Warner Bros.: Never mind that HDCP hack

DRM The recently confirmed release of the HDCP master key does not seem to have deterred at least one studio from moving ahead with plans for an early, premium VOD window wedged between movies’ theatrical and Blu-ray  debuts. Speaking at a media investors conference in New York Thursday, Time Warner CFO John Martin confirmed that Warner Bros. will begin offering early release VOD films starting next year.

“The idea would be 30 or 60 days after a movie is released into the theaters, allowing an event VOD type of service offering for, I don’t know, $20, $30 for those people that maybe like me, have kids,” Martin said. “You don’t always have the flexibility to get out to the movie theaters. It’s an idea that we’ve been talking about and we’re likely going to experiment with, perhaps as early as sometime the beginning of next year.”

Martin added that Warner would be flexible on the timing of the window, depending on how a film performed in theaters. Some movies would be released on VOD as soon as two months after their theatrical opening (1-2 months ahead of the DVD/Blu-ray release). Others, like Inception, which is still in the top 10 after nine weeks in theaters, would likely have to wait longer.

Some (including me) thought the HDCP hack might mean a delay in the studios’ early VOD plans altogether, at least until they had a chance to fully assess the damage. The MPAA spent the better part of two years humping a petition through the FCC for a waiver of the rules on the use of selectable output controls  (SOC) for set-top boxes so they could close the analog hole for early release content. Now, with the HDCP hack opening a possible digital hole, SOC alone may not provide the security the studios thought they had achieved.

It’s hard to tell from Martin’s comments whether Warner has actually made an assessment and decided to go ahead anyway or if the potential implications of the hack simply haven’t filtered up to senior management yet. We’ll know more about the studios’ thinking generally when we see how security-obsessed Fox responds to the hack.

In the meantime, HDCP-inventor Intel is scrambling to keep a lid on the damage, threatening legal action against anyone who tries to exploit the hack to create a dummy HDCP card.

“There are laws to protect both the intellectual property involved as well as the content that is created and owned by the content providers,” the company said in a statement Friday. “Should a circumvention device be created using this information, we and others would avail ourselves, as appropriate, of those remedies.”

Further reading:

Has HDMI Piracy Ended Hopes for an Early Release VOD Offering from Cable and Satellite? (registration required)

Intel Investigates How Anti-piracy HDCP Protocol Was Exposed