Just as iTunes allows users to rip their CDs to their hard drives for later playback on a variety of devices, so Kaleidescape's DVD products allow users to rip their DVD collections and later stream them to a variety of devices around their homes. But Kaleidescape faces a challenge Apple did not: DVDs are encrypted and the DMCA, passed in 1998, gives Hollywood the legal power to prohibit firms from "circumventing" copy protection.
So, a judge ruled that the device was illegal because it ripped an encrypted copy of a DVD to memory, even though it would not play it back without the original disk in the player. And people wonder why Hollywood is dying.