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Chapter 489 Blu-ray DVD

The conference room fell into a deathly silence, with only the continuous hum of the air conditioning system.

Everyone was stunned. Even Hamilton was caught off guard by Ernst's reversal and subconsciously adjusted his posture, as if Ernst's words had hit him in the back.

After citing so many reasons and data that were detrimental to the traditional disc market, why did you end up supporting it?

Ernst glanced around at everyone present, then shrugged slightly. "It's simple. I can't let Google fill this bottomless pit with its own funds. The operation of a streaming business requires substantial financial support, and we must find more stable sources of revenue. The traditional disc business can be a crucial support for the development of streaming at this stage."

What is the most important aspect of the development of streaming media services?

Herven Weiss almost blurted out "copyright".

No one questions this answer: for streaming platforms, high-quality copyrighted content is fundamental to attracting and retaining users.

Without abundant copyrighted content such as movies, TV shows, and variety shows, even the most advanced technology and the most comprehensive platform functions cannot impress users.

Ernst nodded to Herven Weiss and continued, "So, do you think the major film and television companies would be willing to license their high-quality copyrights to us at an extremely low price?"

How is that possible?

No one dared to even imagine it.

Ever since MGM and Google collaborated and ripped off major music giants worldwide, companies have become increasingly aware of the importance of online copyright.

Take Disney as an example; the licensing fees for DVD film and television copyrights are generally divided into two or more types.

For older films that have been out of theaters for a long time and whose market popularity has gradually faded, Disney will use a package licensing approach, combining a certain number of films into a single license package. Partners will need to pay a fixed licensing fee each year to obtain the DVD production and distribution rights for these films.

For blockbuster films that generate huge market buzz and achieve impressive box office results, or new films that have just been released in the last year or two and still enjoy high market popularity, Disney's annual licensing fee for each film averages over $7.

This licensing fee is the highest in the industry, but considering that Disney itself does not directly participate in the DVD production process, and its licensing content also covers the film production rights, the partners can make profits by producing and selling DVDs independently, so it is not an exaggeration.

For companies like MGM that also need to make a profit from production, the price is generally between $3 and $5.

Google Video's desire to acquire online copyright licenses from major film and television companies, even if not at an exorbitant price, will certainly not be lower than the licensing fees for traditional DVDs.

Hollywood, as the core of the global film and television industry, produces thousands of films every year, with more than 300 to be released in theaters this year alone.

Even if you are selective and only choose films that are popular in the market and have good user reviews, the annual online licensing fees for new films released in the last three years may be close to $1 million.

Add to that the older movies, and Google Video's copyright fees alone could amount to one or two hundred million dollars a year.

This only covers copyright fees. If you add in the labor costs, utilities, broadband fees, equipment costs, and R&D investment required for platform technology upgrades and feature optimizations, each item is a bottomless pit.

In the early stages of its streaming business, Google Video was destined to be a money-losing venture that would continue to incur losses.

As Hamilton said, DVDs are still the mainstream in the global video content consumption market. Although streaming media will inevitably replace traditional discs and become the dominant force in the future market in the long run, the transformation will take time and cannot be achieved overnight.

Users' consumption habits need to be cultivated gradually, and streaming media technology also needs to be continuously improved and perfected; all of these require time to mature.

Therefore, Ernst wanted to use the profits from the DVD business to fill this hole, and couldn't let Google continue to subsidize it.

"Therefore, we need to launch a dual-track parallel plan."

"A dual-track plan?"

Ernst nodded. "That's right. That means we should concentrate our resources on developing the streaming media business to seize the initiative in the future market, while simultaneously promoting the DVD rental business. We can leverage the existing user base and profitability of the traditional disc market to drive traffic to and support the streaming media business."

"However, we will not produce traditional DVDs, but rather Blu-ray DVD rental services."

"Blu-ray DVD?" Everyone was puzzled, having never heard of the term before.

Ernst explained with a smile, "AI Technology is secretly developing a new type of DVD player specifically designed for playing Blu-ray DVDs."

