China Preps DVD Rival Format Push

Electronics manufacturers in China may be gearing up for another attempt to establish a proprietary optical disc format, although some analysts said such a move is unlikely to succeed.

The DVD player makers plan to switch to enhanced versatile disc (EVD) in an attempt to avoid paying patent royalties on the DVD format, according to published reports. The world’s largest producers of DVD players, Chinese electronics companies would use the format instead of standards such as MPEG-4.

Last week, 20 top manufacturers including Haier announced their plans to switch from DVD to EVD entirely by 2008, according to a report in China Economic News.

Getting foreign entertainment companies to adopt the new standard would be an uphill battle, however. China has attempted to introduce its own standards before, including super video compact disc (S-VCD) in the mid-1990s, and its own advanced telecommunications standard, TD-SCDMA. Both faced foreign resistance and a lack of broad support even within China.

The move is most likely an attempt at reducing the royalties, according to industry observers. Chinese DVD manufacturers first made a push with EVD in 2003, but months later no players had appeared on the market in China or abroad. Consumer acceptance of an entirely new format will be difficult in China and overseas.

“Unless Chinese DVD manufacturers are prepared to sacrifice the global market and the Chinese market to manufacturers in India and elsewhere, they cannot afford to make a wholesale shift to EVD production at this time,” said David Wolf, chief executive officer of Wolf Group Asia. “For that reason, it’s unlikely to take place.”

Kristian Kender, editor of China Media Monitor, a Beijing-based industry publication, said: “It’ll be pretty hard on a global scale, because the DVD format is so entrenched. On the other hand, they can make a good argument that it makes it much harder to pirate material.”

“It will be difficult for them to get international firms to come on board, but the Chinese DVD market is so huge on its own that even if this standard is not adopted outside of China, the home market is enough to support the rollout.”

-Steven Schwankert, IDG News Service (Beijing Bureau)