Companies move ahead with DVD burning plans

UPDATE: DVD CCA gives approval

By Paul Sweeting and Ned Randolph -- Video Business, 9/27/2007

SEPT. 27 | Disc-burning kiosk companies and movie download services are moving forward with plans for on-demand DVD burning following the DVD Copy Control Assn. approval last week of on-demand manufacturing using CSS encryption.

Sonic Solutions last week unveiled a broad range of licensing deals and partnerships around its Qflix download-and-burn platform, including companies targeting consumer burning applications as well as in-store burning kiosks.

The deals open the way for home recording and on-demand manufacturing using CSS, the same copy-protection system used on commercially pressed DVDs, ensuring that burned discs will play in any set-top DVD player, while offering content owners a degree of protection against unauthorized copying.

Among those licensing Qflix technology for home use is Dell Computers, which will begin bundling Sonic’s CSS-enabled burning software in high-end PCs and laptops equipped with Qflix-compatible DVD burners.

The new burners are being made by Pioneer, DataPlay, Philips, Plextor and TSST (Toshiba Samsung Store Technology).

Consumers also will need new Qflix-compatible discs, which are being offered by Verbatim and RITEK.

In addition, Sonic announced Qflix licensing deals with movie download providers Akimbo and Blockbuster-owned Movielink.

Senior VP and general manager of Sonic’s advanced technology group Jim Taylor said he expects to begin beta testing an in-home burning application with Movielink before the end of the year.

On the retail side, Sonic has licensed Qflix technology to kiosk makers MOD Systems, Polar Frog Digital, TitleMatch Entertainment Group and YesVideo.

TitleMatch, Polar Frog, MOD Systems and others have been working with retailers on pilot programs to test whether customers will order and wait around five to 10 minutes to burn DVDs on demand.

“Today, when you go into a store and buy a movie, you buy only what they have on the shelf,” said Anthony Bay, co-founder and chairman of MOD Systems, a third-party vendor. “The promise of digital delivery in retail is you have the same catalog on the Internet, except you can pick it up in the store.”

Walgreens is one retailer that likes what it has seen from the concept. The drug retailer said it will start rolling out DVD burning kiosks in stores within the next few months.

“We feel this [approval] is a key step forward in allowing DVDs on demand at retail,” spokeswoman Tiffani Bruce said. “The industry has been waiting on the approval for some time. Now that we have it, we expect strong studio participation in our plans.”

With its footprint of 6,000 stores, Walgreens hopes to become a retail leader with in-store DVD burning.

“We think this is appropriate for most of our stores,” said Bruce. “It will be a key differentiator. [DVD burning] is something you can do in the time it takes to refill a prescription or pick up a photo finishing order.”

Sonic’s Qflix platform, which it developed in conjunction with Pioneer, consists of authoring and burning tools to manage the download-and-burn process.

Although the delay in securing final approval was a setback to Sonic’s Qflix rollout plans, Taylor said he still sees significant opportunity in on-demand manufacturing.

“If we and our content partners, if everyone in the value chain does a good job of finding good niche product and making it available with a good consumer experience, I actually think there's a very big opportunity for the industry,” Taylor said. “The key will be whether the studios make the right kind of content available.”

On-demand manufacturing of standard-def DVDs is being introduced just as the industry is turning its attention to high-definition formats, but Taylor still sees a lot of life in standard DVD.

“This is definitely a transition technology,” Taylor acknowledged. “It's a transitional technology for two reasons: One, eventually everything is going to be in high-def; and two, eventually we're going to move to electronic delivery, with no physical media involved.”

Both of those developments, however, “are 10, 12, 15 years away,” Taylor said.

In the meantime, some executives were quick to caution that the DVD-CCA approval doesn't clear the way for immediate on-demand burning.

“There are still obstacles,” said Mary Litchhult, VP of business development for TitleMatch Entertainment Group. “Are the drive manufacturers ready? Is the media available? Not yet. We need drives and media—and, of course, content."

It will take a large number of manufacturers to embrace the idea and carry it into the retail channel, combined with consumer understanding of how it works, said Curt Marvis, CEO of CinemaNow, which already has limited burning available on its site using a non-CSS encryption scheme.

Everything hinges on studios to make their content available, he said, otherwise kiosk, drive and blank-disc manufacturers will not respond.

“One would hope that CSS encryption, all of the studios, including those not working with us to burn, will embrace the technology,” he said.

Susanne Ault contributed