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Blu-ray eyes the China market
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Sony will release first batch of Blu-ray movies, including Spider-Man 3, Kung Fu Hustle and Open Season in China this summer.
Also on July 8, The BDA announced that DRA (Digital Audio Coding) technology had passed an important technical evaluation. This may represent "a key milestone for a locally-developed Chinese technology to be potentially adopted by Blu-ray Disc format", according to BDA's press release.

This milestone is the result of hard work by engineers in the Audio Codec Evaluation Technical Task Force under the BDA's Joint Technical Committee, and close collaboration with China's Hualu Group and DigiRise Technology Ltd.

Blu-ray Disc is the next-generation optical disc format that has been developed for high definition audio-video and high capacity data software applications. A single-layer Blu-ray Disc can hold up to 25 gigabytes of data and a double-layer Blu-ray Disc can hold up to 50 gigabytes of data.

But Blu-ray is only at the start of what is likely to be a very long journey to the market in China. As I recently learned, Blu-ray has launched its sales in China, but to date the number of players sold barely reaches 10 units per month. One reason may be its high price -- over 5,000 yuan per unit -- although the Beijing News has reported that Sony will lower the price to around 1,000 yuan.

The second reason may be that most of general public has no knowledge of Blu-ray. DVD, and even older-fashioned Video CD (VCD), are still popular among Chinese households.

These are hardware issues. But Blu-ray fans also have a problem of software availability in terms of discs. There were no China-region coded Blu-ray movies selling in Chinese market until July, when Sony Pictures and its longtime Chinese collaborator Excel Media decided to release the first batch of Blu-ray movies, including Spider-Man 3, Kung Fu Hustle and Open Season.

Thus far, Sony Pictures has released 122 Blu-ray movies around the world. In the United States, they have sold 11 million copies in total, while in Asia to date sales number 150,000. But in China itself, sales are almost zero.

To resolve the problem Shanghai Epic Music Manufacturing Operations, a joint-venture between Sony Digital Audio Disc and various Chinese companies, became China's first Blu-ray Disc manufacturer. They announced on July 11 that they will launch a production line in December, hoping to boost the sales of players from Sony, Panasonic and Pioneer Blu-ray, all of whom are concerned about weak sales of their product.

The Chinese market is complicated by the fact that ordinary Chinese like low-end affordable products. In the 1990's before DVD emerged, and while Westerners still mainly watched VHS tape, the low-priced VCD and its player became a phenomenon and a must-have in China, making it difficult for DVD players to enter the huge market without lowering their price.

Now, before Blu-ray has yet taken hold of the market, Chinese-based high definition audio-video technologies have already started to establish a presence. Leading the field are Enhanced Versatile Disc (EVD) and China Blue High Definition (CBHD) technologies.

But once Toshiba pulls out, EVD and CBHD also will have their work cut out. One industry insider told me that Chinese governmental support for domestic Red-ray products had deterred Chinese manufacturers from investing in Blu-ray. But he added that Blu-ray's advanced technology and its extra disc storage space is likely to mean that he and many others may eventually opt for the format.

The future is still unclear – domestic demand will sustain the HD-DVD camp in China even when Toshiba pulls out in February. In fact Toshiba has said it will still support HD-DVD development in China. Together with a number of global HD-DVD backers and Chinese companies, Toshiba set up the China High Definition DVD Industry Association on September 7, 2007 in an attempt to promote the mass production of High Definition DVDs.

"Many are watching and waiting", the insider said. China's domestic manufacturers still have a foot in both camps – collaborating with Blu-ray in foreign markets and manufacturing CBHD products at home. "Customers don't care if it's Blu-ray or HD, as long as the product can meet their needs."

"It will take at least three years to popularize Blu-ray," he said, pointing to such issues as the high price and the relevant patent fees, which will take time to negotiate.

(China.org.cn July 18, 2008)

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Blu-ray eyes the China market
When Toshiba announced that it would cease supporting HD in Feb., the 7-year-long format war between HD and Blu-ray effectively came to an end. The focus for Blu-ray manufacturers now turns to the next huge world market.
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