The technology is developed by Dolby's subsdiary called Cinea and according to the company, "discs are encrypted using the AES 128-bit encryption standard. It's a National Security Agency-level standard, a world-class, state-of-the-art encryption standard".
Academy of Motion Picture Arts and Sciences, the organization behind the Oscars, says that they're having talks with individual studios whether they would support the technology or not. After a court order in last December, MPAA can't force studios to adopt the technology, but it is left to individual studios to decide whether they support the scheme or not.
Basically the encrypted discs would mean that if (and cynics would say, when) screener copies leak to the Net again, the only option is that someone who received an authorized screener DVD must have leaked it as the discs can't be given to friends or relatives as they don't have the equipment to play the discs (or copy the discs).
Oh, did you recognize the name of the company behind the scheme? Yes, the same guys who developed the original DIVX DRM-equipped DVD format (not to be confused with the DivX video codec)..
Source: Reuters