Even with all of this onerous encryption and DRM, it's not hard to find pirated copies of movies. It makes me think that the sacrifice in ownership rights for the theaters over their equipment isn't worth it.
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Piracy is inevitable, but in this case their model is much more robust that I would have predicted.
So basically they have this very secure scheme for getting movies to theaters, but everything else is full of holes. Makes you wonder if all the effort and cost to secure the theater distribution chain is worth it. If you're going to allow playback on devices in "adversarial" hands (streaming, home physical media playback), it's going to be incredibly difficult to restrict copying. Tightening up the one instance where the hardware and people operating it have less incentive to pirate (and more incentive to not pirate, given the risk to their theater business) seems like wasted effort.
Certainly this does make the case of a theater-only-first release nearly impossible to pirate. But there aren't quite as many of those anymore, and all this DRM must be expensive, both in the hardware/software, and in the logistics. I guess they've found it's worth it, but... oof.
Kaleidescape movie players[1][2] are an example of an "adversarial" environment in customers' homes but so far, their DRM is still unbroken by pirates. (10+ years of Strato players deployed out in the wild but still not defeated yet.)
The 4k 100+ GB encrypted files downloaded by Kaleidescape is considered 1 step below the DCP theater releases and are higher quality than Blu-Ray 4k UHD discs. The downloads are often 40+ GB larger than 66 GB discs and downloadable months before physical media is available so the Kaleidescape movies stored on the customers' harddrive are very desirable files to hack and reverse engineer but so far, their DRM protection hasn't been bypassed. Kaleidescape is more locked down than the simple DVD CSS 40-bit encryption.
Sure, a Kaledescape owner could point a video camera at the screen and record it (the "analog hole"[3]) -- but those types of "rips" that suffer generation losses are not considered high quality.
[1] https://www.kaleidescape.com/systems/movie-players-servers/
[2] https://www.kaleidescape.com/news/kaleidescape-taps-nexguard...
You're not thinking the same way the motivated pirates think. Some pirates (especially in Eastern Europe, Asia, etc) rip new releases as fast as possible to illegally re-sell or re-stream for lower prices (or show along with ads for revenue). In this way, the pirates get the revenue instead of the legitimate movie studios.
So pirate groups in combination with illegal streaming websites can be thought of as a black market financial arbitrage. So far, the video sources they used include Blu-Ray rips and streaming Netflix or Amazon Prime Video webrips.
However, the Kaleidescope players could theoretically also be included as rip sources ... if the DRM was broken. The math for profitable arbitrage isn't that ridiculous. E.g. :
- a 4k UHD Blu-Ray is $33.49 : https://www.amazon.com/Conclave-4K-UHD-Edward-Berger/dp/B0DP...
- it would take only ~80 of those titles to recoup the cost of $1995 Kaleidescope player + the $7.95 rental fees for 80 downloads. All downloads after that break-even threshold is extra money for the pirates. Another bonus is pirating 4k UHD content that's not available on physical Blu-rays.
But the Kaleidescope DRM isn't broken. Therefore, the $7.95 rental downloads can't be used as a new vector for pirate releases. Of course, Kaleidescape doesn't want this scenario to happen so they're incentivized to continue paying for the DRM licensing protection.
And to recap the specifics I was replying to, it was this: >"If you're going to allow playback on devices in "adversarial" hands (streaming, home physical media playback), it's going to be incredibly difficult to restrict copying."
Kaleidescape is one counterexample to that. So far, they have actually restricted copying with success.
The issue is the so-called "DRM" isn't just the encryption of the harddrive files. The DRM protection also includes the watermarks in the video images that survive the HDMI capture. If pirates don't want their $2000 Kaleidescape player blacklisted and bricked, they have to figure out how to remove all forensic watermarks (the invisible low-level "noise" in the image frames) so the illegal copies can't be traced back to that specific compromised player.
It's not impossible but it raises the threshold of difficulties. E.g. using differential analysis to reverse-engineer watermarking now requires buying TWO players for $4000 instead of just one for $2000; and paying for 2 download rentals instead of just 1. And add hours of analysis work on top of that. DRM doesn't have to make piracy impossible; it just has to make the cost/effort equation not attractive. For now, the Kaleidescape DRM scheme is "good enough" for the cost/effort equation to not make sense for pirates.