Digital dollars

Digital dollars

Baltimore's CDigital capitalizes on the business community's — and the public's — hunger for optical media

Baltimore Business Journal – Tuesday April 4, 2006 – Julekha Dash

Photo by: Nicholas Griner | Staff

Sure winner: He had to go through a rough patch before finding a niche.

A trip to Switzerland in 2001 convinced Tom Booth Sr., a Catonsville real estate developer, to take a career detour.

A friend showed him a digital printer that could duplicate CD-Roms with the ability to embed a unique bar-code in each one, making the disks easy to track. Booth saw an opportunity to invest in next-generation technology that he thought would be embraced by government and the defense industry whose officials could put sensitive data on optical media.

"It seemed like a sure winner," Booth said.

After pouring $3 million of his own money into starting the company, Booth discovered the surefire plan was not as simple as it seemed. The company, CDigital Markets Inc. in Baltimore, faced competition from established competitors that had already made inroads in government and the defense industry, Booth said.

But after a rocky start, the company found its niche in duplicating CDs and DVDs that can be used for promotional or informational purposes.

CareFirst BlueCross BlueShield has enlisted CDigital Markets to put their entire provider network on a CD-Rom — a directory whose paper form is 728 pages.

In some cases, the company partners with an advertising agency such as Baltimore firms Planit and Alexander + Tom Inc., whose clients request promotional CDs. Alexander + Tom hired CDigital to work on a project on behalf of the Washington Capitals, a National Hockey League team. CDigital duplicated a CD that contained information on the team, but also doubled as an entry ticket to a game.

As more households purchase personal computers and use high-speed Internet connections, corporate America has become more willing to embrace optical media, fueling the company's growth. A few years back, prospective clients thought that optical media should only be used for storage, but now its use as a marketing vehicle to complement paper collateral is becoming more widely accepted, CDigital executives said.

The company, which employs 17, broke even last year and will turn a profit this year as sales reach $5 million, up from $3.5 million in 2005. To market the company, CDigital's salespeople send e-mails, attend trade association conventions, advertise on the Web and make cold calls.

In 2003, Doug Trotter and Paul Smith came on board as investors. Tom Booth Sr. is today a "passive investor" as he devotes more time to his real estate endeavors. But his sons Michael and Tom Booth Jr. work for the company.

Clients such as Envision Real Estate Software Inc. say that one of CDigital's advantages is that its digital printer can handle short-run printing assignments.

Many other companies that offer CD duplication services say that the minimum order is 500 whereas Envision sometimes wants 50 copies of a CD for its clients, said Envision Vice President William Ervin.

Envision, a subsidiary of Dutch financial services giant ABN AMRO Holding N.V., develops CDs that double as business cards, for retail mortgage lenders, financial planners and homebuilders. These clients use the disks to inform prospective clients about their services.

Envision, based in Farmington Hills, Mich., has been using CDigital for two years, during which time the Baltimore firm has duplicated 1 million CDs for it, Ervin said.

Having the ability to order small printing jobs allows the company to save money by not having to place a minimum order.

And the CD is resilient: The labels are heat resistant and won't peel off in the sun or under water.

"You don't want [a CD] to lose its original gloss or color," Ervin said.

Universal Music created 100-run commemorative CDs for recording artists such as rapper Eminem, Snoop Dog and country artist Toby Keith. Songs on the Toby Keith CD, which is a greatest hits compilation, are no different than those you would find on his other CDs. But since these are limited-edition CDs, with only 100 copies, fans were willing to pay close to $500 for some CDs on EBay.

Michael Sien, senior sales manager at CDigital explained it this way: "People want to feel they're unique."

What's in store for the company in the future?

The company just signed a marketing agreement with a firm that provides in-flight food for U.S. airlines to duplicate CDs for tourism companies to be served along with the sandwich and chips in the snack meal.

In addition, the company is exploring ways to put decals on other mediums, including steel, leather and glass.

"We can print on media other than CDs," Tom Booth Sr. said.

CDigital is talking to a company in Buffalo, N.Y., about putting personalized decals on a toothbrush with dentists' names, for instance.

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