Blu-ray victory means royalties, royalties, royalties
Posted by Michael Kanellos | 72 comments
Forget about customer satisfaction or superiority of image quality. The real issue in the war between Blu-ray and HD DVD was about royalties.
With the competition gone, the Blu-ray consortium now has the opportunity to persuade PC makers and consumer electronics makers to adopt Blu-ray drives as their optical drives of choice. It will also get studios and disc makers to deliver Blu-ray discs to consumers. And every time one of those drives or discs leaves a factory, the Blu-ray Disc Association will get a royalty.
The numbers add up quickly. Look at DVD, for example. To make a DVD player legally, manufacturers recently had to pay around $4 per player or drive, according to some estimates. A few years ago, those fees were around $15 to $20. Fees get paid every time a DVD drive gets included in a PC. Nearly every PC in the world has a DVD drive these days and roughly 250 million PCs get shipped every year. Companies that legally make DVD discs also pay fees. The DVD6C licensing group dropped the per disc fee in January to 4 cents per disc. Years ago, it was 7.5 cents per disc. Then there are verification fees.