China to develop own DVD format

For the second time in two years, China has announced it will develop its own next-generation DVD standard to avoid paying hefty licensing fees to foreign companies, which adds up to about 40% of the production costs, state media reported. The new standard will be based on, but incompatible with, HD DVD, which is being promoted by Toshiba Corp. and Universal Studios, Intel Corp., and Microsoft. The Chinese standard is not expected to reach markets until at least 2008 and, if adopted, it could add a new wrinkle to the battle between HD DVD and the competing Blu-ray Disc formats, over which one will become the dominant new DVD standard.
About 80% of DVD players worldwide are made in China.