Film fans would be allowed to make legal copies of DVDs for use on portable players, under a plan agreed by US media and technology giants.
DVD piracy has become a global problem for the movie industry
The move, involving companies such as Disney, IBM, Microsoft and Warner Bros, marks a shift in the movie industry's stance on online movie piracy.
The alliance is currently developing content protection technology ready for licensing later this year.
DVDs are presently protected by content scrambling which prevents copying.
The computer and consumer electronics industries have pushed to allow less restricted sharing of media between TVs, computers, and portable players.
Next-generation DVDs are expected to deliver superior video and audio, although industry players have yet to agree on which format will become the industry standard.
This week, film companies in the UK joined forces for the first time to convince movie fans that buying pirate DVDs funds terrorism and drug dealing.
The £1.5m Piracy is a Crime campaign, the biggest of its kind yet in the UK, was launched in London on Monday by presenter Jonathan Ross.
A new trailer warns that buying a pirate DVD is like stealing a car or phone.
Militant groups are among those involved in selling DVDs in the UK, according to the Federation Against Copyright Theft (Fact), the industry's anti-piracy unit.
Copies of Spider-Man 2, which had its UK premiere in London on Monday, have already appeared for sale on UK streets and the internet.