Chinese Involvement Could Trigger HD DVD Price Plunge

If ever there were a time for either Blu-ray or HD DVD manufacturers to play a trump card, now may be the time, and this could be the one: A consortium of Chinese university engineers and government officials, in cooperation with a Chinese video standards group that includes globally recognized manufacturers, plus the DVD Forum, have come to an agreement on a standard specification for a blue-laser disc mechanism and format specifically for the Chinese market.

The new group will be called the China High Definition DVD Industry Association, or just CHDA, and this is not the last you will hear of it.

The agreement announced early this morning US time is critical, because up until now, China has been reluctant to participate in the high-definition video disc industry unless it had an opportunity to bring its own video encoding standard to bear: AVS, a codec which incorporates elements of MPEG-2, but is otherwise different from -- and some argue, better than -- other MPEG encoding standards and VC-1 in important respects.

Now, the DVD Forum's involvement has evidently made it possible for Chinese manufacturers to produce components that play blue-laser, high-def discs using the Chinese national standard, though which are fundamentally compatible with HD DVD with only minor adjustments.

The upshot here is this: The same country that has literally upset the LCD TV industry on its ear in just the last year alone, now has the specifications it needs to do the same with high-def video discs. While it makes so-called CH-DVD players for the home market (the name is subject to change, the new consortium says), China can also produce HD DVD players for the rest of the world, at prices that can best be described as Chinese.

All of a sudden, the incentive for studios such as Warner Bros. to call a halt to exploiting new disc technologies its own engineers had patented, and for Paramount to jump ship and abort its Blu-ray support, may be becoming clear.

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