Otari Inc.

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Otari Inc.

4-33-3 Kokuryo-cho
Chofu-shi
Tokyo, 182-0022
Japan
Telephone: (+81 4) 2481 8626
Fax: (+81 4) 2481 8633
Web site: http://www.otari.com

Private Company
Incorporated: 1965 as Otari Electric Co., Ltd.
Employees: 167
Sales: $25 million (2006 est.)
NAIC: 334290 Other Communications Equipment Manufacturing

TAPE DUPLICATION SYSTEM IN 1965

VIDEO SUPPORT

MISSING THE DIGITAL REVOLUTION

INVESTING IN DIGITAL FOR THE NEW CENTURY

PRINCIPAL SUBSIDIARIES

PRINCIPAL COMPETITORS

TAPE DUPLICATION SYSTEM IN 1965

Otari was founded in 1965 as Otari Electric Co., Ltd., by Masayuki Hosoda. Based in Tokyo, the company was named after the village of Otari, where Hosoda had been born. From the start, the company targeted development of equipment supporting the audio recording industry. The company’s first product, the DP-1000 high-speed tape duplicator, was released in 1966. Over the next several years, Otari continued to develop its tape duplication technology, boosting the DP series speeds from 8 to 16 times by 1968. By 1970, the company had released the DP 5000, capable of speeds up to 32 times.

Otari had begun to broaden its product lines by then. For this, the company moved upstream, and began developing its own tape recording technology. In 1968, the company debuted its first master tape recorder, the MTR-60. One year later, Otari released its first multi-track recorder, the MX-5000. In support of its expanding manufacturing operations, the company opened a new factory, the Toyoshina Factory, in Nagano, in 1969. The following year, the company moved into a new headquarters building in Ogikubo, Tokyo.

The new product line encouraged Otari to branch out beyond the Japanese market at the beginning of the 1970s. For this, the company launched a sales and distribution joint venture in Singapore, which provided coverage of the Asian Pacific region outside of Japan, in 1970. In that same year, Otari moved into the all-important U.S. market, forming a joint venture there as well. The company’s arrival into the U.S. market was accompanied by new generations of its products, including the DP-5000 and its latest-generation recorder, the MX-7000. Back at home, the company also took on the fast-emerging cassette tape industry, developing its first in-cassette duplication system in 1971.

Successive generations of its core product lines enabled Otari to establish itself as a major name in Japan, and a growing force in the U.S. market. The company responded to increasing demand for its products by opening a new factory, the Matsomoto Factory, in Nagano, in 1972. The following year, Otari stepped up its U.S. presence as well, launching its own wholly controlled subsidiary there, Otari Corporation. This subsidiary played an important role in helping Otari gain entry into recording studios throughout the United States, and by the end of the decade, the company had come to rival many of the long-standing names in the recording equipment industry. Part of the company’s success came from its strong product development effort, which led to the launch of the 24-track MTR 90 in 1977. At the same time, the company found success within the broadcasting industry as well, particularly with the launch of its MX-5050 two-track and four-track tape decks. These products helped set an industry standard and remained in wide use through the rest of the century.

VIDEO SUPPORT

With much of the technology for the fast-developing videotape industry arriving from Japan, Otari naturally turned toward supporting the format. The company began developing a new line of videotape-specific equipment, such as the VL-100 videotape loader, introduced in 1979. The company had also continued to develop its line of in-cassette duplicators, while introducing the ARS-1000 and BGM-1000 tape player systems in the mid-1970s.

The fast-growing videotape industry provided new expansion opportunities for the company. Europe represented an important developing market for the company. In support of its sales there, the company opened a dedicated subsidiary, Otari Deutschland. That company later changed its name to Otari Europe to better reflect its pan-European focus. By then, the company had also boosted its Asian region presence by establishing a new wholly owned subsidiary in Singapore in 1980. Also in that year, Otari launched a dedicated sales and distribution unit for Japan, originally called Otech, and later Otaritec. This subsidiary also served as an importer and distributor of third-party equipment for the Japanese market. By the middle of the decade, Otari itself had moved into new headquarters in Ogikubo, Tokyo.

COMPANY PERSPECTIVES

For over 40 years, Otari has been a leading manufacturer of professional audio products for the music recording, broadcast, post-production, film and live sound markets, of products such as analog and digital recorders, mixing consoles, plus high-speed industrial audio and video cassette loading and duplication systems. With our current high-quality, innovative digital products, and with more on the way, Otari truly is “Digital’s New Standard.”

This move supported the debut of the company’s high-speed video duplication system, the TMD-T-700, launched in 1986. The company also developed a videotape loading system, the T-320, which was introduced in 1987. In the meantime, Otari had continued developing its range of audio recording systems for the studio and broadcast industries. New products included the MX-80 multitrack tape recorder and the BTR-5 broadcast tape recorder, both released in 1986. These were joined by the master tape recorder MX-55 and the multitrack tape recorder, the MTR-100A, both introduced in 1987.

MISSING THE DIGITAL REVOLUTION

Otari moved to a new headquarters facility in Chofu, Tokyo, in 1989, changing its name at the same time to Otari Inc. The company continued developing its range of industrial equipment for the recording and video industries, launching a pair of eight-millimeter tape loaders, the T-820 and VL-811, as well as a videotape loader, the T-320II, in 1990.

The 1990s promised a new era in the audio and video industries with the arrival of new digital recording and playback technologies. Despite its deep roots in analog technology, Otari recognized the need early on to develop its own digital capacity. The company’s first foray into digital came with the release of its DTR-900 digital multichannel tape recorder in 1986. That system supported the Pro-Digi (PD) format, with a 32-track capability.

