The CD Turns 25

We love lists at TBP. The 25th anniversary of the CD is a convenient excuse for these fascinating yet irrelevant data points about the development of CD technology.

Via the BBC, consider this:

• The compact disc project was launched following Philips’ failure with its video disc technology in 1978.

• The video disc was one of the first commercial products to take advantage of laser technology that could read information from a disc without any physical contact.

• Research into the video disc began as far back as 1969, and itself was inspired by Italian Antonio Rubbiani, who had demonstrated a rudimentary video disc system 12 years earlier.

• In 1970 Philips began work on what was called the ALP (audio long play) – an audio disc system to rival vinyl records, but using laser technology.

• Lou Ottens, technical director of the audio division at Philips, was the first to suggest that the ALP be made smaller than the dominant vinyl format and should aim for one hour of music.

• The project initially flirted with the idea of quadraphonic sound but a disc with one hour of music had to be 20cm in diameter and so the plan was abandoned.

• In 1977 Philips began to take the development of a new audio format much more seriously. A new name for the product was discussed and names considered included Mini Rack, MiniDisc, and Compact Rack.

• The team settled on Compact Disc because it was felt it would remind people of the success of the Compact Cassette.

• In March 1979 Philips conducted a press conference to show off the audio quality of its CD system in production and also to impress upon rivals how well it was progressing.

• Philips first CD player cost more than £1,000 in today’s money

• A week later Philips travelled to Japan after the Japanese Ministry of Industry and Technology (MITI) had decided to convene a conference to discuss how the industry could create a standard for the audio disc. The company left Japan having agreed a deal with Sony.

• Philips’ plan for a CD with a 11.5cm diameter had to be changed when Sony insisted that a disc must hold all of Beethoven’s 9th Symphony.

• The longest recording of the symphony in record label Polygram’s archive was 74 minutes and so the CD size was increased to 12cm diameter to accommodate the extra data.

• In 1980 Philips and Sony produced their Red Book, which laid down all the standards for compact discs. From that time on the companies worked separately on their own CD equipment but in the early days agreed to share components.

• In April 1982 Philips showed off a production CD player for the first time. "From now on, the conventional record player is obsolete," said Lou Ottens.

• The first commercial CDs pressed were The Visitors by Abba and a recording of Herbert von Karajan conducting the Alpine Symphony by Richard Strauss.

• US record labels were initially very sceptical about the CD. A year after launch there were 1,000 different titles available.

• In 1985 Dire Straits’ Brothers In Arms became the first CD to sell more than one million copies. It is still the world’s most successful CD album.

• In 2000 global sales of CD albums peaked at 2.455 billion. In 2006 that figure was down to 1.755 billion.


How the CD was developed
BBC,  Friday, 17 August 2007, 10:30 GMT 11:30 UK

Compact disc hits 25th birthday
17 August 2007, 11:07 GMT 12:07 UK

Category: Digital Media, Music, Technology

Who Knew?

Category: Credit, Psychology

New Home Sales= Zero Gains, +/-

"The U.S. Commerce Department said Friday that new home sales rose 2.8% in July after falling 4% in June."

That was how most of the MSM covered Friday’s New Home Sales. 

The problem is, it is not correct.

First, let’s start with the actual data release, via Commerce:

Sales of new one-family houses in July 2007 were at a
seasonally adjusted annual rate of 870,000, according to estimates
released jointly today by the U.S. Census Bureau and the Department of
Housing and Urban Development.

This is 2.8 percent (±12.0%)* above the revised June rate of 846,000
and is 10.2 percent (±12.3%)* below the July 2006 estimate of 969,000.

That seems pretty straight forward — except the way it was reported ignored the statistical reality.

Commerce noted what the margin of error and statistical significance was.  They included this small caveat about the actual data:

Estimated average relative standard errors of the preliminary data are shown in the tables. Whenever a statement such as “2.5 percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred. All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease.

So the correct answer to the question "What were New Home Sales in July 2007" is as follows:

There was no statistically significant change from June to July. According to the Department of Commerce, the range was -9.2% to +14.8%.

There was no statistically significant change on a year-over-year basis, either. Commerce reported a range from -22.5% to +2.1%.

New_home_sales_julyThis is not how it gets reported.

I am not sure if it is a case  of innumeracy or of the media wouldn’t have a story about New Home Sales otherwise.

As the Commerce Department itself reported in the footnotes, Friday’s New Home Sales were statistically meaningless.

Even the nearby chart  has the illusion of precision

Existing Home sales were out today, and may come in for the same treatment later this weekend.

Note: This is before we even factor in the cancellation factor after the jump:


UPDATE August 27, 2007 2:21pm

I see that Northern Trust’s Paul Kasriel comments:

Gain in New Home Sales Is Inconsistent with Reports from Home Builders

Today’s report that suggests a recovery in sales of new homes is not anywhere close. At the same time, the increase in sales and price are suspect because the financial press has a number of stories everyday about home builders reporting significant declines in sales and earnings, a plethora of incentives to move sales, cancellations of contracts, and so on. Cancellations of contracts to purchase homes are not reflected in this report. It is reasonable to assume that excluding cancellations leads to overestimating sales of new homes and underestimating inventories of unsold homes. Also, the home builders (see chart 4) survey for August showed the second lowest reading in the history of series. We need to see reports of future months and watch out for revisions of estimates of home sales.



AUGUST 24, 2007 AT 10:00 A.M. EDT

How does the Census Bureau handle cancelled sales contracts?

Gain in New Home Sales Is Inconsistent with Reports from Home Builders
Northern Trust Global Economic Research

August 24, 2007

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Category: Data Analysis, Economy, Psychology, Real Estate

“Capitalism without Financial Failure is Not Capitalism at All”

Category: Credit, Derivatives, Federal Reserve, Psychology, Real Estate

Late August Linkfest: Week-in-Preview

Category: Financial Press

“You Will”

Category: Technology

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Category: Financial Press

Are we in Recovery Mode?

Category: Economy, Investing, Markets, Psychology, Technical Analysis

Lindsey visits the Googleplex

I found this terribly amusing . . .


Who knew Lindsey did comedy?

Category: Corporate Management, Technology, Video, Web/Tech

Agriculture Break Out Relative to Energy, Commodity Index

Category: Commodities, Energy, Technical Analysis