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!

On his Copyright and Technology blog, he describes the objective of this paper as an effort “to gather actual security requirements from major content owners and describe them in a single document. The intent is to help pay-TV operators and other video service providers that are looking to launch multi-screen video services, so that they know what to expect and avoid any unpleasant surprises with regard to security requirements when licensing content to offer through their services.”

Bill summarizes one of the major findings while developing these content security guidelines. “Life for pay-TV operators used to be relatively simple: adopt a conditional access (CA) technology that was equally effective in thwarting signal theft as it was in thwarting content piracy. Economic and security goals were aligned between operators and copyright owners.  Now life is considerably more complicated, as operators have to support home networks and branch out into mobile services. Content security requirements are more complicated as well.”

Click here to read the entire post from Bill’s Copyright and Technology blog. Download the paper and let us know if you agree with the content security guidelines for multi-screen video services.

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.

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.

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.

Since 2006, we have held that spot as the leading software-based content security for global IPTV deployments, which is a noteworthy feat since so much has changed in the IPTV landscape since that time.

In the current wave of market consolidation, Verimatrix is now the only the independent player in the software CA/DRM market. We feel our continued market share is significant as it proves we are able to maintain our focus in IPTV while expanding our solutions into other markets.

It’s interesting to go back and read our first announcement in 2006. That report tracked 470 IPTV service providers and about 60 different IPTV vendors. Fast forward to this latest report. It tracked 913 IPTV operators and the top 120 IPTV vendors, which were broken down into in 24 sub-sectors. The numbers have nearly doubled in five years!

With this report, MRG has also introduced its RankTracker system that allows the monitoring of the movements of IPTV ecosystem vendors compared to previous reports. It is easy to track how the regional and global rankings have changed over the course of time. With this feature, you’ll find that we have moved up to 2nd place in North America!

For information on our award-winning content security solutions for IPTV, please visit our website.

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.

But we would like to underscore the rationale, with all the current industry hype around OTT video and TV Everywhere, for why the leading IP revenue security company would be investing in DVB broadcast conditional access?

The answer is found in the global perspective we have gained in working with many different types of network operators and system integration partners around the globe. Today’s digital TV global landscape is still dominated by DVB broadcast systems – but these broadcast only networks of today are certainly the hybrid networks of the future.

Based on compiling a number of industry metrics and reports, we’ve identified 700+ operators, today with more than 160M subscribers, will switch the technology base of their network over the next couple of years – perhaps from analog to digital, or from MPEG2 to MPEG4 digital technologies. Operators that fit this description will grow to 220M subscribers in the same time frame.

And we feel all of these networks will use the transition point to consider new CA/DRM solutions that enable cost optimization and position the network service to grow into IP service delivery of one sort or another in the medium term.

Even during the next transitionary few years, the subscriber base of virtually all of these operators may well be dominated by broadcast-only technologies. But at the same time as adding a number of premium IP-based service options, operators will almost certainly want to explore a range of client options including cost-effective cardless security.

Therefore they will see a flexible DVB broadcast solution as a major component of an overall growth trajectory that includes broadcast, hybrid, and Internet network delivery. And that they will want to manage the rights for content across all these networks in a holistic manner.

Think of it this way: the operators that “only” need broadcast DVB security now, will need VCAS 3 later in their deployment. With this acquisition, not only do we maintain our focus as digital TV security specialists, but we can now offer a full security migration plan for DVB operators that want to move to a hybrid network – all under a single security architecture.

By adding Comvenient’s deep DVB expertise and hard-earned reputation for secure and reliable products, which are very complementary to Verimatrix’s, we will reach our goal to be the most successful and innovative CA/DRM company in the market.

To put a finer point on it, here is how our company profile has been enhanced with this acquisition:

Founded: 2000

Scope: Content and Revenue Security for multi-network, multi-screen applications: IPTV, DVB, hybrid & over-the-top to STBs, PCs, connected TVs, web tablets & mobile devices

Locations: San Diego, California, with European HQ in Munich, Germany; Sales offices in The Netherlands, France, Russia, China, Singapore and Argentina

Customers: 450+ operator customers in 50 countries, including 20 Tier 1s and 2s – protecting more than 18M screens for IPTV, DVB, PCs and other devices

Partners: More than 110 ecosystem channel & integration partners Ericsson, Huawei, Nokia Siemens Networks, Technicolor and ZTE

Investors: Goldman Sachs, Mission Ventures, Crescendo Ventures, Cipio Partners, JK&B Capital and SunAmerica Ventures

NAB is a great opportunity for us to continue to discuss the benefits of our broadened DVB capabilities. You will see the Verimatrix booth (#SU6207) and the Comvenient booth (SU3024) adopt the new “Expect More” messaging and an emphasis on combining smart card and cardless security, DVB migration strategies and multi-network/multi-device security options.

Please come by to hear more.

I’d argue the biggest impediment to perfecting these apps is content. The biggest impediment to gaining the rights to content is content security. And who already has access to high-quality content and conditional access (CA) / digital rights management (DRM) systems in place? Digital TV operators. We believe the cable, satellite and IPTV operators that already have the rights to broadcast premium content are in the cat bird seat to offer the best live mobile TV experience.

The demand is clear. According to Sandvine, real-time entertainment, including video streaming, now accounts for about 43% of North American Internet traffic, up from 10% in 2008! And for the first time in history, the number of households paying for TV subscriptions is falling, in part due to the rise of Internet TV and over-the-top (OTT) services.

The technology is finally catching up to this demand when you consider what adaptive rate streaming can now enable.

Now, in this new OTT world, the issue of content rights is complicated. Take companies like Ivi and FilmOn.com for example. They have developed technology that captures over-the-air broadcast signals and streams them to mobile devices – without consent from the networks.

Clearly these broadcasters are not thrilled with the so-called loophole that they found in the U.S. Copyright Act. Both of these companies are already in an embattled legal fight with content owners to see if they have the right to do this. According to some attorneys, the law is on the side of the networks.

We recently launched our ViewRight LIVE app in iTunes, which enables secure distribution of premium pay-TV services via WiFi and mobile wireless networks – of live TV. The app provides subscriber/device registration and device-level authentication. ViewRight LIVE also allows operators to customize and brand their mobile TV channel to match the look and feel of their traditional channels.

So with the content rights, technology infrastructure and now the security available to enable a superior live mobile TV experience, digital TV operators have a tremendous opportunity. I’d say it is better to beat fledging online TV operators in the marketplace rather than the courtroom.

What are your thoughts?