By Debbie Galante Block

Feb 6,2007_  During my years in college, I worked in a drug store part time. We had an "undercover"security guard who was known to all of the shoplifters. A few of the more expensive perfumes and electronics were locked in glass cases. Needless to say, we were ripped off every single day. I remember one time, finding about a dozen empty makeup boxes in a bag at the back of store. It was just too easy. At that time, there were no DVDs to worry about. While stealing makeup from a drugstore is a crime, of course, it's a self-contained one; stealing DVDs, by contrast, can lead to piracy. Statistics say that 9% of new-release DVDs are stolen. So, how are these criminals to be stopped? Kestrel Wireless says they have found a way.

If the name Kestrel doesn't ring a bell, the name Frank LoVerme might. He was at Warner in the early days of DVD. Today he is the senior VP of business development for Kestrel. The company, headquartered in Emeryville, California, set out to "create a mechanism where manufacturers of products and retailers could securely control the value of a product. Radio Frequency Identification (RFID), a radio wave-based automatic identification method designed to track products or animals using embedded remote data retrieval devices such as tags or transponders, is at the heart of Kestrel's DVD privacy prevential solution. "RFID," according to Kestrel, "coupled with a secure network transaction, has allowed us to achieve our goal." They call it RF Activation or RFA.

"A DVD isn't worth stealing if it won't play," says LoVerme. "When you're able to control the value of your products¡ªand to control under what conditions that value can be accessed¡ªyou can eliminate the incentive to steal and a host of related problems."

How does it all work? RFID chips are enhanced with RFA extensions and embedded into a DVD along with an antenna and an optical shutter. The optical shutter is a film whose chemical state controls the ability of the laser to read a DVD's start-up files. Certain data are loaded onto the chip by the manufacturer and the optical shutter is applied in a non-operative "disabled" state and remains in that state throughout the supply chain.

At the Point of Sale, data is read from the device by an RF reader and passed via the internet or cell broadband access to the Kestrel server. A key token is returned to the device through the reader and analyzed by the chip using an off-the-shelf technology called Public Key Encryption. If the token is the correct one, the chip using the RF reader's energy will change the product's status to activate by changing the state of the optical shutter so that the laser can integrate the start-up files.

What does this mean to the replicator? DVD equipment would need to be modified. However, how the chips, antennas, and shutters are applied will differ from replicator to replicator, according to LoVerme. Two pieces of equipment will have to be purchased. The first is a semi-conductor inlay applicator that places the chips on the bonded substrate to the substrate that has the data layers. The second device is a public key encryption token writer. Both products are readily available. Added to an existing line that is capable of making DVD-14s, the combined cost, along with other modifications, would be about $500,000, he said.

Another interesting benefit to this technology has to do with returns. Talk about thinking outside the box. LoVerme said that in recent times, returns have increased by 20-30%. That's a function of short sale windows for newer releases. Studios have to pack the channels to sell as much as they can in the first two weeks of the release date. About 60% of the total lifecycle sales are in the first two weeks of release. "We've been given a range of $1.20 to $1.81 for the supply chain to bring the DVD unit back from the shelf into inventory," LoVerme says.

Why bring it back? Why not just kill it in the same way it is activated? After the deactivation, the studio will then be sent a report that a certain DVD was killed by a specific retailer and will never be able again to be activated under any circumstances. You have eliminated the reverse logistics.

How will Kestrel make money? Well, there won't be a license, replicators will instead be certified. "We'll make our money on the network through transaction fees," according to LoVerme.

To sum it up, according to LoVerme, products cost 5-15% more than they need to because of theft. Many stores are going to great lengths to prevent theft. Kestrel seems to have a solution worth trying. That aside, as a consumer, I say anything that will eliminate blister packs and shrinkwrap and stickers that have an agenda of their own, is worth testing. And, in the "hurry up" society we live in, the biggest deterrent of all to me is going to a store and having to find a clerk to unlock the glass cabinets so you can look at a product while the clerk impatiently stares. Kestrel's technology seems painless and it seems worthwhile to at least follow its development.

Debbie Galante Block is a freelance journalist living in Mahopac, NY. While her areas of concentration have varied widely, she most closely covers music as well as audio and video technologies for magazines such as Billboard, One to One, and Post.

source:  www.emedialive.com