BMG record label has begun making good on its pledge to consumers to replace copy-protected CD that caused playback problems in home audio and PC players. U.K. purchasers of Natalia Imbruglia’s White Lilies Island began receiving prepaid return mailers for problem CD last weekend. Title makes U.S. debut today, but without copy protection. Meanwhile, Tel Aviv- based Midbar Tech issued statement defending its Cactus Data Shield (CDS) 200 copy prevention used on disc.

DTV set penetration might reach 75.5% by 2006 if FCC mandated that all new sets sold after Jan. 1, 2004, have DTV reception capability and that all TV stations complied with current DTV transition schedule, according to report commissioned by NAB and MSTV. Figure falls to 65% if FCC mandates phased implementation of DTV receiver rules, starting with larger sets, according to report, which was submitted to FCC as ex parte filing. If FCC leaves transition to free market forces, report by Arthur D. Little projected DTV penetration would reach only 8.5% (9.3 million sets) by 2006. Under free market scenario, incremental cost to manufacturer of adding DTV capability is expected to decline to $21 per set by 2006, from current $100, report said; under phased mandate figure would drop to $9, and under full mandate to $8.40. Report acknowledges initial cost increase for adding DTV capability “could substantially affect purchasing decisions regarding low-end sets,” and consumers aren’t likely to pay more than $60 premium for DTV capability on low-end sets. Study assumed FCC would mandate that DTV reception capability would simply be added to standard-definition set, making it dual-mode.

Matsushita Communication Industrial plans to withdraw from limited-growth operations, such as production of certain floppy disc drives, to focus on core businesses such as cellphones and car navigation systems, Japanese news reports said.

Next-generation digital hard disc recorder for PVR applications has been developed by Japan’s Nihon Computer. Product can record 2 digital streams simultaneously from different sources, Japan press reports said. Company said it would market drive at about $400 as dual-use product for recording from TV and home security video cameras. It combines generic hard drive with Nihon’s proprietary chips and image processing software.

Sega of America said its holiday slate of games included Sega Sports NBA 2K2 for Dreamcast, Sega Sports NFL 2K2 for Dreamcast and PS2, Super Monkey Ball for GameCube. PS2 and Xbox versions of NBA 2K2 are scheduled to ship in early 2002 and GameCube version in spring. Xbox version of NFL2K2 will ship in early 2002. JSRF-Jet Set Radio Future for Xbox -- sequel to last year’s Jet Grind Radio -- will move in Feb. Sega said Sonic Adventure 2: Battle for GameCube would ship in early 2002.

As many as 2 million DVD players were sold Thanksgiving weekend in U.S., sources estimated Mon. Apex Digital brand alone shipped one million players for holiday sales weekend, with many sold at promotional price as low as $70. Kmart had chainwide allocation of 50,000 Apex players at that price, per retailer’s sale circular. Stock of 34 at suburban N.Y. outlet was sold out within hour of 7 a.m. opening, electronics dept. mgr. told us Thanksgiving morning. Wal-Mart carried equivalent model at $75 for 5-hour Black Friday blowout.

Microsoft’s Xbox was most searched-for videogame console at Yahoo Shopping in week ended Nov. 25, Yahoo said Mon. Xbox was followed by Nintendo’s GameCube and Sony’s PS2, respectively. Yahoo said transactions over Thanksgiving Day weekend (Fri.-Sun.) increased more than 75% over same weekend year ago. Top 3 most searched-for electronics products at shopping.yahoo.com Web site were digital still cameras: Olympus C-3000 Zoom, Canon PowerShot S100 Digital Elph, Nikon Coolpix 995.

MiniDisc portable whose appearance can be customized by inserting different patterned sheets into transparent outer case was introduced in Japan by Aiwa at about $193. More than 10 patterns are available, including flowers and military camouflage. Moreover, photos or other personal images can be inserted in transparent sleeve if they are smaller than 2.9x1.8”. AM-HX300 can play for 14 hours without recharge.

Failure of Japanese game maker Square’s animated movie Final Fantasy: The Spirits Within to generate much interest at box offices worldwide continues to have repercussions for company. Square announced Mon. that CEO Hisashi Suzuki was resigning after company posted its largest loss to date -- loss it attributed primarily to film’s disappointing showing, reports said. Square reported group net loss of ?13.28 billion ($107 million) for 6 months ended Sept. 30, reports said, and movie had revenue of only about $30 million in U.S., instead of $80-$90 million company had expected. Film also failed to become hit in Japan. COO Yoichi Wada will succeed Suzuki, although latter will remain chmn. Although report quoted spokesman saying “company’s board accepted Suzuki’s request to step down as they believed that it would be best for the company to conduct a speedy restructuring under a new leadership given the quickly changing environment in the game industry,” spokesman said resignation shouldn’t be read as sign Suzuki was taking blame for movie’s failure. Meanwhile, Nikkei Business Daily said Square also was “loosening its hold over troubled DigiCube.” Latter company sells videogames and CDs via convenience stores and other locations. Suzuki, who also is DigiCube CEO, will resign that position as well in April, report said, and Square will sell 1,500 shares of its DigiCube stock and reduce its stake in company to about 38% from current 47%. Square, at that point, will cease including DigiCube in its consolidated results.

Suppliers sold 187,464 DTV sets to dealers in Oct., up 27% from Sept. and 113% higher than in same 2000 month, CEA said. Oct. shipments were worth more than $341 million, it said. Unit shipments in year’s first 10 months totaled 1,050,460 sets, CEA said, including both integrated sets and standalone monitors. It projected DTV shipments of 2.1 million in 2002, 4 million in 2003, 5.4 million in 2004, 8 million in 2005, 10.5 million in 2006.