Despite this early entry into the digital realm, the company expected penetration of the new technology to take place only slowly. Otari’s primary focus therefore remained on the analog market. As a result, Otari suddenly found itself lagging behind in the professional audio recording market at the beginning of the 1990s. As one Otari executive explained to Billboard in 1997: “Otari got blindsided by the digital revolution in professional audio.”

Otari responded by launching an acquisition drive to boost its technology and manufacturing capacity. The company first acquired console manufacturer Sound Workshop, based in Hauppauge, New York, in 1989. As part of the acquisition, Otari took over production of a Pro Disk hard drive-based recording system that Sound Workshop had been marketing. Next, Otari added manufacturing capacity in the United States, buying Massachusetts-based King Instruments, which focused on the audio duplication market. Then, in 1991, the company boosted its digital recording technology through the purchase of Digital Dynamics Inc. The following year, the company consolidated its U.S. manufacturing operations into a single unit, called Otari Manufacturing Corp. The new subsidiary then took over global production of Otari’s audio mixing consoles, audiocassette loaders, and automation systems.

Otari launched a number of new digital technology products, including the DP-103 digital master reproducer and the company’s RADAR (for Random Access Digital Audio Recorder) system, both in 1994, as well as the DTR-8 digital tape recorder in 1995. The company also became part of Sony Corporation’s attempt to build its mini-disc system into a worldwide standard, developing the MR-30 mini-disc recorder in 1997. Yet the company’s continued focus on its analog technology left it struggling to keep up in the professional audio recording industry, which turned massively to digital recording technology in the 1990s. Worse, Otari had built its systems based on the Pro-Disk format. In the mid-1990s, however, the industry abandoned that format in favor of the more robust DASH format, leaving Otari in the lurch. In the meantime, sales of analog-based systems dropped precipitously into the second half of the decade.

KEY DATES

1965:: Masayuki Hosoda founds Otari Electric Co., Ltd., in order to produce tape duplication systems.
1970:: Company enters United States and Singapore through joint ventures and begins to market first audio recording consoles.
1973:: Company establishes subsidiary in California.
1980:: Company establishes sales subsidiary in Singapore and forms Japanese trade subsidiary Otech (later Otaritec).
1983:: Otari forms dedicated European sales and support subsidiary in Germany.
1986:: Otari launches first digital recording system.
1989:: Name is changed to Otari Inc.; company acquires Sound Workshop in the United States.
1994:: RADAR (Random Access Digital Audio Recorder) system is launched.
2000:: DAS series of digital archive systems debuts.
2007:: Shrink-wrap removal system is introduced as part of expanding line of DVD and CD production equipment.

INVESTING IN DIGITAL FOR THE NEW CENTURY

In response, Otari’s U.S. unit received a new injection of capital from its Japanese parent in order to restructure its product focus, shifting its manufacturing effort from analog to the development of its digital technologies. With an expanded budget, the company set out to reconquer the professional audio industry. As then-president Jack Soma told Billboard: “The good news was, all of these moves—the acquisition of Sound Workshop, the experience Otari had in the hard-disc market, the move into large digital multitrack machines—laid the groundwork for the large-scale repositioning that was to follow. These earlier moves showed me that Otari had the right vision. It just needed fine-tuning in terms of doing it more successfully.”

The company’s RADAR system provided a strong example for this successful fine-tuning. RADAR had originally been marketed as a post-production system for the audio market, with lackluster results. Into the late 1990s, however, the company, led by its European sales office, began marketing RADAR instead as a replacement system for 24-track analog tape decks. The effort quickly paid off, as a growing number of major producers, engineers and recording artists, including U2, Peter Gabriel, Seal, and others, embraced the RADAR system. Otari in the meantime expanded the RADAR line into four console types, ranging from the Status, the entry-level system priced at $25,000, to the high-end, custom-designed Premier, priced up to $500,000.

Otari’s move into digital took off still more strongly in the 2000s. The company released a flurry of digital technology-based systems, including a new generation of RADAR, the T1307, in 1998; the digital master reproduction system DP-2 in 1999; the DAS series of digital archive systems in 2000; and the digital audio disk recorder, the DR-10N, in 2001. By the middle of the decade, Otari had regained its position among the professional audio recording industry’s leading console companies.

Also in the 2000s, Otari invested in fiber-optic technology in order to develop its Lightwinder audio transmission and routing system. The new system permitted the transmission of audio data over long distances through the use of analog to digital and digital to analog converters. Originally launched in 1996, the Lightwinder system was subsequently upgraded to provide multichannel support over still longer distances, with the launch of the LW-50 in 1997 and the LW-50 Colosseum in 2003. The company continued to build up the Lightwinder series, adding the LW-55 in 2004 and the LWB-16 and LWB-64 series in 2006.

At the same time, Otari had emerged as a primary provider of industrial equipment for the CD and DVD industries. For this, the company developed a full-range of automated reproduction, packing, and packaging machinery. These included the CM20TI DVD title sheet inserter and the VDP series of CD and DVD duplicators, added in 2004, and the CM20CF, a DVD case-feeder system added in 2005. These were joined in 2006 by such new products as the DVD case closing system, the CM-20CC; a disc inserter, the CM-20DIS; and a disc detector, the CM-100DC. At the other end, the company developed a shrink-wrap removal system, which permitted the automated removal of shrink-wrap from returned DVDs, a process that previously had required human intervention. That unit, the CM-25DW, was unveiled in March 2007.

In this way, Otari successfully carved out a position for itself as a world leader covering much of the audio and industrial equipment needs of the audio recording, video, broadcasting, and live audio industries. After more than 40 years in operation, Otari had grown into a world-class company, while remaining family owned, still led by founder Masayuki Hosoda.

M. L. Cohen