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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My guess would be that the plan is mostly to ensure that when a new release premieres in theatres, going to a theatre is the only way to experience it in high quality.
It doesn't really matter all that much if the people who waits for it to arrive on Netflix gets a pirated copy; it does matter if the ones forking over $20 to see it in a theatre does, though.
It’s a different dynamic than we typically talk about with DRM. Most of the time DRM is something imposed on a consumer who doesn’t really want it. But in this case, the consumer is the theater and they really do want the protection.