Posted by: ESSEN Patent & Trademark Office
Practice Area: Patent    Country: China    Publish Date: 07-Sep-2009

China's home-grown blue-laser optical standard CBHD (China Blue High-definition Disc) players have been outselling Blu-ray (BD) players, which is reviving a format war in the high-definition DVD market. The market share of CBHD players is 3 percentage points higher than that held by BD players, Taiwan's Digi Times reported recently, citing
industry sources.

That has brightened prospects for CBHD. Early last year, the Blu-ray Disc Consortium, a group of 100 technology and media companies led by Sony, declared victory over the HD-DVD format mainly developed by Toshiba. According to Japanese media reports in July, Toshiba will switch to Blu-ray by the end of this year. CBHD was seldom viewed as a serious rival.

However, a low-pricing strategy seems to have helped CBHD vendors gain market share over Blu-ray in China. A CBHD player sells at 2,000 yuan to 2,500 yuan, and a CBHD movie disc sells at 50 yuan to 70 yuan. By contrast, a BD player usually is priced at 3,000 to 4,000 yuan, and a BD movie disc can cost more than 150 yuan.

British newspaper The Times reported that analysts believe CBHD could mount a serious challenge to Blu-ray. "You are looking at a technology that comes with the backing of the Chinese government and has the power to win the support of the big studios if they sense it is a way to make money in China," Atul Goyal, a technology analyst at CLSA was cited by The Times as saying. "Everyone thought the format war was dead, but it is clearly still alive," Goyal said.

CBHD, if it could successfully challenge Blu-ray, could help China shed its status as a technology backwater although the country has become a global manufacturing hub and is exporting goods to every corner of the world.

Chinese DVD player makers typically have to pay royalties of more than $20 for every machine to patent holders such as Philips. Stung by the high royalties paid to foreign technology vendors, the Chinese government has been giving strong backing to a number of homegrown technology standards such as CBHD, next-generation mobile phone standard TD-SCDMA and a wireless encryption standard called WAPI.

Sales of CBHD players and discs are now still limited to China. However, if developers gain wider industry support and promote the technology globally, it will have a chance to woo international buyers.

"They (CBHD) are taking over the world. I personally think that a cheaper version is spot on," an Internet user named John Houghton wrote in a message left on The Times website. "How can companies believe that superior technology and great viewing are the only important factors? Personally, I would love to watch films in great quality, but what
I won't do is pay hundreds of pounds for the player and then 25 pounds per film," Houghton wrote.

Warner Bros, which is considered a key force in deciding the film format war, has committed to supporting CBHD. In January 2008, Warner Bros announced plans not to support HD-DVD and switched to Blu-ray. The studio has said it will launch 100 titles on the CBHD format by the end of this year. The Times report said at least one other big Hollywood studio is considering supporting for CBHD, but did not reveal the company name.

Industry observers said the huge potential of the domestic market will likely help CBHD grow into an internationally competitive format to challenge Blu-ray. It is estimated that Chinese people now own about 27 million high-definition TV sets, and that number is projected to reach 72 million by 2011.

The high-definition DVD player market is estimated to be worth billions of dollars.

(Source: SIPO 2009-08-03)