"As we all know, the mainstream DVDs on the market currently use red laser technology, and the storage capacity of the discs is about 4.7GB, which is simply insufficient to meet the needs of higher-definition video recording and storage."

"If Blu-ray technology is used for recording, the wavelength will be shorter, and blue lasers are expected to increase the storage capacity of optical discs to over 25GB. Do you know what that means?"

Everyone understood, and Herven Weiss, unable to hide his excitement, spoke first, saying, "If the storage capacity of the disc can really be increased to over 25GB, it not only means that the video clarity can be improved to another level, moving from the current high-definition standard to the higher ultra-high-definition standard, but also that the larger storage capacity can add more value-added functions to the video content, such as multilingual subtitles, multi-channel audio, behind-the-scenes content, etc., which can greatly enhance the user's viewing experience."

Why is streaming media the future? It's certainly more convenient, but more importantly, streaming media doesn't have storage limitations.

Upon hearing about this technology, Herven Weiss no longer had any intention of sticking to developing only streaming technology.

His reason for opposing Google Video's entry into the DVD rental market is that the industry will become a sunset industry from the moment Google Video launches, and he feels there is no need to spend huge sums of money to enter this field.

But with the advent of higher-definition DVDs, things are different. This difference in clarity has widened the gap too much for streaming media, and it won't be caught up in the next year or two.

"When will iTech launch this technology?" he asked anxiously.

"It should be soon," Ernst replied vaguely.

In fact, A.Tech itself didn't even know it was developing this technology; it was all Ernst's rambling.

But it doesn't matter, because he understands this technology.

Because his previous life involved work related to blue light technology.

This technology is high-tech in this era; it's a technology that hasn't appeared yet.

Back then, Blu-ray technology was very basic, and one of the businesses of the company he worked for was storage-level optical disc libraries and enterprise-level data archiving, both of which involved this technology.

There are currently only three major challenges in developing blue light technology.

Optical technology, storage media and circuit design.

Optical technology is easy to solve, and he can handle the problem of wavelength control of laser diodes.

In terms of lenses, there are higher requirements for lens resolution and anti-interference capabilities.

Traditional red-light DVD lenses are made of plastic, while blue-light lenses require high-refractive-index optical glass and precision coating technology to reduce reflection loss.

This problem is not difficult. We can find an optical company to cooperate with and improve the polishing accuracy by introducing computer numerical control ultra-precision machining equipment.

If all else fails, we can develop new composite lenses that use multi-layer thin-film structures to compensate for processing errors and improve precision.

If laser technology solved the problem of how to read data, then the storage medium determines how much data can be stored.

Traditional DVDs use a pitted track storage system, while Blu-ray DVDs, in order to achieve higher capacity, must reduce the pit size and track spacing.

This problem is much simpler; it's simply a matter of innovating material properties.

Ernst will just provide some data, and Bell Labs will be able to give the results.

As for the final circuit design issue, it's nothing more than improving the functionality of electronic components.

Blu-ray DVDs have a signal frequency that is more than three times higher than that of red DVDs, which places higher demands on preamplifiers, analog-to-digital converters, and digital signal processors.

For analog converters and digital signal processors, you can contact Texas Instruments (TI). Their existing technology is more than sufficient. The only challenge is the preamplifier.

This requires a preamplifier to amplify the weak current signal output by the optical sensor to a voltage signal in the volt range, while suppressing noise interference.

Ernst lacked knowledge in this area, but he knew that low-noise complementary metal-oxide-semiconductor (CMOS) semiconductors could be developed to achieve this by optimizing circuit structure and employing novel semiconductor processes.

The reason for supporting DVD rentals was entirely because Ernst had envisioned the Blu-ray DVD market.

Currently, companies like Sony and Philips probably haven't researched this technology yet, or even considered it.

AiTech could completely monopolize this market, make a quick buck, then license its technology, leaving others to fight tooth and nail, and then rake in the final profit.

Blockbuster's doom came when Google Video became the company that could exclusively rent Blu-ray DVDs, at which point its massive customer base became the target of streaming services.