Our take...
The arrival of managed copy represents another step forward for BD, a format that was designed to evolve. The downside to this development is the potential confusion it will cause for consumers. While managed copy will be a requirement for all BDs manufactured after final agreement is signed, existing BDs cannot be enabled.

The Blu-ray Disc Association has indicated that current BD players do not support managed copy, and such functionality is unlikely to be enabled by a firmware upgrade. And even if this were possible in principle, existing BD players lack the necessary power to copy and transfer – presumably via USB to the PC or other storage device, or directly to compatible removable storage media, such as an SDHC card or USB flash drive – a full-res movie (around 15-20GB of data). Indeed, early BD players – prior to the introduction of profile 2.0 – might also not feature the Ethernet connection required for the online authorisation process. BD player households would therefore have to upgrade their hardware to make use of the managed copy functionality on new BDs. It is worth mentioning, that there is no obligation for BD hardware manufacturers to facilitate managed copy – it is only mandatory for BD software – so proliferation of capable BD players will be contingent on manufacturers building this functionality into devices.

Managed copy would obviously be much easier to implement across BD drives for PCs and the PlayStation 3 (PS3), platforms with sufficient processing power and the added benefit of local storage. The PS3 already facilitates legitimate, controlled ripping of BD game discs. For example, for the PS3 release of Rock Band 2, Harmonix enabled owners of the original game to export most of the songs from the Rock Band BD to the console's hard drive and access them while playing the sequel (it charged $5 "to compensate music licensors for expanded use"). Managed copy of BD movies on PS3 therefore seems conceivable, providing the user has enough space on the hard disk.

As things stand there will be limitations around usage – the only formats currently supported for managed copy are AACS-encrypted BDs, CSS-encrypted DVDs and Windows Media DRM-encrypted digital files. BD and DVD drives will therefore also have to be upgraded, for AACS and CSS encryption respectively, by those users wishing to burn their managed copy to a disc.

The fact that a managed copy can be burned to DVD – a format that could not accommodate a Full HD movie – implies that users may be able to 'down-res' the managed copy or make a lower resolution copy. It has not been revealed whether the managed copy could be optimised for viewing on other devices, such as portable video players, but in any event, the number of these with which it would be compatible is limited at this point as Apple – whose iPod device accounted for 72% of all active installed portable video players in the US in 2008 – has not applied for an AACS license. However, Apple is working with the studios on Digital Copy so there is a precedent for the licensing of its Fairplay DRM.

It is not yet clear what implications managed copy will have for Digital Copy. The latter is a slightly different proposition, as the studios often literally bundle ready-to-use digital versions of the title with DVDs and BDs (in some cases, the user has to download the files from an online destination). Commonly it comprises two pairs of files, formatted for Windows Media and iTunes respectively; one designed for viewing on a computer and one optimised for transfer and playback on a portable video device. Managed copy and Digital Copy are further distinguished by the burn rights attached to the former, and the higher resolution available – all Digital Copy files are SD.

There is no discrete cost attached to Digital Copy, but for DVD it is often only available with the special edition release so is associated with a premium. Distributors will be allowed to charge consumers for making managed copies but, for the reasons outlined in detail in a report on Digital Copy (see link below for further information), Screen Digest does not believe this represents an opportunity to generate incremental revenue. To do so would be to attempt to sell functionality that, with consumer disc ripping technologies, many consumers (at least the early adopters) believe they are already entitled to. Illegal DVD ripping is widespread, with a range of freeware available enabling consumers to circumvent copy protection. Managed copy – if offered to consumers for no extra charge – has the potential to discourage the rapidly-growly illegal BD ripping segment and help prevent it becoming as commonplace as DVD-ripping. The challenge will be in how to offer managed copy as a simple, consumer-friendly function, which could provide through the addition of new functionality and increased flexibility an extension to the life of the studios' physical retail business.