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Tuesday, September 05, 2006
Philips Changes Licensing Scheme to Attract Pre-recorded Disc Makers

Philips is pressing makers of pre-recorded discs in Taiwan to accept a licensing scheme similar to Veeza, a licensing scheme that was not well received by disc makers.

Digitimes reports that the new scheme is applicable to pre-recorded CD-R and DVD discs, and so far, only Bestdisc Technology has sign up for it while leading and second-tier makers are still watching developments.

To date, there has been no disc makers in Taiwan and China who have accepted the Veeza licensing system, which applies to blank CD-R discs, the sources indicated. Philips is now pushing its new licensing scheme for pre-recorded discs on Taiwan-based makers by attaching it to existing contracts, the sources pointed out.

To promote the new licensing system, Philips lowered the royalty charge for a pre-recorded DVD disc from US$0.03 to US$0.025. The new licensing scheme, like Veeza, requires that makers declare the volume and client for each shipment of pre-recorded discs, the sources indicated. Taiwan-based makers, including U-Tech Media and Infodisc Technology are reluctant to accept the new licensing scheme because they feel it breaches business confidentiality, the sources pointed out.

In order to bring pressure upon Taiwan-based makers, Philips has urged major international vendors of pre-recorded disc, especially the top eight movie producers in Hollywood, not to place OEM orders with unlicensed makers as well as customs agencies in the US and Europe to confiscate imported pre-recorded discs without a Philips license, the sources noted.

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