Rallying the Disc Patrol: Protection Schemes for CD and DVD

Debbie Galante Block

EMedia Professional, December 1998
Copyright Online Inc.

"Consumers need to understand that by buying pirated product, they are cannibalizing the industry they love," says Kathlene Karg, Director of Intellectual Property and Public Policy at IDSA.
Right now, illegal copies of Titanic are being viewed and popular games are being illegally copied and played. And despite the best efforts of anti-piracy groups worldwide, piracy statistics continue to soar, which begs the question: Can the DVD Technical Working Group's goal for copyright protection and anti-piracy solutions really change anything?

While it's clear that Hollywood's influence and concern over copy protection issues played a significant role in delaying DVD-Video's foray into the marketplace, copy protection for DVD-ROM, for the most part, has been ignored. Technology manufacturers say this benign neglect will change, but the future seems uncertain. After all, CD-ROM copy protection in the U.S. remains relatively stagnant. Indeed, the only thing that will change consumer copying habits, say many analysts, is education.

Scandiplan Technology's spokesman, Joergen Espensen, confirms the reluctance of U.S. software publishers to implement protection of their products. "Part of that story goes back to the mid-1980s when diskette copy protection schemes lost popularity because legal users often had problems, hard disk contents were damaged due to protection systems, and code security was low. However, attitudes are beginning to change in the U.S. The technological time delay is very small now, and an increasing number of products come from Japanese or European companies. So publications or software packages that are distributed worldwide must be implemented everywhere, or not at all."


According to a study released by the Business Software Alliance and the Software Publishers Association, four out of every ten new business software applications installed globally in 1997 were pirated, with estimated revenue losses of $11.4 billion. Of the countries surveyed, the United States registered the most significant piracy-related dollar losses--at $2.8 billion--while China reported the highest piracy rate at a whopping 96 percent.

Following that study, the U.S. Trade Representative released its "Special 301" list, which focuses on countries that allow piracy to occur in their territories. Especially problematic for the entertainment software industry are China, Taiwan, Paraguay, and Bulgaria. In fact, the International Digital Software Association (IDSA) estimates a $3.2 billion loss for entertainment software alone.

Kathlene Karg, Director, Intellectual Property and Public Policy at IDSA, notes that the situation is not improving either. "Piracy hasn't gotten better," she says, "there has just been a shift in where a pirated product is coming from and how it is being distributed." For example, CD-R technologies have made illegal copying easier, and some people are selling CD-R generated pirated software on the Internet for $10 a pop.

Unfortunately, Karg explains, "Pirating software can be done incognito and it generates quick cash." To minimize these developments, she recommends a worldwide crack-down on the people who are doing the pirating. "Policies need to be implemented that prosecute those selling illegal modification devices, like those which bust DVD's regional coding," she offers. But public education is also key. "Consumers need to understand that by buying pirated product, they are cannibalizing the industry they love."


Of the 25 software publishers contacted for this article, not one was ready to vouch for any particular product. Is that because they don't want to tip their hand, or because they are not satisfied with the products currently available? The answer, it seems, remains open to interpretation.

Most of today's copy protection schemes are currently being experimented with or viewed by Hollywood studios, who have taken an aggressive stance on copyright protection. And the Copy Protection Technology Working Group (CPTWG)--a committee developed by the DVD Forum to research DVD anti-piracy and copy protection solutions--is currently considering proposals to standardize watermarking and authenticating mark technologies for digital-to-digital copying, which will enhance the Content Scrambling Scheme and regional coding already in place. The group is also working to extend protection to Internet and satellite transmissions as well.

Another solution frequently considered by the studios is watermarking, which embeds a mark into the video itself. Although transparent to the end-user, the watermarked video is forever coded, whether it is pressed to DVD or transmitted through a satellite. The value of this technique, however, is a subject often disputed.

While many industry analysts consider watermarking "too passive" to work, Macrovision senior vice president Mark Belinsky says it can, "from a pirate's standpoint, be very difficult to get rid of." The primary advantages of the authenticating mark, which exists as little more than a blemish stamped onto the disc, are its noninterference with playback and its subtlety--it can't be picked up by a recorder, and thus, can only be copied to compressed discs. Pirates, therefore, will have to have their own replication facility to make discs with authenticating marks, according to Belinksy.

Belinsky remains optimistic about the success of DVD copyright protection, noting that, by July, more than six million DVDs had been encoded with Macrovision's digital-to-analog copy protection. Moreover, 75 percent of all DVDs produced in the past year have been Macrovision-protected, he claims. "The technology is licensed to both DVD-Video player and DVD-ROM manufacturers who incorporate Macrovision-capable circuits into their products, and to rights owners who add certain copy protection activation commands to their discs," he explains. Macrovision has also teamed up with Digimarc and Royal Philips Electronics to offer CPTWG a combined solution for watermarking and authenticating DVDs for digital-to-digital copying. Together, Belinsky notes, the companies are offering 15 patents.

