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!

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!

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.

So what was the topic of this year’s biggest digital TV conference? Well, actually, I was disappointed because it was multi-screen or any screen or something along those lines. But why is it disappointing you ask? Because we have been promoting this concept for years! And specifically securing premium pay TV content to all screens that subscribers find useful. In reality, I am really quite pleased that the industry finally caught up with our innovative security approach.

Let me offer you my observation about at least one of the less obvious challenges related to delivering rich combinations of TV services to all these connected TVs and portable platforms.  The challenge is reproducing many aspects of the live TV experience in a scalable fashion. Therefore, we are firm believers that, as this market matures, Internet TV services will naturally need a combined solution for both on-demand and live consumption.

None of the critical adaptive bitrate streaming protocols out there, specifically Smooth Streaming and HTTP Live Streaming (HLS), have been defined in a way that makes it easy to support tens of thousands of concurrent subscribers watching a major live event such as the soccer World Cup in real time.

When compared to the well-honed DVB broadcast technologies, some of the key issues of practical concern, like managing semi-synchronized key changes and addressing revenue leakage through re-broadcasting of various kinds, are not yet developed to scale in a streaming environment.

Addressing these kinds of issues takes Internet TV to the commercial level necessary to truly reproduce the pay-TV service paradigm–and associated revenue models – with which we are all familiar. This is where our experience from the IPTV and DVB worlds comes in really handy; where content is distributed to millions of subscribers while managing device entitlement, device security and frequent real-time rights changes.

If this makes you wonder if your current or planned multi-screen service scales beyond just a proof of concept or a friendly trial, give us a call. We are happy to show you how our VCAS for Internet solves this problem without installing a large number of servers in your head-end.

And don’t forget to stop by an old-fashioned cheese farm while visiting Gouda.

Steve Christian was recently featured on the increasingly popular Pay OTT TV Blog from Tvinici, which was highlighted at IBC 2011. 

Content security is one of the most complex issues associated with OTT TV.

We have asked Steve Christian, VP Marketing at Verimatrix, to give us the DRM / Conditional Access perspective of OTT TV (Verimatrix provides software-based security solutions for service providers).

Steve, What do you think are the main reasons behind pay TV operators expanding into the Over-the-Top Space?

A key driver is to be able to cover the bases of additional screens in the home, which from a defensive perspective would gather eyeballs of competitive or niche services. From a more positive standpoint this raises the competitive bar for other pay-TV operators in the same franchise area or region. Another reason is to be able to expand the geographic reach of the operator’s service brand beyond the existing subscriber pool, potentially to a worldwide audience.

What are the greatest challenges associated with content protection in the pay-OTT space?

The greatest challenge is awareness of content protection issues at a high level, and the details of how this must be supported at fine grain level.

To read the complete Q&A, please visit the Pay OTT Blog.

Check out the post and leave a comment so we can continue this discussion!

And stop by our booth at IBC 2011 – 4.B54!

Since last year’s show, it seems the digital TV industry has entered a new period of pragmatism and commercial maturity. This feels like a welcome period of stabilization after the recent cycles of hype following OTT’s emergence as a viable new technical option for service delivery.

The commercial and technical communities are now clearly rethinking some early bets. And we would argue that the tendency to give services and content away for free, or for minimal ROI, just because they represent new and flashy beachheads for promotion, is increasingly being eclipsed by the trend to include Internet delivery options as a component of existing video service relationships.

Yes, there are some pure play OTT providers on the scene that have certainly been aggressive and innovative. But as the dust settles, we anticipate that they may be increasingly been seen as complementary or niche service options among a field of competitive options led primarily by established service brands.

At IBC 2011, we expect to see the growth of content delivery over the Internet as a parallel and complementary component of pay-TV services, simply using a different technology base from the other components of the service delivered using traditional managed networks.  I expect that the two will look increasingly similar or highly merged as far as business models and key players are concerned.

From our perspective, Verimatrix is highly visible at IBC 2011 as a key independent player in the world of revenue and content security, offering a flexible and comprehensive set of solutions to multi-network, multi-screen video business delivery challenges.  Being independent has proven to be an increasingly valuable differentiator for us as it has provided us with the flexibility and means to focus solely on content security.

