1 C r y p t o g r a p h y R e s e a r c h, I n c : L e a d e r I n A d v a n c e d C r y p t o s y s t e m s ™ 1 Objectives for Securing Next- Generation Optical Discs Cryptography Research, Inc.

2 C r y p t o g r a p h y R e s e a r c h, I n c : L e a d e r I n A d v a n c e d C r y p t o s y s t e m s ™ 2 Guiding Principles Free market economics -Technical systems should enable market-based solutions to security problems. Risk management -Piracy is a problem like credit card fraud, and is neither feasible nor necessary to eliminate completely. Best practices -Systems need to provide the best range of security features with the best possible assurances of security.

3 C r y p t o g r a p h y R e s e a r c h, I n c : L e a d e r I n A d v a n c e d C r y p t o s y s t e m s ™ 3 Principle: Free Market Economics Studios and CE/IT companies should maximize their profits by meeting customer demand while working to control piracy. Vendors that provide tools should compete to offer studios the best systems and security features. Security decisions should be based on cost/benefit analysis.

4 C r y p t o g r a p h y R e s e a r c h, I n c : L e a d e r I n A d v a n c e d C r y p t o s y s t e m s ™ 4 Principle: Risk Management Content owners should gain as much knowledge as possible about piracy events when they occur. For every attack, including unexpected attacks, content owners should have the broadest possible range of responses. Parties that incur risk should have the ability and responsibility for controlling it.

5 C r y p t o g r a p h y R e s e a r c h, I n c : L e a d e r I n A d v a n c e d C r y p t o s y s t e m s ™ 5 Principle: Best Practices Security should be based on strong cryptography and other well-understood primitives and techniques. Designs should be produced by experienced experts whose objective is to mitigate piracy. Parties that rely on the security should be able to evaluate and understand it.