of MQA? And where are the journalists willing to critique the claims with a proper demo?

Again great article from the archives. But it's also a sad reminder of how far the level of discourse has fallen these days in the audiophile media.

John Atkinson's picture
Archimago wrote:
Kudos Stereophile for the writing all those years back!

Thank you. I am gradually working my way through all the great stuff in our archives. The photo, BTW, is of DCC tapes I have in my own collection, though I no longer have any means of playing them.

Archimago wrote:
The obvious modern analogy of a company selling an encoding scheme is with Meridian and MQA. So where is this level of openness with MQA these days? Where is the detailed A/B comparison of MQA?

I report on a detailed series of A/B comparisons, both with commercial recordings and with some of my own that I had mastered in MQA, in the September issue. You can also find comparative testing at

John Atkinson
Editor, Stereophile