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The Latch-Key Generation: Piracy Protection and DVD

Debbie Galante Block

September 2000 | After all, the handy business model that has of late made CD piracy such a cakewalk--thanks to the ubiquity of CD duplicators and the dirt-cheapness of CD-R media--doesn't add up for DVD. Remember when duplicators were pricier, and CD-R media was less abundant and priced at $5-10 or even higher, and the joke was that anyone with the capital and know-how to get into CD-R piracy could make more money doing anything else? With DVD, it's even more extreme, since the only viable duping machines, Pioneer's DVD-R drives and integrated systems based on them, go for $5000 and up, and blank DVD-R media cost more than most current DVD titles.

So is it too soon to worry about DVD piracy? Keep in mind that not all piracy happens in the home or subterranean copy shop, by the pirate's own hand--for years, most CD piracy happened courtesy of illegitimate masters submitted to replicators of various reputations. What's more, as demonstrated by the meteoric fall of DVD-Video player prices, it doesn't take long for prices to come down. DVD burners debuted at costs upwards of $17,000, and already recorders are selling for less than one-third of that figure. But compared to a CD burner, which can be purchased for $150, DVD-Recorders are nowhere near dropping into that negligible-expense category, although new, lower-priced entries to the market may be shown as early as COMDEX.


Currently, the installed base of DVD playback devices in North America totals almost 7 million, and the DVD Entertainment Group expects this number to reach at least 12 million (if not 15 million) by the end of 2000. According to the Software & Information Industry Association (SIIA)--a trade association for the digital content and publishing industry formed when the Software Publishers Association and Information Industry Association merged in 1999--ownership of DVD-ROM drives among PC users has nearly doubled during the past two years, from 11% in 1998 to 21% in 2000.

So whatever the current constraints to pirating DVD content, the potential market for that content is increasingly lucrative, and as DVD becomes more and more mainstream, you can bet professional pirates will find a way to profit from their pilfering. Content owners who are not looking down the road at DVD piracy protection will see about as much of what's going on in their industry as any other ostrich with its head in the sand. While in the U.S. availability of pirated product throughout the software industry has decreased in recent years, in countries such as Malaysia, rip-off rates continue to increase unabated, which is cause for concern to any content owner with designs on international markets. And industry analysts expect the piracy issue to heat to a boil within the next three years.

A recent piracy report on the music industry provided by IFPI Secretariat (the International Federation of the Phonographic Industry) indicates that the global pirated music market totaled 1.9 billion units in 1999. Total sales of pirated music CDs topped 500 million units for the first time, with pressed pirated CDs (as opposed to CD-Rs) rising to an estimated 450 million units from 400 million in 1998. IFPI estimates that pirated music CD-R sales increased to at least 60 million units in 1999.

The International Digital Software Association (IDSA), which represents companies that publish video and computer games for video game consoles, PCs, and the Internet, reported in February 2000 that the industry lost an estimated $3 billion due to software piracy in 55 countries. Malaysia, where the piracy level is 99 percent, led the list of major offenders.

As for home video piracy, the Motion Picture Association of America (MPAA) says worldwide piracy costs the American motion picture companies $2.5 billion a year in lost revenues. While not every disc illegally copied or pirated disc sold at a cut-rate price represents a lost legitimate sale that would have happened--as the MPAA and others will often irresponsibly argue--the latest statistics nonetheless paint a clear picture of cottage industries run rampant that will sooner or later take their toll on DVD.


With approximately 6,800 DVD-Video titles on the market (as of June and not including adult titles), what kind of protection for DVD exists, and at whom is it targeted? Before the DVD specs were released, both a content scrambling system (CSS) and regional coding were put into effect. In the haste to get DVD to market, the Copyright Protection Technical Working Group of the DVD Forum settled for the best technology available at the time, and industry sources say neither scheme was really very secure. Both have already been broken.

CSS is an encryption-based security and authentication system that requires use of "appropriately configured hardware," such as a DVD player or a computer DVD drive, to decrypt, unscramble, and play back--but not copy--motion pictures on DVDs. CSS has been licensed to hundreds of DVD player manufacturers and DVD content distributors in the U.S. and around the world. In October 1999, only three years after its introduction into the consumer electronics market, a Norwegian teenager allegedly hacked CSS and began offering, via the Internet, a software utility called DeCSS that enables users to break the CSS copy protection system and hence to make and distribute digital copies of disembodied VOB files from DVD movies via their PC hard drives. Designed to enable Linux users to play back DVDs via their DVD-ROM drives in the absence of a licensed software DVD player for Linux, the DeCSS hack sent Hollywood into paroxysms of terror since it signaled the fallibility of the control measures it had imposed to date.

