Around the same time, Ohga received a telex from L.F. Ottens, a Philips technical executive. The message on the telex said, "If you happen to come to Europe, please visit us." Ohga had known Ottens since the mid-1960s, when Sony and Philips had successfully achieved the global standardization of the audio compact cassette. Since then, a strong relationship based on trust had developed between the executives of Sony and Philips (see Part II, Chapter 5
In June 1978, when Ohga had the opportunity to visit the Philips head office in Eindhoven, Ottens showed him an Audio Long-Playing (ALP) disc similar to the one which Nakajima and Doi had been working on. Philips was the manufacturer that had pioneered the optical videodisc system using laser technology in the 1970s. The ALP was a by-product of this technology. During the 1970s, various manufacturers had been competing to develop a digital audio disc. "This 11.5 cm disc has a playing time of one hour," Ottens explained while giving a demonstration. To Ohga's eye, the disc appeared to be very small. Technologically speaking, it was something that Sony could also manufacture. If a 30 cm disc could yield thirteen hours and twenty minutes of playing time, a 9 cm disc would theoretically yield an hour's playing time. Philips had been trying to develop a one-hour disc that could fit into an automobile dashboard. Ohga recognized the value and marketability of the product. Philips believed that this disc, which produced high quality digital sound and was small and easy to handle, would completely replace LP records.
Ottens had invited Ohga to get a sense of whether Sony was interested in jointly developing and marketing the new 11.5 cm audio digital disc with Philips. Originally, the development of the audio digital disc in Sony was born from Nakajima's passion for high quality digital sound. Nakajima had dedicated himself to the task of developing such a disc. But could this product really be marketed? People still placed great trust in vinyl LP records.
Ohga's decision was quick. He felt that the small, shiny silver disc that he saw at Philips had great potential. He believed it would replace the LP record. The disc still recorded too much background noise and the development of a signal error correction system was at its very early stage. Nevertheless, Ohga felt that Sony and Philips could create a good product together. Philips was a world leader in optical videodiscs, and Sony had considerable expertise in digital audio signal processing technology. If Sony and Philips worked together, it was likely that they could produce an ideal recording medium. Moreover, both companies owned software record companies-Philips had world famous record company Polygram, while Sony had CBS/Sony Records, which was established in 1968 and had grown considerably since then. Polygram and CBS/Sony could therefore supply software for Philips and Sony. At that time, Ohga was an executive deputy president of Sony Corporation and the president of CBS/Sony.
While the new Sony-Philips partnership was being cemented, executives from both companies visited one another. During one of these visits, Morita, who was Chairman at the time, and Iwama, who was President, formally expressed their agreement for the joint development, in order to propose the result of their development to the DAD (Digital Audio Disc) Conference. The DAD Conference comprised of 29 manufacturers from around the world who had started talks toward the standardization of the digital audio disc in September 1977.