This format isn't 10.3 compatible, but VLC isn't either, so we shouldn't care. Pointed by zacwest on the forums.
# Note: We can't directly create a read only dmg as we do the bless stuff
echo "Make the disk image read-only"
mv "$(top_builddir)/vlc-$(VERSION).dmg" "$(top_builddir)/vlc-$(VERSION)-rw.dmg"
- hdiutil convert "$(top_builddir)/vlc-$(VERSION)-rw.dmg" -format UDZO -o "$(top_builddir)/vlc-$(VERSION).dmg"
+ hdiutil convert "$(top_builddir)/vlc-$(VERSION)-rw.dmg" -format UDBZ -o "$(top_builddir)/vlc-$(VERSION).dmg"
rm "$(top_builddir)/vlc-$(VERSION)-rw.dmg"
# We are done