Most DeCSS sites have been removed from the Internet, however the MPAA filed lawsuits against at least two providers that have found a "legal" way to offer the programs. Another version of CSS is in the works, but most industry sources say there is no rush to release it. (The DVD Forum also claimed the CSS hack delayed the release of DVD-Audio, although one might just as easily attribute the delay to other technical difficulties or perhaps just wait for a potential market to suggest itself--especially given that CSS-2 will not even be used with DVD-Audio.) Admittedly, CSS was not meant to stop professional pirates, but rather to inhibit the consumer who may make a copy for a friend, or otherwise noodle with the content of the disc he or she has bought. This is where the Digital Millennium Copyright Act (1998), which protects digital-to-digital copying, kicks in.

James Burger, partner at the Washington, D.C.-based law firm of Dowlohnes and Albertson, explains the Digital Millennium Copyright Act (DMCA) in layman's terms. "This law makes it illegal for someone to hack an effective copy protection mechanism. The problem is in defining an 'effective' mechanism. Nobody is required to respond to the technology. In other words, if you put a disc in a machine, and in the normal course of operation, it plays it--then tough luck. But if you go in to break something to make it play, that's illegal. For example, the hacking of CSS." But even Burger concedes that DMCA is a messy piece of legislation.

Burger also questions the effectiveness of digital watermarking. "If I took a DVD with watermarking and put it into my machine today, it would play. It won't even see the watermark if it is a good one. You need to put in a detector. At some point, the music industry will require detectors in some machines. At that point, there will be something out there that responds. Does that then make it illegal to hack the watermark? It's not an easy question to answer," he says.

Macrovision copy protection technology, applied to players and also encoded onto discs at the replicator level, prevents users from copying a DVD to VHS. All of the major studios use this protection on nearly 100% of their DVDs. But this protection must not only be used in DVD players but also in DVD-ROM drives if it is to be a universally effective tool, since movies can also be played on the PC and potentially copied as desired.

"We have over 140 manufacturing licensees, many of which are PC manufacturers. However, no software publishers have licensed Macrovision as yet," says Carol Flaherty, vice president, video copy protection group, of the DVD creation community beyond Hollywood and other strictly video content providers. "To DVD we apply not only the normal Macrovision copy protection used on VHS, but we have something extra for DVD called color stripe. That's where we add in additional layers of copy protection on the horizontal lines of the video screen," she says. Macrovision's DVD protection is put in place at the mastering stage of production; it's part of the replication process of the DVD. When the glass master is made, copy protection is applied. For DVD playback devices, Macrovision technology in the player is part of the video decoder.

For the Macrovision protection, hardware manufacturers pay an annual licensing fee, but no royalties per unit. Content owners pay a per-unit royalty. The royalty on DVD copy protection ranges anywhere from 5-10 a disc depending on the volume being produced, according to Flaherty.


For the last three years, Macrovision, Philips, and Digimark have been working on watermarking technology for recordable DVD. "We embed a digital watermark in the video content itself. That watermark can actually transmit messages. It can record information, such as how many times the viewer has watched a program," Flaherty explains. The industry is still deciding on a standard.

Macrovision also hopes to market a DVD-to-DVD copy protection technology that Israel-based anti-piracy solutions provider TTR Technologies currently has in development. A prototype of the product is expected this summer with a commercial product expected by spring 2001. TTR chief scientist Baruch Sollish has developed technology that incorporates a digital signature as well as content encryption that will affect DVDs. With the addition of a circuit board to the mastering machine, this signature will be put on by the replicator during the mastering process.

"In the first version of our yet-unnamed product, we will not need firmware," says TTR chairman and CEIO Mark Tokayer. "In subsequent releases, there will be firmware in the playback devices, which will check the digital signature of DVDs and be able to play the content if it is found, in fact, to be authentic." Tokayer says it is too soon to quote the specific costs of their DVD product, but he did say that after installing the circuit board in the mastering device, there is no further cost of goods. Of course, publishers will need to pay a per-unit royalty for the protection, as with the current Macrovision solution. Real-world testing of the product is going on at Media Morphics, a subsidiary of replication equipment manufacturer Toolex International.

New developments are also in the works at Macrovision, which is now included under the umbrella of its software division, Berkshire, England-based C-Dilla Ltd. subsumed by Macrovision in June 1999.

