Just this month, I am proud to say we hit another major milestone that reflects as much on the entire digital video industry, as it does on Verimatrix. We celebrated reaching 500+ pay-TV operator customers and securing more than 20 million screens. (For additional milestones, read about our global number one ranking in Content Protection/DRM in MRG’s IPTV Market Leader report – for 5 1/2 consecutive  years!)

A large part of our tremendous growth has been due to the pay-TV planets colliding. Back in 2006, virtually all of our customers were delivering green field IPTV services over managed networks. Fast forward six years, our heritage in IP-based security techniques has placed Verimatrix in the center of this collision.

Cable and satellite providers are taking advantage of IP networks for two-way communication – over both managed and unmanaged (OTT) networks.  IPTV operators are also turning to Internet-based OTT video to enable a compelling multi-screen experience. And we are finding that increasingly even “pure play” OTT video providers need to meet the same content security requirements for premium video as the traditional operators do (see our latest white paper, Content Security Requirements for Multi-Screen Video Services.) Of course, there remain tens of thousands of analog operators that are still transitioning to digital (India’s Phase I digitization this year presents a wealth of opportunities.)

Our cable and satellite (DVB) customer base increased 100% in 2011, and we’ve had a 500% growth in secure OTT video services. Based on feedback from customers, particularly our DVB customers, they feel more confident that our VCAS solutions will help them extend into multi-network, multi-screen video services more efficiently.

Additional proof of our position in the market can be found in our 3-Dimensional Security approach, which we introduced more than three years ago: Flexible layers of protection techniques that address evolving business needs and revenue threats. In other words, any screen over any network to meet any threat. This clearly still rings true today.

Since celebrating this milestone was so much fun, everyone is focused on reaching the next one!

How can we provide our customers with the most innovative solutions for securing and enhancing revenue for multi-network digital TV services on the market today?

This month, Verimatrix has been recognized for our innovation by two separate entities, both distinguished in their own right.

During CES 2012, our MultiRights solution won the Content Protection category at the prestigious 2012 TV Innovation Awards.  Very exciting news, especially considering the source of the award.  Now in its third year and administered by IMS Research, the 2012 TV Innovation Awards are one of the premier endorsements of innovation in television. The awards recognize the most forward-thinking companies that are creating products and services to change the way people watch television.  We are thrilled that Verimatrix was honored as one of these companies.

We feel that this commitment to innovation has also contributed to our sustained market leadership in software-based security. In December, MRG released its bi-annual IPTV Market Leaders Report that named Verimatrix in the top position. This marks the 11th consecutive time that we have maintained our market share in IPTV, representing 5 ½ years of Verimatrix global leadership.

Not a bad way to ring in the New Year!  We are thrilled to kick off 2012 on such a high note and look forward to continuing our relentless innovation in multi-network and multi-screen content protection and revenue security. Our philosophy is that if we offer our customers innovative solutions for securing and enhancing revenue on their multi-network digital TV services, we help them to market leadership positions in their own business. Their success becomes our success.

To help navigate this landscape and to better serve our customers and the market, we helped develop a paper that will serve as a content licensing and security guide for video service providers planning multi-network, multi-screen services. We teamed with Bill Rosenblatt, founder of GiantSteps Media Technology Strategies, who has been steeped in digital rights and content management technologies for many years and has served as technical expert in litigation and public policy initiatives related to digital copyright.

Basically, he has the studio relationships, technical and legal chops and objective perspective to summarize available information and draw conclusions that are valuable to service providers.

We believe this is the most comprehensive guide available today on how the approach to multi-screen and TV Everywhere types of services relate to traditional licensing and security rules. In general, we found that practical security requirements for over-the-top (OTT) services and portable devices are becoming more analogous to traditional video delivery as the industry matures, meaning the requirements are becoming more stringent.

It is HD content, delivered to any device, that has become primary benchmark in licensing terms and security requirements. The physical media delivery regime for HD was fundamentally grounded in the AACS protection model – now the application of similar principles and in the digital delivery domain is part of the background, although we are seeing trends that this is changing.

In fact, the content of this first version of the paper highlights areas – licensing attributes, new security techniques, release windows, usage rules and studio policies – that are most in flux and provides signposts on where requirements are headed. Of course, market dynamics will never stop shifting. Content owners will attempt to influence them through their licensing deals, and content protection requirements are among the most important licensing terms.  When appropriate, we will update our conclusions over time and use future versions of the paper as a vehicle for updates and elaborations as the industry evolves.

