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CD-ROMS LOSE SOME OF THEIR SIZZLE

THE HOLIDAY SEASON MAY NOT be too rosy for makers of CD-ROMs. Fairfield Research Inc., a market researcher in Lincoln, Neb., estimates that households owning a CD-ROM player will spend 39% less on new disks in fourth-quarter 1996 than they did last year (chart). It bases that forecast on a survey of 1,000 such households. In the third quarter of 1996, the company reckons, 26 million households bought only 38.9 million disks at retail, down considerably from the 43.3 million disks that 18 million households purchased a year earlier.

Why the softness? Gary Gabelhouse, Fairfield's CEO, says that consumers don't have time to use many more disks. He adds that a glut of titles has forced down the price that publishers can charge. ''It's hard to make this industry work,'' says Gabelhouse. He predicts a consolidation around companies such as Disney and Viacom, which could keep production costs low by reusing programming from other media, such as movies and TV.

EDITED BY JOHN W. VERITY



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Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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