Macrovision to acquire Blu-ray's BD+ for $45 million

Already the provider of a key element of the copy protection schemes in Blu-ray and HD DVD, the content protection software company will acquire the embattled BD+ from its creator.

Cryptography Research, Inc., the R&D firm that developed a virtual machine environment protected by a layer of encryption -- the tool whose viability was one of the catalysts for the split between the HD DVD and Blu-ray camps -- has agreed in principle to sell BD+ to Macrovision for $45 million in cash, plus stock warrants.

While the deal itself may not be telling, the terms are extremely revealing: Macrovision is getting CRI's patents, its existing ciphers, its customer agreements and partnerships, and even some of the employees involved in devising the scheme.

Thus, CRI isn't sublicensing the concept in order to maximize its IP investment. It's getting out of the Blu-ray encryption business, and handing it over to someone who may care more about it.

Macrovision's existing contribution to the content protection realm -- for which it's already notorious in many circles -- is analog content protection (ACP), which is part of the AACS scheme and licensed through AACS LA.

The basic concept was introduced back in the days of the VCR, making Macrovision synonymous in many users' minds with consumer-unfriendliness. ACP makes delicate, pulsating adjustments to the gain control in order to prevent copies from having anywhere near the same quality as the original - pulses that an analog TV display misses but that a recorder writes to tape.

In 1997, Macrovision was contracted to devise a next generation of that concept for the digital realm: an ACP for DVD. Its solution was the infamous "color stripe" pulses encoded into the video stream, which would be in sync with the display but out of sync with a recording device. That lack of synchronization caused early VHS tape copies of DVDs to have unavoidable color banding.

A few years ago, Macrovision branched out into different areas of the digital content protection realm, acquiring InstallShield in 2004.

Today, a joint statement from the selling and buying companies reveals Macrovision's intent to incorporate BD+ into its broader suite of digital content protection properties - a move which could enable it in the future to bundle their licenses.

But now that the system appears besieged by malicious users a mere five months after its premiere deployment by 20th Century-Fox. Macrovision, a larger and more capable company than CRI, may be able to come to its defense, perhaps not only patching the virtual machine-based encryption scheme but quite possibly extending its reach and expanding its purview into the realm of consoles and computers.