Amazon to Launch VMD HD Disc Players Mid-December, Developer Says

The ML777 will feature a memory card slot, though NME in the past has shown models without the slot priced at $189. If retail sales do begin, it would cap years of development work -- and unexplained delays -- on VMD, a red laser-based format that NME says allows upscaling of standard DVD content to HD resolution. VMD thus is being positioned as a low-cost alternative to other HD disc formats (though some HD DVD players already have been comparably priced). Shinco Electric, Sistech and other suppliers have been enlisted to make the players in China with Asutek supplying the drives and Hitachi the laser pickups, NME said. NME will make its authoring software available commercially in early 2008, it said in an SEC filing.

Amazon Friday showed the ML777 standalone and bundle and the lower priced ML622 as “currently not available.” Amazon listed the VMD players as having first appeared on the site Sept. 14. At CEDIA, NME said it expected to ship the decks in October (CED Sept 10 p1), but Potter told us that timing was for preorders only. PCRush.com, which has an order for 10,960 units, also will be marketing the players, NME officials said. The PCRush pact carries a $10,000 monthly marketing plan fee for the first six months, and after that, one percent of monthly sales or $7,500, whichever is more, NME has said in SEC filings.

About 100 VMD titles are expected to be available at launch in the U.S., about half of them Bollywood titles. Anthem will contribute five titles including The Enigma with a Stigma, Mother Ghost, 8th Plague, Soldier of God and Two: Thirteen. Distribution of higher profile titles, including Icon Entertainment’s Apocalypto and We Were Soldiers, are initially being limited to Australia, Iceland, New Zealand and Poland. NME expects to have “hundreds” titles available in the U.S. by January along with some new content agreements, Potter told us.

Potter wouldn’t disclose sales figures for VMD players introduced in India earlier this fall. In India, the player was sold bundled with titles at $293. NME posted $227,993 in sales in Q3 ended Sept. 30, marking the company’s first revenue, it said in an SEC filing. NME’s Q3 loss widened to $6.76 million from $1.17 million a year earlier as operating expenses soared to $6.79 million from $1.175 million, the company said. General and administrative expenses jumped to $1.31 million from $922,524, while R&D increased to $441,469 from $114,484. During the quarter, NME issued 1.2 million shares at 25 cents a share, raising $300,000.

To expand its presence in Europe, NME signed a letter of intent Sept. 27 to buy Slovakia-based FKH Electronics, which makes and distributes appliances and CE goods in Central Europe under the Orava brand, it said. FKH, which has 270 employees, posted more than $25 million in annual revenue in each of three fiscal years ended December 2006, NME said. FKH sells products through more than 1,700 retail stores, including those operated by Carrefour, Tesco, Metro and Ahold, NME said. NME also finalized an agreement in late October with Lazy Town Entertainment for the release of 53 episodes of the LazyTown series on VMD in Iceland. VMD players will be packaged with 12 LazyTown episodes in Scandinavian countries and Iceland, NME said. It landed a pact with independent film distributors Sena and Myndform to bundle titles with the players in Iceland, the company said. Most VMD titles are expected to sell for $20, said NME, which is developing encryption technology with Optikey that’s expected to be available in early 2008.

For some years now, NME has been promising U.S. distribution of VMD players and discs, but as yet has not delivered. Nor has the company been very forthcoming with information. For example, NME long has been reluctant to discuss specifics about title availability. As recently as last week, NME said the order from PCRush.com “will complement HD VMD film content currently available in the U.S.,” but disclosed no details on the HD software. As of late Friday, NME hadn’t replied to requests from Consumer Electronics Daily for more information on its HD titles. The company similarly has ignored our queries on whether VMD players and discs are regionally coded. - Mark Seavy