The battle between two rival high definition formats for video disks has been decided in favor of Blu-ray, which was jointly developed by Sony, Samsung, Philips and other companies. Mike O'Sullivan reports, a U.S. manufacturer based in Washington State has embraced the new technology, and sees a bright future for it.

Last year, Erick Hansen of Blu-ray Technologies set up an independent plant in Spokane, Washington, to manufacture disks in two high definition formats, Blu-ray and HD DVD.

Each had its backers. Toshiba had developed the HD DVD format, partnering with NEC and a number of Hollywood studios, which agreed to use the format for their high definition releases. But Blu-ray got more backers. After major retailers such as Wal-Mart and Best Buy made the switch to Blu-ray, Toshiba gave up the fight last month and said it would no longer make or market HD DVD equipment.

Both Blu-ray and HD DVD encode data on high-density disks using a violet-blue laser. But Hansen says Blu-ray disks hold more information, and retrieve it faster.

"We have an analogy that we use at our facility," he explained. "We basically say, if you're a banker and you can get your money faster to a client without loss, without any problems, you're basically going to win the loan war. That's what Blu-ray does and that's what it did, and that's why anybody that actually understood the technology knew that Blu-ray would be the winner in the end."

Hansen was a pioneer in the DVD business, and still produces DVDs and compact disks. In the 1990s, he manufactured them outside Los Angeles, but says costs were high, so in 2006 he chose the city of Spokane in Washington State for his new plant.

Costs are much lower there for electrical power and workers' compensation insurance, which covers employees injured on the job. He also keeps his expenses down by working with the environment and not against it, for example, using the earth to cool the high-tech clean room where the disks are made.

"The first thing we did was, we took our clean room and put it underground. We built it in a basement," explained Hansen. "When I had the facility in California, we spent about $20,000 a month on air conditioning. Now we spend maybe $300 or $400 by building it at 65 degrees in a basement, in an environment that we could control."

That temperature of 18 degrees Celsius is just right for the process.

The disk-molding machines generate heat, which he says he puts to use.

"We take that excess heat, redirect it back up into the first, second and third floors of the building (it's a four story building) and heat the rest of our building with the waste energy that we create," he said.

Hansen uses water to cool the machines, and as the water heats up in the process, he pipes it through the ground to chill it naturally. He sells polycarbonate scraps from the disk making process to an automaker for tail lights.

He says new technologies are creating business opportunities for entrepreneurs like him. And he says as American companies learn to keep their costs down, they can manufacture at home, instead of outsourcing to countries like China.

Manufacturers of Blu-ray disks and equipment must still persuade consumers to invest in high definition television sets and video players. That battle continues, while new technology such as high-speed digital downloads over the Internet may make even Blu-ray disks obsolete someday.