A Japanese TV station broke a major piece of news on the progress of China Blue High Definition (a China-grown competitor to Blu-ray) in the China market last week, but the English-language technology press, through a translation mistake, misreported the news. It turns out that CBHD penetration in China appears to have hit a staggering 30 percent, in only a few months on the market.

The story, from TV-tokyo.co.jp, features text and video, and on perusing a Google translated version of the text, and spotting the number "6" next to "DVD," "3" next to "CBHD" and "1" next to Blu-Ray, one site reported that CBHD had "a 3% market share lead on Blu-ray." A number of other publications picked up the story and reported similarly. One even went so far as to claim CBHD dominance in Japan. A more accurate translation obtained by Ars from professional Japanese translator Camellia Nieh shows that the true story is far more interesting. TV Tokyo visited Gome, a major retail chain in China, where CBHD discs and players were flying off the shelf, while Blu-Ray players and discs languished. They also visited a factory for one of the largest CBHD manufacturers. Sources in these companies tell TV Tokyo that, in the China market, CBHD already constitutes some 30 percent of all disc players sold, while Blu-Ray accounts for 10 percent, similar to its penetration in the USA. DVD is responsible for the remaining 60 percent. That China has achieved 30 percent CBHD penetration, the sources say, reflects the strength of the format, as well as the determination of a nationalistic Chinese government and industry seeking to avoid foreign licensing fees on DVD and BD technology and make a greater profit on domestic sales.

At the retail store, a pretty shop girl (some things don't need translation) tells TV Tokyo that while the players are more expensive than DVD players (almost $300), the discs are cheap, and she expects the format to spread rapidly because of a marked difference in quality between DVD and CBHD. Retail cost of CBHD discs worked out to about US$7.40, while Blu-Ray discs cost US$29.60—close to what they do in the USA.

At the CBHD factory, owned by Shanghai United Optical Disc corporation, a joint consortium between China Record Shanghai and Japanese Memory Tech, managers expressed excitement over CBHD. They said that while the components of a CBHD player are more expensive, the homegrown format, with some technology licensed from the defunct HD DVD players at a bargain, avoids about $21 in licensing fees on each player compared to DVD, and even more compared to BD, leaving a much higher profit. Meanwhile, the discs are almost as cheap to press as DVDs. They expect to be pressing over a hundred titles in CBHD within the year, and hundreds next year.

The ultimate spread of the new format will be controlled partly by its adoption by American movie studios. Of the six major studios, only Warner Brothers is currently shipping its library on CBHD, leaving WB titles and domestic Chinese films as the only legitimate CBHD content. Of course, content from other studios may well end up on the new format, since commercial piracy is widespread in China. If penetration rises as rapidly as it has so far, nearly the whole Chinese market may transition in a matter of a year or two, leaving hundreds of millions of players ready and eager for cheap, available American films. Given this, content providers may be interested in making at least some money off the CBHD distribution of their titles, and sign with CBHD defensively.

Indeed, if the CBHD scaleup is so rapid, and costs so low, why not take the new format beyond China's shores? The engineer interviewed at the CBHD factory believes there's a strong market for the player in other emerging countries, and that the new format could come to dominate HD sales in other parts of the world, and possibly even in western strongholds where Blu-Ray is currently the only physical HD format in town. If this happens, it would represent a major victory for China, which has, in the past, mostly licensed technology from other countries. Building on its success with Super Video CD (SVCD) in the domestic Chinese market, the Chinese manufacturing machine would have begun to flex its muscle with Chinese IP, abroad.