ELECTRONICS: Tape from Opelika

In the wonder world of electronics, much of the magic is performed by a simple looking device—a plastic ribbon covered with particles of iron oxide. Its name: magnetic tape. On its surface a fantastic amount of sights, sounds and statistical data can be electromagnetically recorded. The tape can be played over and over again without wearing out, can be erased and used again for new recordings. Tape recorders are challenging phonographs for hi-fi music; they fly in jet planes and guided missiles to record test data; in the first earth satellite, a tape recorder will read dozens of instruments and transmit the data to earth. Using magnetic tape, giant computers compile payrolls and forecast sales. Entire libraries and millions of legal documents are being tape-recorded. This fall CBS and NBC will replace their kinescopes with tape recorders to rebroadcast TV programs so that they can be shown at the same hour across the U.S. with all the clarity of the live broadcast.

Last week, as other stocks drowsed, Wall Street woke up to the wonders—and possibilities—of magnetic tape. The stock of ORRadio Industries Inc. jumped live points in a day to 23. Reason: ORRadio, one of the four major makers of magnetic tape (others: Minnesota Mining & Manufacturing Co., Audio Devices Inc., Reeves Soundcraft Corp.), is the fastest growing company in the new field. Its sales, which rose 62% to $1,600,000 last year, are expected to hit $2,500,000 this year and quadruple next year. This week in Opelika, Ala., ORRadio rushed to completion part of a new plant to start commercial production of tapes used to rebroadcast TV programs.

Hitler v. Ike. ORRadio’s founder—and a pioneer in U.S. tapemaking—is John Herbert Orr. 46, onetime radio-station owner. While serving as a major and chief radio engineer on General Eisenhower’s SHAEF staff during World War II, Orr, like other radio experts, was amazed at the lifelike quality of Nazi broadcasts of Hitler’s speeches. They had none of the distortions of speeches rebroadcast from the wire recorders then used by the U.S.

When the Allies captured Radio Luxembourg. Orr found out the secret: the Germans were using a “Magnetophon”‘ recorder with a magnetic tape far superior to familiar paper tapes or wire. The recording of a speech by Hitler was erased from a captured tape and a speech of Ike’s recorded on the same tape for rebroadcasting. But the erasure was muffed and, in the middle of Ike’s talk. Hitler’s voice broke in loudly. Orders quickly came to manufacture some new tape. Orr tracked down Dr. Fritz Pflaumer, who had developed the original magnetic tape for the I.G. Farben chemical combine, got the basic know-how necessary to produce the new tape. Pflaumer also gave him a formula for a much better tape.

Unlimited Market. Back in Opelika after war’s end, Orr set up shop with six employees to make the improved tape. He invested $250,000 realized from the sale of Opelika’s radio station WJHO and other holdings, sold stock to friends by incorporating in 1950, raised another $246,675 in 1953 by a public offering of 149,500 shares of stock. After licking production problems, he developed a new tape coating (Ferro-Sheen) with unusually high fidelity. This caught the eye of the Ampex Corp., a maker of wire recorders and other electronic equipment, which had gone into the manufacture of tape recorders after one of its engineers had brought two of the Magnetophons back from Germany. ORRadio and Ampex worked together to develop the TV tape for rebroadcasting. Ampex was so delighted with Orr’s new tape that it later bought a 28% interest in his company, supplied Orr with another $250,000 for expansion.

Next month Orr will announce another new tape, especially designed for long-life storage of valuable documents. The tape will last for up to 100 years, cannot be erased, thus eliminating one of the drawbacks of present tape, which can easily be accidentally erased. Orr sees unlimited uses for tape, not only for computers and automatic machines but for all manner of consumer products. Like other tapemakers, he sees tape recordings superseding phonograph records as soon as the cost can be cut. Before long, he expects, people will take home movies with electronic cameras employing magnetic tapes, run them off through their TV sets. Says he: “Our sales will be limited only by our capacity to produce.”