by Lisa M. Keefe
In the race to replace the long-box compact disc package, Melrose Park-based AGI Inc. appears to be out of the running for now -- but the company may ultimately come out a winner.
For the last three years, an environmental campaign to get rid of the 6-inch-by-12-inch boxes in which CDs are packaged, which are considered wasteful, has been a hot topic in the music industry. Music packaging firms are scrambling to come up with a suitable same-size replacement.
Just 14 months ago, AGI seemed to be a leader in that effort with its full-sized but low-waste package, called the DigiTrak (CRAIN'S, Jan. 7, 1991). But the company has since lost ground to other designs.
In the meantime, however, support has been building industry-wide for using a smaller package, comparable in size to the 5-inch-by-6-inch hard plastic "jewel boxes" contained in the cardboard packs that hold the CDs themselves.
In that case, AGI is well-positioned with its jewel box-sized card-board CD package. The company may yet get a piece -- albeit a different piece than it had expected -- of the domestic compact disc packaging market.
"There has been considerable demand," says AGI President Richard Block. "We think our products will do well."
Three years ago, environmentally concerned people from all segments of the music industry launched the "Ban the Box" campaign, which aims to replace the ubiquitous long box with some package that uses less paper and plastic.
Music retailers, however, insisted on the long box, or something of equal size, in order to reduce theft and to fit in their existing display shelves -- which once held record albums.
Caught in the middle are the package design and production companies, including AGI.
At stake are the sales revenues and licensing fees for the packaging for nearly 300 million compact discs sold every year.
There is no single organization with the authority to make such a decision for the entire U.S. music industry. So, since the Ban the Box campaign began, the industry's four music packaging companies, including AGI, other package design companies and even some independent designers have proffered long-box alternatives.
Eight to 10 CD package designs have been unveiled, although only a handful are actually on the shelves.
AGI's entry in the race, the DigiTrak, was introduced a year ago on Sting's release, "Soul Cages." Instead of the typical 5-inch-by-6-inch hard plastic jewel box, the CD is packed in a cardboard box that is folded out to long-box size, held open by two plastic tracks and shrink-wrapped in plastic.
But neither "Soul Cages" nor the Digi-Trak did as well as expected. Since the "Soul Cages" release, the DigiTrak has been used on several other high-profile releases -- often at the artists' request -- including albums by Bonnie Raitt, U2, the Grateful Dead and a country tribute to Roy Rogers.
But the 20% increase in AGI's revenues that Mr. Block thought was possible a year ago never materialized. He says now that the privately held company's sales in 1991 were "between $ 50 million and $60 million," compared with about $ 540 million in 1990.
Instead of the DigiTrak, many recording labels are using a plastic "bubble pack" like those used for packaging cosmetics or small hardware items, which makes it easier for the stores to hang the CDs on display hooks. Or, they have switched to long boxes made from recycled cardboard.
"The DigiTrak didn't catch on," says Rob Simmonds, chief financial officer of New York-based Ryko-disc, a small recording company, and one of the Ban the Box campaign founders. "It's not a contender to be the ultimate replacement to the long box," he says, although he admits there are no clear front-runners yet.
In the last year, AGI has spent about $ 185,000 on the equipment needed to make the DigiTraks, and two other U.S. music packaging companies have purchased equipment worth up to $ 60,000 to produce DigiTrak packages under licensing agreements with AGI.
In a significant departure from industry opinion a year ago, many observers now believe that CDs eventually will be packaged only in jewel boxes or something of similar size, despite retailers' objections.
Even Mr. Block says, "The belief is the industry will head for a jewel-box-size-only package. Our product will fit those requirements, as well."
If you take the plastic tracks off of the DigiTrak package, the DigiTrak remains, a jewel-box-sized cardboard box with a plastic tray glued inside for the CD.
Mr. Block says that in the last year, the company has signed up new licensees for the DigiTrak in Australia, the Netherlands and the United Kingdom. A Japanese company has been a licensee since 1987.
Also, AGI has found new DigiPak sales in the computer market, selling CD-ROM computer discs for Apple and Microsoft in the cardboard box. "Whoever has wanted a solution has had it" in AGI's DigiPak product, Mr. Block says. "If it has to be further developed, we can do that, too."
