You didn't read the second-to-last graf of my comment. Even if they can't universally stop copying, and a small number of people can still introduce high-fidelity copies, they can use technology to create deterrents to distributing them.
Two simple examples:
If a license or physical player is needed to create a high-fidelity copy (for instance, by capturing raw video streams from a player), and the output video is watermarked, content providers can revoke the player. Now "free" copies cost players.
If the same technology creates a trail of evidence leading back to "pirate 0", people will start getting sued. Not everyone the RIAA sued was innocent, and there's nothing to say that the DVD legal teams will create the same PR firestorm the RIAA did by abusing the system. Just as importantly, if it takes a huge amount of effort to create a supply chain of unlawful copies, the court case is much more damaging.
Content protection is not really a practice focus for us (though anticheating and kernel protection are), so my thoughts on this are not an exhaustive summary of the space of solutions content providers have. I'm just saying, the content providers aren't always on the wrong side of computer science.
To render watermarking useless, pirate_0 only needs to periodically buy a new player+LCD with cash. Any scarcity created by discouraging amateurs from being pirate_0 will only encourage professionals to move into the sector.
Even if it costs $1k to get each movie release out of protected form, it's cheap for a (dubious) advertiser wishing to get a message out to a huge audience.
And further down the road, I suspect there will be an anonymous market for such content. $1k is only a penny from 100k people.
The sector is already dominated by professionals. The dynamics of satellite TV were similar, and though it was a painful process to revoke not only malicious players but the entire population of defective players that broke the protected path from DTV to the S-Video port, they eventually succeeded.
My point is, "useless" is too strong a word. It isn't silver-bullet simple, but it is a tool that can be made to work. Content providers are already costing Slysoft money; now they just have to figure out how to increase that cost fast enough to push them out of business.
Both satellite piracy and creating DVD decryption software require cracking the decryption process in a sustainable way.
But for getting one-time copies out, there will always be an analog output at the end of the chain. Watermarking allows the distributor to pinpoint the device used, but the only thing they can do with this information is shut down the device. I don't see how this can be an economic threat when player prices must be kept low for consumers, but there are millions of people wanting pirated content (which is easily distributed after extraction).
There are two things they can do with the watermark: revoke the device, and sue the person who bought it. You can't get an AT&T SIM card or a DTV smart card without a contract. The only difference between those and a DVD player is the form factor.
Given a budget of $10k, I'm pretty sure I could obtain either one of those anonymously.
How hard is it to forge the required identification or bribe a store clerk to not check identification?
If someone's house is broken into, are they going to be liable for piracy through their stolen media player? (Assuming there's a several hours before it can be disabled)
The value of an anonymously acquired media player would be a lot higher than either of those two things. There's no market because nobody is willing to pay $1k for an anonymous cell phone when they can just get a prepaid one. But if one absolutely needed an AT&T SIM card, with that budget I'm sure they could forge all the required identification.
Of course it's hard to speculate the difficulty of such forging in the future. But I would think that $10k would be enough to break some human link in the chain.
Two simple examples:
If a license or physical player is needed to create a high-fidelity copy (for instance, by capturing raw video streams from a player), and the output video is watermarked, content providers can revoke the player. Now "free" copies cost players.
If the same technology creates a trail of evidence leading back to "pirate 0", people will start getting sued. Not everyone the RIAA sued was innocent, and there's nothing to say that the DVD legal teams will create the same PR firestorm the RIAA did by abusing the system. Just as importantly, if it takes a huge amount of effort to create a supply chain of unlawful copies, the court case is much more damaging.
Content protection is not really a practice focus for us (though anticheating and kernel protection are), so my thoughts on this are not an exhaustive summary of the space of solutions content providers have. I'm just saying, the content providers aren't always on the wrong side of computer science.