As you are doubtless all aware, two new consumer digital recording formats are about to reach the high street: Philips' Digital Compact Cassette (DCC) and Sony's MiniDisc. DCC has just beaten MiniDisc to the punch, and in this issue we have a review one of the first DCC players. Another few weeks, and you'll be able to go and try one out for yourself.

There has been pre-launch criticism of the compromises required to make digital recording work at low cost for a consumer medium. Both DCC and MiniDisc employ 'masking' techniques to reduce the amount of data they write to their respective recording media — they do not record parts of the signal that they reckon you won't be able to hear. It's a shame that this trick has to be used, but provided that you regard DCC and MiniDisc as alternatives to regular analogue cassettes, and not rivals to DAT, I think it can be seen as an acceptable technical compromise - albeit one the mere thought of which sets my teeth on edge.

There is, however, another worrying aspect about the launch of both formats, and that concerns the royalties on sales of DCC and MiniDisc. In short, record companies are proposing to pay reduced royalties on the new formats, and artists and their managers aren't too happy. (Those managers who've discovered that their contracts already hold them to reduced royalties on new formats have even less to smile about.) The whole issue is complicated by the fact that each record company negotiates with each of their acts individually, but the BPI are hoping to negotiate 'breaks' that could cut royalties payable to singer/songwriters whose material is released on DCC by as much as 40%. The BPI argue that introducing new formats costs them a good deal of money, and that in view of the fact that artists will benefit from new formats it is only reasonable to expect them to bear some of the cost.

Managers and artists see it differently, and are quite rightly unwilling to simply give in to the BPI's demands for them to bear rather vague 'costs'. So strong is the feeling that this is another opportunity for record companies to squeeze artists — memories of the introduction of CD, with its associated royalty cuts, are relatively fresh — that Ed Bicknell, Dire Straits' manager, has gone so far as to insist that the bands' titles be withheld from release on DCC unless the full publishing royalty is paid — he does, however, concede that a reduction in the record royalty may be appropriate. Genesis, U2 and Simply Red are among other major acts supporting Dire Straits' stand.

While it's hard to feel sorry for a band such as Dire Straits when they complain about a few royalty points, they are among the very few artists who actually have any muscle with record companies. They are therefore in a position to make a stand that will benefit artists who are in no position to do so, and are therefore to be applauded for doing just that. Particularly at a time when record companies are finding it hard to justify high CD prices, the BPI and individual record companies will find little sympathy for their point of view.