A recording device for digital data streams, such as digital TV broadcasts or digitized music, stores copies of program content encrypted by a key unique to the recording device. Distribution of program content is thus discouraged, since intelligible playback of program content would not be obtained on another recording device, which would have a different key. To reduce manufacturing complexity which would result from requiring all bits of a key to inhere in hardware, a first portion of the key inheres in hardware and a second portion is selected from among several candidates residing in a memory device, the key being determined by combining the first and second portions according to predetermined rules. The second portion is reselected at predetermined intervals from among the candidates. Only payload portions of packets are encrypted while header portions are left in the clear in order to facilitate ancillary functions of recorder such as fast forward, fast rewind, and program search.