China adopts EVD as tactic to avoid DVD royalties

New format sidesteps DVD royalty structure; “national format” could impact deals with U.S. moviemakers
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China’s Ministry of Information Industry (MII) has announced the adoption of the domestically-developed EVD (Enhanced Versatile Disc) as the country’s national DVD-player standard. The ministry intends EVD to be a means of freeing Chinese makers from having to pay DVD royalties to the 3C 6C patent royalty alliances. A number of China-based makers of DVD players are paying a royalty of $10 per exported DVD player to the two groups of patent owners. The significance is that diminished royalties could crimp R&D and marketing of next-generation disc media that the audio industry will rely upon to handle high-resolution projects. Furthermore, content companies like Universal are in the process of forming joint ventures with Chinese companies. The decision to make EVD the equivalent of a national media format would significantly affect the economics of any such deals.

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