Blu-ray Price Drop Conspiracy

What do Panasonic, Philips and Sony have in common? The companies are all Blu-ray patent-holders and now they want to pimp the format by dropping cost and simplifying licensing. But they need other patent holders on board to create a one-stop shopping experience for any company that wants to license all the patents required to manufacture Blu-ray products. They hope the results will be price reductions for players and discs not to mention a renewed consumer boom to the format.

The plan is expected to come together sometime in the middle of this year. The license program is to be offered by an independent company that will cover all the essential patents required not only for Blu-ray but also for DVD and CD.

Gerald Rosenthal is the former head of IP at IBM and CEO of open Invention Network. He will lead the freshly minted license organization and offered a quote at a recent Sony press release:

“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 market and serve the interest of all companies participating in this market be it as licensee or licensor.”

Is that business-speak for Blu-ray stuff will get cheaper? We can only hope.

Here’s an example of the kind of savings licensees and licensors can expect. New Blu-ray player licenses will drop to $9.50 and $14 for Blu-ray recorders. Movie disc licenses should drop to eleven cents and royalty rates will drop at least 40%.

Will we see these savings passed on to us consumers? It should, Blu-ray is still expensive compared to DVD. Sure it’s a significant upgrade to us but most think of it as another upgrade like the one they had to do to get DVD upgraded from VHS.

But comparing the DVD/VHS divide to the DVD/Blu-ray difference is not really fair. The average person who doesn’t know how many horizontal lines of resolution are on his HDTV can’t be expected to get excited about the difference between 480 and 1080P. That means the manufacturers have work to do – starting with cutting prices low enough so Joe-HDTV-Six-Pack can see the difference for himself.

Until then I’ll be limiting my Blu-ray purchases to the bargain-bin so I can still afford that six-pack of my favorite brew.