Saturday, November 24, 2007

Macrovision to Acquire BD+ Blu-ray Disc Security Technology

Macrovision Corp. has announced that it has signed a definitive agreement to acquire certain technology assets from Cryptography Research (CRI), the San Francisco-based R&D organization focused on solving complex security problems. After the transaction, Macrovision will own the SPDC (Self-Protecting Digital Content) technology, which formed the basis of BD+, an element of Blu-ray’s content security platform.

BD+ has been adopted by more than 20 companies including major CE manufactures and motion studios. Upon the close of the transaction Macrovision will be the primary licensor of BD+ technology to studios. The BD+ will complement Macrovision’s existing ACP and Ripguard video security solutions used to protect DVDs from copying. The company itself did not say whether BD+ will be used for other products than Blu-ray discs.

BD+ is the latest copyright protection layer for Blu-ray discs that compliments AACS, HDCP and so on. BD+ is a small program recorded on a Blu-ray disc that is executed by player and examines whether the players security keys were changed as well as decodes part of the content encrypted with BD+ keys. The BD+ technology was finalized in June, 2007, and when first implemented, it required Blu-ray players to be reflashed in order to playback new movies.

“As we continue to build our business and work with our partners to develop and implement new distribution models in the digital marketplace, we seek to expand our capabilities to address emerging standards such as Blu-ray,” commented Fred Amoroso, chief exec of Macrovision Corporation. “The integration of SPDC into our product portfolio will enable us to continue to provide innovative technology to our customers as they expand their distribution vehicles. Not only is BD+ critical for content security, but it also supports value-added features that enhance the consumer playback experience, such as potentially unlocking bonus content.” Mr. Amoroso also noted, “I am especially delighted to add some of the cryptographic talent for which CRI is renowned. We believe they will allow us to accelerate our future security solution development efforts.”

The consideration for the SPDC assets is $45 million in cash plus warrants exercisable for Macrovision stock, a portion of which are subject to certain performance milestones. The transition is subject to customary closing conditions and Macrovision expects it to close in the fourth quarter of 2007 and be slightly accretive to 2008 earnings.

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