Presentation to HADOPI - AACS LA, LLC October 5, 2012 - WikiLeaks

Presentation to HADOPI
     AACS LA, LLC
     October 5, 2012

AACS Licenses
• AACS provides a comprehensive system to ensure that
  content is protected from the point the Blu-ray Disc is
  manufactured until the content is displayed for consumer
  enjoyment
• IP Licenses Granted
  – Patent licenses necessary for implementing technology
    described in Specifications
  – Trade secret licenses necessary for confidential material
    (including keys)
  – Copyright license to use and make copies Specification
    documents

AACS Licenses (cont’d)
• Key Protection Required
• Content Protection Required
• Fees
  – Fees are for recovery of AACS costs only (not
    intended as a profit center)
  – Annual fee
  – Per key fee
  – Order processing fee

AACS Licensees
• Over 1000 worldwide
• 40 French companies are content licensees, including
  – INA editions
  – Pyramide Video
  – SND
  – Studio 37
  – StudioCanal
  – TF1
• Freebox is a French company that is a licensee producing
  Blu-ray players

Cryptographic Keys
• Keeping Keys confidential is core to the effectiveness of AACS
  technology and security of the content protected with AACS
• AACS Agreement classifies keys as “Highly Confidential
  Information” and subjects them to the following:
  – Keys are subject to very detailed legal obligations to maintain the
    confidentiality of keys, including limiting the number of employees who
    may have access to Keys
  – For example, storage of Keys must be in secure locked location (or using
    electronic storage requirements including, at a minimum, password
    protection)
  – Failure to maintain Keys confidentiality subject to liquidated damages of
    $1 million per violation

Cryptographic Keys
• Technical Protection Requirements for Key
  Secrecy (“Key Robustness”) –
  – physical protections must be employed for
    hardware implementations
  – software implementations must be protected
    using security techniques such as obfuscation

Protecting Decrypted Content
• The goal of these requirements is to maintain security of
  decrypted content
• Internal protections (“Content Robustness”) –
  – Content path inside the player must be protected in accordance
    with AACS license
• Output protections – When content is sent from a player
  device to another device (e.g., a television set for display)
  – Content leaving the player must pass through an output using a
    technology approved by AACS (e.g., HDMI with HDCP
    encryption)

Watermark
• Content owners may use a watermark supported by AACS . This watermark
  – is special inaudible digital information hidden in the audio track of movie content
  – survives unauthorized recording with a video camera or ripping of content from discs
  – can be detected using a special “detector” (either chip or software)
• AACS Licensed Players are required
  – to use a detector to check content for watermark to determine whether the content on a disc
    was copied from a theatrical release of the film or from a prerecorded Blu-ray Disc
  – to take action to prevent playback of content from a disc if the watermark is found in an
    unauthorized copy of the content
• This watermark technology is owned by Verance Corporation, which licenses its
  technology on reasonable and non-discriminatory terms and conditions

Consequences of Unprotected AACS
                Keys
• Keys could (and would) be taken by others to use in
  unlicensed, non-compliant products that do not
  protect the content
• Unauthorized Title Keys enable access to the
  particular movie encrypted with that key
• Unauthorized Device Keys enable access to any
  movie encrypted using AACS
• Content may then be copied, redistributed or
  otherwise used in unauthorized ways throughout the
  world

Consequences of Not Protecting
          Decrypted Content
• Unprotected content could (and would) be
  subject to capture by software and
  hardware that would then be able to copy
  and redistribute it
• Such content will become the source for
  Internet distribution, increasing Internet
  piracy and filesharing of movies originated
  from BDs

Consequences of Unlicensed Players

• In addition to the consequences of not
  protecting keys and content, additional
  problems would exist if unlicensed Blu-ray
  players are permitted to exist
  – Use of IP without license
  – Discrimination vs. licensees

Proposed VLC Player
Based on VideoLan’s request, a VLC Player would
• use and distribute unlicensed intellectual property;
• distribute unprotected AACS keys;
• not provide protection against interception of the content that
  is played using the player; and
• permit the output of the content through unprotected digital
  outputs from the computer (e.g., a unencrypted digital home
  network output)

Legal

French, EU and
International Law
Summary

EU and French Blu-ray and Video Market
• Local French film industry representatives will be meeting with HADOPI separately and can
  describe the local situation in detail. Our summary understanding of the situation is as follows:
• Overall, both in the EU and in France the home video industry has been declining in revenues over
  the past several years. Consumer spending on all physical video (DVD, Blu-ray,VHS) has declined from a
  high of approximately 12bn euros in 2004 to approximately 8.3bn euros in 2011.
• Blu-ray, however, has been growing over this same period of time. Consumer spending on Blu-ray
  has risen from approximately 62m euros in 2007 to over 1bn euros in 2011. And just the growth in
  spending on Blu-ray in the EU from 2010 to 2011 alone represented an increase of over 24% as compared
  to a decline in spending on DVDs of over 11% during the same one year period.

EU and French Blu-ray and Video Market
               (cont’d)
• For France, consumer spending on Blu-ray has increased from under 10m euros in 2007 to nearly 210m
  euros in 2010. And just between 2010 and 2011 consumer spending on Blu-ray increased almost 21%
  while consumer spending on DVD during the same one year period declined 13.5%.
• Blu-ray is a bright spot in an overall challenged video industry in the EU and in France. The video
  industry supports not only local retailers and distributors, but it is a critical sector in supporting the health of
  the local audiovisual industry.
• The Blu-Ray market (video window) is an important contributor to film pre-financing through the
  system of minimum guarantees (up to 25%) and the special tax that is allocated to the CNC (French Film
  Institute). Undermining the Blu-Ray market will ultimately have a negative impact on film financing.
• Blu-ray, supported by the AACS protection, has been the foundation for new consumer offerings.
  Digital copy of content on Blu-ray discs has been available on some titles in France. UltraViolet, which
  allows for multiple downloads and unlimited streaming of content to multiple devices, is being made
  available as an added feature to Blu-ray discs in the U.S. and U.K. and should be launching in France next
  year.

Thank you