The cassette system - invented, like compact discs, by Philips - has already run into controversy. The British Phonographic Industry (BPI), which acts for record companies, is seeking to reduce artist and publishing royalties during the introductory phase. The demand is being resisted by the Mechanical Copyright Protection Society (MCPS) representing publishers and songwriters. Any royalty reduction would also apply to MiniDisc, the new format to be launched by Sony.
The issue has polarised the music industry and is set to dominate the 'In The City' conference in Manchester today. The International Managers' Forum, representing managers of leading bands, is being launched at the conference.
The BPI's proposal to discount royalties has met fierce opposition from several leading managers, including Andy Dodd and Elliot Rashman, who manage Britain's biggest-selling band, Simply Red. He says that managers, artists and composers were not consulted and must 'organise to remove unfair practices'.
About 250 managers are expected to attend the closed meeting, among them Peter Grant, former manager of Led Zeppelin, and Ed Bicknell, manager of Dire Straits. Mr Bicknell and Dire Straits are at the forefront of the DCC dispute. Four albums by the band - whose 1985 release, Brothers in Arms, helped establish the CD - were to have headed PolyGram's launch. But Mr Bicknell is now asking them to withdraw the titles from the DCC launch until the issue is resolved.
The BPI's director of legal affairs, Sara John, said a royalty cut would be justified: 'All the upfront investment is on the record companies' part. We're asking the artists, songwriters and publishers to share some of the risk.'