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Closing in on a final AACS agreement? - October 23, 2008

Depends on who you ask. Members of the AACS Licensing Authority are scheduled to meet in Tokyo next week to discuss what some are claiming (or at least hoping) are final details on a deal that is basically done. The agreed-on final rules for Blu-ray managed copy and watermark detection--two of the stickiest issues--have been sent to licensees currently operating under the AACS interim license agreement for feedback, according to AACS sources. Some involved in the negotiations tell Media Wonk they're hopeful the group will have language hammered out on a final license agreement by the end of this year.

If all goes according to plan, managed-copy servers could be up and running before the end of 2009 and studios could begin enabling managed-copy on Blu-ray titles at that point.

Other sources simply laugh or roll their eyes at that timetable, however, citing the many times in the past they've heard the same predictions, only to see the date-certain come and go without any certainty. "Fool me once...," one skeptic said, leaving it to the listener to fill in the rest of the quote.

There are other signs that suggest serious trouble within the organization that could still scuttle a final deal. According to AACS sources, some IT companies within the organization are rapidly losing patience with the negotiations, which have dragged on for nearly four year. If a final deal is not reached by the end of this year, those sources say, one or more could decide to forget the whole thing.

"This whole thing [AACS] could just collapse like a melting ice cube," one source said. "At a certain point it becomes a question of resources."

Failure to reach a deal on a final AACS license could deal a serious blow to the Blu-ray format in general. Without managed-copy, Blu-ray becomes a much less attractive format for PC makers and other IT companies, particularly given its already-high licensing costs. Without the support of the IT industry, however, Blu-ray is at risk of becoming essentially a consumer electronics format, rather than a cross platform optical-storage medium like DVD.

There are already signs that the IT industry is looking beyond Blu-ray for the delivery of digital content. Earlier this month, Apple chairman/CEO dismissed Blu-ray as a "bag of hurt," and suggested that Apple is in no hurry to adopt the format. Microsoft is yet to add native Blu-ray support to Windows, and is yet to release a Blu-ray peripheral drive for its Xbox 360 game console despite having to discontinue its add-on HD DVD drive.

"We have the best HD movie and TV options in iTunes," Apple marketing VP Phil Schiller said in explaining the absence of a Blu-ray drive on the new MacBooks. And it compiled that library in much less time than the four years the AACS negotiators have been at it.

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