Whether you are a traditional managed-network operator, an OTT video startup, or an ecosystem partner developing devices and apps for premium video delivery, this paper is a must-read to gain a better understanding of content and revenue security in the changing world of multi-screen services.

If you are facing some of these choices in launching new breeds of services, please take a minute to download this paper and let us know what you think. We look forward to continuing this discussion!

#1.  Our CEO, Tom Munro, was shortlisted in the Technology Leader category for his contributions to the pay-TV industry as a whole.

#2.  Mario Pino, Marketing Launch Director for our customer Etisalat, was shortlisted in the Marketer of the Year category.

We are enormously gratified to receive this recognition; 2011 has been an incredibly productive and successful year on many fronts for us here at Verimatrix.  As our CEO, Tom is the visionary responsible for Verimatrix’s technical and commercial momentum in multi-network revenue security.  With a growing list of multi-screen deployments around the globe, this momentum is hard to ignore.

And we would also like to extend our sincerest congratulations to Mario.  It is an honor to be recognized alongside a partner, especially one as hard-working and innovative as Mario.  It’s Mario’s job to ensure that Etisalat lives up to its marketing message of ‘Get ready to be amazed’. Since Etisalat developed its vision as a leader in digital media delivery network over any network, any screen, at any time, the progress has been exponential.

In 2011 alone Mario played an instrumental role in launching the IPTV 2.0 service called eLife TV, Etisalat xGames, as well eLife OnWeb and eLife OnDemand on LG Smart TVs and LG Smart Upgraders. More information about these deployments can be found on Mario’s blog. He has achieved many accomplishments this year, and we wish him continued success in 2012.

Congratulations, Tom and Mario!

We laid out our product roadmap to show how we are meeting the needs of both our DVB and IPTV customers that are broadening their services to hybrid DVB-IP and multi-screen delivery. We haven’t received an RFP in the last 12 months that didn’t include some multi-network, multi-screen component. Even if customers are not ready to make that type of network transition now, they certainly want to understand their future options.

The Summit also provided a valuable forum to exchange views with experts and industry peers on the state of revenue security, potential threats and the piracy scene, and what’s next in the pay-TV marketplace.

We brought in two guest speakers to provide a broader view: Alan Constant and Steve Bjuvgard of Imediaco, a firm that provides technical and strategic consulting services across the entire range of media distribution technologies with particular expertise in video security. Alan offered an insightful perspective on the next 10 years of pay TV, by examining the previous 10 years. His convergence prediction is that DTH will be initially replaced by some form of hybrid network and then OTT on unmanaged networks.

Steve dug deep into piracy issues with some regional case study examples. He deftly broke down the status of piracy, along with the regulatory and legal enforcement environments in Asia and the Middle East. For example, in some Middle Eastern countries, it is estimated that up to 40% of urban households accessing pay-TV signals are unauthorized – meaning non-paying users.

Fresh from IBC, I also had some reflections to share. The most obvious was the lack of 3D “noise” on the show floor when compared to 2010. We saw only modest advancements in the positioning and development of 3D solutions and services. The 3D hype was soundly replaced by multi-screen services – although definitions differ, it is clearly the evolution of network convergence and it is no longer considered “new and mysterious” as it has been in years past. And it is worth pointing out that the falling prices of DVB set-tops are opening new markets, particularly in emerging regions.

Of course, operators are making decisions on the best ways to secure assets on these different delivery networks. As a validation of the software-based security approach, we saw even the legacy smartcard providers announce their software-based, multi-screen solutions. Of course, the other piece to the multi-network, multi-screen puzzle is content rights, which we find are dragging out these next-generation implementations.

We are working on some ground-breaking research regarding content rights across different networks and devices, so stay tuned.

All in all, the attendees at the EMEA Autumn Summit were a very interesting and dynamic group, representing both technical and business disciplines, with very ambitious and advanced business plans.  The speakers shared the difficulties of combatting piracy, not only through technical means but also through judicial, commercial, and creative mechanisms.

Of course, fun was had by all during our “extracurricular activities,” such as the visit to the Erdinger brewery with an extended tour of its facilities, where we learned everything worth knowing about beer making, and the Oktoberfest event itself, which was a totally OTT event (pun intended).

We look forward to hosting more events in 2012. We would love to get your input on what you’d like to hear from Verimatrix. Leave a comment and let us know.

Last week, we posted answers to several of the follow up questions that were generated during our recent Light Reading webinar on Multiplatform Content Protection: How to Secure Content Everywhere.

Below are even more answers to questions with themes that pervaded multiple questions and comments during the session.