Another DVD solution that has been presented to CPTWG comes from the team of IBM and NEC. According to Alan Bell, program director for IBM's DVD project office and co-chair of the CPTWG, the focus of their solution is minimizing false positives, which occur when a "single copy" signal results from encryption. "We have paid particular attention to eliminating the probability of getting a false positive during encryption. Using our technology, we can say that the probability of getting one is so low that during the normal lifetime of a recorder, you should have less than one occurrence, statistically speaking."

"One of the more difficult parts of developing this copy protection system," he continues, "is dealing with the 'single copy' (a.k.a., false positive) scenario. This is particularly relevant to electronic distribution of digital video, including satellite broadcast. Once the 'single copy' is made, the copy itself must be copy-protected against further unauthorized copying." Bell concludes, "in our proposal, the video is re-marked within the video recorder to indicate that no further copying is permitted."


Obviously, DVD-Video has been the center of recent copy protection attention. While software-based technologies can presumably tailor their CD-ROM technology for DVD-ROM, DVD-ROM-specific technologies remain few and far between. But that doesn't lessen the value of the technologies currently available for CD-ROM.

SafeDisc--developed through a partnership between Macrovision and C-Dilla Limited--first hit the streets last quarter and utilizes an authenticating digital signature, as well as encryption, to protect CD-ROM content. The digital signature--which cannot be copied by CD recorders or mastering equipment--is added to each original disc. The authentication software then reads the digital signature, allowing the program to be decrypted and to play normally. Unauthorized copies will not function.

The software needed to apply SafeDisc to titles is available to mastering and replication facilities from Macrovision and Doug Carson & Associates, a supplier of CD-ROM mastering software based in Cushing, Oklahoma. Software publishers seeking to use the technology must enter into a usage agreement with Macrovision, then direct their mastering and replication service providers to apply the technology.

"Before the mastering process, the product is encrypted with a unique key-per-product title," explains Peter Newman, C-Dilla's Managing Director. "During the execution of the title, the decryption key is extracted from the watermark and the method of extraction is not exposed to the hacker. This is done in such a way that it does not affect the real-time performance of the title."

For now, SafeDisc is being targeted to the games market. Typically, a games publisher would need to generate one-to-two percent additional sales revenue (previously lost to piracy) to cover the additional cost of SafeDisc, according to Newman. This technology will be extended "in due course" to cover software and content publishing on DVD-ROM discs, according to Brian Dunn, vice president at Macrovision.

While SafeDisc is relatively new, TTR Technologies Limited has been aggressively marketing its technology for the past eighteen months. Its offering, DiscGuard, places an indelible digital "signature" on the glass master during mastering which can be read by CD-ROM drives, but cannot be duplicated by CD recorders or re-mastering. Without that signature, the software cannot be used.

Nimbus CD International, one of the industry's largest replicators, previously held the exclusive rights to manufacture DiscGuard-protected CDs on a worldwide basis, but that exclusivity ran out in September. According to TTR assistant vice president Tamir Rotir, the company has about 12 other replicators waiting in the wings. On the publishing side, it has signed contracts with EHQ, in the Far East; Hed-Arzi Multimedia, Compedia, and TAT, all based in Israel; the United Kingdom's DigitalX; and Russia's New Media Generation. DiscGuard has even been used to protect Barbie by Mattel in Turkey.

Nocopi Technologies, based in West Conshohocken, Pennsylvania, offers a series of "invisible" inks and additives that can be applied practically anywhere on the product at any point in the distribution channel, including the store or ports of entry. Nocopi vice president of product sales Michael McGovern says, "This technology allows for intellectual property owners to perform a test whereby an authentic disc reacts with a clear, immediate, and reversible response. Non-authentic discs, on the other hand, will not respond at all." Another Nocopi technology allows an intellectual property owner to perform a simple test on the outer packaging first, and if deemed authentic, he or she will not need to test further. As for cost, "Nocopi's customers pay a technology license royalty, which is based upon volume. Generally, for large volumes, the rate is a fraction of a cent per unit protected," McGovern says.

Wave Systems, located in San Jose, California, has a completely different approach to protection. The company is developing partnerships with content providers and OEMS to bundle CD-ROM and DVD-ROM discs with computers. To purchase electronic content, consumers must have an add-in card or peripheral device with an embedded WaveMeter and a bundle of CDs containing WaveEnabled content, or a new PC that has an installed WaveMeter. Once the WaveMeter is registered with WaveNet--the company's transaction processing system for monitoring credit, payments, usage, and royalty information--consumers can purchase content contained on the bundled CDs. Any CD can be made WaveEnabled, according to Wave Systems public relations manager Kent Kappen. Consumers, who can also request additional WaveEnabled CDs for their system at any time, will never pay more then the current retail prices for content. OEM prices vary, depending on the offerings.

