China offers own alternative to DVD format

BEIJING -- Seeking to compete on its own terms in the lucrative entertainment industry, China announced a government-funded project Tuesday to promote an alternative to DVDs and "attack the market share" of the global video format.

The rollout of the project, known as EVD, or enhanced versatile disc, was timed to coincide with the beginning of what China calls the "golden sales" period -- known elsewhere as the Christmas shopping season.

EVD would give Chinese manufacturers and technology consortiums a homegrown platform to sell and build on. It also is aimed at relieving Chinese DVD producers from paying licensing fees to companies that hold patents to the DVD format.

It was not immediately clear if any elements of EVD would help China battle the intellectual-property theft it has been promising to eradicate since joining the World Trade Organization in 2001. Pirated Hollywood movies on DVD are still everyday sights on the streets of Chinese cities.

Nor did the Chinese government say whether it had contacted major film producers about eventually releasing their movies on EVD. That would be a pivotal factor in any new format's success.

A spokesman for the Motion Picture Association of America did not immediately return a call seeking comment.

Development of the new, high-definition compression format has been sponsored by China's State Trade and Economic Commission and its Ministry of Information Industry.

The official Xinhua News Agency said organizers hoped EVD "would attack the market share of DVD," the acronym for digital video, or versatile, disc.

Research on EVD began in 1999. It was developed by a company called Beijing E-World Technology Co. Ltd. using video-compression technologies licensed by On2 Technologies, an American company.

Because large parts of China's economy are controlled by the state, it is in a better position than most countries to ensure such new technology will take hold in the domestic market.

More uncertain is the international market, which has moved toward DVDs as the standard.

On the surface, it would seem that EVD's international impact could be huge, because China makes about 60 percent of the world's DVD players, said Vamsi Sistla, senior analyst with Allied Business Intelligence, an Oyster Bay, N.Y.-based research firm.

But there is no guarantee that standards bodies and Hollywood will endorse EVD, meaning that EVD machines for the forseeable future will need to also play DVDs -- thereby forcing Chinese manufacturers to keep paying DVD royalties, Sistla said.

Also, while EVD is designed to be better than DVD at recording and showing finer-quality images for high-definition TVs, the HDTV market remains small -- and already is the focus of competing standards, such as Blu-Ray and HD DVD-9, developed by leading electronics companies in Japan, Korea and Europe.

"It's too premature at this point to feel that EVD is going to change the entire ball game," Sistla said. "There is no guarantee for success."

In China, though DVD is the upper-end standard, many people still use VCDs, or video compact discs, a differently coded format. VCDs never caught on in the United States, where a shift from VHS-formatted videocassettes to DVDs has been under way for several years.

Most DVD players play VCDs out of the box as well.

The government has said EVD players will cost about $240, though the cost of technologies generally drop as they are widely accepted. In comparison, a domestically produced DVD player costs about $85.

EVD's emergence has not only economic but cultural roots. It is consistent with communist China's broader intentions -- carving out a unique place in the global economy, whose standards it complains have been defined by the West.

As it moves further from its planned-economy roots and deeper into its market-oriented experiment, China has made a point of saying it wants to develop Chinese answers to modern problems. EVD fits that goal.

The Communist Party newspaper People's Daily said last month that EVD will let domestic disc-player manufacturers "shake off their previous dependence on foreign technologies."

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AP Technology Writer Brian Bergstein in New York contributed to this report.