Did you find that approach to be effective at all?
If you are decrypting on the player then the decryption key must be on the clients device. What is to stop them grabbing the key from memory and ripping the stream anyway?
Yeah, it was just a prototype to protect live video streaming on Android devices... Performance was pretty bad and so the frame rate was pretty low. I think it would work decently for desktop Flash. JW Player have a HLS plugin for Flash which is pretty good, a lot more fleshed out than my prototype ended up being.
I can see that that could work on a locked down iOS device but a rooted android phone would surely be able to access to manifest file and make a copy of the keys and stream contents.
After all you only need one device to copy the stream and re-stream DRM free to others.
Apple do something similar http://developer.apple.com/library/ios/#documentation/Networ... this approach is more secure than what we de (Restrict access to the manifest file and have Flash request the current key when needed at runtime).