Content Decryption Module (CDM) in your browser or Mobile SDK generates the license challenge

The "license challenge" (it might be a mistake I think it's supposed to be a license request) is just a packet (that can be saved and later sent to anywhere) and it contains the encrypted certificate which doubles as your HWID. An adversary needs to control the private key of the license "server" the challenge is for (this is a privacy measure introduced to prevent the CDM from offering the HWID to anyone who wants it). Now if you want the HWID you need to work for it (one time) by stealing a private key, bribing/blackmailing employees or issuing secret edicts ("here is a new license server we need a certificate for"). Working for Hollywood is also an option I suppose.

Pirates sacrifice devices when they publish ripped content due to the certificate being revoked after Hollywood downloads the torrent and by doing things like this:

    For large-scale per-viewer, implement a content identification strategy that allows you to trace back to specific clients, such as per-user session-based watermarking. With this approach, media is conditioned during transcoding and the origin serves a uniquely identifiable pattern of media segments to the end user.