The fundamental floor as far as AACS or any other protection is concerned is concerned is that there is no way to revoke decrypted copies, so assuming people are willing to find these holes (and they don't have to make them public) and release the decrypted copies, it's useless as a mechanism to stop illegal downloading.
Well, they have already played burned Blu-Ray copies on (some) standalones. Apparently, how well they support the various disc formats and playback methods (and the restrictions inherit to them) is highly firmware dependent (at the moment).But what is the sense? HD DVD players are not allowed to play HD DVDs without AACS (for example: you make a HD DVD with your grandma's birthday party: you have to encrypt it by AACS, if you want to watch it on your HD DVD player).
You may be right on both counts. But I still found myself excited by the prospect that I could put movies I bought onto my server and watch them on the HTPC.
Not many people are going to be downloading 30-50GB pirated movies from the net let alone hosting it.
I doubt many people would download a 4GB iffy quality 720 divx encoded movie.
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How are you going to play these 720p divx movies anyway? Through your PC? You sure aren't going to be playing them in your DVD player or HD player.
My brother pointed me to a blog that links to entire movies YouTube. Besides the legality of that, I was blown away that anyone would be interested in a super crappy version of any of these movies.
Give it 5 or 10 years, people said the same thing about DVD's.
The shear size of DVD's saved them from the rampant copying of MP3's, and the larger HD-DVD and blu-ray discs might delay it further (although I don't think most pirates care enough about image quality).
I own a massive DVD collection (800+ discs), the only copying I do is to my own server for convenience, I want to do the same thing with any HD format. It may not be very practical from a space requirement today, but I'll still be watching the discs in 5+ years.
I'd also happilly adopt a lower quality download format that didn't have stupid DRM restrictions. Or a pay service with a large enough movie selection.
Right now I won't adopt either HD format because 5 years from now there is no guarantee I'll be able to play media I buy today.