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Time to revisit Blu-ray?

In the past many smaller producers have been turned off by the high cost-to-market to replicate and release their HD video content onto Blu-ray disc. By far the biggest contributor to these high costs (and confusion overall) has been the mandatory AACS Licensing Agreements needed for every Blu-ray video title released.

Since launching the content distribution and digital rights management scheme in 2006, all involved have been working under the interim AACS licensing agreements and paid accordingly. All this changed on June 5, 2009 when the final AACS Licensing Agreements were released by the AACS Licensing Agency (AACS LA), that included some significant price reductions - especially for lower volume publishers, wishing to replicate a few thousand copies.

Summary of the AACS fee reductions:

Fee	Interim Price (old)	Final Price (new)	Summary
AACS Content Provider License	$3,000 one-time	$500/year	A new Annual Fee Option
AACS Title Key Certificates	$1,300 per master	$500 per master	$800 less per master
AACS per disc Royalty	$0.04/disc	$0.04/disc	No change

What does this mean?

These fee reductions mean that getting into the Blu-ray market has just opened up to many more producers. In particular those who wish to release Blu-ray titles for the first time and test HD markets with their content. Under the interim agreement, a content owner would have to pay a one-time $3,000 to get a Content Provider License, then pay $1,300 for each master AND pay an additional $0.04/disc in royalties - all before they even started to pay for replication.

Here's an example:
A first-time producer wishing to replicate 1,000 Blu-ray discs under the old interim agreements would have been required to pay $3,000 upfront for the Content Provider License. Then a further $1,300, per master in Title Key certificate fees and $0.04/disc in royalties ($40 total). That was $4.34/disc just to get started and that didn't include the cost to replicate the actual discs.

Under the final agreements, the same first-time producer can opt to pay an annual Content Provider License of $500/year, then $500 per master for Title Key certificates and $0.04/disc royalties. This adds up to $1.04/disc, not including replication costs - but still a significant $3,300 less to get into Blu-ray.

What else is new?

In the final agreement, "Managed Copy" was refined and approved. Managed Copy is a requirement for the content owner to allow end-customers to make one full resolution copy of the Blu-ray discs they purchase. When authoring a Blu-ray master, a URL which points to a server online is added, which allows customers to get an authorization code needed to make their copy. The copy will still be protected by a digital rights manager (DRM), so no additional copies will be possible.

Note: Many of the Blu-ray authoring applications support this feature, but not all, so check with your authoring house.

Managed Copy will be mandatory on all Blu-ray discs by Q1 2010, but not all Blu-ray players will support this feature straight away, which leaves managed copy somewhat on the sidelines until a more comprehensive solution is agreed to.

Also the final agreement includes plans to eliminate analog outputs from Blu-ray players, called the "Analog Sunset Provision". This provision states that all Blu-ray players manufactured after the end of 2010 must limit the analog output to only standard-def resolution. And that after 2013, no player can have an analog output at all. The Analog Sunset Provision is meant to reduce the amount of pirated discs in the marketplace and won't affect how a disc is authored or replicated.

Actual Costs-to-Market for Blu-ray

Under the final agreement's fee structure, below is a total breakdown of the costs. We'll use the example above where a first-time producer wants 1,000 retail-ready Blu-ray discs delivered. Let's assume the BDCMF fileset is already authored and ready to go.

Steps	Responsibility	Cost
Content Provider License	Content Owner	$500
Title Key Certificates	Replicator	$500
Royalties	Replicator	$40
Replication Costs	Replicator	$2,990
Total		$4,030

Under the interim fee structure, the same project would cost $7,330 to bring to market!

Full Blu-ray replication pricing can be found here. If you need assistance with the authoring of a project, more details on how PacificDisc could help can be found by clicking here.

In Conclusion

PacificDisc is thrilled with the new guidelines and fee structure for AACS. Now that most of the barriers to entry have been reduced (not eliminated, but greatly reduced), we are excited and ready to start replicating more Blu-ray discs for our target customer - the smaller, hard-working independent producer.