Blu-ray gets simplified licensing

Posted by Wolfgang Gruener

Tokyo (Japan) – Occasionally it just takes a lot of time to get something right. Blu-ray is not quite where we would've expected the now sole high-definition video format at this point in time, but it seems at least licensing will become much easier. Panasonic, Philips and Sony announced that they have agreed to create a "one-stop-shop" product license company for Blu-ray, which should positively impact the availability of Blu-ray discs and Blu-ray players and recorders in the market and in consumer homes.


It has been almost five years since the first Blu-ray supporters agreed to develop the high-definition format, and more than four years after that the promoter group has been formed. But the industry will have to wait until summer of this year until Blu-ray media and devices can be built without running to different companies to acquire portions of the entire technology license tree necessary to build Blu-ray devices.

Panasonic, Philips and Sony said that the license program will be offered by a new independent licensing company to be based in the United States with branch offices in Asia, Europe and Latin America. The CEO of the new license company will be Gerald Rosenthal, former head of IP at IBM and more recently CEO of Open Invention Network.

However, this new company will only be a start as "other holders of essential patents for Blu-ray disc, DVD and CD patents [are] invited to join this licensing entity as a licensor and also as shareholder." The cost of jumping into Blu-ray can still be substantial, as the licensing company will charge $9.50 for every Blu-ray player, $14.50 for a recorder, $0.11 for a read-only disc, $0.12 for a recordable disc and $0.15 for a rewriteable disc. And still, the license fees are expected to be "40% lower than the current cumulative royalty rates for individual Blu-ray disc, DVD and CD format licenses."


Editor's opinion

Look at the money involved here. $9.50 for every Blu-ray player. In 2008, people bought 2.4 million players, with an expected 2009 sales figure of 5.3 million. Bear in mind that these companies are already making a profit off the sales of the devices themselves. These additional fees are above and beyond those base profit margins, accounting for $22.8 million in 2008 and $50.4 million in 2009 just from player sales alone, let alone recorder or disc sales which are probably at least as much if not more.

It seems to me that the companies could stand to make a far greater sum of money were they to reduce the cost involved in obtaining the players and opening up the market to allow all of us to buy them for reasonable prices.

Is Blu-ray such a complex technology that there was an up-front investment of hundreds of millions (or billions) of dollars that this kind of high-cost is mandated to recoup the investment? Or is it just corporate greed?

While this new license company may help reduce the difficulties in obtaining licenses to build Blu-ray products, it doesn't seem to be doing much to stem the cost to the end-consumer. And personally, I think that is wrong.

And on top of it all, the reality is we can buy reusable SD and SDHC cards today which rival the capacity of Blu-ray discs. We can have our PC with a Terabyte hard drive and just use DivX or alternate free video codecs to handle our content, which is stored online and immediately available. In addition, it's not about this ridiculous Blu-ray superiority or any other lie their marketing departments will tell consumers about some storage format. It's about meeting consumer needs. And right now, the best solution for any of us would be to stop buying Blu-ray products and insist that they release something that makes sense, especially in light of the low cost of modern day multi-gigabyte memory cards and huge capacity hard drives which could be simply Ethernet-networked (or wireless) into our local devices, allowing for on-demand viewing of locally stored content.

These companies and their greedy, profit-based driving forces which stifle and limit innovation (and here) for the sake of personal profit are just about the worst scourge of the Earth in my opinion.


Rick C. Hodgin is the managing editor of TG Daily.com. The opinions expressed here are solely his own.