Brilliant Years 1991

Chapter 148 The Past and Present of VCD

In fact, when everyone shook hands and exchanged greetings and sat down, Cao Yukun didn't take it seriously, but as they chatted, he suddenly perked up - if Cao Yukun didn't pay much attention to what Jin Zhijian had just introduced about the image compression chip, but when the other party mentioned that he planned to use this newly developed chip to produce a machine that could play video images...

Well, not many days ago, Cao Yukun had just watched the video with Song Yuqian.

"VCD? Well... if you plan to set up a factory in mainland China, then you plan to sell it in mainland China?"

"Oh, so a disc can compress 90 to 110 minutes of content, a movie. So what? Oh, this kind of player... well, as far as I know, only a few wealthy families in mainland China have VCRs. Theoretically, you can sell shoes in places where people don't wear shoes. I think the VCD you mentioned still has a good market prospect."

"Oh, licensed to Texas Instruments for production? Sorry, I'm really an outsider to this. Anyway, the decoding chip you have is an exclusive technology. Don't companies like Sony have it? Yes, yes, that's right. I also think that a company like Sony, the industry leader, cannot possibly not have technology like image compression! Yes, I understand what you mean. Anyway, it's an exclusive technology!"

He did not dare to reveal any sign of being optimistic about this industry, and even acted as if he had no idea about the entire consumer electronics industry. He mainly listened and answered questions, and only occasionally interrupted to carefully collect the information he wanted to find out - Sun Yansheng actually already had a partner in the mainland.

The matter was not complicated. He had developed the MPEG image compression chip and possessed the technology. However, in the field of audio and video all over the world, the Japanese were basically invincible. International giants like Philips were completely unable to compete with them. Therefore, if he wanted to sell this technology, he could only go to exhibitions. As a result, he met a group of people who came from the mainland to visit the exhibition.

A researcher at some electronic research institute in Anhui Province, his name is Jiang Wanhai.

The two talked in depth for a long time, and almost hit it off immediately. They decided to open a factory in the mainland to produce a new type of home audio and video playback device supported by this decompression chip. Referring to Sony's CD player, they named this device Video Compact Disc, which is abbreviated as VCD!
Of course, Sun Yansheng had some money, but not much. Jiang Wanhai, who was just a researcher in mainland China, had even less money. He could only go to the government to solicit investment, but he probably didn't dare to have too high expectations.

Therefore, Sun Yansheng chose to come to Hongkong to raise money and attract investment.

This is crazy...

Cao Yukun never thought that he would encounter such a thing!
Of course, in such an era, or in fact in any era, things like this should be everywhere. From Jin Zhijian's attitude, it is not difficult to see that he should have dealt with similar investment-raising things before - for rich people, there is never a shortage of opportunities.

However, whether it is an opportunity or a pitfall depends purely on personal ability.

If one were not a time traveler, who could have known clearly that in the next few years, this new thing, VCD, would become a big hit in the inland area where the commodity economy had just begun to become active?
It just so happened that not long ago, Cao Yukun had just thought about this matter - analyzed the causes and why VCD was so short-lived.

It can be said that VCRs and videotapes dominate today's Europe and the United States, developed regions around the world, and among wealthy people in underdeveloped areas.

For this reason, giants in related industries such as Sony simply look down on products like VCD, which do not actually have any distinct technological advantages, and will never think of redesigning a new product to attack their own market.

Therefore, if something like VCD is produced and sold in America, it will almost certainly fail.

They simply cannot compete with the entire chain of VCRs, videotapes, licensed production of movies and TV series, and even videotape rentals that has already been fully established in those places.

A giant like Sony can easily strangle it with just a wave of its hand.

Even if we ignore it, the entire operating chain that benefits from the VCR and videotape industry will spontaneously boycott things like VCD, causing it to die out in vain!

But the mainland can.

Because the mainland is poor.

Until now, the domestic VCR market is very small, and large companies generally do not pay attention to this domestic market. The production of videotapes is also seriously lagging behind. Therefore, in fact, even if most families buy VCRs, they often face the problem of having no movies to watch. And if a large number of overseas legitimate videotapes want to enter, it involves approval, ideology and other issues, which is very complicated.

So in fact, in China, VCRs and videotapes have not yet formed an orderly functioning ecosystem at all - without an ecosystem, there will not be many actual beneficiaries.

Therefore, this market can almost be said to be completely blank and is a blue ocean market.

This gave VCD the opportunity to debut in the market.

However, with the development of the national economy, in the next ten years, the domestic residents' income will rise sharply in a very short period of time - call it inflation, or call it the social dividends of economic development finally spilling over to ordinary workers, it doesn't matter, the short answer is that everyone's wages are rising, and their consumption capacity is soaring!

