Analyst: Corel's DRM patch only a bandage

Corel Software said in a statement last week that customers must download a new update of its InterVideo WinDVD software if they wish to continue watching HD DVD or Blu-ray discs on PCs.

The move has been anticipated since December, when a hacker accessed the device key used to communicate with the security keys on each movie disc. By compromising the key, the hacker could have made and circulated unauthorized copies of movies. The Advanced Access Content System Licensing Administrator, the group backing the AACS copy-protection format used by both Blu-ray and HD DVD, also announced that it was doing away with the compromised keys.

The creators of AACS, which includes IBM, Intel, Microsoft and Panasonic, anticipated that their security keys might be hacked. To stay a step ahead of the hackers, they designed a system that allowed them to swap out compromised keys.

A security system that anticipates hacks and enables copyright holders to issue new safeguards is considered an improvement in the entertainment business. But others say the only thing it will achieve is a prolonged tug-of-war between stakeholders and pirates, said Yankee Group Research analyst Josh Martin.

"We saw a hack come out less than three months after the hardware for both HD DVD and Blu-ray, and it's a sign of things to come," Martin said. "People with ample time and ample desire will always find a way to crack DRM (digital rights management)."

Corel is developing an automated system to perform security updates, but testing is incomplete, the company said in an e-mail. This means customers will have to download the new software--a requirement that may frustrate some, Martin said.

"We have tremendous confidence in the AACS system and our products' upgraded security," Catherine Hughes, a Corel spokeswoman, said in an e-mail. "Our hope is that we won't have to deal with issues like this in the future. Regardless, by automating all future updates our goal is to ensure that consumers continue to enjoy all of the latest benefits offered through (high-definition) playback without unnecessary disruptions."

Martin said that such attempts to thwart hackers are futile and end up alienating the majority of users, who aren't trying to cheat the system. Martin argues that content, hardware and software makers abandon DRM. He knows that they have to protect their content, he said, but notes that there is a security measure inherent in high-definition video files that would discourage most consumers from pirating them: their size.

"HD files are so enormous," Martin said. "It takes too long for them to download, store and manage."

"Let's be honest," Martin said, "next-generation DVDs offered the promise of managed copy, which was the ability to rip your DVD and put it on your PC and stream it around your house and all this other stuff...None of that has come to fruition. So why don't these guys focus on enabling those functionalities instead of trying to thwart the minority that are trying to hack content?"

Among WinDVD users, there's been some confusion over whether the update will affect only discs that are manufactured after the new keys have been distributed. Not so, said Hughes.

"Our recommendation is for anyone using HD DVD or Blu-ray disc playback to download the update in order to ensure that both their existing titles and newly purchased titles will continue to play," Hughes said. "If someone inserts an HD or Blu-ray disc with the new licensing keys, it will result in HD/BD playback of previous titles being disabled until (users) install the free update."