While the AACS interim licensing agreement has allowed the Blu-ray and HD DVD camps to release their products on time, initial players will ship without support for managed copy.
To accommodate Toshiba and other companies that wanted to start shipping their high-def products, the AACS Licensing Association came up with a somewhat bizarre solution: It released an interim spec that enables Hollywood studios to securely encode and distribute their content and supports playback of that content on players. But the interim version of AACS has limitations, most conspicuously the lack of support for managed copy. "Managed copy" is industry jargon for the technology that lets content providers offer legal free or fee-based ways for you to move content around on a home server, make a physical copy of content for backup purposes, or transfer it to another device such as a portable media player.
"A player that's licensed under the interim agreement will not be able to do managed copy," states Richard Doherty, spokesperson for the AACS Licensing Association. Although Doherty declined to go into detail about the outstanding issues, he did say that they concern how managed copy will be implemented (and what it will, and will not, allow), and not the actual technology. Technologically speaking, the spec is done, which means it is plausible that "a manufacturer can implement managed copy [but not turn it on], and then enable it in any number of ways down the road," says Doherty.
Let's hope that these initial players can be upgraded to support the final AACS specifications. If you'd like to read more, the entire article can be found here.