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The Ins and Outs of Blu-ray Disc Replication and Licensing

It takes more than just imagination and hard work to put together a Blu-ray video disc. Outside of the usual authoring mechanics, content owners and publishers must not only make physical production decisions but also contend with numerous legal and financial obligations to the technology, patent, trademark, and other intellectual property holders.

The Ins and Outs of Blu-ray Disc Replication and Licensing

Hugh Bennett
EMediaLive October 7, 2008

Disclaimer: The following is provided for general information purposes only. Those engaging in any of the mentioned or similar pursuits should seek the advice of competent legal counsel. Information contained in this document has been obtained from sources believed to be reliable. The author does not warrant the accuracy or completeness of such information. Responsibility for the use of the contents shall remain with the user and not with the author.

It takes more than just imagination and hard work to put together a Blu-ray video disc. Outside of the usual authoring mechanics, content owners and publishers must not only make physical production decisions but also contend with numerous legal and financial obligations to the technology, patent, trademark, and other intellectual property holders.

In an earlier article (Blu-ray Disc Licensing for Small Publishers, Duplicators, and Independent Studios), I identified these responsibilities for small publishers and independents duplicating video onto writable BD-R/RE. This time around, I will address the same concerns for anyone having their material replicated onto prerecorded BD-ROM discs.

Some Assembly Required
Blu-ray Disc (BD) production begins with the content owner/publisher, or contracted service bureau, creating a BD-ROM AV (HDMV, BD-J) premaster with a video authoring system. Although scores of options for this may seem available, only a few professional Blu-ray tools (including Sony’s Blu-print and Sonic’s Scenarist) currently output the necessary BD Cutting Master Format (BDCMF). The premaster is then delivered to the replicator on an external hard disk drive, which may or may not be returned, or by electronic transfer (WAM!NET, etc.).

As an industrial process replication is, by nature, best suited for large-scale manufacturing, thus disc factories require minimum orders be placed (e.g. 1,000 pieces). As with DVD, the cost of a BD project (see Table 1) depends upon turnaround time, mastering (glass master, stamper), number of discs, layers (single, dual), check samples, labels (colors, process, film, proofs, printing), packaging (cases, coverwrap, inserts, shrinkwrap, security spines, anti-theft tags, stickers), fulfillment (warehousing, order processing, pick and pack, shipping), and so on.

Protection Money
Be it a few million copies of the latest Hollywood blockbuster or simply a handful of humble corporate training videos, the Advanced Access Content System (AACS) must be used to protect all replicated BD-ROM AV authored titles. However, before getting underway, essential business arrangements must be made between the content owner/publisher and AACS LA, an agency that develops, promotes and licenses the encryption technology on behalf of its creators (IBM, Intel, Microsoft, Panasonic, Sony, Toshiba, Warner Bros., and Disney). Current agreements are interim with AACS LA working to provide final versions before Feb. 27, 2009 (as of Dec. 2008). As such, terms and requirements may be subject to change.

Best serving the needs of small publishers is the AACS Content Provider Agreement. By declaring themselves as “Basic Content Providers” under the contract it allows occasional and modest-sized ventures to obtain the lowest licensing rates offered (see Table 2). In particular, it prescribes a $3,000 one-time administrative payment made directly to AACS LA, in addition to several other fees that can be either collected by the replicator (typical) or remitted by the content provider. As of Aug. 2008, these total approximately $1,310 per title + $0.04 per disc ($500 Content Certificate, $800 Content Certificate fulfillment fee, $0.04 per disc Media Key Block/MKB and $10 MKB fulfillment fee***). Dual-layer discs (BD50) require two Content Certificates be signed but the cost is the same as for single-layer (BD25).

Be aware, however, that replicators are free to mark-up these rates and, quite often, levy additional service charges. According to Michael Ayers, chair of the AACS Business Group, “AACS LA does not interfere with the prices charged by any AACS licensee for their products/services, whether a device manufacturer, content owner or replicator.”

To gain access to quantity discounts, larger publishers can either identify themselves as “Volume Providers” under this contract or, alternatively, execute an AACS Content Participant Agreement. But which option is best? According to Ayers, the “Content Participant Agreement has additional rights to exercise third-party rights to enforce the agreement against device manufacturers, to impact decisions to change the terms of operative AACS documents, etc. They also have the option to choose volume discounts for keys, if it makes sense for their projected production volume.” Consequently, choosing between the Content Participant and Content Provider agreements “is part mathematical exercise and part assessment of the desire of the content owner to have the ability to exercise a more active role in the AACS ecosystem.”

Call My Agent
AACS LA also compels content providers to appoint registered agents in both the states of New York and California to accept legal documents (related to service of process). Typically, this can be done at modest expense through a suitable third party such as a lawyer or service company (see Table 2). For example, California’s Secretary of State maintains a list of such organizations within its jurisdiction.

I Am Not a Number
Encoded during the authoring stage, all AACS-encrypted BD-ROM AV titles must contain an International Standard Audiovisual Number (ISAN), a unique identifier used to permanently distinguish individual “audiovisual works” (a 24-bit hexadecimal or 96-bit binary number such as ISAN 0000-0000-D07A-0090-Q-0000-0000-X). This scheme is centrally managed by the ISAN International Agency in Geneva, Switzerland with the specifics locally assigned through its appointed regional agents. ISANs may be obtained as needed after establishing an account with one of the registrars and remitting any applicable fees (see Table 2).

Extra, Extra!
In addition to AACS encryption, an optional layer of enhanced content protection called BD+ may be applied to protect any replicated BD-ROM AV disc. Originally developed by Cryptography Research, BD+ is presently owned by Macrovision and licensed through BD+ Technologies LLC.

