HD DVD, Blu-ray "Managed Copy" coming later this year
The managed copy spec that will allow users to make copies of HD DVD and Blu-ray movies is finally nearing completion. MPAA head honcho Dan Glickman recently said that the AACS support behind managed copy would be ready before the end of the year, so we contacted the HD DVD Promotional Group and our sources in the industry to see what's up.
A spokesperson for the Group told Ars that the full implementation of managed copy will appear only once AACS is finalized. That final specification is expected in the coming months, according to Glickman's comments, although other sources tell us off the record that the commonly occurring AACS cracks aren't helping with the timeline. The hope, at one studio at least, is to see managed copy in time for the 2007 holiday season, and confidence is high that this schedule will be met.
Once the final specification is ready, studios will be able to specify what options they would like to offer and for how much. For instance, a user might have the option of making one free backup or could be charged a nominal fee to create a version suitable for mobile usage. Studios could even permit multiple copies at discounted pricing, allowing consumers to make copies for friends and neighbors at a fraction of the original cost. We'll have to wait and see what they bring to market, but there's one common denominator to all of this: all copies will be slathered with a big helping of DRM.
According to the HD DVD Promotional Group, managed copy will be retroactive for all HD DVD discs—that is, discs sold today will work with managed copy, even though the feature is not ready yet. The same is not true for Blu-ray, however.
Back before either HD DVD or Blu-ray launched, there was a war of words between the two camps over the feature. The dividing line between them is that the HD DVD folks require all studios to support managed copy (so-called "mandatory" managed copy), while the Blu-ray camp doesn't. Required or not, studios have the option of charging for any and all managed copy use, so it is not the case that HD DVD will offer free managed copy on every disc.
Yet even with the option of charging for managed copy, not all studios are fans of the idea. A source close to a major Blu-ray partner who spoke on condition of anonymity told Ars that there is a fear that managed copy could be exploited and provide a backdoor to AACS security. When I pointed out the obvious flaw with that concern, namely that AACS has already been compromised, my source said that hopes are still high that the AACS game of cat-and-mouse with hackers will ultimately be won in AACS' favor.
Regardless of the relative strength of AACS, it's too late to turn back now: the copy protection spec is in the wild, and a complete overhaul is not possible. This may not be a bad thing. Studios could realize that the best way to combat piracy is to engage customers at more attractive price points. On the other hand, the studios have to be careful not to enrage traditional distribution partners, who could turn on the studios if they feel that they are being cut out of the equation. For now, it's baby steps.
Disney, for instance, recently affirmed its successes on the iTunes store, noting that despite a pricing structure which is below that of DVD, the distribution model is still profitable for them. This emerging revenue stream is why it's not completely absurd to envision managed copy being used to create and sell multiple copies. A sale is a sale is a sale, and it's even better when the studios don't have to pay for packing and distribution. One option that could placate traditional retailers would be to sell backup rights in store, at the time of purchase. Michael Ayers, spokesperson for AACS LA, told InfoWorld that they are looking at the idea of charging a premium for movies such as "Spider-Man 2" that would come with, say, three backup licenses.
Whatever the case, the AACS cracks haven't deterred the HD DVD camp. Its promotional spokesperson confirmed to Ars that managed copy "remains a mandatory feature of the HD DVD specification," and we expect that many Blu-ray studios will ultimately sign on as well. The biggest remaining question is pricing. My source suggested to me that iTunes pricing is "probably instructive."