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.

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

There are many industry pundits that are skeptical of this initiative – for all the reasons people are skeptical of any industry consortium. Not all the major players are supporting it (Disney, Apple); there are too many players involved to make any significant progress; who is pushing their own agenda above the benefit of the group; will it actually work.

One decision the DECE has made, which we feel is critical to the success of Ultraviolet, is the DRM schemes it has chosen to support. To be sure, there are three proprietary DRM technologies on the list – Microsoft’s PlayReady, Adobe Access, and Widevine’s unnamed offering. But they’ve also approved Marlin and OMA as open, non-proprietary DRM standards.

It’s easy to see the advantages of a multi-vendor DRM scheme, especially as we stand knee-deep in the TV Everywhere hype. Although detractors point to the pressing need for accountability and responsiveness in a market that is highly dynamic to say the least, we feel such open DRM standards can go a long way to help enable the type of consumer choice that all digital TV operators are aiming for.

In fact, we see the decision to support multiple standards closely mirrors our MultiRights approach. In short, MultiRights mediates different DRM technologies on multiple devices through a single set of subscriber entitlements interfaces and Web services APIs. Our strong support of the Marlin standard as a key component of this architecture is one key proof-of-concept for our MultiRights approach.

Case in point, although Project Canvas announced it will also support multiple DRM schemes, it has strategically decided to launch with only Marlin. According to an article by Philip Hunter in Videonet, “The DRM was the most important and contentious technology choice facing Canvas, having to meet conflicting objectives. On the one hand, it has to satisfy the BBC Trust’s stipulations for openness and universal access, and on the other make the Internet sufficiently secure to deliver high value premium content from movie studios and others.”

It is Marlin’s support for open standards, flexibility and market acceptance that pushed it to the top of Project Canvas’ list.

What are your thoughts? Has Verimatrix chosen to support the most promising technology in the Ultraviolet boat or are proprietary DRM schemes likely to leave these new promising initiatives stranded in port?

As the logic and variety of options are outlined on the Project Canvas web site, offering security mechanisms have clearly been identified as a key technology for Canvas devices. Even in this new video delivery age, a strong core security platform provides the essential support for revenue generating services and complements the fundamental free-to-air and catch-up services central to the Canvas vision. This partnership between commercial pay-TV services and traditional public broadcasting is a healthy example of how common platforms can benefit the industry and the consumer.

We have demonstrated our commercial developments of Marlin Broadband (Marlin BB) on a number of occasions, most prominently at IBC 2009 and IPTV World Forum events. In addition, we have incorporated Marlin support within our MultiRights DRM framework as an important complement to our globally deployed VCAS core technology.

As we move towards delivering fully commercial Marlin solutions, we look to Project Canvas as an important milestone in the selection and deployment of such standards track DRM options. There are a number of other projects around the world evaluating challenges similar to those faced in Canvas and we hope to participate in those initiatives on much the same basis.

Check back here frequently for news on how our value proposition meshes with these large-scale deployments.

Post #3:  Consumer Subsidized TV: The Role of More Open Standards

The era of the dedicated set-top box (STB) for each service to a TV is definitely coming to an end. What is emerging is a picture that involves a series of platforms that can support service specific applications or widgets selected and managed by the consumer. These platforms may themselves be based around standards such that service operators can create the applications that engage the consumer.

In certain kinds of systems, for instance the DirecTV view of the home media server, standards are only necessary to be able to share the content, they are not necessary to manage the device itself.  That device, therefore, can be a completely proprietary system that is wholly owned and subsided by the network or system operator. It is most likely produced exclusively for that network operator, just like traditional STBs have been. 

IP-based standards in such platforms also allows operators to cost-effectively deploy a security system and business rules that can satisfy all demands of content owners while creating the transparent usage model that consumers demand.

We believe that IP and the sophisticated protocols built on IP are the common building blocks to make digital convergence happen inside the home.

One such standards activity is the Open IPTV Forum – a cooperative of technology companies that is seeking to create an end to end platform for the delivery of IP video services. Another recent initiative is Project Canvas propelled by the BBC in the UK.  A standard becomes important like this when it can enable multi-vendor participation. 

As members of both the Open IPTV Forum and Digital TV (DTG), among several other standards consortiums, we are seeing the central role that IP-based technologies are taking. However, we feel that a key component to these specifications is the ability to generate revenue. Creating the right experience that consumers are willing to pay for will most certainly generate continued innovation.

We are watching Project Canvas and others like HbbTV closely, like the rest of the industry.

Stop by our booth at CommunicAsia to discuss the current standards in Asia Pacific.

But in reality, these two worlds are really not exclusive as they might seem.

Some content may start as paid content, and later on may be distributed in the clear with commercials and eventually distributed freely. Other business models allow users to chose between paid but ad-free version or ad-supported version of the same content. Content providers or service operators are not likely to transcode each content for different distribution models if they can avoid it.

