From the early stages of the PCM-1 development, Sony had been looking for a way to record and play back sound using a digital audio disc. In 1975, Sony put the Betamax VCR on the market. At the same time, Sony had been working to market an optical videodisc (laser disc) which was developed by Philips. Described as "a record that plays a picture," and having a diameter of thirty inches, the same as a conventional LP record, this "large platter" was developed by Senri Miyaoka, the same person who had developed the Trinitron color TV. Deputy President Iwama remarked to Miyaoka, "Sony must have optical technology in the coming age of electronics." Encouraged by Iwama, Miyaoka assembled a team of engineers to develop an optical recording system, selecting members from within the 2nd Development Division.
In spring 1976, Doi and his colleagues delivered a prototype of the PCM-1 to Miyaoka and his team and asked them to make a disc, which could record digital audio. This disc was probably the first digital audio disc prototype in the world.
The type of signals recorded by the Betamax and the video disc were the same, meaning that the PCM-1, which had been developed as an adapter for the Betamax, could also be used as an adapter for the video disc player. At this time, Doi's plan was to connect the videodisc player to the PCM-1, thus creating a digital audio disc. The sound quality of the Betamax was relatively high, so this seemed like a reasonable plan. When Doi and his colleagues tested the disc they had developed; however, they felt as if hit with a sledgehammer. What they heard was the complete opposite of their expectations. Far from producing a clear sound, the disc produced a poor disconnected sound against a background of static and could barely be heard.
After looking into the causes, Doi made three decisions. The first was to use the PCM-1, which they had been preparing to launch in the autumn of that year, as an adapter exclusively for Betamax. This was a simple and logical decision. The second decision was to approach the audio disc and the videodisc as unrelated items and give priority to developing audio technology. In other words, to develop a brand new way to directly record the digital audio signal onto an optical disc, instead of using a video signal from a video recording format. At the time, the videodisc was a star product, which everyone believed would prove popular throughout the world. The decision to develop a digital audio disc that used a totally different format was extremely bold. Doi's third decision was to actively develop signal error correction technology, something for which no one had any experience to draw upon. Considering this, the third decision was quite exceptional.
Audio data is converted to binary digital signals, and recorded on the surface of a digital audio disc as an array of ones and zeros. When played back, digital signals are converted to electronic signals as a light beam reads them. Signal error correction is a function whereby the machine rectifies a situation in which a bit has been incorrectly read. Signal error correction is especially important in optical discs because, compared to tape a greater number of erroneous readings are made during playback.
Under Doi's leadership, the team began to study signal error correction. At the same time, Doi ordered computer specialists to create a computer simulation system for studying signal error correction. Thanks to the efforts of Doi and his team, Sony was able to establish a firm position for itself in the field of digital audio.
At the 1977 Audio Fair, Sony and two other companies exhibited their digital audio discs and players. However, these two companies used a video signal on a videodisc, and they had a rather simple signal error correction feature. Sony's machine was an unmodified video disc player that recorded digital audio signals, not video signals, directly on an optical disc that employed signal error correction.
Sure enough, people criticized Sony saying, "Even though it's possible to meet industry standards by using a video disc with a video signal, Sony had to be different and use a different format." Responding to this criticism, Doi gave a speech during Audio Fair in which he said, "Using video signals, you can record a performance that's thirty minutes in length, but by recording audio directly you can record a performance thirteen hours and twenty minutes long." In other words, the efficiency of direct audio recording is twenty-seven times greater than that achieved using video signals. He tried to convince listeners of the technological superiority of direct recording. Ohga, who was later informed of this speech, angrily commented, "Thirteen hours and twenty minutes is an absurdly long time. Hardware works only when it's fed software. Although Sony has its own software company, CBS Sony isn't going to make any money by marketing a disc with hours and hours of music recorded on it."
Thirteen hours and twenty minutes was actually the theoretical limit of direct recording. In 1977, the playing time of a demonstration disc was an hour, and at the 1978 Audio Fair, the time was two hours and thirty minutes. Due to the structural limitations of the video disc player, the actual recording density achieved was lower than the theoretical level.