(FORTUNE Magazine) – Even fruitcakes and loud neckties may have brought more joy this holiday season than CD-ROMs. Says Michael Moon, a partner at Gistics, a Larkspur, California, consulting firm: "For CD-ROMs, once again, this Christmas sucked eggs."

That's tough gingerbread for a $1.5 billion industry that depends on the holiday season for nearly half its sales. But CD-ROM makers have done little to help consumers understand the product, which contributes to a retail return rate that averages 20%, much higher than for books or audio CDs. Only about 6% of the roughly 3,500 titles out there turn a profit.

The problem is multimedia: You generally can't preview a CD-ROM the way you can a music title, so buyers often have no idea what they're bringing home. Prices are all over the map, and titles are cropping up in bookstores and toy stores, where the nerd factor is lower.

Then comes the killer misapp--getting a title up and running. Many consumers are clueless as to whether their combination of hardware--it helps, for instance, to have a computer with a CD drive--matches the software. So CD-ROMs have an "out-of-box" failure rate that's startlingly high. According to Gistics, 50% of titles for the Windows 3.1 platform and 32% of those for Apple fail the first time a buyer tries to boot up.

That happened to Disney Interactive last Christmas day when kids across America got Lion King CD-ROMs, which their frustrated parents could not boot up properly. Worse, Disney's technical staff was off for the holiday. This year, 1,150 people were manning the phones.

To head off these problems, the Interactive Multimedia Association (IMA), a trade group in Annapolis, Maryland, recently began distributing free software called CD Match that consumers can use to learn their system's drive speed, memory, and other capabilities. The IMA is also pushing for uniform labeling for titles, covering the same checklist as the software, so buyers can select compatible titles. If this works, next Christmas may be a merrier affair for CD-ROM recipients.

--Justin Martin