Sony opens China's first Blu-ray factory

Set to meet perceived demand growth among rich Chinese

BANGKOK -- As U.S. consumer spending falters, Sony Pictures Home Entertainment is looking to China, where on Tuesday it unveiled the country's first Blu-ray Disc factory with partner the Shanghai Media Group.

Just weeks after Sony became the first Hollywood studio to distribute its movies on the new format in China, SPHE and SMG christened a 130,000-square-foot facility outside Shanghai capable of making up to 500,000 discs a month.

The factory, which will employ 200 full-time, was launched to serve the perceived growing number of Chinese willing to spend up to $30 for a high-definition new release title in a market flooded with $1 bootleg DVDs and pirated Internet downloads.

With 32 Blu-ray titles in the market now and plans to have 100 out by the end of the year, SPHE this week will release the catalog titles "Broken Trail" and "Daddy Day Camp" and follow up with BD versions of the new releases "21" and "Vantage Point" after the Lunar New Year ending Feb. 2.

Sony vp for China Tim Meade said that the Blu-ray format represented 20% of SPHE's royalties business in such territories as Hong Kong, Taiwan, the Philippines, Malaysia and Indonesia by the end of 2008.

"The results in Southeast Asia give us confidence. The same discerning consumer now exists in China and now we're here to serve them," Meade said in a phone interview.

SPHE's biggest Blu-ray sales account in China thus far is Amazon.com's partner in China, Joyo.com, said Meade, who noted that company titles also sell at 100 Sony Electronics shops in China, in the government-run Xinhua Bookstore chain and in specialty shops catering to wealthy Chinese.

The Shanghai facility is Sony's fourth Blu-ray production line in the world. The others are in Terre Haute, Indiana, Shizuoka, Japan and Salzburg, Austria. A fifth BD line is due to be added to the company's Pitman, N.J., facility by mid-2009.
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