Feel free to let us know you agree or disagree by leaving a comment below.

Are keys determined by the DEVICE identity or by the USER identity? Do security systems provide for different entitlements for different users of a single device?

The management of key distribution for encrypted video streams is one of the ways to regulate consumption to different subscribers. In order to do that most effectively, operators need to determine the entitlements of those keys both at the user level and the device level. Security systems could provide different entitlements for different devices going to the same user or to provide different entitlements for different users on a single device.

The consumer’s experience is adversely affected by making consumption rules too complicated.  If the value proposition of the service or transactional purchase is too complicated and not intuitive to the consumer, then whole experience is detrimentally affected.  In our experience, we have found that you really want to make the rules as simple as possible but keep entitlement management on a fine grain basis managed on user-by-user and device-by-device basis.

Can HLS support the needed adaptation of streaming rate for the larger screen in addition to smaller screens?

The ability of HTTP Live Streaming (HLS) to scale delivery systems from small form factor devices to large devices is part of what makes it so attractive.  So, yes, it is possible for the device to adapt to the right bit rate to match the resolution of its own screen display as well as to match the stream profile to the available network bandwidth.

Do you see a trend towards IP video home gateway/IP STB among pay TV operators?

We believe that the market is inexorably moving to IP-based video delivery across networks outside the home as well as inside the home. We are working with cable operators that are migrating to so called cable IPTV or DVB-C / IP hybrid networks to take full advantage of the cost and operational efficiencies that are possible.

But the transition necessarily involves stepping stones, and the gateway device is certainly an element of solutions that can help bridge the gap between traditional video network delivery technologies and the IP centric world.

Where do you see gaming consoles in the universe of ‘connected devices’ and video consumption, and DRM protection?

Gaming consoles are very sophisticated and powerful video machines that make great set-top box substitutes. We also think that they could enable viable second or third screens in the home. They are pretty good from a video processing and cost standpoint, so therefore they should be pretty good from a home video services standpoint.

The challenge has always been developing applications for game consoles as they have not been open development environments and it’s been harder for these devices to become rich targets for different kinds of video services.

Access the archived webinar from Light Reading here.

Things have certainly changed in the last six months.

• Cord-cutting may be still a much debated statistic, but is in fact a competitive threat to traditional pay-TV services, particularly with younger generations. This threat grows with the quality of services that can be delivered over unmanaged networks and the variety of devices that can be used to display high quality video services.

• Progressive operators are finding ways to add OTT services to their subscription packages. IMS Research forecasts that in 2016, OTT services delivered via pay-TV set-top boxes will generate $436 million in worldwide operator revenues.

• Innovation among television technology suppliers has far from run its course. New announcements from digital systems vendors appear every day, creating momentum for strong partner ecosystems that can provide operators with the advanced capability they seek, but with options and flexibility for deployment.

We are seeing this support largely for the standard of HTTP Live Streaming (as opposed to the proprietary HTTP Dynamic Streaming from Adobe and Microsoft’s Smooth Streaming) mainly because of its open standards-based approach, including the definition of a standardized stream encryption mechanism for live and on-demand content.

The natural effect of a standards-based protocol and growing technology support is of course a more cost-efficient platform, making HTTP Live Streaming ideal for the kind of large-scale services that these progressive operators want to add to their line up.

However, we recognize that we are still in the early days of developing the business environment for adaptive rate streaming and OTT video services – which is why we are organizing the Capitalizing on OTT Breakfast Forum the morning of March 22 just down from the IP&TV World Forum conference that starts that same day.

We are bringing together industry leaders from Harmonic, RealNetworks, AwoX, Minerva Networks and Heavy Reading to discuss revenue optimization strategies for OTT services to multiple devices.

These companies are far from the only strong contributors to the momentum in this space, but do represent distinct elements of the overall value chain. And as such are able to illustrate very effectively the growing body of both product and expertise that can be brought to bear on this new market.

The point here is not to talk about where the industry is currently positioned in regards to OTT video, but to illustrate a vital and growing phenomenon that will shape the next phase of industry development – the integration of these new delivery mechanisms within an existing managed network service. The presenters will be discussing specific technology decisions operators need to make when building an integrated OTT platform.

With the ability to secure OTT video, operators are also provided a platform to deliver – and more directly monetize – their existing and future premium content.

This event is for broadcasters and network operators that are evaluating adaptive rate streaming technology in order to expand their service umbrella. Not only will you have access to these industry leaders, they will provide a preview and focus of what’s most important at the IP&TV World Forum conference.

