Extraordinary Genius - Chapter 645
Chapter 645 – The era of two formats
All the companies had agreed to Feng Yu’s demands, and FengYu would naturally give them some benefits. If not, no other companies wouldwant to cooperate with Feng Yu in the future. If all these companies were towithdraw from the DVD Forum together, then each of them only has to compensate40 million USD. If these companies go all out for revenge against Wind and RainElectronics, Toshiba and Sony will benefit from it.
“From next month onwards, the authorization fees for the VCDwill be lowered by 50%, and in the future, the fees will be lowered by 5 USDevery year.” Feng Yu announced.
Even if the authorization fees were lowered by half, it wasstill 25 USD per unit, and the companies had to pay Feng Yu for the next 5years. Actually, these companies will not need to pay Feng Yu for the next 5years, DVD will replace VCD players within the next 3 years.
This condition seems beneficial to these companies, but itwas useless. Feng Yu had announced the reduction of the authorization fees byhalf and every year onwards, it will reduce further, what else could thesecompanies say? Reduce further? Why not ask for the authorization fees to bewaived? But which idiot would agree to this?
If these companies made this demand, that shows they lacksincerity to cooperate.
These companies could only accept this announcement, butsome Japanese companies were not happy. They made another demand. The VCDplayer prices cannot be lowered anymore this year. If it was reduced further,then all of them will have not profits and might even lose money.
Now, their profits for every VCD players after the reductionof authorization fees was about 20 USD. It was considered very low.
Feng Yu agreed. He was also not willing to let the VCDplayer prices drop further as it will affect his profits too. He also needsthese people to help him introduce his DVD standards. Also, he only agrees tomaintain the prices for this year. He could reduce the rates after this year ifhe wants.
Also, Feng Yu’s current primary focus was Super VCD players.The profits from Super VCD players were several times of VCD players, and itwas selling well. The second-generation of Super VCD players should be out nextyear, and VCD players will be obsolete soon.
If Feng Yu wanted to teach these companies a lesson, hecould lower the prices of Super VCD players. These companies will surely vomitblood!
But now was not the time. Sony and the other companies werestill going strong.
When the DVD Forum managed to attract, more than 30 world’s biggestconsumer electronics to join and set up their headquarters in China, Sony, andthe rest panic.
Why didn’t they receive the invitation for this DVD Forum?They were some of the biggest consumer electronics companies in the world.Which company was the organizer of this Forum?
The headquarters was set in China’s Hefei? That means it wasWind and Rain Electronics that started this organization. This small companythinks they can be the leader with those two patented technologies? Are thosecompanies stupid? Why would they join this organization?
When Sony and the rest of the companies saw the list ofmembers that joined this forum, they realized Microsoft and Tata were alsoincluded. What has the DVD got to do with software companies? Why were theygetting involved?
Although Sony and the rest of the companies do not want toadmit, after these companies formed the DVD Forum, they were isolated.
There were 3 types of DVD encoding formats and 5specifications. DVD+R/RW was from Wind and Rain Electronics. DVD-R/RW wasintroduced by Pioneer and Toshiba’s format was DVD-RAM. RW was still in thetheory stage, and it was still being developed, while RAM will be replaced byROM in the future.
Actually, AIWA company was still developing DVD-Audio. AfterDVD audio optic drive, Wind and Rain Electronics had been researching onDVD-video. These technologies were still in the development stage and could notbe introduced to the market yet.
So, DVD+R, DVD-R, and DVD-RAM were the formats in theindustry, and it was a race for the companies to make their format the industrystandard. At first, DVD+R was the weakest, and it had the least companiessupporting this format. Toshiba’s RAM format had the most supporters.
But now, everything was changed. DVD+R will become themainstream format, and the other two formats will slowly lose their support.
These opposing companies were already in an alliance againstWind and Rain Electronics. They were leading at first, but suddenly, the tideshad changed.
The only solution was for the two companies to cooperate andintroduce only one type of format. If not, they will be beaten by Wind and RainElectronics.
But here’s the problem. Which format should they use as theindustry standards?
Both parties had to work together, but for this cooperationto work out, it must be fair. Both companies were big companies and had goodtechnologies. There was no reason to give up their own format to supportanother company.
So, Toshiba, Sony, Pioneer, HP, and the rest of thecompanies met up for a discussion. All of them had only one aim. They want theother parties to give in and support their format.
These companies understood that if they were to go on theirown ways, they would fail. If they cooperate, they will be able to resistagainst Wind and Rain Electronics. The party who give in will fail.
Toshiba and Sony were working together, and Sony had a largedisc production facility. Also, Toshiba was one of the shareholders of WarnerBros., and Sony owns Columbia Pictures.
Pioneer also has a large disc production facility and had HP’ssupport. HP was the best in Laser technology. Also, HP was one of the world’stop PC company and needed the DVD drive.
Both parties started negotiating. This cooperation must befinalized fast as both parties need to decide on the format and standard torival those companies in the DVD Forum.
In the end, HP gave in under the condition that the DVDdrive technology must be authorized to them for free. Pioneer had no otherchoice.
To prevent being kick out of the game, Pioneer could onlyagree to introduce DVD-RAM format and give up on introducing DVD-R. But Pioneerwill carry on its R&D on DVD-R.
These companies had come to a conclusion and decided tofollow the DVD Forum. They will also set up an alliance of companies and namethis alliance as DVD Alliance. These few companies used their connections toinvite the rest of the consumer electronics companies to join this alliance. Theywill work together to develop this technology and fight against DVD Forum.
But the majority of the big companies had joined the DVDForum. They could only invite some second-rate companies. However, they stillmanaged to set up this alliance.
After the DVD Alliance was set up, they immediatelyannounced that they will continue to research and introduce DVD-RAM format.They also claimed that DVD-RAM was the best format in the industry, and theDVD+R format was not as good as theirs.
DVD Forum immediately retorted. There was a comparisonbetween both formats. DVD+R storage was 2.8G, and DVD-RAM’s storage was only2.58G. It was clear, which was a better format!
But these figures were derived from theories andexperimental labs. It still could not be mass produced. Both parties’technologies were still not completed. The format that was more popular withthe consumers will be the leading the pack and will be the most profitable inthe future.
So, the DVD industry had entered a two formats era.
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