The concept of marketing items that utilized digital signal processing developed in the 1970s, spearheaded by the Sony Corporation and N.V. Philips, a Dutch company. This collaboration resulted in the release of the laser disc, for video viewing, and the audio compact disc (CD). The audio CD is viewed as a particularly revolutionary development as this item had all but replaced the record album as the standard audio unit by the 1990s. Credited with superior sound quality, decreased likelihood of scratching and the ability to play a full recording non-stop, the CD offered significant advantages over the vinyl album. CDs also offered the advantage of easier storage, given that, at 4.7 inches in diameter, they are significantly smaller than record albums.

Laser discs have revolutionized the computer industry as well. The compact-disc read-only-memory (CD-ROM) offers data storage capabilities superior to the floppy disc and allows for the creation of fully searchable databases and reference libraries as well as multimedia displays. For instance, an entire encyclopedia set can be stored on one CD-ROM. A CD-ROM can store up to 600 million characters. Audio CDs can be played on a computer CD-ROM drive. Read-write discs allow for recording sound and coding data directly to a CD.

The mid-1990s saw the development of the high-density CD (HDCD), which could store even more information (data, video or sound). Philips and Sony pioneered this development as well, along with Matsushita and JVC.