Scandiplan Technology's DVD-Cops is a successor to its CD-Cops system. According to Joergen Espensen, the DVD-Cops process mimics CD-Cops throughout mastering and replication, and the files to be protected by DVD-Cops are modified ahead of time. "After production, a few samples of finished pressed silver DVDs are placed in a PC and measured with a special DVD-Cops software tool," Espensen explains. "The advanced technology embedded in DVD-Cops is designed to distinguish from which master the DVDs are pressed. The measurements are combined in a nine-digit code that the end-user must enter the first time he or she uses the product."

"All pressed DVDs from the same master share the same code," he continues. "The code is then distributed along with the product. Each time the product is started, the DVD is measured out and compared to the stored nine-digit code. This process takes as little as five seconds. There is also a handy network solution reach, as well as time-expiring protections, that only require the DVD to be inserted at certain intervals. A one-time registration fee is collected and the license fee is one percent of the DVD's retail price," Espensen says.

Irvine, California's Rainbow Technologies also offers a product called Sentinel LM (License Manager) which allows developers to add license enforcement capability to any Windows or UNIX application. Applications can be licensed on a standalone or network basis. "Using Sentinel LM's graphical interface, developers can add licensing to their application with a few simple clicks," says Rainbow worldwide marketing manager Mike Emerson. Prices reportedly start at $395 for a developer's kit and range from $495 per year to generate an unlimited number of demo licenses to $20,000 to generate 10,000 permanent licenses."


Yet another copy protection method still making the rounds, despite its high cost, are dongles. Dongles are hardware locks that attach to a port on the computer (usually the printer port) and interface with the application to provide decryption. Dongles can also perform other functions, like checking for a certain serial number or code before allowing an application to run. CPU dedication security information contained within the CD helps authenticate the CPU before copying occurs.

In addition to software protection, Rainbow boasts a strong presence in the dongle market, particularly overseas where about 50 percent of its product has already shipped. "Software doesn't give the level of security that those markets require," says Emerson. But dongles can be pricey at about $20 each. Despite the high price tag, Rainbow "expects to sell three million of the Sentinel Super Pro this year for vertical markets or international distribution," he projects. Recent clients include Autodesk, Chyron, Corel, Fujitsu Software Corporation, Macromedia, and Micro Focus.

The Buffalo Grove, Illinois office of Aladdin Knowledge Systems specializes in an extensive line of hardware devices (parallel, serial, PCMCIA, internal card & USB)--known as Hardlock--that contain customized Application Specific Integrated Circuits (AASIC) with a developer-programmable encryption algorithm. Each developer is equipped with a Crypto-Programmer Card containing over 43,000 unique algorithms, explains Aladdin product manager Laura Waas.

Hardlock gives developers a choice of protecting any DOS or Windows 3.x, 95/98, or NT application and its related data with or without source code modifications. Moreover, its data encryption functionality stores the data file in encrypted form on the hard drive. Upon activation, data passes through the ASIC for processing and displays in unencrypted form. Upon deactivation, the company says, the process is reversed to restore the data to its encrypted form on the hard drive, protected from any unauthorized accesses. Hardlock's data encryption is done in the background and on-the-fly. The average cost of Hardlock devices range from $20 to $40, depending on the quantity and the type of device selected.


"Professionals will nearly always find a way to copy your discs," reasons Eugene Evans, president of Infinite Ventures.
Although software publishers have been focusing on the encryption debate, solutions are not being implemented, with abundant costs a key cause. After all, if the technology employed does not work, that's money down the drain. But there are other issues, such as speed, that are affecting the rate of early adoption. According to IDSA's Karg, games are just one example of products that may not always benefit from copy protection. "Games rely on quick technology," she says, "on how fast you hit that control. The fact is that if you put a layer of encryption on top of the actual codes, it slows everything down. So, if the product is encrypted, it is not a big hit in the marketplace because it is slower. People won't pirate it because it is not a popular game."

Activision was one of the first publishers to have bundled DVD titles on the street, namely repurposed versions of Spycraft and Muppet Treasure Island. "Copy protection for DVD-ROM, at this point, is a non-issue here and in Europe," says Brad Crystal, vice president of OEM sales at Activision. "But CD-ROM titles shipped to Europe almost have to have some extra deterrent." He explains, "Many European retailers feel that if products are copy-protected, it will discourage some of the casual piracy that erodes sales. If titles are not protected, retailers feel potential customers will stop coming into their stores because they will have already gotten pirated copies. If product is copy-protected first, we have a chance to sell more product to the retailers," he says. Crystal would not comment, however, on what forms of protection Activision uses.

