Is it going to be DVD or EVD?
First it was BetaMax versus VHS, then it was CD vs DVD. It looked like the next format war was going to be HD-DVD (supported by Toshiba, Sanyo, NEC) versus Blu-Ray DVD (Sony, Panasonic, Sharp, EA and Disney).
The education market is just like the consumer – it doesn’t really care who wins the format wars, so long as it gets the products it wants in schools, colleges and homes. What we had all forgotten was the sleeping dragon called China. It’s a huge market and the Chinese have never been thrilled with the licensing fees they pay to make DVD players. So rather than working to Western standards and paying money to foreign companies for their IP, Chinese companies came up with the Enhanced Digital Versatile Disc (EVD) format.
Work on EVD started back in 1999 with the format officially announced in 2003. Unfortunately, litigation between On2 Technologies and Beijing E-World that started in 2004 held up the rollout of the EVD format. This year 19 of China’s 21 DVD manufacturers agreed to switch totally to the EVD format by 2008 and in December launched 54 new EVD players.
This is a serious issue for companies who want to enter the Chinese market with their education content. Do they simply adapt their existing DVD content into Mandarin or do they need to make an EVD version? The EVD debate also highlights a shift in China’s economic policies towards building competitive advantage by using locally developed, rather than Western, intellectual property (IP) standards. The ability to develop valuable IP normally correlates to educational investment, although in the case of China the issue of local standards seems to be as much about exercising political control over technology as it is about competitive advantage.
A good example of this phenomenon is China’s implementation of its own WiFi encryption standard that no-one else in the world uses (it’s seen as inferior). We suspect that the drive to set local IP standards is also for the Chinese government to achieve a tangible R.O.I. from their massive investment in education.