As a comment on Google’s apparent position here, I don’t see why an open source codec or open standard should be fundamentally incompatible with revenue generating services. This has been disproved by several standards organizations including MPEG, DVB or OMA, but that is a discussion for another day. The bottom line is that if valuable content will eventually be encoded and distributed using VP8, we’ll be able to protect it if the business model requires it (it is open source after all, isn’t it?) Read on NewTeeVee why open sourcing VP8 matters.

The other issue in debate is whether open source VP8 will stay free. It is unlikely that after a quarter of a century of digital video compression research, Google (or On2) would be able to come up with a codec that is of comparable quality as those developed by MPEG/ITU without infringing on anybody’s patents. If I remember correctly, Microsoft tried something similar with VC-1 and it did not work according to the original plan.

I don’t believe that any serious service provider will jump on the VP8 bandwagon without being able to accommodate all licensing fees into their business model upfront.  Maybe this will speed up MPEG’s effort to create a royalty-free version of MPEG codec, which will avoid splitting the pay-TV and free-TV worlds.

I guess we will wait and see . . .

For one, there is very little 3D content and little commitment to produce more. I heard a statistic that I can’t prove, but sounds about right: there is a total of 120 hours of 3D television programming in the world. And one reason that Hollywood is willing to invest so much in experiences like Avatar is to bring new life to the theater release window. In other words, to make 3D an experience you won’t have at home. It seems logical for them to hang on to that distinctive advantage as long as possible before making the same content available at home.

And of course, there are a lot of people who just got “spousal approval” for an HD flat screen and they aren’t likely to head back to Costco for a replacement technology any time soon. 

Is seems like there is at least a possibility of a HD-DVD vs. BluRay style overhang in 3D technology as well.  We are seeing competing standards from organizations like CEA and SMPTE, plus the announcements from Panasonic about displaying 3D TV images at 1080p along with a Blu-ray disc player supporting the same resolution. The standards battles that are upon us will surely slow down development.  Peter White of Rethink Researchwrote a great piece on the topic in the latest Faultline, 3D’s cold shower – 3D Standards merely sub-standard. Check it out. 

Speaking of Blu-ray players . . . one thing that struck me at CES was that the most promoted feature of new Blu-ray players has nothing to do with playing Blu-ray discs!  Instead, there seems to be a race to collect box-top logos for internet delivered video services like Netflix. 

Since Blu-ray is all about the quality of the picture and streaming video is all about easy and direct access to content, it will be interesting to see how consumers choose.  If convenience trumps quality, it could be fatal for Blu-ray discs. Do you agree? 

Please come visit us at CSTB 2010in Moscow, Feb. 2-4.  Our very own Steve Oetegenn will be presenting on, “Emerging Delivery Technologies that Can Enhance your Business Model.”

Their most recent paper, published this  week, on the Common Scrambling Algorithm (CSA) mandate that many pay-TV deployments must accommodate illustrates very succinctly how technical decisions that once were wholly supportable now hobble the transition of traditional pay-TV players to the new competitive world. My only misgiving here is for any sense in which the specifics of this issue might reflect on the reputation as a whole of the DVB. The guidance of the DVB and its contributors has been instrumental  to organize and commercialize digital pay-TV around the globe, and continues to do so. 

The timely critique of a single technical standard should only be a cause to celebrate open debate – and legacy CA players who rush to the defense of this particularly sacred cow should see it as such. Rather, like scientists who see a grand theory smashed on the rocks of experimental evidence, we should recognize that the changing landscape does require a new assessment of the relevance of certain standards and grasp the challenge that this brings.

Compare that with IPTV operators. In the early days, theft of service was never a forefront requirement when building their networks – for two main reasons. They felt they had more control with fixed networks where the end device was a set-top box, so the threat of theft of service was potentially lower. In addition, content owners saw the emerging Internet Protocol Television (IPTV) as a potential threat and imposed much higher security requirements in order to gain rights to premium programming. Despite claims to the contrary from smart card vendors, software-based security was deemed acceptable in a two-way network and content protection was key to a full channel lineup to attract subscribers.

With the appeal of hybrid networks and novel OTT (over-the-top) services, all types of pay-TV operators find themselves in new revenue security territory. Cable and satellite providers are making strategic decisions to add more interactive services, many of which are delivered over IP-based networks. They are finding that software-only security solutions offer a more economical alternative, which are far easier to deploy, compared with smart cards that simply do not translate in the two-way environment, in particular in the case of mobile devices. 

IPTV providers are now looking into OTT services that deliver content outside their controlled, managed network. They need layered security solutions to take advantage of different delivery mechanisms outside of the living room. Plus IPTV operators with rights to exclusive content have become an attractive target for hackers, so theft of service prevention is a higher priority.

You can now put revenue security on the list of how these pay-TV services are converging. Operators require a flexible protection solution that can handle different networks, delivery formats, multiple end devices and the addition of new services – the ultimate goal is help monetize content, increase ARPU and reduce churn.

Come see me at Digital Hollywood Fall where we will tackle the latest DRM standards and actual technology implementations – today at 12:30!