Drop by our booth (#4.B54) at the show, to learn more about:

• Enhancements to our OTT security solution, VCAS for Internet TV, and the rationale for investing in these areas. As the global footprint for OTT services grows, we are adding captioning support for multilingual programming, on-screen display (OSD) fingerprinting, dynamic copy control directives and more. Find out why.

•  The competitive advantage generated for our customers by the integration of Verimatrix IP technology and the mature DVB technology we acquired earlier in the year. One of the clear benefits is a common rights management approach and an architecture for hybrid client devices that enables dynamic dual network functionality for combinations of DVB and intermittent IP delivery networks.

• The alignment of our current products and development directions with the support for new technical and commercial standards that will serve to rationalize the industry moving forward, including DECE, MPEG-DASH and Open IPTV Forum.

• Our vision of the “new reality of multiplatform video distribution.” As multi-screen business models are being explored, the challenges of content licensing and rights becoming more apparent. Operators are faced with determining and managing a fast-growing set of rights. We’d love to share our current thoughts and experience on these issues.

•  The latest on our new watermarking solution, StreamMark.

We will also have several partner and customer stories to share, along with demonstrations that illustrate our multi-network, multi-screen security solutions – a space where we are unique in our ability to support the vision of the world’s most ambitious operators.

We are also delighted to announce that VCAS for Internet TV has been shortlisted for a CSI Award in the best content protection technology category.  A much appreciated nod, and a great way to kick off what we anticipate will be a very successful (and busy!) conference.

So if you’re in Amsterdam next month, drop by our stand, say hello and share your thoughts with us on the trends here and at @verimatrixinc that will define IBC 2011 and pave the way for the IBC 2012.

We’ve received an overwhelming response to the report and we feel that’s because it hits on some major issues operators are currently dealing with, such as the infrastructure challenge, how to ensure revenue security across multiple devices, and tackling universal content rights that appeal to both the consumer and the content owner.

Based on the feedback we’ve had so far, we thought it would be valuable for Steve Oetegenn to expand on some key points from the report.

• What were you hoping to elucidate with the recent Videonet report, “Making all TV multi-screen TV?”

This report is timely and is another indication of the maturing of the over-the-top (OTT) video marketplace. Consumer expectations have driven the need for multi-screen TV and we are at a point where the technologies and standards are catching up for operators to enable such services – and operate them in a way that complements their more established business streams.

Now we are talking about how to more effectively scale and monetize these services; how to combine on-demand content (which has dominated OTT video) with live content; and how to deliver it over different networks to different devices without sacrificing quality of experience.

This is an exciting time because progressive operators are setting the bar for what is possible. The technology and business decisions they are making are critical to meeting consumer expectations and long-term development of the market.

• How do you see subscription-based and ad-based TV models co-existing in multi-screen services?

Informal polling results from our recent Light Reading webinar illustrated what the market is also seeing – operators taking a mixed approach to revenue extension, just as they have done on more traditional delivery platforms. The more you look at pure online offers today, the more they look like subsets of traditional cable operator models.

• What type of standards will need to be established to secure multiplatform content across different network domains and native DRM schemes?

Actually multiple DRMs and hand-offs during delivery seems like a highly unlikely scenario to us for the most part. The trend appears to be towards efficient and effective end to end models of cloud based services. The future development of these approaches seem likely to adopt “security neutral” forms of content distribution and service protection such as HLS, DECE/Ultraviolet CFF and YouView’s choice of Marlin. (Read more on this topic in ScreenPlays)

The use of DTCP-IP in the home is a counter example with a single “conversion” point in a home gateway, but one that is again vendor neutral in concept, enabling technology solutions to be created that add significant value to the underlying solution.

• What is Verimatrix’s strategy to ensure interoperability within a multiplatform world?

We have launched a strategy that offers two directions in support of optimizing and extending our customers service umbrella.

The first of these is certainly a focus on supporting a widely deployed standard for advanced adaptive streaming, which we believe is HTTP Live Streaming (HLS) at this point. Our value proposition here is to provide additional authentication and entitlement capabilities to existing device implementations and match more of what a commercial premium service is looking for. Clearly, this involves supporting many lightweight client implementations, but this is well rehearsed territory for us in the IP set-top box space.

