Does anyone know how to defeat this?

Presumably their MP4 enveloped content is encrypted using ISMACryp, either v1 or v2.

Are there any applications out there capable of dealing with this?

Had a look at MP4Box/GPAC but thats just out of my league to get it up and running, if it d even work that is.

I assume you need a streamripper that uses the keys for decrypting the stream the moment you handshake and start streaming from the server, just like the legitimate player software does.

No such software in existence?