HDCP's main feature is its ability to lower HD quality on incompatible TV sets and computer monitors as a security mechanism. Basically, this means that only newer HDTV sets with an HDCP-compatible digital input can play Blu-ray and HD-DVD discs at full quality. Analog inputs like the VGA connector CRT monitors use, as well as the component video connectors found on HDTV's since the late nineties, will only play these discs at the resolution of a standard DVD. DVI, a true digital video input found on computer LCD's and older HDTV's, will also suffer the same fate. With no statistics to go by, I wager about 80% of HDTV's out in the wild, along with a staggering 98% of computer monitors, will soon become obsolete due to HDCP restrictions. "Welcome to the HDCP, bitch!" Indeed.
HDCP is part of a new breed of content protection that goes by the name of digital rights management (DRM). You can find DRM everywhere today: The iTunes music store uses a DRM technology called "Fairplay" to tie the music you purchase to your computer and iPod, and Microsoft has their own version dubbed "Play for Sure" which serves the same purpose.
Why have content providers gotten so paranoid? Blame piracy; specifically, blame peer-to-peer file sharing. Ever since the days of Napster, both the movie and music studios became very worried about losing track of their property, so they chose to implement DRM methods as a means to keep control. Some tech pundits refer to DRM as "digital restrictions management" (wikipedia.org/drm), which I believe is a far more accurate description of the technology.
With HDCP, the movie studios have created a seemingly perfect content protection scheme. They now have the ability to encrypt video data with incredible levels of security, and they have blocked access to the high-definition content from older inputs. This is all well and good for them, but it leaves the consumer in the dust. Now, consumers have to be extra cautious when purchasing a new HDTV, especially if they are doing it for the express purpose of playing Blu-ray and HD-DVD discs. In addition to the myriad choices of size, shape, and underlying technology, you now have to make sure that your new TV is fully HDCP compatible.
Computer users have it even worse: Only a handful of HDCP compatible exist today, and we really won't be seeing too many options until the very end of this year. You will also have to upgrade their video card, which can cost the same as a new monitor. To top it all off, Windows Vista may also be required to be HDCP compatible.
If you thought the Blu-ray/HD-DVD format war was a mess, just wait until HDCP comes out in full force. It's almost as if the movie studios don't want HD discs to succeed. They seem to be doing everything they can to stifle the progress of these incredible new formats. Perhaps they're just trying to squeeze out another few years of profit from DVD media. Or perhaps, and most likely, they are just completely out of touch with the way consumers use their media. While I expect either HD-DVD or Blu-ray to fail rather organically, HDCP may just destroy them both with its complete disregard for the consumer.