RF Activation Seeks to Turn off Theft

LoVerme notes that retailers can configure business-rule settings so that discs can be activated only under certain conditions—for example, during specific business hours, or only by certain employees.

LoVerme won't divulge what manufacturers and retailers will have to pay to install the infrastructure needed to use and maintain the Kestrel technology, but says it would be offset by expenditures they will no longer need to make. Manufacturers, for instance, would no longer need to apply the electronic article surveillance (EAS) tags (which cost 2 to 3 cents per disc ) currently used to trigger alarms whenever thieves remove unsold products from retail stores. If the technology proves more effective than the EAS tags in deterring theft, he adds, the savings in product shrinkage could also be significant.

Additionally, the Kestrel protocol can be used as a "kill switch" to permanently disable a disc. Retailers could use this feature to "kill" discs not sold by a predetermined date, rather than returning them to the studios. The logistics needed to return unsold discs can cost movie studios up to $1.50 per disc, LoVerme explains, so using the kill option on unsold discs and then recycling them could be another incentive to implement Kestrel's technology.

Kestrel claims its RFA technology can be used on any optical media, including music compact discs, or with any consumer electronics, such as televisions, computers, music players and so forth. In consumer electronics, the tag would be embedded in the product's circuitry, linked to a switch that could be set to block a power source, or to make a vital logic file inaccessible. Exactly how this would be deployed would be up to the manufacturer, but with theft of newly released movies and video games sold in DVD format as high as 18 percent, the system is initially being marketed to movie studios and the DVD replicators they use, as well as to retailers.

Kestrel is also in discussions with Philips to design the RFA technology into high-frequency (13.56 MHz) near-field communication (NFC) tags that could be read and activated by NFC-enabled devices. Such devices would be able to function as both an RFID payment device and an interrogator. LoVerme says Kestrel foresees that movie and music discs with NFC-compliant RFA tags would be sold through alternative entertainment media retailers, such as Starbucks, or through mail-order vendors. Consumers would then use their NFC-enabled cell phones or PDAs, which are now starting to come to market, to download the corresponding keys and activate the discs.