Rising to the green challenge - a thinner disc

Technological advances, ecological awakening, retailers’ green policy and government regulations coalesce to making carbon footprint-busting discs an ever more attractive proposition. WILHELM F MITTRICH, CEO of EcoDisc Technology, explains the concept and identifies the market opportunities.

What has been your involvement in the optical disc industry?

I've been involved in this industry before ODS was established. I did own one of the largest classical music catalogues, with about 1,600 hours of digitally recorded music, and we released the first major classical music content on CDs already in 1992, targeting the budget-price market. I was the first person to sell hundreds of thousand of CDs to a single retailer in Germany. The manufacturer of these discs got into trouble and in late 1997 I took the company over. The manufacturer at the time was running four CD lines with a staff of 40. Ten years later, the plant consisted of 120 lines and 2,600 employees producing CDs and DVDs. That was ODS.

Why and when did you move into the thin disc territory?

It daunted on me back in 2006 that if you are in this business you couldn't simply manufacture the same disc over and over again. You have to look forward and that meant engaging in R&D and new products. I met the inventors of what was formerly called TVD (thin DVD). I thought it was an interesting idea to develop a DVD that uses less polycarbonate, less energy, and produce less carbon emissions. It took the inventors about a year to develop a better product that was to become the EcoDisc. It was put on the market in the summer of 2007 and since then tens of millions of these EcoDiscs have already been sold.

From the initial launch we have substantially improved the EcoDisc, with six patent applications pending in the United States and four in Europe. The first European patent has just been granted in October.

In September 2007, the UK newspaper Mail on Sunday distributed 2,6 million EcoDiscs as cover-mounts on one Sunday, pressed by ODS at that time. On the following day we were anxiously awaiting readers' reactions. Amazingly, we only got a handful of complaints from people who have put the disc in their CD player! This basically meant that consumers overwhelmingly accepted the EcoDisc in the same way as a standard DVD.

After that, other major publishers took the EcoDisc on board, the biggest one being Future Publishing, the UK's largest magazine publisher with computer as well as games titles. They have decided to put all their DVD-5 cover-mounts on EcoDisc. We were very proud about this, because they have now specified the EcoDisc as a desirable format in their tender documents. This means that their partners have to supply their cover-mounts or inserts on our disc, an endorsement that the EcoDisc is positioned next to the CD or DVD, at least for this category of customers.

The thin disc has been around for quite some time, what does differentiate the EcoDisc?

The EcoDisc is thin, but the engineering approach in developing the EcoDisc has been completely different. The thin discs that came before were just substrates so they were half a DVD and that was it. Our engineers analysed the clamping mechanism of hundreds of DVD players and they developed a disc which avoids the clamping problems usually experienced with a thin disc. When spun at up to 1.600rpm, a thin disc has a tendency to flutter to such an extent that the laser cannot follow the data with 100% accuracy. This has to do with the physical properties of the substrate, at half the thickness of a standard DVD.

In our design of the clamping area, the disc is engineered in a way that it remains flat and rigid when it's spinning and thereby the laser does not lose focus. In all our tests we have achieved 100% readability or playability, the same as a standard DVD. This is the major difference with other thin disc candidates, and this is why we have all these patent applications.

How is the company organised?

EcoDisc Technology AG, a Swiss company, is solely an R&D and licensing company that licences its technology, know-how and trademarks to replicators on a non-exclusive basis. We are spending about $1 million in marketing activities in the United States and in Europe to drive the content owners to the replicators. We are not involved in replication ourselves and have no intention to be.

What are your arrangements with replicators?

A key feature of the EcoDisc is that it can be manufactured on a CD line and we all know that a large number of CD lines in the market are under-utilised. According to Futuresource there will be over 1,700 CD lines out of service in the next four years and it's obviously very attractive for replicators to put these idle CD lines to another use and make a DVD type disc on it.

Our engineers fit a CD line with an upgrade kit, an Axxicon EcoDisc mould plus other parts, at a total cost in the region of $80,000. This is not a permanent conversion and the line can be reverted to CD pressing at any time. So far, we have only upgraded the Singulus Skyline – Skyline I or Skyline II – with Emould injection moulder because that is the most widely used CD line in the market.

As for licensing, it is very simple: a $0.02 royalty per disc. That is only a fraction of what the replicator is saving in materials, energy and so on.

We have signed up our first major US replicator, who has recently started manufacturing the EcoDisc. The first European replicators have started the manufacture of EcoDisc as well. We have just signed a contract with a major replicator in China, driven by many OEM customers who want to use the EcoDisc for bundling with their IT and mobile phone equipment in China.

What is the problem with using EcoDisc in an Apple Mac?

The short answer is that there is none. Early versions of slot-loading DVD drives built into MacBooks or certain iMacs used to have difficulties ejecting thin discs due to the unique way such drives load the discs. As a matter of fact, Mac users encountered ejection problems of slot-in drives not just with the EcoDisc, but with conventional DVDs or CDs discs as well.

