[klodolph]

But a particular chip will only have the keys for a small number of videos. When you buy a movie, you download that movie encrypted with a unique key, and the unique key is encrypted with your device key. So compromising one chip won't give you any kind of "master key" or anything especially valuable. The movie can be stored anywhere, when you need to play it you will pass the encrypted key to the device and the device will use it to decrypt, decode, and then send the movie directly to video output (possibly re-encrypted with something like HDCP, although that's a broken scheme).

The chip will also not send high-definition output to VGA, so you will need to do better. Basically, you have to hack the hardware.

I'd like to clarify that I'm not defending DRM, just that circumventing DRM is not as easy as people in this thread intimate. I think the reason why DRM will fail is because of economic pressures: the cost of deploying millions of devices designed to protect ubiquitous data against a small number of highly intelligent and motivated cryptography experts and hardware hackers.

[wyager]

Someone already has to buy a movie to rip and upload it. One organization can buy lots of movies at a time and upload them all.

And the analog hole can't be closed. If the video is encrypted on the wire, you can just jack into the TV's DSP hardware (at worst).