A security system that disables the playback of DVDs until an RFID chip has been activated could dramatically reduce the amount of in-store theft, according to the firms behind the project.

NXP Semiconductors and Kestrel Wireless have created a system that embeds radio frequency chips into optical consumer goods such as DVDs and computer games. 

When activated by Kestrel's Radio Frequency Activation-enhanced RFID reader at the till, and the information verified, the product is activated and an electro-optic film is altered to allow the discs to be read.

The two companies claim that the security system will eliminate the incentive for theft.

"Using NXP's RFID technology and Kestrel's RFA it is possible to disable DVDs at the point of manufacture and enable them at the point of sale, making goods stolen at any point during the supply chain worthless," said a statement by the firms.

Christophe Duverne, senior vice president and general manager of identification at NXP, explained that hundreds of millions of dollars is spent by retailers and manufacturers each year to prevent theft.

"RFID technology is transforming the manufacturing, distribution and sale of merchandise," he said.

"This is creating a new level of security, stimulating sales, reducing total costs and making the shopping experience more enjoyable for consumers."

The two companies are in talks with Hollywood studios about using the technology to protect DVDs.