With Blu-ray player pricing remaining quite high, China has decided to independently develop its own high definition format, red-ray, which has had some great success progress so far in its development, according to the Chinese research firm CCID Consulting. It has a significant price advantage over Blu-ray, particularly without all the high royalty charges associated with Blu-ray.
The main challenge China’s new red-ray format will face is attracting content providers to take on the format. This currently makes it difficult for it to build up an industrial supply chain to produce the discs and player components. One major problem Chinese manufacturers are facing is struggling to make profits on DVD player manufacturing, which has resulted in a significant drop in the number of DVD manufacturing enterprises from 830 in 2006 to just 480 in 2007, so they are hoping this new format will help the manufacturers. Despite this drop, China currently produces 94% of all players in the DVD market.
So far, 11 manufacturers have been reported to have signed up with the Blu-ray Disc Association, which will allow them to manufacture Blu-ray discs and players. This also means that when Blu-ray players hit the shelves in China this year, it will not have to rely on importing Blu-ray players. On the other hand, with this new red-ray format, it looks like the Chinese may start their very own format war, unless the red-ray format becomes unsuccessful in taking on content providers.