Cheaper discs? Panasonic, Philips, Sony plan joint Blu-ray licence

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Panasonic, Philips and Sony today announced they joint forces to consolidate the Blu-ray licensing business. The aim is to offer a single license that not only covers patents for Blu-rays but also DVDs and CDs. If things go well, we as consumers could get cheaper movies, music or games in the process.

The companies are saying that the new licensing system will be launched in the middle of this year and be handled by an independent US-based entity that serves as a single point-of contact for licensees. Licensed companies are saving time and money, which may help expand the Blu-ray business.

Apparently, royalty rates for Blu-ray products are 40% lower than the current combined rates for individual Blu-ray, DVD and CD products.

More details in the joint press release:
February 25, 2009 – Panasonic, Philips and Sony are currently working with other Blu-ray DiscTM patent holders to establish a one-stop-shop license for Blu-ray DiscTM products. This license, which covers essential patents for Blu-ray DiscTM, DVD and CD, will be introduced in the middle of this year. The license program will be offered by a new independent licensing company that will be based in the United States with branch offices in Asia, Europe and Latin America. The CEO of the new license company will be Mr. Gerald Rosenthal, former head of IP at IBM and more recently CEO of Open Invention Network.

“By establishing a new licensing entity that offers a single license for Blu-ray DiscTM products at attractive rates, I am confident that it will foster the growth of the Blu-ray DiscTM market and serve the interest of all companies participating in this market, be it as licensee or licensor.” said Mr. Rosenthal.

The three founding companies believe that the introduction of this simplified one-stop shop product license will stimulate the growth of the market for Blu-ray DiscTM products.
Any holder of essential patents for Blu-ray DiscTM, DVD and CD patents is invited to join this licensing entity as a licensor and also as shareholder.

The fees for the new product licenses are US$9.50 for a Blu-ray DiscTM player and US$14.00 for a Blu-ray DiscTM recorder. The per disc license fees for Blu-ray DiscTM will be US$0.11 for a read only disc, US$0.12 for a recordable disc and US$0.15 for a rewritable disc. As a result of the efficiencies obtained with the combined license offering, the royalty rates for Blu-ray DiscTM products are expected to be at least 40% lower than the current cumulative royalty rates for individual Blu-ray DiscTM, DVD and CD format licenses.

The Blu-ray DiscTM product licensing program aims to create a level playing field in the market for Blu-ray DiscTM products by introducing special measures to encourage companies selling Blu-ray DiscTM products to comply with their license obligations. The program also includes measures to easily identify unlicensed products in the market and a system to address those who may not have obtained proper licenses for Blu-ray DiscTM products.

In this one-stop-shop product license, the new license company will be a single point of contact for licensees, greatly reducing the burden on licensed companies that would otherwise have to report to multiple patent pools.

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