Out of putting a lot of effort into the next generation DVD anti-piracy technology, the last thing the movie studios needed was to see it ruined like DVD's CSS.  Now that a hacker publicly known as Muslix64 made a tool available to decrypt several popular HD DVD titles along with a YouTube video showing a ripped & decrypted HD DVD title playing back, the companies behind the Advanced Access Content System (AACS) technology used to encrypt HD DVD titles is looking into this.  To make matters worse, the hacker has promised to post an updated HD DVD decrypting tool to handle a wide range of HD DVD titles.  A spokesman for one of AACS' companies mentioned they are aware of this and are looking into the claims, but will not give any further details at this time.

The movie studios see this hack as a serious threat to HD DVD sales at this early stage, since as consumers move from DVD to HD DVD, they could potentially grab illegally copied HD DVD titles instead of officially released titles.  However, while this may appear to give Blu-ray an advantage for the studios, Blu-ray also uses this same AACS to protect its titles, although it does have the advantage of an extra layer of software based copy protection known as BD+. 

For consumers who like to be able to back-up movie titles, play them on a digital monitor without the infamous HDCP compliance requirement or at least rip them on to their PC to play around the home and on portable devices (including cases where managed-copy would not allow), this may help push consumers into choosing HD DVD over Blu-ray.  For example, some consumers may have hardware and a monitor more than capable of playing back high definition content at up to 1080P, but very few consumers have HDCP compliant monitors and graphics adaptors.  This means that if a HD DVD hack is available, consumers would be more tempted to use the hack to watch HD DVD titles on their existing hardware than to replace their monitor and graphics card just to be able to install a Blu-ray drive to play Blu-ray titles (assuming Blu-ray manages to stay resistant to this attack).