The second is in response to a clear recognition that not all devices targeted by a given service operator will use a single protection mechanism or even similar file formats. However, it will remain important for operators to manage rights of all devices in concert and it will be vitally important that the consumer experiences a highly uniform and pervasive service offering. The Verimatrix MultiRights strategy provides an answer for this by licensing critical third party technologies and providing them under a common management umbrella.

• With operators facing major transition points for their network (e.g. analog to digital or MPEG 2 to MPEG 4), is there a common security consideration that will more easily enable multi-screen services?

Multi-screen services are just one aspect of an operator seeking to optimize commercial opportunities – and such network transitions are all a part of this kind of picture. Verimatrix provides a single security approach that addresses many aspects of the new commercial opportunities that our operator customers wish to exploit, which is in contrast to the highly siloed approaches of legacy conditional access (CA) providers.

• Where does digital watermarking come in?

Watermarking is a powerful tool that we bring to bear in a layered revenue security approach. The most interest in this extra layer has been for high value, early release content where high resolution video-on-demand (VOD) services offer a tempting point of interception for content pirates and we need to offer a multi-level, layered security approach.

It’s not obvious at present that the value of pirated video copies at mobile screen resolutions warrants the use of this additional security layer, but as screen sizes and service resolutions grow this will become significantly more important.

We will be launching our new server-based watermarking solution at CableNET. Stay tuned.

Click here to view the Videonet report.

Send us a comment or question that you feel hasn’t been addressed for the roll-out of multi-screen video services.

A very broad topic, indeed, but also a very timely and relevant one. With an increased number of tablets and smartphones driving consumer interest in video on the go, consumers are demanding access to preferred content across devices, anywhere and anytime. However, for service providers and content owners to be able to provide these services in a profitable manner, the content must first be secure. In addition, as new revenue models develop, the content protection must offer increased flexibility and the ability to follow complex rules.

We addressed these issues during the webinar and are pleased to note that there was a very productive and stimulating Q&A session at the conclusion of the presentation. Many excellent questions were asked, however, and time constraints did not permit us to answer every question. Therefore, we’ve taken a sampling of the unanswered questions, and provided our answers and guidance below.

Be sure to watch for the second installment of this series, where we’ll be answering more questions from the webinar participants.

How will operators profit from content delivery using adaptive rate streaming of various types of video content? What network operator capabilities, if any, could enhance the end user QoE for such services?

Modern pay-TV operators should embrace novel technologies, such as those utilizing adaptive rate streaming (ARS), which have been designed to effectively scale and solve many remaining IP video issues.  Operators will profit from ARS as long as they increase subscribers’ quality of experience (QoE) and leverage the associated subscriber data.

With ARS, subscribers can enjoy an uninterrupted experience with the highest quality possible, even as they roam from one network environment to another.

In addition to the optimum-quality viewing experience, ARS also scales effectively on global and local networks, makes highly effective use of today’s content distribution networks (CDNs), and ensures that true HD media experiences over the Internet can become a reality. All of this translates to a richer consumer experience, with more personalized choices with regard to content, time and place.

ARS can also provide valuable subscriber intelligence. At Verimatrix, we believe that the more you measure, the more you can impact QoE. While the concept of gathering subscriber usage data is not new, operators need to think about subscriber behavior and usage data more intelligently. This data can be leveraged to generate new revenue streams, increase subscriber loyalty, as well as enhance QoE and subscriber satisfaction.

Technologies like ARS can provide a veritable treasure trove of data that can be analyzed for extremely useful metrics like performance trends and traffic patterns.   These metrics provide a robust foundation for enhancing QoE and turning it into a real competitive advantage.

What are the trends, now and in the next year or two, in stationary viewing vs. mobile (iPhone, iPad, etc.) viewing of video content?

This is a great question.  Without a doubt, the content landscape is rapidly evolving as a result of the increasing role of over-the top (OTT) services. Static information feeds from the Web today are joined by an ever richer vein of mainstream programming delivered directly from its owners – often for free and with minimal advertising interruptions.

