I mentioned VCD earlier, let's mention VCD now, talking about the well-known VCD industry, many people naturally think of the patent pain of the home appliance industry, in the 21st century, people with a little economic common sense will feel sorry for it.

The world's first VCD machine was developed by Wanyanwan Provincial Group, which may be the only opportunity for China to lead the world in the field of consumer electronics.

It is said that in April 1992, the American International Radio and Television Technology Exhibition was held in Las Vegas, USA, which was the largest television technology expo in the world at that time.

At that time, Jiang Wanmeng, who was now the general manager of the group in Anhui Province, took his colleagues to the beautiful exhibition.

At the exhibition, an inconspicuous MPEG image decompression technology exhibited by the American C-CUBE company aroused Jiang Wanmeng's interest, and he intuitively immediately thought that this technology could be used to store images and sounds on a small disc at the same time.

Since then, Jiang Wanmeng has invested 570,000 US dollars, in September 1993, the MPEG technology was successfully applied to audio-visual products, and a high-quality and inexpensive audio-visual product - VCD.

In December of the same year, he and the Chinese-American Sun Yansheng (then the chairman of C-CUBE Company) jointly invested 17 million US dollars to establish Wanyan Company, and each took a word in the names of Jiang Wanmeng and Sun Yansheng as the company name: Anhui Wanyan Electronic System Co., Ltd

In 1993, Wanyan Group launched the first VCD, but Mr. Jiang Wanmeng, the head of Wanyan Group at that time and the developer of VCD machine, made a fatal mistake that he regretted for the rest of his life.

He even thought that in the situation at that time, it was not of much significance to apply for a patent, so that the first batch of 1,000 VCD machines launched by Wan Yan were almost all bought by domestic and foreign home appliance companies to make prototypes and became the object of dissection.

Later, there were rumors on the Internet, because Sony, Panasonic, Philips and other foreign manufacturing companies have strengthened the research on VCD machines, launched new patented technologies, and refreshed the technical standards of VCD, so that domestic home appliance enterprises, including Wanyan Group, need to pay huge patent fees to these foreign giants for the production of VCD.

In the following seven or eight years, these patent fees accumulated in the domestic market as much as tens of billions.

Originally, Lei Weidong saw such news on the Internet and regretted VCD, thinking that the Chinese people had missed an opportunity, but later when they got older and knew more things, they realized that these were nonsense, and the truth of the matter was not like this at all.

In terms of VCD, domestic home appliance enterprises, including Wanyan Group, do not need to pay huge patent fees to these foreign giants for the production of VCD, nor have they paid any patent fees, because Wanyan's abandonment has led to the absence of patents for VCD machines.

It was only later on the DVD that huge patent fees had to be paid to these foreign giants.

And this is only an exported DVD, the DVD sold in China has not paid the patent fee at all, you must know that in the 90s, China did not join the WTO at all, how could it be possible to pay patent fees to foreign giants at home under that national condition at that time.

For exports, those giants can use the patent law to squeeze DVD manufacturers, and if they don't pay royalties, they won't let those countries import.

And if you don't pay patent fees in China, who do you go to complain about before China joins the WTO in 2003? Even after 2003, there were many cases of non-payment of royalties.

However, it is actually easy to understand why Wanyan Company died before dawn.

Because the VCD player is a brand-new audio-visual product, the problem faced by Wanyan Company in 93 years is that the software and hardware must be developed together, and it is also independently developed.

In the early stage, 17 million US dollars were spent to build Wanyan Electronic System Co., Ltd., of which hundreds of millions of research and development funds were used, according to Jiang Wanmeng, Wanyan company also invested 20 million advertising costs in 94 years. However, in order to know whether a product can be popular, in addition to hardware, software is also very important.

And the popularity of VCD is inseparable from the overwhelming number of pirated discs.

Many people say that Wanyan has invested hundreds of millions of R&D funds to develop products, but has not applied for patents in time to monopolize technology, and other manufacturers only need to spend a very small price to obtain a complete set of mature production technology.

In the early stage of product cost, Wanyan Company suffered a big loss; The next defeat was to invest 20 million in advertising in 94 years.

Until 95 years, the DVD player market was still in the cultivation stage, and before the emergence of a large number of pirated video discs, the market capacity of DVD players was very limited, and no amount of advertising money invested would have the desired effect.

Advertising is a business that requires continuous investment, and once interrupted, advertising will become ineffective over time.

If the 20 million advertising budget is delayed to the second half of 95 years and then invested, it may be able to bring Wanyan back to life.

