ASR Recording cashes in big-time on boom in demand for CD-ROMs.

Armed with a $2.5 million piece of machinery, Allan Schor has launched his company, Canoga Park-based ASR Recording Services of California Inc., into the latest rage of the computer world, the "CD-ROM."

Schor's new machine is capable of producing 6 million CD-ROM discs a year -- and just weeks after having it up and running, it is going full bore to fill orders.

The CD-ROM industry may even offer a minor salvation for Los Angeles' troubled economy, which has been savaged by aerospace cutbacks and other woes.

"It's been a great experience for us," said Schor, watching his compact disc machine as it popped out a fresh disc every 3 seconds. "We have had extremely good response (sales) since it came on line."

Already, Schor is planning to buy a second machine from the supplier, Robi Systems, a Swiss manufacturer and contractor.

Many consumers will recognize CD-ROM discs as compact discs, of the type music albums are recorded on.

The acronym CD-ROM stands for compact disc-read only memory. That means the disc has information stored on it at the factory, but cannot accept new information from users -- just like an ordinary music CD.

However, the discs are becoming popular in the publishing and computer industries and among computer owners, explained Schor, because of their vast information storage capabilities.

"You can store the entire Encyclopedia Brittanica on one CD, with photos and audio (voice in addition to the text)," said Schor. "People are putting the (phone) Yellow Pages on CD-ROM."

Viewed another way, one CD-ROM disc will store as much as 400 of the 3.5-inch high-density floppy discs, now widely in use.

Too, although the discs cannot be "written on" by computer users, they can be interactive -- that is, users can play games on the CDs, or ask questions.

"You might ask your computer to search for the word 'Lincoln,' and it will tell you all the information available on Lincoln, and perhaps part of the Gettyburg Address," said Schor's son, Eric, in charge of marketing for ASR.

Schor's machine is housed in a "grey room" at his 40,000-square-foot factory in the San Fernando Valley. The CD-maker itself, however, is in a section of the room sheathed in heavy plastic curtains.

"A positive air pressure is maintained behind the curtains," explained Schor. "Only filtered air is allowed in."

That way, a clean, dust-free environment for the machine is maintained, without the expense of constructing an entire clean room.

The Robi Systems machine prints CDs much in the same way the old vinyl records were made -- pressed by a master mold. Then a metallic film is put onto the disc, and another clear protective lacquer coat. Tiny, microscopic pits in the discs, when read by laser, convey information.

Schor is confident he can compete with other CD manufacturers around the globe. "This type of production is capital intensive, not labor intensive," he said. That means labor costs are not as important as they might be in other industries. "Besides," said Schor, "I have the latest, and best, equipment."

Indeed, the $2.5 million CD-maker, gleaming white and looking like an apparition from an old Star Trek series, is attended by only two people as it relentlessly pops out disc after disc. The machine runs 24 hours day.

Too, being in Los Angeles means Schor can ship to domestic buyers quickly, without overseas shipping costs -- in fact, the nearness of the Los Angeles-Long Beach harbor even makes exports easier, said Schor.

Typically, wholesale buyers of CD-ROMs are small- to medium-sized recording companies, publishers and some computer program makers, said Schor. He declined to name names, not wishing to alert competitors to his customer list.

Sales are running at about $10 million this year for Schor's existing business of audio tapes and the new CD-ROM trade.

Production runs of as little as 500 CD-ROM discs make sense in some situations, said Schor, although he looks for larger runs in the 25,000 to 100,000 range.

"Ballpark, it costs $800 and $1,200 to make a master for a software CD-ROM, and between $500 and $600 for a music CD," said Schor. "Then there is a cost of between $1 and $1.50 a unit to make the copies."

Despite the Southland's recession, "We expect that (sales) to double in the next two years," Schor said, mostly due to the CD-ROM disc sales.

Despite the rosy outlook for the nascent but burgeoning CD-ROM business, Schor does not think the industry offers a complete substitute for the platoons of unemployed aerospace workers in the Southland. "We really don't employ enough people -- look, one machine makes 6 million discs a year," said Schor.

One who sees a big future for CD-ROM programming is Kenneth Smith, director of business development for the Santa Monica-based outfit Communicate.

The company handles the software side of CD-ROM production -- in other words Communicate will program images or data to be imprinted on a CD-ROM.

If somebody wants to make a commercial or slide show and put it onto CD-ROM, Communicate stands ready, said Smith.

"A CD-ROM allows one to put on a presentation that puts the old slide show to shame," said Smith. "You can present video, audio or text, in whatever configuration is right for your audience."

The same disc might be used to show only graphs to executives on a busy schedule, then later used to show videos with audio to another group, said Smith.

Already, there are 3 million CD-ROM-reading personal computers in the United States, a number that may triple in 1994. "If you look in the ads, many of the personal computers sold today are equipped to handle CD-ROM," said Smith.

In the future, some types of magazines and many business list will be distributed on CD-ROM, said Smith. "On a business list of security companies, for example, some of the companies listed may want to put an ad alongside the list, which could include descriptions of their company, and interview with guard, and some more figures," said Smith.

For manufacturer Schor, the emergence of Los Angeles as a programming center for CD-ROMs was one reason to stay in Los Angeles, although he was recently enticed by Nevada's low tax climate.

"We think Los Angeles is becoming and will become something of a center for CD-ROM programming," said Schor. "We are right here, close to the programmers. That will be good for business."