Another company that has done its homework with regard to copy protection is Microsoft Corporation. Still, the company expects another 12-18 months to pass before it has much more than visual deterrents on the market. According to antipiracy program manager for the company's OEM division Geoff Goetz, Microsoft is currently using Nimbus' 3-D i.d hologram to protect its products. Nimbus and Applied Holographic's technology can be put on the inner mirror-band of a disc during the mastering stage, says Goetz, or full-face holograms can be applied to the disc during the replication stage. Microsoft chose to use the inner mirror-band option on Windows 98.

"Since it is so difficult to counterfeit 3-D i.d.," Goetz continues, "end-users or corporate customers can look at a product and make a cursory judgment as to whether it is genuine or not. Because we have done such a large-scale educational campaign, counterfeiters who really want to pass off their product as genuine are going to have to replicate it. But we have yet to see any passable copies."

Purcellville, Virginia's Infinite Ventures is another publisher facing the choice of whether to provide DVD copy protection for its DVD-ROM products. President Eugene Evans says the company is "not currently planning to provide any DVD copy protection" for Dracula Unleashed "because it is too pricey and too time-consuming." After all, he reasons, "Professionals will nearly always find a way to copy your discs. I think that the work which is being done to protect perfect copies of DVD movies will benefit software in the long term." In the meantime, he says, the company is planning a series of DVD discs and considers any piracy as "potentially broadening the awareness of our titles. My belief is that anyone who goes to the trouble of buying or accepting a pirated DVD was never going to buy it anyway, so sales have not been lost." So instead of expending tremendous resources to "protect" discs, Evans advises stopping the source. "SPA and IDSA efforts and raids on pirates will reap more benefits than any copy protection ever could," he adds.


The good news for anti-piracy revolutionaries is that content providers of all kinds--music, movies, and software--are beginning to work together to develop solutions and will continue to do so. So far, piracy has not gone away and, in all likelihood, it won't disappear anytime soon. But making it difficult, time-consuming, and costly for the pirate to practice his or her "trade" at least minimizes the problem. Whether we can control it--and eventually defeat it-- remains to be seen.

Breaking Down a Global Epidemic: Piracy and the Bottom Line

According to a study conducted by the International Planning and Research Corporation for the Business Software Alliance and the Software Publishers Association, declines in piracy rates in 1997 were offset by an increase in the number of software applications in use, resulting in higher dollar losses overall. The top ten countries taking the greatest hit are:
Country Total Dollar Loss Piracy Rate
United States $2.8 billion 27%
China $1.4 billion 96%
Japan $0.8 billion 32%
Korea $0.6 billion 67%
Germany $0.5 billion 33%
France $0.4 billion 44%
Brazil $0.4 billion 62%
Italy $0.3 billion 43%
Canada $0.3 billion 39%
United Kingdom $0.3 billion 31%

Picking a Protection Scheme: Look Before You Leap

While the number of protection methods available seems impressive, picking the "right" one is not an easy task. Scandiplan's Joergen Espensen offers this advice to publishers considering copy protection:

CPTWG Requirements for Watermarking & Authentication Solutions

  1. Visibility: The technology must not affect video quality.

  2. Robustness/Reliability: The embedded mark must survive transmission.

  3. No False Positives: It must not register a "single copy" signal.

  4. Functionality: It must be capable of supporting authorization of single copies.

  5. Security: It must be difficult for the mark to be removed.

  6. Cost: It must be priced as reasonably as possible.

Protection for the Wild Blue (Laser) Yonder: Dow's "First Draft" Action Plan

The plastics division of Midland, Michigan's Dow Chemical Company has a whole new approach to copy protection that, as of late August, was still in development. T.J. Wainerdi, global market manager of optical media, says Dow's anti-piracy model will be aimed at discs that can hold 30GB or more. High-Definition digital televisions have already begun to ship, and in order "to play a two-hour video on a high-definition digital television, a disc will require at least 30GB of information, so these discs are right around the corner," he predicts.

As a means to an end, Dow is developing a new polymer, known as Polycyclohexylethylene (PCHE), which offers the combination of lightness and transparency needed for such a disc. Current discs use polycarbonate, which is just not light enough and potentially not transparent enough, Wainerdi says, to hold such volume. "When you put a disc into a player, that player has to spin that disc. The faster it can spin that disc, the higher the amount of data transfer you can get. That is all directly dependent upon weight. If we have the lightest weight optical-grade polymer available and are willing only to sell it for this application, we can report volumes sold and compare the number of discs ordered by the content holders to the number actually replicated. As part of a signed agreement, we would only sell to legitimate replicators as will any other PCHE supplier. Discrepancies will be reported to enforcement agencies currently employed to manage piracy losses. If a pirate wanted to use another material, such as polycarbonate, the disc would potentially be insufficiently transparent and excessively heavy, rendering it unplayable," he explains. Details and costs remain undetermined.

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

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