It is pre-encoded, with a unique stream key (like a session key). The stream key is then encrypted with the public key of each playback manufacturer (multiple c

It is pre-encoded, with a unique stream key (like a session key). The stream key is then encrypted with the public key of each playback manufacturer (multiple copies of the key, one per manufacturer) in DVD CSS. A more complicated scheme is used for Bluray which provides for unique keys for each player but without significant overhead (see http://www.wisdom.weizmann.ac.il/~naor/PAPERS/2nl.html http://www.wisdom.weizmann.ac.il/~naor/PAPERS/2nl.html).