While in the past this meant watching low-quality video on a PC monitor, today OTT services can be watched on the big screen connected to game consoles, Internet-enabled TVs, dedicated streaming devices such as Roku, and a variety of mobile devices, including the iPhone and iPad.

Consider these recent statistics (from a recent Nielsen report on smartphone usage), which represent a possible threat to traditional pay TV:

• Penetration of smartphone devices in the U.S. jumped from 23 percent of the market in the last quarter of 2009 to 31 percent in Q4 2010, representing a 35 percent increase
• The number of video viewers rose by 41 percent to 24.7 million over that timeframe
• Users spent an average of 4.2 hours per month consuming video at the end of 2010

Over the next couple of years, I think we can anticipate that this trend will continue. If you are looking for real time statistics, I suggest checking out the BBC Internet Blog, which posts a monthly snapshot of BBC iPlayer performance.  It’s a great resource and very helpful in identifying key trends and issues.

Do you think that ISO/MPEG’s DASH standard will become the dominant adaptive streaming protocol. If not, why not?

Yes, we do think that once it its finalized MPEG DASH is poised for widespread adoption.  In our opinion, device makers will want to preferentially support a single video stream type. That will tend to help the adherence of standard video support in both PC-type browsers and embedded browsers (which have been much more of a challenge in many cases), and starts us down the road of direct HTML page support for connected TVs etc. We think that MPEG DASH will become the obvious choice for embedded devices.

We are closely watching and participating in the standards development that will help enable and secure multiplatform content. For the latest standards developments and insights, read my article in the May 2011 issue of ScreensPlays,”Initiatives Promise Efficiency Gains for Multiscreen Service Operations.”

What questions do you have on this topic?

So, this time I was not sipping coffee at a foreign airport nor feeding my sweet tooth with poffertjes. This year I drove to NAB and it is hard to type while driving 320 miles back from Las Vegas to San Diego. I still can’t find a good app on my Android phone that would take my dictations and convert them to text.

But back to NAB. It seems like tablets were everywhere and if your booth didn’t have one, you were not cool (of course we had one or two as well). And it is all related to over-the-top (OTT) distribution of content, especially video. I can’t help but feel that the direction the industry is going is questionable: from HD video on a large screen TV to a low-bitrate, low-resolution video on a portable device.

I know, I get it, it is all about mobility and “on my time” and “wherever I am.” So it certainly has its benefits and the video quality is improving every day through better implementations of adaptive bit-rate streaming and ever increasing bandwidth.

The content quality is also improving as studios are getting more comfortable to release pay-TV movies and episodes when they are protected by conditional access (CA) or digital rights management (DRM). This was the point of our production-ready OTT demos streaming protected video to iPhones, Android phones, laptops and Macs, and yes, even iPads and Android tables (to make sure we fit right into the NAB buzz!).

Where did the quest for highest quality and best picture disappear? Actually, it did not.

As we discussed with Herve Utheza, president of our partner company RCDb, during a session on “Tapping into the Blu-ray Potential,” OTT is also coming to our living rooms bringing Hollywood content to a device that everybody is familiar with, is simple to use and always brought quality entertainment for the whole family.

Yes, you guessed it; the good ol’ Blu-ray player. It is the most deployed entertainment device (including BD-enabled game consoles) already connected to your living-room large screen TV. And now, when you connect it to your broadband and insert the RCDb-Verimatrix disc (or rather a disc branded with your OTT service), Eureka! You have access to potentially thousands of movie titles, TV episodes and even live content from the comfort of your sofa (and no, it does not serve beer yet – we need to leave some room for phase 2).

And the beauty is that it plays on all BD players with BD-Live 2.0 capability (virtually all recently manufactured players) and it has a standard built-in DRM called Advanced Access Content System (AACS) used to protect all Blu-ray titles today.

A popular device, standardized around the world, capable of delivering high value paid content and already purchased by the consumer. Sounds like a sweet spot to me.

Speaking of sweet spots – if you still don’t know what poffertjes are, let’s meet at IBC 2011 in Amsterdam.