Chapter 626 – Industry Standards race
Wind and Rain Electronics introduced the single side double layer model and technology. Single side double layer disc was very different from Toshiba’s Double side double layers technology. The Double side double layers had more storage than single side double layer technology.
But the single side double layer encoding technology was simple and a lot easier to introduce to the market. Feng Yu and Philips both felt the storage for the disc does not need to so high. Single side double layer structure was enough for now.
In the future, the discs for movies, music, games, etc. were mostly using single side single layer structure. It was because a single side single layer structure storage would reach more than 5 gigabytes. It was more than sufficient to store a standard movie or even a high definition movie!
Movie collections? That’s after the year 2000. Some movies became popular and introduced part 2, 3, and so on. Movies collection of the same series appeared then. But there was a lot of pirated version, and most of the pirated movie was produced in China.
DVD was still not applicable for drama series. It was the movie companies that wanted to use DVD. They need the DVD to distribute their movies, and consumers were willing to buy their products. The movie companies usually do not own the rights for dramas.
Most of the dramas were aired on TV. If the viewers like the drama, the TV station will air a rerun of the drama. Movies were seldom air on TV as the rights were too expensive. The rights cost almost the same as a drama series, but a movie was too short. The TV station could not even earn back the amount they paid for the film.
In the future, CCTV movie channel will be the biggest buyer of movie rights. Many people shoot movies because they wanted to sell the rights. They can sell to VCD companies, CCTV movie channel, etc. This was because the producers could not make money even when the movie was aired in the cinema.
So, Feng Yu told Thomas that the Double side double layer structure was a waste. The cost was higher, and the technological requirements were higher. It was hard to implement it too. Even the single side double layer structure was not required now. When both companies were researching on single side double layer structure disc currently, they should continue to upgrade the encoding technology. Their aim should be using single side and single layer disc to meet the demands of the cinema companies.
Of course, they also need to research on high storage disc. In the future, the blue ray high definition movies would be too big to be stored on a standard disc. One blue ray high definition movie was more than 20 gigabytes!
But currently, high definition movies do not even exist. Who would they sell this high storage disc to? The VCD or DVD players had to be connected to the TV. The resolution of the TV in this era was only so high. Even if there were a high definition movie disc, it would not be shown on the TV!
After Thomas returned to Holland, Philips immediately call for a press conference to announce they would use Wind and Rain Electronics, Single side double layer structure disc and technology, to enter the VCD market.
This news caused an uproar in the consumer electronics industry.
Many companies were still laughing at Wind and Rain Electronics when they introduced this format and technology. A small electronic company from China wants to set the industry standards? Who would listen to you? We will be the one who would set the standards, and you must follow our standards.
Toshiba was one of those companies, and Sony announced that they will be collaborating with Toshiba to set the DVD players standard.
But now, Philips, a world-renowned electronics company, had announced they will abide by Wind and Rain Electronics standards. This means they were helping and supporting Wind and Rain to seek profits.
Everyone knows that the one who set the industry standards will be the industry’s leader. Philips had recognized Wind and Rain Electronics as the industry leader?!
But everyone immediately knew Wind and Rain Electronics had authorized Philips to use their patents. With Philips helping to set the industry standards, other companies will also agree to follow it.
PolyGram, a record label under Philips had started to collaborate with Wind and Rain Electronics. They sold the rights of their music at low cost to Wind and Rain Electronics and Wind, and Rain Electronics will produce music and videos VCD according to the new format.
Many other companies, including movie companies, record labels, etc. which had worked with Philips previously also announce that they will use Wind and Rain Electronics standards.
Toshiba and Sony start to act. They had joined hands to set the industry standards. They firmly believe that they had bigger storage and more advanced technology. Their disc should be more suitable for the industry. They also start to contact more movie and music companies to introduce their format.
Toshiba and Sony had thought that they would be able to suppress Wind and Rain Electronics when they join forces. After the industry standards were set by them, their related technologies’ worth would increase. Wind and Rain Electronics will waste time and funds for developing those technologies.
But Toshiba and Sony did not expect Philips would come into the picture and collaborate with Wind and Rain Electronics!
It was frustrating for Toshiba. Toshiba had approached Aiwa and Wind and Rain Electronics to try and get the authorization to use the VCD patents. But their request was rejected!
Many other companies like NEC, Fujitsu, Panasonic, etc. had contacted them too. All of them were also rejected and did not get the authorization!
Big companies do not dare to use other people’s patents illegally. If they were caught, they would be punished heavily. The company would have to surrender their profits from the products which had used another company’s technology. It will also affect the company’s reputation.
Why Feng Yu did not sell the authorization to those companies? Authorizing, those companies were also profitable.
There were two reasons. First, Feng Yu was waiting for MPEG-II technology to be developed. He does not want other companies to develop this technology earlier than him.
Secondly, those companies were all Japanese companies!
Feng Yu does not want the Japanese to make profits from this technology.
Now, Feng Yu had asked Jiang Wanmeng to contact other companies. They were preparing to have a large-scale patent authorization for the first generation of MPEG technology and the VCD player technology.
Feng Yu has the most advanced technology in his hands, and he wanted to make the most out of his older technologies. This was what many big companies were doing. This way, the company could make more money and also prevent other companies from overtaking them.
Many companies focus on developing new technology and patenting them. These companies will not produce any products but make use of authorizing their patents to earn money. For example, Ericsson will stop making mobile phones in the future. But Ericsson owns lots of patents in the mobile phone industry, and they used it to make money. Their annual profits were even higher than some mobile phone companies.
When Toshiba and Sony were looking for companies to use their formats, Pioneer and Hewlett-Packard announced that they will collaborate and introduce a new standard of DVD, which will be rewritable.
Another two electronics giant were cooperating and want to set a new direction for the DVD industry.
You all are fighting to set the encoding standards for single side double layer and double side double layers structures for encoding standards? We will develop a new rewriteable encoding standard. We can also make money from this.
Now, there were 3 types of DVD standards in the market. All of which were introduced by world-class companies, and it was a stalemate.
The funniest part was there were no DVD players in the market yet! The fight for the industry standards was ongoing, and DVD will not be popularized.
Feng Yu got to admit that he was pissed by these. These companies could not make money, and they do not want others to make money too. Let’s see who will last until the end!