DVD-ROM versions of C-Dilla products such as SafeDisc are also under development, according to Toby Gawain, vice president of software Europe. "We try to offer the strongest commercial security and widest compatibility," Gawain says. "There are now 93 replication plants worldwide offering SafeDisc lines." But after many years in the industry, Gawain harbors no illusions about long-term security with any anti-piracy product, no matter how well-designed or widely implemented. "Sooner or later everyone gets hacked. We aim to produce a new version of the SafeDisc technology every 30 to 45 days to stay ahead of the hackers. Think of it as the converse of a virus checker. Every six weeks or so a new virus comes out and you need to upgrade your checker. Every six weeks or so a new version of SafeDisc will come out that is unhacked," he says.


Among the several companies currently offering CD-ROM protection, few seem to have DVD products in the works. One company, Scandiplan, offers a product called DVD-Cops based on the same technology as its CD-Cops. DVD-Cops recognizes an original DVD and rejects all copies. No special equipment changes are necessary, nor are changes required in the glass-mastering and it can be produced by all DVD plants. The software that checks the DVD is protected by Link's Code Security, a system which has been in use since 1984.

DVD-Cops was finished in mid-1998, and the first DVD title protected with the Scandiplan technology was produced in October 1998, according to company spokesman Joergen Espensen. DVD-Cops is applied directly to a finished EXE file. The protected application is added to a DVD image. Data is then sent to the DVD factory as usual. When the DVDs are finished, an access code, which uniquely identifies a particular DVD, is extracted. This code is then included with the DVD when sold and can be silk-screened onto the DVD itself. During installation, the user enters the access code. From then on, the software runs only when an original DVD is present in the drive.


DVD-Audio players were expected to hit the market before 4th of July, launching a fresh wave of piracy fears for the recording industry. The Secure Digital Music Initiative (SDMI)--a forum that brings together more than 180 companies and organizations representing information technology, consumer electronics, security technology, the worldwide recording industry, and Internet service providers--is developing open-technology specs to protect content providers, including those developing digital audio for a range of delivery technologies, DVD-Audio among them. In an effort to protect the playing, storing, and distribution of digital music so that a new market for digital music may emerge, the SDMI open technology specifications hope to achieve the following:

  • Provide consumers with convenient access to music both online and in new emerging digital distribution systems
  • Enable copyright protection for artists' works
  • Promote the development of new music-related business and technologies

SDMI-compliant devices will be introduced in two phases. Phase I will allow consumers to play existing CDs and digital music files as well as electronically distributed music in protected and unprotected formats. Phase II begins when a new screening technology is adopted to filter out pirated music. Consumers will then be able to upgrade Phase I systems.

Verance Corporation's copy protection technology has been adopted for Phase I of the SDMI, according to Verance chairman David Leibowitz. Verance's watermark technology has also been adopted for DVD-Audio copyright control. Leibowitz says, "Every DVD-Audio player and recorder will have detectors to read and react to our watermarks." A DVD-ROM drive is a multi-purpose drive so it will also be equipped with Verance detectors.

As a result of the CSS hack, CSS-2 technology has been withdrawn from consideration for use in relation to DVD-Audio products. The DVD Forum has decided to use Content Protection and Pre-Recorded Media (CPPM) as a copy protection technology for DVD-Audio and, as of press time, was preparing to publish the version for DVD-Audio, according to DVD Forum secretary Hideyuki Irie. IBM, Intel, Matsushita, and Toshiba have announced the availability of the 0.9 revision of the Content Protection for Recordable Media and Pre-Recorded Media (CPRM/CPPM) Specification.

CPPM is an encryption technology under which content on a disc is encrypted according to standard pattern that authorized players can decode. (CPPM technology is proprietary so the DVD Forum could not provide further information.) The system defined by the specification relies on key management for interchangeable media, content encryption, and media-based renewability. A license can be obtained from License Management International, LLC (http://www.dvdcca.org/).


The International Recording Media Association's (IRMA) Anti-Piracy Compliance Program was officially unveiled at REPLItech in June. Its purpose is to protect intellectual property rights in the replication of optical media through adherence to procedures and guidelines that help prevent inadvertent or intentional replication of unauthorized DVD-ROMs. The initiative was developed with significant input from the IDSA, MPAA, BSA, IFPI, SIAA, and the RIAA. Modeled after the ISO 9000 program, the IRMA procedures specify a series of international standards for quality management and quality assurance. IRMA will uphold the standards through internal audits and regularly scheduled surveillance.

