DRM Debate Resumes Over 'Managed Copy' for Blu-Ray, HD DVD

A full three years after the idea for it was first raised, and well over a year since the first generation of high-definition DVD players was supposed to have included it, the debate over both the meaning and implementation of mandatory managed copy (MMC) for the final 1.0 version of the AACS copy protection scheme has been re-ignited.

As IDG correspondent Jeremy Kirk first reported for InfoWorld early this morning, representatives of the AACS Licensing Authority and essentially all the major US movie studios may be finally close to an agreement on MMC, though AACS LA Chairman Michael Ayers did not reveal what that agreement may entail, and which side may have compromised the most.

The idea of managed copy is to enable an HD DVD or Blu-ray Disc write-enabled player connected to the Internet to make a limited number of backup copies of legally purchased discs per customer. As the system has been outlined before, movie studios would operate online sites called clearing houses, which would review the customer's records, determine whether she's entitled to a backup, and authorize or decline the transaction - thus triggering the player's response to its user.

Managed copy is a controversial idea among customers because of all the technologies it would entail: First, it assumes clearing houses keep records of their clients, in order to permanently limit the number of backup copies a client can produce. Second, it assumes player consoles have permanent connections to the Internet, perhaps using dedicated, registered DNS names - so not only do clearing houses keep track of clients but of players as well. Third, the system could place the content producer in the role of mediator, which may have serious legal implications especially if studios wish to charge extra for backups.

Antitrust laws passed in the 1960s prohibit studios from unfairly profiting from their productions in a way that may stifle free-market competition. Such laws forced studios then to sell off their interest in theater chains, as well as vice versa, in the famous case of Loews' spinning off its interest in MGM. The validity of such laws with regard to whether studios can engage in distributing -- or even selling, as some studios may reportedly still prefer -- backups online, may be challenged.

Further, the possibility exists that clearing houses may become "preferred" online sites for all kinds of content distribution - preferred, that is, by the AACS-endowed players that would contact these sites first in order to maintain copy protection, in so doing, possibly upstaging others who may see managed copy as a new opportunity for an open market in movie download sales.

Reports from the AACS LA that a deal on MMC may at last be at hand, have circulated practically since negotiations for the final specification first began several years ago. BetaNews has not seen evidence from outside sources corroborating the AACS LA's statement this morning.

Yet another perennial sticking point among the key players in the negotiation, including both studios and manufacturers, has been the meaning of the first "M." Sure, it stands for "mandatory," but whose mandate are we referring to?

Manufacturers of consoles contend it means giving console owners a guarantee that they'll be able to make at least one copy of discs they purchase. Studios, meanwhile, counter that it means the mandate that the content owner will have first right of acceptance or refusal over whether a customer can make a backup.

And over the years, whenever a publication prints either definition for MMC but not both, it gets flooded with urgent requests for corrections from the side that definition did not favor.

But part of Ayers' statement this morning revealed that a compromise may be in order, involving customers pre-purchasing backups when they buy the original discs, wherever they buy them. For example, a backup-preventative "Spider-Man 3" may sell for $49, while a one-backup version sells for $54 and a three-backup for $59.

This would give retailers an olive branch, putting them back in the business of selling supplemental content. At the same time, it leaves consoles connected to the Internet so that customers can, in one likely scenario, redeem their pre-purchased backup coupons from clearing houses.

BetaNews has contacted the AACS LA for further comment on this issue, which may be forthcoming.