Theoretically speaking, even if VCD had not appeared, in the next ten years, people in China who gradually became wealthy would definitely think about buying a VCR - it is a standard feature of wealthy families!

Twenty or thirty years ago, when people were so poor, the so-called standard equipment for wealthy families was at least a three-wheel drive and a ring. This kind of consumption was almost inevitable as income increased. Therefore, the arrival of VCD was just in time.

While Sony and other international giants were taking a nap, especially in recent years, America has actually been busy cleaning up these Japanese electronics giants, which made them somewhat unable to cope. Suddenly, the domestic economy began to develop rapidly, and people suddenly became rich, and VCD happened to appear - so everyone hit it off, and this market rose rapidly.

Of course, looking back at history, this period of development was actually a somewhat abnormal prosperity.

Well, although Cao Yukun was born in 1992 in his previous life, there was actually almost no decent copyright protection in the country even in the 2000s, so when he watched discs at home as a child, almost all of them were pirated - so in fact, the rise of VCDs is also closely related to the sudden rise of piracy.

The emergence of a large number of cheap pirated discs and pirated film sources will inevitably lead to a rapid prosperity in the VCD market. After all, a large number of wealthy families have consumption needs in cultural and entertainment.

But to be honest, although this would greatly damage the interests of related film and television companies, it would not actually harm the VCD manufacturers. The subsequent rapid decline of VCD was probably purely due to vicious internal circulation. Cao Yukun did not know the details of VCD production at that time, but he knew very well that when he was in elementary school, the market was full of cheap VCD players worth a few hundred yuan. Only those that advertised on CCTV and were considered famous brands could get a slight brand premium!

It is conceivable that this thing must have no patent protection from the very beginning, and anyone can produce it. This means that the market will quickly enter a price war, so that no factory can enjoy the blue ocean dividend! Therefore, there is naturally no possibility of subsequent technology research and development, new product launch, and even the possibility of shaping the entire market, which requires considerable positive capital continuous investment.

So... after rising rapidly, it quickly fell to the bottom, and with it, the VCD itself was quickly eliminated.

Then, with the rise of the Internet, speeds became faster and faster, and hardware became more and more advanced... This industry, including CDs before and DVDs after, has found it difficult to become a national market again.

Now it is clear that the inventor of this thing is called Sun Yansheng.

"Me? Haha, I do have a little money, but I know nothing about this thing, and I have no idea how it will sell if it is produced in China in the future!"

Can VCD be made?

Of course it can be done.

But what Jin Zhijian and Sun Yansheng who were sitting next to him at the moment could not understand was that even if Cao Yukun did this, he would never aim to make it like the American VCR market.

It is destined to be something that only has a lifespan of ten years at most.

However, Cao Yukun did not just want to make some money and then leave - instead, he felt that the decoding chip technology in Sun Yansheng's hands might be more important than making money from VCDs.

By extension, if we do not limit our focus to the VCD product alone, the next twenty years or so will be an era of explosive growth for the consumer electronics industry!

VCD, DVD, computer, MP3, MP4, smart phone, tablet computer...

Video chips, image decoding, display technology...

If you can enter this industry circle by investing in VCD, and use the money earned from the early VCD to successfully expand the front-end technology research and development, and the back-end circuit board production, chip design and other technologies, it would be really tempting.

Even if you only participate slightly, who can guarantee that you won't be able to climb up in the future?

"Well... I wonder if you, Akun, are free tonight? I'll treat you, let's have dinner together and continue chatting. I think you should learn more about this technology and market prospects before you can make a decision!"

It seemed that he had already heard from Jin Zhijian's words that this big boss had no intention of investing in VCD. However, the young man in front of him, named Cao Yukun, was said to be a wealthy man with a large fortune who could earn tens of millions of Hong Kong dollars every month. So Sun Yansheng quickly shifted his target and began to pursue Cao Yukun.

Cao Yukun immediately smiled and waved his hand, pointing at Jin Zhijian, saying, "It's definitely not possible tonight! Brother Zhijian just promised me that he would take me to the cocktail party tonight!"

But Sun Yansheng was not discouraged and immediately said, "Then tomorrow! I wonder where Mr. Cao's company is? Wouldn't it be convenient for us to visit him tomorrow?"

Cao Yukun pretended to hesitate when he heard this, and turned his head to look at Jin Zhijian. It seemed that for his sake, it was not appropriate to continue to refuse. Then he took out his business card and handed it over, "This is my business card, with my company's office address on it. But I may not go to the company these days, so please call me in advance when the time comes!"

Sun Yansheng immediately agreed, "Okay! Let's contact by phone!"

(End of this chapter)