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The HD media market has been struggling for some time now- With such an exciting beginning: promises of "a digital media revolution", "Crystal Clear Images" with "unmatched quality and sound". As the market shifted up a gear, we all bore witness to a pitch product battle between Sony and Toshiba bringing back the ghosts of Betamax and VHS. Sony, emerging victorious felt the road ahead was clear.

However, in China, a resurrection was brewing in the form of China Blue High Definition Disk (CBHD). Toshiba have given the company the licensing rights to HD DVD with hopes of becoming the world leader in HD technology in the near future. How do they know this? in China CBHD players are outselling blu-ray by nearly 3 times, costing a quarter of the price (Times).

Where Did it All Go Wrong?

Conceived by Sony in times before economic slow down- It was thought with HDTVs becoming much more common, upscaled content would be needed on optical media. Sony believed they had fallen upon the fool proof formula seen in the glory days of DVD adaption.

In creating their own brand, the company predicted billions in revenue, dizzying heights for their ailing CD business and a complete stop to piracy. It was a gold rush, how could it possibly fail?

What Sony didn't account for was the global belt tightening that has occurred in the last 12 months. The problem? why pay extra money for a slightly sharper picture?

Big Trouble in Little Chinatown

Commanding the HD optical media market is a much needed boost for the country: The current slowdown has hit the economy hard- unemployment is rife and growth non-existant. To top this off, Blu-Ray royalties cost Chinese manufacturers huge amounts of money rendering their pricing uncompetitive.

CBHD would alleviate these problems - Royalty exclusive, Locally manufactured, cheaper products would open up HD content to the restless masses. The situation is win win for the Chinese Government.

What about the rest of the world? English is the number 2 language in Asia so English-language CBHD's will be available in some form. It is safe to say that players and disks will most likely be readily available on Ebay by Chinese vendors, and not in the too distant future. After all, who could resist a HD flick for the price of a DVD?

Everyone's Happy, right?

Toshiba have effectively done the impossible- HD DVD will rise from the dead. Instead of the company taking huge losses on their multi billion dollar investment, CBHD will bring the company incremental revenue from royalties, not to mention, a sympathetic ear from the Chinese Government.

China also feels the benefit of this partnership. Blu-Ray has had a low uptake due to its high cost, so introducing a value driven competitor in what was thought to be an over-expensive, one horse race is bound to create waves both in China and around the globe.

The next opportunity comes in CBHD vendors spotting the potential for writeable CBHD. Many consumers are desperate for something bigger than DVD but cheaper and more compatible than Blu-Ray. This demand should not be ignored.

The big loser therefore comes in the form of Blu-Ray, effectively history repeating itself for Sony. They have misjudged the market, once again opting for quality over price. In fairness, Blu-Ray had potential (much of it thanks to Playstation 3), but it may be time Sony 'Blu' this one off.

Learn more about this author, Matthew Foster.
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