We've noted for a while that just like every other DRM scheme, the AACS copy protection scheme at the heart of both the HD-DVD and Blu-Ray formats accomplishes little more than irritating paying customers. The system got cracked within months of its release, and the studios have been playing a losing game of cat and mouse with hackers ever since. The AACS system is more ambitious than previous copy protection systems in that it attempts to control not just players but also any device connected with the player. If you try to play an AACS-protected disc on an unapproved TV, the player is required to reduce the quality of the video, or refuse to play the video altogether. As a consequence, there are a lot of customers out there who would like to play their legally-purchased movies on their legally-purchased TVs, but whose legally-purchased HD-DVD or Blu-Ray players refuse to cooperate.

Ed Felten notes that the limited functionality of the official players has created a market for software that will allow them to play their movies on "unapproved" hardware. And thanks to the DMCA, such players cannot be legally developed in the United States. So not surprisingly, overseas firms are taking up the slack. One of the leaders is Antigua-based Slysoft, which makes the AnyDVD HD software. It advertises that its software will allow users to "watch movies over a digital display connection, without HDCP compliant graphics card and HDCP compliant display." There's a basic lesson here about the economics of prohibition. As Hollywood develops ever-more-elaborate and restrictive copy protection schemes, those copy-protection schemes come to inconvenience more and more customers. That, in turn, creates a larger market for circumvention software, prompting software companies to invest more in developing more powerful and user-friendly tools for removing copy protection. All Hollywood has accomplished, in other words, is providing a small boost to the overseas software industry.

Tim Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Tim Lee and other experts on challenges your company faces, click here.

Permalink | Comments | Email This Story