Skip the queue the morning of the show and attend our free OTT breakfast forum. You won’t be disappointed. Plus you can enjoy delicious bacon sarnies to start your day!

RealNetworks

Harmonic

Minerva Networks

AwoX

• Ericsson AB for its Multiscreen TV
• Huawei for its IPTV Service Delivery Platform and MediaCloud On-Demand Solution
• Nokia Siemens Networks for its Ubiquity Multiscreen TV platform
• ZTE Corporation for its Service product line

We would like to congratulate our partners on this prestigious honor. The IP&TV Industry Awards are a symbol of recognition and respect in the industry, and we are delighted to see such prominent and leading edge technology providers being acknowledged.

Of course, it’s worth noting that that all these solutions are secured by our next-generation Verimatrix Video Content Authority System (VCAS™) 3 architecture.

Verimatrix’s broad and diverse partner ecosystem supports an increasing number of partners and devices for multiscreen services.  We pride ourselves on offering best-of-breed, advanced solutions to our customers, and strive to help our users achieve time and cost reductions.

To that end, we will be conducting multiple demonstrations at IP&TV World Forum, and we encourage you check out the latest at our booth (#117).   You can simply drop by, or contact us if you would like to arrange a meeting in advance.

Congratulations again to all of our partners on this tremendous honor and we look forward to seeing everyone in London next month!

You’ll notice that OTT has been a common theme throughout our blog posts this year – we have tackled issues ranging from the likelihood of traditional TV operators embracing OTT video as a service to how service providers can capitalize on advanced OTT technologies to enable new streams of business to the growing support for HTTP Live Streaming.

In addition to helping operators maximize the effectiveness of their existing bandwidth, ARS also
offers many advantages over previous video delivery techniques over the Internet. For instance, it naturally supports home firewall transparency, and a wide variety of use cases — it can deliver video across a combination of wired and wireless networks, through any combination of home broadband devices and firewall devices.

In our opinion, this is extremely important because the protocols that we’ve been using for IPTV, in particular, don’t have those properties, and as a result they don’t work very well around the home.  In comparison with previous video techniques used on the Internet, such as progressive download, we see both improvements in operational cost savings for the service provider and in the quality of consumer experience.

And the improvements to the quality of the consumer experience are tremendous.  This is so important because user experience is perhaps the most important determinant of success for businesses that rely on video delivery.  People don’t expect their video material to stop and start and for the audio to drop; they expect a very seamless, continuous experience, and they are not very forgiving of delivery issues.  ARS provides that seamless experience even when conditions deteriorate sharply or if sharing of bandwidth occurs.

In partnership with Harmonic, we worked with Ben Schwarz to author a primer talking about the impact of ARS. You will find a high-level technical description that leads to the technology trade-offs of the different flavors of ARS (from Apple, Microsoft and Adobe). It is written as a guide to help operators make sound selection parameters and consider business implications based on those decisions. You can download the primer at www.verimatrix.com/HLS

We think ARS is one of the year’s most significant enabling technologies, and we’re excited to see what’s in store for 2011.  What ARS advancements do you think we will see in 2011?

Sign up for our Authorized Access newsletters to stay informed on the latest news on revenue security, conditional access and digital TV developments.

I mentioned this earlier this year, and the main themes still exist. Operators are evaluating the best, and most-cost effective ways to enhance their network that will improve their competitive profile, capture additional revenue or simply better serve current subscribers.

Technically, the challenges may be coming from a transition to MPEG-4 for HD and, eventually, 3D TV, the integration of hybrid services onto an existing broadcast network or the delivery of video services to PCs, portable players, game consoles and mobile handsets.

Another category of operators are those that are still in transition from analog to digital TV delivery that have the opportunity to leapfrog some of the technology choices made by earlier adopters of digital standards. The push to digital usually factors in changes in local regulations, breaches in outmoded security systems and competitive pressures.

A consistent pressing need is to move towards a unified platform that integrates the management of multiple delivery networks and a much greater variety of client devices inside and outside the home. And of course, commercial paid services need an effective answer to the question of revenue security across this delivery landscape.

Depending on the balance of many factors, service providers will typically adopt one of the following approaches to the transition . . .

I’ll stop there because you can read the entire opinion piece in the IBC Show Daily. Or leave a comment and we can continue the conversation.

It is definitely worth visiting our booth at IBC 2010. We are in a new location – Hall 4, Stand B84, and will have some interesting demos and comfortable chairs!

We look forward to seeing you later this week at the show!