Movies on DVD were supposed to be copy-proof. So why are illegal copies getting stamped out faster than Halloween sequels? European hackers discovered a hole in the costly software code that Hollywood banked on to thwart movie pirates. One software licensee inadvertently neglected to encrypt the "key" that unlocks DVD movie disks. Now, that key is easily found on the Internet--meaning that almost any PC can be turned into a part-time moviemaking machine, cranking out perfect digital copies. "That's what really scares the motion-picture makers," says P.J. McNealy, a research director with information-technology researcher GartnerG2. Properly implemented, encryption can be virtually impenetrable. But too often, human frailties gum up the works by leaving unforeseen breaches in otherwise secure systems. This explains why so many protection schemes get "hacked in a matter of days," says John M. Jordan, a technology expert at Cap Gemini Ernst & Young.

By Roger O. Crockett

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