According to Mark Hollar, senior director of product management (entertainment products) at Macrovision, content publishers who wish to take advantage of BD+ must “enter into patent and technology licenses agreements” as well as pay an “upfront authoring fee per cutting master format along with a royalty fee per replicated disc.” Physical production then requires “the authoring house to send a digital version of the master to Macrovision, where BD+ is applied. Macrovision then obtains an official signature for the BD+ code and sends the completed master to the replicator.”

* Content Certificate fees are identical for both single (BD25) and dual-layer (BD50) discs.
** Each Content Certificate is unique as it is derived from a cryptographic hash of the contents of a given disc. Thus, if the contents change for any reason (alterations to correct errors, new version, etc.), the Content Certificate is no longer valid and another one must be purchased from AACS LA.
*** One MKB per title required. Typically, replicators purchase from AACS LA 100 MKBs at a time for $1,000 (i.e. 100 MKBs ÷ $1,000 = $10/MKB order fulfillment fee).

Logo a Go-Go
Beyond the necessities of content protection, BD publishers must also identify and comply with an assortment of trademark and related responsibilities (see Table 3). For example, using the official Blu-ray Disc and BONUSVIEW (identifying Profile 1 Ver. 1.1 features) logos requires receiving written permission from the Blu-ray Disc Association (BDA) License Office, an entity responsible for managing and policing essential Blu-ray technical and legal agreements. To advertise and promote BD products and technology, consent to use these logos is available, at no charge for an indefinite term, by executing a Logo License Agreement (LLA). Exploiting Regional Playback Control (RPC), in addition to making use of the Blu-ray and BONUSVIEW logos, instead requires completing either a Content Participant Agreement (CPA) or Content Participant Agreement Light (CPA Light). Both are available for a five year term with an annual fee of $3,000 and $500 respectively (for more details, click here). For the most part, the CPA grants licensees legal rights over and above those conferred by the CPA Light.

Authorization to make use of BD-Live technology (internet/network connection, etc.) and its logo involves executing a separate BD-Live Logo License and Online Certificate Issuance Agreement. This is also available from the BDA License Office at no charge for an indefinite term but with completion of a further $1,000 Key Delivery Agreement (KDA) necessary to obtain the enabling BD-Live private key.

Of course, proper ownership notification must always be given and all names and logos used in accordance with strict guidelines (Blu-ray Disc Logo Guide; Blu-ray Disc Region Playback Control Logo Usage Guideline). And, depending upon the nature of the title, it is important to remember that other trademarks and service marks, such as those from Dolby Laboratories and DTS, carry their own licensing and usage obligations.

Due Diligence
When investigating potential Blu-ray replication facilities it is prudent to be concerned about more than just the quality and price of their work. Are they licensed? Do they respect patent and other intellectual property rights? How do they safeguard material? What is their reputation?

Consider that it is the position of BD intellectual property holders that content publishers use only licensed disc manufacturers. This entails verifying that a chosen replicator has obtained all permissions necessary to exploit essential BD physical and application formats, video codecs, content protection schemes and so on. Content publishers that choose not to use authorized replicators risk the possibility of patent lawsuits or other legal actions.

Some confirmations may be obtained quickly by consulting public lists published by licensors including MPEG LA (MPEG-2, MPEG-4 AVC/H.264, VC-1) and the BDA License Office (FLLA), while others must be requested such as those from AACS LA (AACS), Panasonic/Philips/Sony (ROM Mark) and BD+ Technologies (BD+).

Be aware, however, that the bulk of Blu-ray patent holders have yet to declare their licensing intentions. For example, although many are currently working to establish MPEG LA as the administrator of a joint patent pool, this effort is still ongoing. Thus replicators and content publishers alike remain in the dark as to any further obligations.

To help replicators develop sound practices and content publishers identify reputable business partners several industry groups have established various minimum operational standards and compliance processes, in addition to providing valuable educational resources. For example, the Content Delivery & Storage Association (CDSA) offers formal anti-piracy certification programs to optical media manufacturers and post production facilities while IFPI has long been engaged in worldwide anti-piracy investigation, enforcement and training efforts, including physical plant inspections.

The Cost of Doing Blu-ray Business
With its slew of legal agreements, upfront charges, recurring fees, and other imperatives, BD replication is a time-consuming, expensive, and all-around frustrating proposition for small- and medium-sized publishers.

Quantitatively speaking, for 1,000 copies of a simple title, all these demands add at least $7.54 overhead to the price of a single disc (calculated as a one-shot deal). Based on my earlier examples, this works out to roughly $11-12 (SL) to $13-14 (DL) each for a finished product. Ordering more units and amortizing the one-time and annual fees over multiple titles and years will dramatically reduce these estimated figures, but cost-efficient replication is, obviously, geared toward frequent high-volume production.

As the prices of writable hardware and media come down and compatibility matures, there should be little doubt that the best long-term solution for independent, in-house, and boutique high-definition publishers will be BD duplication rather than replication.

For more information:

BD+ Technologies LLC
Blu-ray Disc Association
Blu-ray Disc Association License Office
Content Delivery and Storage Association
Dolby Laboratories, Inc.
DTS, Inc.
ISAN International Agency
Macrovision Solutions Corporation

Hugh Bennett, editor-in-chief of Hugh’s News, is president of Forget Me Not Information Systems, a reseller, systems integrator and industry consultant based in London, Ontario, Canada. Hugh is author of The Authoritative Blu-ray Disc (BD) FAQ and The Authoritative HD DVD FAQ, available on Hugh’s News, as well as Understanding Recordable & Rewritable DVD and Understanding CD-R & CD-RW, published by the Optical Storage Technology Association (OSTA).

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