We have approached this problem with extensive research and by testing virtually every 'problem drive' and its follow-up model and these tests have shown that later models do not malfunction anymore thus indicating that Apple's OEM suppliers have since addressed this issue.

We have nevertheless modified our product design to ensure backwards compatibility with all affected Mac models, which is reflected in our product tests.

How does your product fit into the wider optical disc market?

The optical discs market, of which DVD is a subset, is not one single market, but two. One is the Hollywood feature film market and this market needs more and more capacity so it needs DVD-9, it now needs Blu-ray and it may need 100 or 200Gigabytes in a couple of years once 3D movies and 3D games become more popular and require this additional capacity.

The other market is promotional DVDs, educational, children's, publishers' cover-mounts, bundled DVDs of OEM manufacturers and so on. This market does not have a capacity problem; it has a sustainability or environmental problem.

The EcoDisc is well suited for direct mail campaigns because of its lighter weight. The total weight of an envelope including the EcoDisc is below 20g, which is the threshold in Europe.

There are already initiatives in some countries to restrict the use of free DVDs as cover-mounts on newspapers and magazines because DVDs with their toxic bonding are very difficult to recycle. These customers are looking for a more environmentally-friendly product.

The DVD has been on the market for about 15 years and it has never changed. It has never adapted to the change in society, environmental requirements or politics, and I think today's materials and processes enable one to make the DVD more environmentally friendly by using less energy, less polycarbonate and with lower carbon emissions. This is why we invented the EcoDisc. It has the same electrical properties, the same optical properties and the same capacity as the DVD-5. It can be packaged on the same fully automatic packaging system and can be printed on the same printers. It has everything a DVD has, but is environmentally friendly.

As a matter of fact, when we go after potential clients we are not approaching the purchasing departments of large companies, but the corporate social responsibility, the so-called CSR departments. In one of the largest content owners in the world, the appropriate person is called the Vice President of Environmental Initiative. We are targeting these people because it is their mandate to find products that better fit their "green" corporate strategy.

Eco-friendly is good but is said to cost more. With the economic downturn aren't you entering the market at the wrong time?

Environmental concerns are not new, they have been around for 10 or 15 years, but environmentally-friendly products in the last 10 years have been generally more expensive, and some looked weird. Things have changed. For me, an eco-friendly product must not cost more, must be fashionable and be available for the consumers. It can only satisfy these three conditions if it employs new technology and this is what we are doing. We are coming into the market at exactly the right time. In a nutshell, we enable the replicator to make this product at a lesser cost while providing additional benefits. Therefore our slogan: "It costs less than a CD, but it has more value than a DVD."

We cannot dictate the price. I can tell you that in some markets customers are prepared to pay more for an EcoDisc than for a standard DVD because of the additional environmental benefit they want to gain. In other markets customers will always want to pay less so the EcoDisc offers the replicators more space to negotiate.

DVD FLLC has sent a letter to replicators warning them that their DVD Format Logo Licence could be terminated if they would manufacture 0,6mm discs. How did this effect the EcoDisc?

This had a dramatic effect on our licensing activities as most replicators see the DVD Forum and DVD FLLC as an “authority” although they are simply lobbying groups with a history of fighting new and better products. For years they have not acknowledged the DVD+RW and they are still promoting the HD-DVD as the only high density format and Blu-ray is banned from their websites.

We immediately obtained a preliminary injunction by the court in Hamburg which prohibits DVD FLLC to continue their threat anywhere in Europe. Although we have sent DVD FLLC all court papers and the judgment was formally served in Japan a couple of month ago already, DVD FLLC did neither oppose the injunction nor did they withdraw their threats. They simply kept silent and therefore added to the insecurity of the replicators.

After DVD FLLC has also threatened our US licensee we have now filed a lawsuit for violation of anti-trust laws, unfair trade practices and trade libel. This lawsuit was filed on 28. October and we were hopeful that the DVD FLLC lawyers who acted against our US licensee would accept service of this lawsuit, but they refused. This will put the litigation off for many months until all the formalities of official service of a Japanese translation of the complaint has been serviced through the diplomatic channels in Japan. Again, DVD FLLC is avoiding either a clear statement or a quick dispute resolution which would be in the interest of replicators and the DVD manufacturing and trading business in general.

What is next for EcoDisc?

We are expanding the product range with an EcoDisc CD and a EcoDisc DVD-9 equivalent. The CD version is being released by the time this interview is published and we have already received considerable interest from publishers in Europe and the Far-East.

The EcoDisc DVD-9 is undergoing design testing at the moment, we have a proven concept and are now working to fine tune the geometry. We expect this product to enter the market by spring next year. Naturally we are looking into other media that can benefit from the fantastic features of our EcoDisc range and will be looking to develop recordable products very soon.

Contact: www.EcoDisc.org...

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