High-def camps OK AACS

On track for March launch, HD DVD starts promo tour

By Paul Sweeting -- Video Business, 2/16/2006

FEB. 16 | A critical hurdle to the launch of both the Blu-ray Disc and HD DVD formats was cleared late Wednesday when negotiators reached agreement on an interim license for the AACS copy-protection system slated to be used by both high-definition formats, sources involved in the discussions said.

The interim agreement will permit hardware makers and disc replicators in both format camps to obtain the secret encryption keys needed to start pressing discs and shipping players capable of reading the discs.

Without such an agreement, it would have been nearly impossible for HD DVD backers to meet their planned late-March launch date, dealing the format a potentially devastating blow.

Blu-ray hardware makers Samsung and Pioneer plan to start shipping players in May, a date that also would be in peril if an agreement wasn’t reached soon.

Negotiators worked feverishly over the past several days to hammer out enough agreement to let both sides’ launch plans go forward, after efforts to reach a final agreement broke down last Friday without a deal.

On Wednesday, HD DVD’s principal developer, Toshiba Corp., unveiled plans for a 40-city retail and media tour to showcase the new format and build momentum for the launch.

The tour kicks off Feb. 22 in New York and Paramus, N.J., followed by stops in Boston; Chicago; San Francisco; Washington, DC and Los Angeles, among other cities.

The first HD DVD titles are slated to arrive March 28 from Warner Home Video.

Warner officials were not immediately available for comment.

Although both the Blu-ray Disc Assn. and the DVD Forum agreed to adopt AACS (Advanced Access Content System) as the primary copy-protection scheme for their respective high-def formats, efforts to negotiate final terms and conditions for implementing the technology have faltered, often amid bitter recriminations among AACS member companies.

The technology was co-developed by Sony, Toshiba, Panasonic, IBM, Intel, Microsoft, Warner Bros. and the Walt Disney Co., which will jointly oversee licensing through the AACS Licensing Authority (AACS-LA).

Although the basic workings of how the system encrypts video content and decrypts it on playback were settled fairly quickly, disagreements have arisen over issues such as the sorts of video outputs AACS-compliant players will be permitted to have and whether they must respect region coding on the discs.

Among the more contentious issues has been implementation of the “managed-copy” requirement for AACS-encrypted discs.

Under rules generally agreed on by the eight members of the consortium, all AACS-encrypted discs must permit users to “rip” the content to a hard drive under carefully controlled conditions.

The provision is regarded as essential by Microsoft and Intel, which hope to integrate the new formats into larger digital home networks based on their technology.

Microsoft, in particular, is keen to include managed-copy capability in Vista, the next generation of its Windows operating system expected to arrive later this year.

Although the studios have agreed to managed copy in principal, they are concerned that it could become a tool for pirates if not carefully controlled.

The issue was further complicated when the Blu-ray Disc Assn. agreed last year to adopt an additional layer of copy protection for its discs. Known as BD+, that additional copy protection was being aggressively promoted by 20th Century Fox.

Although Fox is not a member of AACS, the decision to adopt BD+ split the consortium, which includes members from both camps.

Microsoft and Intel were concerned that the operation of BD+, which is not under the jurisdiction of AACS-LA, could interfere with consumers’ ability to view their high-def discs over a home network.

Blu-ray companies have strongly disputed those claims, accusing Microsoft of concocting the issue in order to delay completion of the Blu-ray format specs.

Microsoft has emerged as a strong backer of HD DVD and is locked in a fierce battle with Blu-ray developer Sony for dominance of the next-generation videogame market.

Sony plans to incorporate Blu-ray technology into its PlayStation 3 game consoles, which will be pitted against Microsoft’s Xbox 360 platform. A delay in approving AACS for Blu-ray could upset Sony’s PlayStation launch plans.

Microsoft officials declined to comment.

The interim agreement does not resolve all questions surrounding managed copy.

Instead, it relies on the fact that first-generation players will have no recording capability anyway to defer the issue to another day.

Under the interim rules, content owners “shall not authorize the making of a Managed Copy … prior to signing the applicable Final Agreement.”