How can I make a video such that the quality degrades if someone tries to record it using cam-studio or similar software? We create music videos which are often subjected to piracy. Although the CDs are encrypted, making it difficult for people to duplicate, anyone can record the videos using camstudio or similar software while playing it on their computer.
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Rovi does try to add an element of security but the simple truth is that once it is being played, there is actually nothing you can do to prevent it being copied. Unless you control everything (including the screen) then an attacker can just wait until the encryption has been removed and copy the output. So this could be in memory, on screen, by intercepting HDMI etc.
This has been discussed at great length on security.stackexchange.com as it is one of the unsolved issues in security.
Rovi, formerly Macrovision dominates this field. Their products can be expensive, and are far from perfect, so there are a variety of competitors out there, but you have to evaluate them (and Rovi products as well) very carefully.