UPDATE: The first time I submitted this story to Digg.com, it got censored too, even though it does not contain the key anywhere in it!!!

Some of you may know I frequent the popular social news web site Digg.com. On Digg, users submit stores they find from around the web and other users “digg” (vote) those stories.

Yesterday, a string of letters and numbers that completely unlock the new encryption system being used on HD-DVDs (that’s High Definition DVDs) started circulating on the Internet. The MPAA, of course, which is perhaps the only organization that gets more excited about robbing people of their fair-use rights than the RIAA, does not want that key out and about, or people might actually be able to (gasp) backup their movies. So they started issuing cease-and-desist orders to any web site that had the key posted, and most complied.

The real backlash, however, came when Digg started removing story submissions that contained the key. If you’re not a member of Digg, you need to understand that one of the holy principles of the community is that it is governed by the community. Good stories make it to the front page; bad stories get buried. When Digg bent over for the MPAA and immediately started removing stories, the community responded…with unprecedented force.

The revolt had been picking up earlier in the day, but when I visited Digg.com at about 10:00pm EST, every single front page story — all 15 of them — referenced the key in some way. It was encoded as a screensaver, as web site color hex values, as the title tag on a site, within a JPG image, in a domain name, and in just about every other creative way imaginable. People have even created CafePress shirts, mugs, hats, etc…and unless the MPAA is going to come into your home and steal your coffee mug or rip the shirt off your back, they can’t stop this.

What makes this truly significant is that Digg.com CEO Jay Adelson posted on the Digg blog today that they must censor the stories because of the MPAA, or risk legal action. Now, users of social sites like Digg hate DRM (Digital Rights Management) to begin with, because they cause headaches and limit fair use rights, and when the overseers of Digg — a democratic community — started censoring stories, the results were staggering. What Digg faces now is a serious conundrum. The company, which just a couple years ago was a tiny startup, now features well over a million users, tens of millions of hits a day, and is valued at dozens, if not hundreds of millions, of dollars. And they must make a choice: do they allow the stories about the key, and risk the ire of the MPAA? Or do they continue to fight a losing battle against stories about the key, and alienate even more readers than they already have? With people encoding the key in everything imaginable, and even posting the key in comments about stories that are totally unrelated, the only way they can completely censor it is to shut the whole site down. What a position to be in.

What do you think? From my standpoint, as someone who follows the digital world closely, this is a stunning manifestation of the frustration that consumers have with DRM encryption — and the astonishing tactics by the RIAA and MPAA that attempt to gag people and restrict their rights. This type of revolt always starts with the people in-the-know, but eventually this will make its way to the general public. Music companies have already started to get the message — EFI has started selling most of its catalog DRM-free, and people are buying it. One day, the MPAA might get a clue and stop spending billions on encryption schemes that ultimately do more to frustrate honest consumers than determined pirates.

UPDATE 2: Digg.com is behaving very erratically under the onslaught of users determined to punish them and the MPAA for censorship. Stories’ digg counts are fluctuating wildly (in the span of 1 minute, the submission for this article went from 42 to 70 to 54), comments are appearing and disappearing, and a story even showed up on the front page with only 1 digg.