Philips is to launch a new method of licensing DVD player patents, the Licensed Status Confirmation Document system. All players exported to the US or EU will require an LSCD, without which they will not be eligible for sale in major stores such as Wal-Mart and Best Buy.
An official with Philips Asia's IP and Standards department explained that per-player licensing fees are currently USD 3.50. 6C Alliance and 1C Alliance licensing costs bring the total to about USD 15. However, an official with manufacturer Chuangying put the cost at nearer USD 20. Ministry of Commerce statistics show that the average export price of a DVD player is only USD 32, with manufacturing costs at USD 13 and licensing fees of USD 18 - leaving only USD 1 of profit.