That's a last mile problem the industry doesn't need to solve. How many people would rather hack hardware than pay money to watch TV and play video games? Of course, if it becomes cost-effective to hardware encrypt the entire stream, I don't think the lack of a W3C standard will make any difference in stopping it.
> How many people would rather hack hardware than pay money to watch TV and play video games?
It only takes one. Everyone else just uses that cracked copy.
I'm not worried about DRM working, I'm worried about it not working in a way that gets in my way as someone whose time is generally worth more than the hassle of finding movies on bittorrent.
This has an expedient solution of only making devices which are able to play DRMed media (perhaps with permissive flags), and having all authoring tools use a per-user content creator key. Then the same broadcast encryption keying that allows players to be selectively disable also allows the cracked transcoder to be disabled.
Of course, this isn't terribly compatible with general purpose computing but operating systems intended for the public have been moving away from general purpose computing for some time and tables and mobile devices are pretty close to that now.
If we go far enough down that path the makers of these handicapped devices can even get legislative help in preventing competition from more user friendly devices by outlawing their sale as was the case for macrovision.
If the DRM system is sequestered from the rest of our computers, then what I described is far from a last-mile problem. It's not a last-mile problem unless support for a "protected" playback path is baked right into the OS kernel, in a way that users would have some difficulty modifying or disabling (e.g. mandatory driver signing and Secure Boot). As long as the playback path is not secured by the kernel, there's always a way to intercept a perfect digital copy of the output in software. And the user doesn't have to know anything about user-space API hijacking, LD_PRELOAD, custom driver development, or whatever it takes, as long as there's some software they can conveniently install that does the job.
So it seems to me that the proponents of DRM would never accept a DRM system that is sequestered from the rest of the computer.