The certification process will involve the following steps:

  • Optical media manufacturing plants must complete and submit an Application for Certification form
  • Each plant can then send two key personnel to an IRMA Anti-Piracy training course and two key personnel to an IRMA Internal Auditing training course
  • Plants are required to document and implement procedures to satisfy the IRMA Anti-Piracy Standard
  • Plant personnel must conduct internal audits to determine and verify that these requirements have been documented and implemented
  • Upon completion of such actions, an IRMA team of certified auditors must perform a system audit to qualify the plant for a Certificate of Compliance
  • Surveillance audits by the same IRMA team will be carried out at six-month intervals.

Sources at companies such as Microsoft and BMG Entertainment say it is too soon to expect replicators to be IRMA-compliant, but they strongly suggest replicators seek the certification. BMG says they will eventually work only with replicators who are compliant. So far, Universal Music, Disctronics, and Cinram have been certified.

Demand for product is certainly key to proliferating piracy. However, capacity exceeding demand also seems to drive some manufacturers to illegal actions. Currently, demand is outpacing supply for DVD. But with so many replicators adding lines every day, could widescale DVD piracy be far behind?

Microsoft Collaborates with Xerox on Internet Copyright Protection

Perhaps the most unstable area of copyright protection is the Internet. Receiving digital media over the Internet may sound wonderful, but it can wreak havoc on copyright protection. Content provider concerns have lead Microsoft to collaborate with Xerox and ContentGuard to create a secure distribution scheme. ContentGuard is a spinoff of the Xerox Corporation.

With contributions from Microsoft, ContentGuard's DRM technology was originally developed at the Xerox Palo Alto Research Center. The content protection software uses encryption technology to "lock" digital content, preventing unauthorized users from forwarding it or copying it unless they have paid or registered with the content owner. When users attempt to access a ContentGuard-enabled document, they are sent to a digital rights management Web site where they make payments as they would in any standard ecommerce transaction. The user can then download the digital content and see or hear it with a standard viewer or player. If a user sends the content to a friend, that friend will not be able to view content until he or she pays for it as well.

Microsoft and ContentGuard will also collaborate on development of a common digital rights management standard. ContentGuard will work to establish one of its core technologies, XrML (extensible rights markup language) as a standard for digital rights management on the Internet. It has agreed to provide the XrML code to the industry royalty-free to stimulate its use among software developers and content providers. ContentGuard's initial focus is on the publishing and ebook markets, however plans are underway to enable ContentGuard for audio and video material.

Companies Mentioned in This Article

Business Software Alliance (BSA)
BSA United States, 1150 18th Street, NW, Suite 700; Washington, DC 20036; 202/872-5500; Fax 202/872-5501; http://www.bsa.org/

DVD Forum
Toshiba Building, 15th Floor, 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-01, JAPAN; 81-3-5444-9580; Fax 81-3-5444-9436; http://www.dvdforum.org/

The Interactive Digital Software Association (IDSA)
1775 Eye Street, NW, Suite 420; Washington, DC 20006; 202/833-4372; Fax 202/833-4431; http://www.idsa.com/

IFPI Secretariat (the International Federation of the Phonographic Industry)
54 Regent Street, London W1R 5PJ, UK; 44 171 878 7900; Fax 44 171 878 7950; http://www.ifpi.org/

International Recording Media Association (IRMA)
182 Nassau Street, Suite 204; Princeton, NJ 08542; 609/279-1700; http://www.recordingmedia.org/

The Motion Picture Association of America, Inc. (MPAA)
1600 Eye Street, NW; Washington, DC 20006; 202/293-1966

Macrovision Corporation
1341 Orleans Drive, Sunnyvale, CA 94089; 408/743-8600; Fax 408/743-8610;

Microsoft Corporation
10500 Northeast 8th Street, Suite 1300, Bellevue, WA 98004; 800/426-9400, 425/705-1900; Fax 425/705-1831; http://www.microsoft.com/

Scandiplan Technology
Lyngby Hovedgade 47, 2 sal, Lyngby, Denmark 2800; 45 45 87 05 05; Fax 45 45 87 05 83; http://www.scandiplan.dk/

Software & Information Industry Association (SIIA)
1730 M Street, NW, Suite 700; Washington, DC 20036-4510; 202/452-1600; http://www.infoindustry.org/

The Recording Industry Association of America (RIAA)
1330 Connecticut Avenue, NW, Suite 300; Washington, DC 20036; 202/775-0101; Fax 202/775-7253; http://www.riaa.com/

TTR Technologies Ltd.
2 Hanagar Street, P.O. Box 2295; Kfar Saba, Israel 44425; 972 9 766 2393; Fax 972 9 766 2394; http://www.ttr.co.il/

Debbie Galante Block (debgalante@aol.com) is a freelance writer based in Mahopac, New York.

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