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We predicted in past posts that AACS, the encryption system intended to protect HD-DVD and Blu-ray movies, would suffer a gradual meltdown from its inability to respond quickly enough to attacks. Like most DRM, AACS depends on the secrecy of encryption keys built into hardware and software players. An attacker who discovers a player’s keys can defeat the protection on any disc that works with that player. AACS was designed with a defense against such attacks: after a player has been compromised, producers can alter new discs so that they no longer work with the compromised player’s keys. Whether this defense (which we call “key blacklisting”) will do much to stop copying depends how much time elapses before each leaked key is blacklisted.

Next week marks three months after the first compromised player key appeared on the Internet (and more than five months after cracks for individual discs began to appear). Discs slated for release on Tuesday will be the first to contain an update to AACS that blacklists the leaked keys.

What took so long? One limitation comes from the licensing agreement signed with player manufacturers, which requires that they receive ninety days’ notice before their keys are blacklisted, so that they have enough time to update their products.

Customers who obtained the new discs a few days early confirmed that the previously leaked keys no longer worked. It seemed as if AACS had recovered from the attacks just as its designers intended.

However, a new twist came yesterday, when SlySoft, an Antigua-based company that sells software to defeat various forms of copy protection, updated its AnyDVD product to allow it to copy the new AACS discs. Apparently, SlySoft had extracted a key from a different player and had kept the attack a secret. They waited until all the other compromised keys were blacklisted before switching to the new one.

The AACS Licensing Authority will be able to figure out which player SlySoft cracked by examining the program, and they will eventually blacklist this new key as well. However, all discs on store shelves will remain copyable for months, since disc producers must wait another ninety days before making the change.

To be successful in the long run, AACS needs to outpace such attacks. Its backers might be able to accelerate the blacklisting cycle somewhat by revising their agreements with player manufacturers, but the logistics of mastering discs and shipping them to market mean the shortest practical turnaround time will be at least several weeks. Attackers don’t even have to wait this long before they start to crack another player. Like Slysoft, they can extract keys from several players and keep some of them secret until all publicly known keys are blacklisted. Then they can release the other keys one at a time to buy additional time.

All of this is yet more bad news for AACS.