Back in October, 2008, eMedia online posted an article by freelance writer Mark Fritz entitled “Is AACS killing the Blue-ray Disc industry”, in which officers of the DVD Association were quoted offering certain opinions about AACS and how it might be impacting the growth of the BD format. I'd like to take a moment to prevent any misunderstandings before they occur: we are not pessimistic about AACS or Blu-ray Disc. Rather, we’re expressing the hope that the format can open itself up for faster adoption and faster growth. There's more to this issue, though, so read on...
For over 10 years, The DVDA has been a strong supporter of DVD. In
recent years, we eagerly looked forward to introduction of a high
definition optical disc format that we could get behind
wholeheartedly. When they finally arrived, we got two of them! The
nearly 2 years spent in the war between HD DVD and BD had a number of
consequences, including, frankly, uncertain initial consumer acceptance
of both formats. One of the other unexpected consequences of the format
war was the splitting of research and development energies between two
formats, instead of them being concentrated on a single format. This
split also contributed to delays in establishing a single standard for
authoring and programming protocols – an important key to energizing
content publishers and producers to adopt the new format.
With the demise of HD DVD in early 2008, the path was clear for Blu-ray
to thrive. However, it takes more than having just one format to
create a successful format. We sincerely believe the DVD was a major
success due to a number of factors: it was a revolutionary shift for
video delivering, and after the first few years of R&D, authoring
tools started to become available that were affordable, and could be
embraced by a large number of authors and publishers worldwide. In
addition, the DVD format did not have licensing agreements that
prevented publishing on the format by anyone who chose to pay the cost
of entry for the hardware or software required to author. If you
wanted content protection, you were free to elect to use CSS for
virtually no additional charge, or MacroVision for a fee commensurate
with the quantity of discs created.
The end result was major adoption of the DVD format by publishers
worldwide, a flood of titles coming to market from both Hollywood and
non-Hollywood content owners alike, and, for many years, a healthy
market for authoring service providers.
Our current concern is that, unlike DVD, the “path to Blu-ray” is a lot
more complex, and far costlier than DVD. We have heard from a number
of independent producers that the costs of licensing are preventing
them from adopting the blue ray format for publication at this time,
and that’s a problem. As we stated in the article, if the goal of
licensing is to inhibit or eliminate the pirates, the unexpected
spinoff shouldn’t be to inhibit the adoption of the format by the very
independent producers who we believe contributed to making DVD the
overwhelming success that it had become.
With DVD, an independent producer was free to create a title and bring
it to market with very little or no additional cost other than
encoding, premastering and replication. Publishing a blue ray title at
this point is far more complex, not only in encoding and premastering,
but also in replication.
A certain amount of this complexity is due to the mandatory licensing
requirements that exist in the BD format. Now don’t get us wrong, we’re
not suggesting that BD licensing be eliminated entirely, because we
certainly understand why the licenses were included in the first place.
Our goal was merely to bring focus to this issue, and to strongly
suggest a tiered approach to licensing fees that will enable everybody
to participate according to their means.
Doing so will unleash the pent-up creativity of thousands of
independent producers who are waiting to participate profitably in
growing the blue ray format. Anecdotally, there are over 93,000 DVD titles in the marketplace, and easily 50% of these were created by non-Hollywood entitles. Those
entities can be enlisted to help build a far more robust market for Blu-ray disc, if fees are lowered, and license complexity reduced.
Let’s assume for a moment that reducing licensing fees would bring
perhaps 1000 new independent producers to the BD marketplace:
• Even if each producer only does one BD title, that’s one million new
BD-ROMs, generating perhaps $2 million for replicators.
• If AACS content participant or provider agreement fees were reduced
from $3000 (a high hurdle for most independents to cross) and
restructured to begin at $500 for a simple license, then those 1000
producers would bring in an additional $500,000 in licensing agreement
fees for AACS, and potentially the same for BDA, assuming they all
signed up for a $500 BDA CPA-light agreement.
• Those 1000 new titles would create 1000 new AACS title key certificates generating $1.3 million.
• Those 1000 new titles would provide more impetus for people to purchase a blue ray player, to be able to play that content.
This translates into increased retail sales for players, and increase retail sales for the BD-ROM media as well.
One million new Blu-ray Discs at $20 retail = $20 million in new retail sales!
*** UPDATE - EARLY 2009 -
In early 2009 we gathered some market data that indicates that of the 95,000+ DVD titles currently in print, over 50% were created and published by non-Hollywood producers. So looking at the number above, it appears that perhaps 1,000 new producers might be a conservatively low estimate of possible new blu-ray producers. Nobody will know for sure, until affordable Blu-ray publishing it made available to non-Hollywood producers.
In summary: in the same way that reducing taxes frequently generates
greater overall revenue for the taxing authority, we sincerely believe
that reducing the financial and licensing complexity barriers to entry
for new BD producers will generate more money for everyone in the
entire BD ecosystem. In order for this to happen, a groundswell of
support needs to be shown for the proposed lowered fees. and that's where
YOU come in: to support our efforts, please do two things, right now:
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