Panasonic, Philips, Sony Promote Single License For Cheaper Blu-ray Manufacturing

Panasonic, Philips and Sony on Wednesday said they, along with other Blu-ray patent holders, would by the third quarter of 2009 establish a "one-stop-shop license" for Blu-ray products, according to a jointly issued press release.

At present, Blu-ray manufacturers have to pay royalties to three separate patent holders for Blu-ray, DVD and CDs just to acquire the technology needed to make Blu-ray players. The single license would cover all of the necessary patents and establish a fixed fee schedule that according to the statement would drive the total cost of royalty payments down as much as 40 percent.

Panasonic, Philips and Sony said the licensing would be handled by an independent licensing company to be based in the United States with offices in Asia, Latin America and Europe. Gerald Rosenthal, a former head of intellectual property at IBM and former CEO of Open Invention Network, was named CEO.

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

The fee structure for the new license would include $9.50 for a single Blu-ray player and $14 for a Blu-ray recorder. Blu-ray disc manufacturing will cost 11 cents per disc for read-only disc, 12 cents for recordable discs and 15 cents for rewritable discs.

Without the creation of an independent license -- an idea that's been kicking around for about two years -- licenses can run as much as $20 for manufacturers because they have to approach different patent sources with different fee schedules to get cleared to make Blu-ray products.

The Panasonic, Philips and Sony statement did not say whether other major Blu-ray patent holders like Hitachi, LG, Sharp and Samsung had expressed interest in signing on for the one-stop license shop idea.

The cost of Blu-ray licensing has, despite steady growth in the technology, inhibited its ability to gain widespread acceptance among manufacturers. Apple CEO Steve Jobs infamously called Blu-ray a "bag of hurt" last fall, blaming the licensing for being "so complex."

Cheaper licenses for manufacturers to make Blu-ray discs means cheaper Blu-ray prices overall. According to the U.K.-based research firm Futuresource Consulting, sales of Blu-ray discs in the United States, Western Europe and Japan will pass the 100 million mark in 2009, with more than 80 million projected in the U.S. alone.

By way of comparison, 36 million Blu-ray discs were sold worldwide in 2008, and 24 million in the U.S. But Futuresource suggested in a statement that Blu-ray in the United States has moved "from early adopter phase through to early majority, with the format gaining real traction in the marketplace."