Blu-ray eyeing China

Via Content Agenda

After initially turning a cold shoulder to China, the Blu-ray Disc Assn. is warming up to Chinese OEMs and consumers, BDA spokesman and Pioneer Electronics senior VP Andy Parsons tells Content Agenda.

The BDA has begun formal evaluation of AVS (Advanced Video System), a Chinese-developed video codec, and DRA (Digital Rise Audio), a Chinese audio format, for possible inclusion in Blu-ray players made and sold in China.

The decision to evaluate the codecs was announced at a press conference held in Beijing on Sept. 28.

If adopted, the move would put Blu-ray on par with HD DVD, which has already approved the use of AVS in a Chinese version of HD DVD currently slated for launch there in May 2008.

Parsons says no decision has been reached yet on whether Blu-ray players incorporating the Chinese codecs would be limited to the Chinese market, as the DVD Forum has sought to do with China-only HD DVD players, or they could be exported to the rest of the world.

"We don't know where we would draw the line, or even if we would draw a line," Parsons said. "Generally, we haven't tried to regionalize the format."

Either way, China has become a major strategic focus for the Blu-ray camp, according to Parsons. "Clearly, we're putting a lot of effort into promoting the format in China," he said.

The new emphasis on the Chinese market and Chinese manufacturers represents a bit of a turnaround for the Blu-ray camp. The format's developers were initially reluctant to license the technology to low-cost Chinese CE makers, fearing a rapid decline in prices would make it harder to recoup their investment.

But with prices now falling for both high-def formats, Blu-ray has little choice but to embrace low-cost manufacturers.

"We would have been foolish to think that limiting the involvement of Chinese manufacturers is something that could be sustained for a long time," Parsons said. "Initially it made sense to keep margins high to try to recoup some of the investment that went into the format, but we always knew that as we got into more competitive price points we would have to look for ways to take some of the costs out."

Parsons also says Blu-ray is unwilling to concede the Chinese market to HD DVD.

"There's this perception that China has somehow 'selected' HD DVD, but that's just wrong," he said. "First of all there's no one entity to 'select' anything, and it didn't come from the government. There was a consortium of groups, which included the government, that pressed for a Chinese version of HD DVD, but at this point that's still a proposal. We haven't seen any product."

According to Parsons, "there's a lot going on over there right now, with both formats."

One thing the Chinese government has made clear, however, is that any high-def format sold in China will have to support AVS, which the government sees as crucial to China's bid for technological and IP parity with Japan, the U.S. and Europe.

So it's a fair bet that the "evaluation," will go well, especially since most members of the BDA board also sit on the steering committee of the DVD Forum, and would be already familiar with the technology from its incorporation into HD DVD.

Parsons couldn't say how long the evaluation is likely to take.