However, Wan Yan invested hundreds of millions of research funds and 20 million advertising expenses in the early stage, and by the end of 1994, the number of DVD players sold had not exceeded 20,000 units, and the price of each DVD player was as high as 4,000 yuan.

It can be said that Wanyan's capital is out of touch! Wanyan spent all its money on the eve of the launch of the DVD player market and fell into an existential crisis.

By the time of the rise of DVD player manufacturers such as Aiduo, Jinzheng, and Xinke in the 95th and 96th years, the annual production capacity of tens of thousands of units was in the market ranking, and even the shadow could not be seen, let alone recovering the investment and making a fortune.

Wan Yan wants to turn over, the only way to continue to raise funds to expand production capacity, and wait until the sudden outbreak of the DVD player market in 95 and 96 to seize the market.

Will Wan Yan succeed in raising funds? Obviously not, otherwise Wanyan would not be a forgotten brand.

Before the emergence of a large number of pirated video discs, the dismal market of video disc players and the dismal operation of Wanyan had already made investors lose confidence.

The most important point is that the introduction of a complete set of production technology for DVD players does not even require a million funds, but investing in Wanyan has to share the cost of hundreds of millions of yuan invested in research and development in the early stage of Wanyan Company.

So on the eve of the VCD outbreak, Wan Yan died.

Later, many people said that when Jiang Wanmeng developed the first VCD machine, he immediately applied for a patent;

If it is said that the state invested 240 million yuan at that time, the plan to use Anhui Province as the production and development base of China's VCD machine became a reality......; The history of the development of VCD machines in China and even the world should be written in another way - an epic sung by Chinese with the main theme!?

In this regard, Lei Weidong scoffed, thinking really well, how could this be possible, even if Jiang Wanmeng immediately applied for a patent when he developed the first VCD machine, it would be useless, because the most fundamental core technology was not in Wan Yan's hands at all.

Wan Yan spent hundreds of millions of dollars on the surface of the VCD, not the core components.

What is the most critical VCD machine, not those patents for the whole machine, the most critical parts in the whole VCD are two parts.

The first one is the C-Cube decoder board, without which you can't recognize the MPEG image decompression code on the disc.

And the second is the movement technology, which is a reader that reads VCD discs, without which it is impossible to read the discs.

It can be said that these two components are the core of VCD, and the other things are very simple things, and it is these two core components that really make money in the era of VCD explosion.

The decoder board used in the world's first VCD is the first definitive decoder chip technology developed by C-Cube company that Wan Yan spent $3.5 million to entrust, which means that Wan Yan can't develop this thing by himself and must cooperate with C-Cube. (There is no way to do this, according to the technology of China at that time, there is no ability to develop it independently)

Because Wanyan Company uses the earliest stereotyped decoding chip of C-Cube Company, although it is jointly developed, Wanyan also has intellectual property rights and can produce it by itself.

However, due to the low integration of this chip, it also means that the manufacturing cost is high and the quality is not stable enough.

Therefore, C-Cube quickly developed the second-generation decoder chip on this basis, because it far surpassed the first-generation in terms of quality and other aspects, and soon the first-generation decoder technology was basically eliminated.

Wan Yan spent $3.5 million to entrust C-Cube to develop the first finalized decoding chip technology, which became rubbish.

In Lei Weidong's view, Wan Yan's biggest mistake was not to buy MPEG image decompression technology at the first glance, you must know that at the beginning C-Cube company didn't know what this technology was for, but unfortunately Wan Yan didn't do it in 92.

If this technology is in the hands of Wan Yan, it is a real patent. Later, because of the joint development, C-Cube saw the prospect of this technology and was reluctant to sell it at all, so Wan Yan could only choose to cooperate in development.

In the VCD market at the end of 94, 95 and 96, only C-Cube produced the second-generation decoder board, which is a technology monopoly and a huge profit.

It is said that the cost price of a second-generation decoder board is only 30 Hong Kong dollars, and the price is 1000 Hong Kong dollars, what is this concept. More than 30 times the profit, which is higher than the profit of drug trafficking.

The reason why Wan Yan, who has the intellectual property rights of the first generation of decoder boards, can't study the second-generation decoder board is very simple, in China, in the mid-nineties, there was no industrial and technical foundation for large-scale integrated circuits.

You must know that many things are accumulated by the industrial base, without which you will not be able to realize no matter how good your ideas are, and you will barely develop them, and you will not be able to produce them at the domestic manufacturing level.

If Wan Yan wants to get all this out of China alone, it is impossible to succeed in technical public relations without investing billions of dollars and a few years, and obviously Wan Yan does not have the strength.