1. Be careful about timing.
Find an exact point when the majority of the users of existing formats are willing to change their habit. Around 1999 something happened to the way people wanted to consume music.
2. Analyze what this change is all about.
At this point people clearly moved towards more availability and was actually willing to sacrifice quality for the availability. Uncompressed audio was compressed and moved quickly between devices. Welcome MP3, Napster, iPod etc…
3. Now plan a format that is exactly the oposite of what people want
Welcome Super Audio CD (SACD). It was released in 1999. Most of you haven’t even heard about it. It is a very high quality audio format that is so insanely well protected that it won’t play on any of your existing devices.
It’s five channels but it won’t play on your new five channel home theatre. It’s digital but it won’t play on your new media center PC. Or Mac. Or Linux box.
This is just as stupid as it would be to launch a digital version of the good old Compact Cassette at the point when people got used to portable CD players and the professionals that wanted recording capabilities already had the high quality DAT system.
Oh. Wait. Someone did exactly that.
Or failing to understand that a special little disk with very low storage capabilities is not the way to go when people are used to carrying around their complete music library. Eh. Someone did that too…
eirikso 
Um. MiniDisc pre-dates the iPod by nearly a decade. That MiniDisc never achieved wide success can be attribute to Sony’s dumb anti-consumer behavior. MD could have owned the removable storage market in the early 90s had Sony not been so strongly against data usage. MD could have owned the low-capacity MP3 player market in the late 90s had Sony moved earlier to increase capacity and not clung to ATRAC. And MD could have experienced a resurgence today had Sony chosen it for the PSP instead of re-inventing the wheel with UMD.
That MD is still around to this day, while DCC and DAT are long forgotten, is a strange testament to technology’s ability to survive despite it’s owner doing everything possible to ensure it’s failure.
Yes, the MD was invented way before any of the serious MP3 players. But Sony kept sticking to it and still are.
I agree with you on the reasoning around the MD format. Because of the limited storage capacity it would have been difficult to use it for the PSP, but they could have made UMD and the player in the PSP backward compatible, so that you could use it for both the new higher capacity disks and the old MD discs. Much like you can play regular CDs in most DVD players.
Rofl.. nice one.