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Tuesday, November 18, 2008

Chinese pirates crack Blu-ray DRM, sell pirated HD discs

By Jacqui Cheng

Forget boring old standard-def DVDs—movie pirates have moved on to selling high-definition discs in an effort to make money on the HD craze. The HD discs are not genuine Blu-ray discs and don't boast as high resolution as Blu-ray does, but they're apparently good enough to fool many consumers, and the movie industry is worried.

Law enforcement in Shenzhen, China, raided a warehouse last month that contained HD copies of a number of popular movies. There were over 800 discs (so, what is that, like eight spindles?) that were packaged in faux Blu-ray boxes, complete with holograms to make them appear legitimate. According to the Motion Picture Association International, this is the "first ever" seizure of these types of discs in China.

The pirates are apparently ripping high-def movies (cracking Blu-ray's AACS and BD+ encryption in the process) and re-encoding them using AVCHD, which offers a 720p picture. Because of the reduction in resolution, file sizes are smaller and can be burned to regular DVDs instead of the more costly Blu-ray discs, netting a tidy profit. Needless to say, the film industry isn't thrilled by the news. "We are concerned and are assigning priority to this issue," the MPA's Asia-Pacific managing director Mike Ellis told the Wall Street Journal.

Fake Blu-ray discs from China
Image from the Wall Street Journal

Movie piracy in China is by no means a new trend, but the proliferation of Blu-ray fakes out of Asia is being viewed as a serious threat that could make its way to other countries quickly. Ellis pointed out that pirates in China can be very enterprising and have exported their wares all over the globe in the past, so there's nothing stopping them from doing so with this new format. "These syndicates are very quick to spot market opportunities," he said.

The news comes at a tough time for Blu-ray. The format's growth is stalling thanks to the high price of discs and players combined with the struggling economy, and in September, Blu-ray's market share actually fell in favor of the cheaper and ubiquitous standard-definition DVDs, as well as HD downloads. With the Chinese Blu-ray clones going for as little as $7 apiece (compared to the typical Blu-ray disc at $30+), it comes as no surprise that they're being viewed as a threat—especially if they're dressed up as Blu-ray discs and consumers aren't clear on what they're getting.