DVD On Its Last Leg in China?
We have received some rather disturbing news from CBINews, it seems more pressure has been put on the Chinese DVD market. Manufactures now have to pay over $20US per patent in fees to distribute DVD Players in the region. In turn royalties and decreased profit prospects await Chinese companies.
This doesn’t mean DVD’s will completely disappear from the Chinese market over night, instead the industry will shift more of it’s focus on CBHD (The CHDA was kind enough to remind everyone) due to low royalties. Many will claim this was bound to happen regardless, pressure on the DVD industry will only increase CBHD’s “domination” of the market.
I predict this will have a negative impact on Blu-ray in the region, if consumers see the horror that is “foreign royalties” would they really want another format with potential to develop into the monster that is “DVD patents”? Regarding foreign support, studios will be forced to fall in line with the dominate medium in the region if the piracy issue is dealt with and demand requires it.
How does this compare? In 2001 China was paying $5 in patent fees, shocking isn’t it? Since then alternatives were brought to market (the gem in the pile is no doubt EVD) yet all of them failed to take DVD’s market share. How much more can the Chinese market take?
This won’t be the first time foreign patents have affected consumer goods in such a way, HDTV’s that exceed 13 inches must pay between $30-50US in patent fees in China. To avoid this, the government is pushing local initiatives, it gives “buy home grown” a new meaning, don’t ya think?
Just for a comparison, fee’s in North America are under $10.