Extraordinary Genius - Chapter 629
Chapter 629 – VCD brands
The companies that bought the authorization couldmanufacture VCD players long ago. But the patent protection was not over, andthey could not produce the VCD players.
Although the companies were paying high fees for theauthorization, it was still acceptable as there were still profits. Mostimportantly, companies did not want to miss this opportunity. They could alsomanufacture VCD players and at the same time, research on new technology. Ifthey could develop newer technologies, they might get more profits in thefuture!
Toshiba also bought the patent authorization. Almost all thebig Electronics MNC got the authorization. Some of them purchased theauthorization by themselves, and some were cooperating with others. Sony wasthe odd one out. They were kicked out from the start.
Norio Ohga scolded Sony’s representatives when they got backto Japan. Sony had wanted to enter the Chinese market with their VCD players.They had prepared the production lines in their factories, and it was wasted!
Sony was not eyeing the profits from VCD players. Theywanted to train their staffs to prepare for the upcoming DVD players. The DVD primarytechnology belongs to Feng Yu, but if Sony were able to set the industrystandards successfully, Wind and Rain Electronics would still have to give into them. DVD disc had higher storage and better picture quality. It can even beused in computers. These were what Sony was after.
That’s it. Sony cannot manufacture VCD players, and the warfor the DVD industry standards was still ongoing. They had invested a lot andgot no returns. This was a massive loss for the company!
But Sony had partnered with Toshiba to set the DVD industrystandards. So, Norio Ohga went to look for the president of Toshiba personallyto discuss if they could work together to produce VCD players.
Sony had prepared the production lines, and they could useit to manufacture VCD players. They only want a share of the profits. If theywere able to develop the DVD players together, then their earnings might evenbe higher than Wind and Rain electronics.
Toshiba considered for a while and agree to cooperate withSony. Toshiba had many dealings with Sony and did not want to offend them.
But both companies argued over the name of the brand forthis VCD player. Toshiba did not agree to name it as Toshiba-Sony. Even ashorten name like Toshi-sony was rejected. Toshiba insists on using its brand.Sony had no choice but to give in. In the end, both parties came to anagreement. Sony will own 40% of Toshiba VCD players, and they also had toprovide the production facilities, workers, and funds.
Toshiba VCD players entered the market. But in Japan, theyfaced fierce competitions from Sharp, Fujitsu, Panasonic, NEC, etc. All thesetop electronics companies also introduced their VCD players into the market.
The production for Toshiba VCD players was low due to theirproduction capabilities and higher efficiency. But the rest of the companieswere strong too. The production cost for companies was about the same. All ofthem could afford to lower their retail rates to attract consumers.
All this while, AIWA company which had monopolized the JapanVCD market was quiet. They did not even lower their retail prices.
Not only in Japan, but many VCD brands also appeared inEurope, America, and other regions. Even in China, new VCD brands wereappearing.
Feng Yu does not care about other countries. But he made itclear to the 4 Chinese factories. You all can manufacture VCD players, but ifyou all want to lower the retail prices to have a price war, then Wind and RainVCD and Aiwa VCD will also enter the price war. When it happens, you all willbe finished!
Of course, Feng Yu did not ask them to set retail priceshigh. Feng Yu told them that Wind and Rain Electronics and Aiwa Electronicsmain target were overseas. But if anyone of them wants to create problems forthem in their backyard, then don’t blame him.
Feng Yu will let their VCD players remain on the shelves andloses all their deposits!
Those companies that bought the VCD authorization had toplace deposits. The companies had to sell at least 10,000 units annually. Windand Rain Electronics set this as the benchmark and collected deposits fromevery company. If any company could not fulfill the target, the deposit will beforfeited. The authorization for the second year will end.
The deposit for each company was 500,000 USD. There were 46companies. Just the deposit alone, Wind and Rain Electronics collected 23million USD. It was used to expand their production lines to manufacture themore advanced Super VCD!
Not only Wind and Rain Electronics, Aiwa Electronics, andAIWA company’s factories were upgrading their facilities and expanding theirproduction lines.
Now, everyone agreed with Feng Yu that the era of VCD hadarrived. Feng Yu’s Super VCD player will be accepted easier by the consumers.The Super VCD player had more storage, better picture quality, and had morefunctions. Wind and Rain will continue to lead the direction of where theindustry is heading and get the most significant market share.
Although the VCD market share was taken up by many otherbrands, the market was opened up. Wind and Rain Electronics’ profits increasedfurther.
Many companies who were manufacturing VCD players werecurious why Philips, who was cooperating with Wind and Rain Electronics, did notintroduce their VCD players. They should have patent authorization.
Also, other than China, the VCD player prices in differentmarkets started to drop. Wind and Rain VCD player and AIWA VCD player saleswere declining. Were they giving up on those markets?
This should not be the case. The companies felt that it wasWind and Rain Electronics misjudged the market and gave out too manyauthorizations. This caused their poor performance of their brand of VCDplayers.
Wind and Rain Electronics had made a mistake. They lost theprofits from VCD players for some patent authorization fees.
The happiest company was Sony. Serve you, right! You thinkyou could snatch the market shares from us? You all were only able to seize themusic player market from us because we were focusing on the movie and gamingindustry.
Now, we have taken over your VCD market share. Where is theSuper VCD you are boasting about? Not yet developed?
The more prosperous the VCD market, the happier Sony was.Although Sony did not make money from the VCD players, Sony’s Columbia Picturesmovie rights increased in value.
Sony might cooperate with Toshiba for the VCD players. ButSony produced the VCD discs themselves. Sony got high profits from the sales oftheir movie VCD discs. They also owned many movie companies and record labels.Sony was the real winner of this VCD war!
Feng Yu had asked Fu Guangzheng to buy as many movie rightsas possible. But some rights could not be purchased. Those companies that wereclose to Sony refused to sell their rights to Fu Guangzheng.
But Feng Yu was not worried. His partner was Philips.Philips also has its own record labels and lots of connections. Feng Yu wasable to make use of this.
The world’s largest VCD disc producer was still Wind andRain Electronics. The factories not only need to manufacture VCD discs, butthey also had to produce Super VCD discs which will meet the DVD player format.
When the Super VCD player was launched, these companies willbe crying their hearts out!
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