For the last three years, an environmental campaign to get rid of the 6-inch-by-12-inch boxes in which CDs are packaged, which are considered wasteful, has been a hot topic in the music industry. Music packaging firms are scrambling to come up with a suitable same-size replacement.
Just 14 months ago, AGI seemed to be a leader in that effort with its full-sized but low-waste package, called the DigiTrak (CRAIN'S, Jan. 7, 1991). But the company has since lost ground to other designs.
In the meantime, however, support has been building industry-wide for using a smaller package, comparable in size to the 5-inch-by-6-inch hard plastic "jewel boxes" contained in the cardboard packs that hold the CDs themselves.
In that case, AGI is well-positioned with its jewel box-sized card-board CD package. The company may yet get a piece -- albeit a different piece than it had expected -- of the domestic compact disc packaging market.
"There has been considerable demand," says AGI President Richard Block. "We think our products will do well."
Three years ago, environmentally concerned people from all segments of the music industry launched the "Ban the Box" campaign, which aims to replace the ubiquitous long box with some package that uses less paper and plastic.
Music retailers, however, insisted on the long box, or something of equal size, in order to reduce theft and to fit in their existing display shelves -- which once held record albums.
Caught in the middle are the package design and production companies, including AGI.
At stake are the sales revenues and licensing fees for the packaging for nearly 300 million compact discs sold every year.
There is no single organization with the authority to make such a decision for the entire U.S. music industry. So, since the Ban the Box campaign began, the industry's four music packaging companies, including AGI, other package design companies and even some independent designers have proffered long-box alternatives.
Eight to 10 CD package designs have been unveiled, although only a handful are actually on the shelves.
AGI's entry in the race, the DigiTrak, was introduced a year ago on Sting's release, "Soul Cages." Instead of the typical 5-inch-by-6-inch hard plastic jewel box, the CD is packed in a cardboard box that is folded out to long-box size, held open by two plastic tracks and shrink-wrapped in plastic.
But neither "Soul Cages" nor the Digi-Trak did as well as expected. Since the "Soul Cages" release, the DigiTrak has been used on several other high-profile releases -- often at the artists' request -- including albums by Bonnie Raitt, U2, the Grateful Dead and a country tribute to Roy Rogers.
But the 20% increase in AGI's revenues that Mr. Block thought was possible a year ago never materialized. He says now that the privately held company's sales in 1991 were "between $ 50 million and $60 million," compared with about $ 540 million in 1990.
Instead of the DigiTrak, many recording labels are using a plastic "bubble pack" like those used for packaging cosmetics or small hardware items, which makes it easier for the stores to hang the CDs on display hooks. Or, they have switched to long boxes made from recycled cardboard.
"The DigiTrak didn't catch on," says Rob Simmonds, chief financial officer of New York-based Ryko-disc, a small recording company, and one of the Ban the Box campaign founders. "It's not a contender to be the ultimate replacement to the long box," he says, although he admits there are no clear front-runners yet.
In the last year, AGI has spent about $ 185,000 on the equipment needed to make the DigiTraks, and two other U.S. music packaging companies have purchased equipment worth up to $ 60,000 to produce DigiTrak packages under licensing agreements with AGI.
In a significant departure from industry opinion a year ago, many observers now believe that CDs eventually will be packaged only in jewel boxes or something of similar size, despite retailers' objections.
Even Mr. Block says, "The belief is the industry will head for a jewel-box-size-only package. Our product will fit those requirements, as well."
If you take the plastic tracks off of the DigiTrak package, the DigiTrak remains, a jewel-box-sized cardboard box with a plastic tray glued inside for the CD.
Mr. Block says that in the last year, the company has signed up new licensees for the DigiTrak in Australia, the Netherlands and the United Kingdom. A Japanese company has been a licensee since 1987.
Also, AGI has found new DigiPak sales in the computer market, selling CD-ROM computer discs for Apple and Microsoft in the cardboard box. "Whoever has wanted a solution has had it" in AGI's DigiPak product, Mr. Block says. "If it has to be further developed, we can do that, too."
source: Crain's Chicago Business,
February 10, 1992, p. 45
