Game theory and movie piracy

I haven’t seen anyone else linking to this, but the blog Freedom to Tinker is doing a badass academic analysis of the effectiveness of HD-DVD AACS encryption using Game Theory. Rather than simply concluding that the studios are evil and hackers will beat the system, they’ve analyzed the encryption method to determine the optimal behavior for each side.

They come to a fascinating conclusion:

It turns out that the attacker’s best strategy is to withhold any newly discovered compromise until a “release window” of size R has passed since the last time the authority blacklisted a player. [. . .] Once the release window has passed, the attacker will use the compromise aggressively and the authority will then blacklist the compromised player, which essentially starts the game over. The studio collects revenue during the release window, and sometimes beyond the release window when the attacker gets unlucky and takes a long time to find another compromise.

They point out that this resembles the current studio model of release cycles:

Interestingly, this release window strategy resembles the studios’ current approach to extracting revenue from films, in which a film is available first in the highest-revenue format — in theaters — then later in a succession of lower-revenue formats — DVD and television. The idea is to extract more revenue from the most enthusiastic fans in early stages and pick up whatever revenue is available from everyone else later.

There are currently seven long articles about the topic, but they are all worth reading.