Philips tries new licensing scheme on Taiwan pre-recorded disc makers

September 5, 2006

GristyMcFisty used our news submit to tell us that Philips is still pressuring pre-recorded disc makers
in Taiwan for royalties. This latest development, reported
over at DigiTimes, speaks to a new licensing scheme, similar to the unpopular
Veeza.

This new scheme covers both pre-recorded CD's and
DVD discs. So far, it is not well received and only BestDisc Technology has
signed up. The other disc makers in China and Taiwan are simply taking a wait
and see approach, having already boycotted the Veeza licensing. Many Taiwan
companies feel both licensing plans breech confidentiality, as they require
disclosure of production volumes. In turn, Philips has approached major
international vendors of pre-recorded discs and Hollywood studios asking that
they do not place orders with the unlicensed producers. In addition, they have
asked US customs to confiscate any unlicensed discs.

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
sources noted. The new licensing scheme, like Veeza, requires that makers
declare the volume and client for each shipment of pre-recorded discs, the
sources indicated.