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An unconfirmed report by German-language news-paper suggests that Hollywood studios, along with major consumer electronics makers, such as Microsoft Corp. and Sony Corp., have agreed not to implement image quality downgrades on hardware that does not support HDCP copy-protection and HDMI output. This means that Blu-ray and HD DVD movies will playback in full-quality on applications like personal computers.

Behind the scenes it was agreed that till, at least, 2010, if not even till 2012, signals from Blu-ray or HD DVD players should be transferred to televisions or displays in full resolution, even if certain components do not support HDCP or HDMI, a report on Spiegel Online web-site claims. Particularly, this may allow next-generation game consoles, such as PlayStation 3 and Xbox 360 as well as personal computers to playback Blu-ray and HD DVD movies in up to 1920x1080 resolution even on monitors that do not support high-bandwidth digital copyright protection (HDCP) technology or HDMI output. In fact, an ATI Technologies' specialist suggested that not all high-definition discs would support HDCP several months ago.

In order to track-down the piracy, movie studios insisted to implement HDCP onto content distributed using the BD and HD DVD media. Typically, the playback of HDCP content should include an HDCP transmitter (computer or player), a digital interface (DVI or HDMI) and an HDCP receiver (a display or a TV-set). The content is encrypted at the transmitter and the signal is transmitted to the HDCP receiver a special bus where it is decrypted before viewing. Both the transmitter and the receiver should comply with the standard, otherwise, it was planned to limit the output resolution – using so-called image constraint token (ICT) – to 540p (960x540), which is a bit better than 720x480 resolution of typical DVDs, but far from high-definition 1080i or 1080p (1920x1080) resolutions.

Given that the majority of relatively affordable LCD or Plasma televisions nowadays support 1366x768 pixels resolution, there will still be some quality constraints, however, they will not be imposed by a software technology, but by hardware limitations. Furthermore, if the report is correct and the ICT will not be imposed for years, computer users will be able to watch high-definition movies on large monitors in full-quality without any need to get a graphics card or a display that supports HDCP.

Neither Microsoft Xbox 360, nor Sony’s entry-level PlayStation 3 consoles support HDMI output. In fact, Sony’s Phil Harrison recently said in an interview that even with analogue outputs it will be possible to view Blu-ray discs using the PlayStation 3 that costs $499.

“Both [PS3] machines have Blu-ray disc as standard. Both machines play Blu-ray disc movies as standard. Both machines will play Blue-ray disc movies as HD. The only difference is that the high end machine uses a more convenient digital interconnect called HDMI, which is a digital standard, and the 20GB unit uses HD component which is an analog standard. […] The end user will not notice any quality difference. Perhaps if you were projecting onto a gi-normous screen you might notice some difference, but also not every HD display has HDMI,” Mr. Harrison was reported to have said.

Representatives of Microsoft Corp. also said the Xbox 360 console would be able to playback HD DVDs using a special add-on drive amid the lack of HDMI output.

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