JAPAN: Verbatim brand owner denies press reports it plans to cease manufacture of Blu-ray and DVD recordable discs
UPDATE: The parent company of blank media manufacturer Verbatim, Mitsubishi Chemical, has issued a statement denying press reports that it is to cease in-house manufacturing of Blu-ray and DVD recordable discs.
The statement, issued by the US PR company for its Verbatim brand, says:
'On Jan 12 the morning edition of Nikkei, the leading business paper in Japan, covered that Mitsubishi Chemical Holdings Corporation (MCHC) stops making optical discs in-house but it was plain assumption made by the newspaper.
'MCHC, Mitsubishi Chemical Corporation, and Mitsubishi Kagaku Media Co., Ltd., made no such announcement.
'We have no plan to withdraw from the production of optical discs, and will continue the optical disc business with all our efforts to achieve an earnings recovery with maintaining the relationships with the partners of the consignment productions and the suppliers of OEM products as before.'
There is no comment in the statement regarding more recent Japanese press coverage suggesting the company plans to move production to factories outside Japan.
It's not just TVs that are too expensive to make in Japan these days – now it seems one of the country's major players in recordable media is putting up the shutters on domestic DVD-R and BD-R manufacturing, and shifting all production overseas.
Acoording to reports in Japan's Nikkei business paper, Mitsubishi Chemical, best-known for its Verbatim brand, is citing lower-priced competition from other countries as the reason for the decision.
It's said to have seen declining profitability in this area of its business, to the extent that a company official is reported to have claimed that 'The time has passed when Japanese companies produce optical discs.'
Such a decision would leave just one Japanese manufacturer of recordable DVDs – Taiyo Yuden, best-known for its That's brand –, and would also makes Mitsubishi the first Japanese company to pull out of domestic production of blank Blu-ray media.
Four other companies, including Panasonic and Sony, still make BD-R discs in Japan, but the suggestion is that Mitsubishi feels this may not be sustainable long-term.
Mitsubishi has until now made discs in factories n Japan and Singapore, but is now expected to outsource production to manufacturers in Taiwan and India.
Taiwanese companies now dominate the blank optical media market, with market leadership in both Blu-ray and DVD recordable products.
In the Blu-ray market the developers of the format standards, Panasonic and Sony, together account for some 26.5% of global sales of blank media, Panasonic having the lion's share of this at 20.2%.
However, as well as increased competition from lower-cost manufacturers, the market is suffering from tumbling prices in Japan and the lack of uptake of domestic Blu-ray recording on the global market. In the computer field, DVD-R and BD-R sales have been hit by sales of external hard drives and USB storage media, and may be increasingly impacted by the growth of cloud storage.
Sales of blank Blu-rays have been slow, not least because there are few suitable recorders available outside Japan, where they are commonplace.
The Japanese enthusiasm for recording programmes on disc hasn't spread to the rest of the world, and while global sales of blank Blu-rays in 2010 were just 2% of the volume achieved by DVD blanks, 95% of those discs were sold in Japan.
Prices of discs have fallen massively in Japanese shops since the BD-R format was released: whereas the average price for a disc was Y780 (£6.50) in 2008, last year it was around Y190, or £1.60.
And demand for DVD blanks is on the slide: having peaked in 2007 at around 6bn units, it's expected to keep on falling to 3.7bn units in 2013. The price per disc has fallen, too – in Japanese shops the average was Y100 (83p) in 2006, and by last year that was down to Y47 (39p).
By bulk-buying, prices of 30p per disc for DVD-R are available in UK online shops, and blank 25GB Blu-rays can be found for less than £1 each.