Broadcast encryption (BE) deals with secure transmission of a message to a group of receivers such that only an authorized subset of receivers can decrypt the message. The transmission cost of a BE system can be reduced considerably if a limited number of free riders can be tolerated in the system. In this paper, we study the problem of how to optimally place a given number of free riders in a subset-difference (SD)-based BE system, which is currently the most efficient BE scheme in use and has also been incorporated in standards, and we propose a polynomial-time optimal placement algorithm and three more efficient heuristics for this problem. Simulation experiments show that SD-based BE schemes can benefit significantly from the proposed algorithms. © 2009 Elsevier Inc. All rights reserved.