It means that cable, satellite and IPTV operators are allowed to offer content that can only be displayed on screens with HDMI connections protected via high-bandwidth digital content protection (HDCP). Any analog or unprotected outputs from the STB device would be disabled during the viewing of that content.

The contention is that, by eliminating the “easy” piracy option of recording the signal from analog outputs of the STB, studios can now consider a new release window for their movie assets. As proposed by Time Warner Cable, it’s called “home theater on demand,” and enables operators to offer a movie for domestic consumption just 30 days after its theatrical release.

While most articles deal with the business dynamics of selling video-on-demand (VOD) movies closer to the theaters and before DVD or BluRay, let’s take a look at the security implications.

The mandatory digital watermark for digital cinema provides some forensic traceability of illegitimate recordings by identifying the theater location and screening time. This helps deter repeat offenders and inside jobs. Nonetheless, some movies are still pirated with a camcorder in cinemas. Apparently, the commercial benefits of selling that movie on illegal DVDs still outweigh the risks for professional pirates. The quality of these recordings is poor and the financial loss to studios is arguably limited in that many who accept that quality would not otherwise buy theater tickets.

It’s also unfortunate that, right after the release of any noteworthy movie on DVD or BluRay, high-quality digital movies can typically be downloaded from Internet file sharing sites in several versions and sizes. The source is of course untraceable in this situation.

This new concept of a home theater on demand window enables the delivery of movies to end user devices. Despite the restriction to HDCP protected outputs, there is no doubt that content released in this high value period will be subject to piracy of commercial and non-commercial flavor. While HDCP provides much better security then that unprotected analog output, it has vulnerabilities.

If these vulnerabilities are too difficult to exploit, pirates will be able to resort to copying content from their HD TV with an HD camcorder in the comfort of their own home – the quality of readily available equipment makes this a relatively easy option. This is where digital watermarking can be used to trace and identify piracy of either approach.

We have been working on our digital watermarking technology, VideoMark, for more than five years now, and have proven results in the field. By enhancing the efficiency, invisibility and robustness of the technology, we have added variations that enable efficient and scalable embedding on the server side of managed networks and content delivery networks (CDNs).

This new home theater on demand requirement takes watermarking into additional networks with specific infrastructure and legacy architecture, with new and interesting integration tasks. It also adds possibilities to make watermarking a standard solution to secure content revenues on this distribution channel.

The recent discussions we’ve had with content owners and distributors certainly indicate that the studios understand the potential of digital watermarking to plug the crucial security vulnerability that is opened by home theater on demand and is only closed in part by selectable output control.

The home theater on demand release window, after all, adds a consumer option, and I believe that the combination of selectable output control and traceability is a sufficient deterrent against piracy to keep this option valid and profitable for content owners.

We will be talking more about the benefits of server side watermarking, so stay tuned . .

What struck me, though, was a feeling that this characteristic phenomenon of a capitalist economy, which is usually associated with innovation, may actually stifle innovation to some extent. What I mean is that if one company has a good idea and tries to add a new feature, new service or a new business model to its system, it is very likely that they need to line up too many of the proverbial ducks in a row. A service provider ordering the end-to-end system may have enough power (or money) to make this happen. Most of the individual players may not have the time and resources to incorporate a speculative feature. 

Case in point, a service provider wants to repackage a set of episodes on a network DVR to a season and offer it again for purchase or rent; it may require cooperation of the storefront vendor, middleware, CA/DRM to re-encrypt the content, content management to keep track of a new asset, user interface, billing system, etc. Not to mention extending the distribution rights obtained from the studio. How can we optimize this process, make it more agile and responsive? 

The Paths to OTT

Another aspect of the conference that perked up my mind was the concept of over-the-top or OTT. What is it, really? When you ask the consumer, it may mean getting content from any source rather than a single TV service provider. It may also mean watching the content on a PC or even more importantly, getting it for free.

 A service provider may be thinking about reaching its subscribers on any device whether the user may be at home, traveling or even outside the provider’s managed network. Or even about reaching a new customer beyond the reach of his fixed network. And the studio may even be thinking about bypassing the service or network operator altogether. A very interesting and intellectually stimulating puzzle, indeed. 

But the bottom line is how is anybody going to make any money and who is going to benefit at the end. Is it like the buzz of the “long tail” content from several years ago? I did not hear it mentioned a single time at the conference. So what are the enablers of a successful OTT strategy? How does one monetize this new opportunity? I personally don’t want to go to too many web sites to get my content, set up numerous accounts, receive multiple bills, learn different user interfaces, set up my preference over and over … you get my point. 

Seems to me that a relatively easy way to deliver OTT is to extend an existing service to new devices and reach existing subscribers wherever they happen to be. This approach represents only incremental cost, reuse of existing content, adding value to the existing brand, extending the current relationship with the subscriber and ultimately increasing or at least maintaining revenue. 

Don’t take me wrong; there will be successful OTT services outside of the traditional service providers. As an example, my family enjoys the Netflix on-line service. But even this one started as an extension of another business strategy rather than a pure OTT, even though it may end up eliminating the mailing of physical DVDs altogether. (By the way, I did end up signing up for a higher tier broadband service indirectly paying for the Netflix service to my DSL provider.) 

This is why Verimatrix has extended content protection services to PCs and smart phones, added support for adaptive rate streaming and provides a multi-rights head-end, shielding the service operator from the complexity of multiple device types, each possibly requiring a different CA or DRM system. These are all necessary enablers of a successful OTT strategy. 

Home Networking Standards and Psychology

Home networking and sharing content among devices in the home in particular is another topic that excites me. It started as sharing content between a DVR and one or more set-top boxes or PCs, sometimes called whole-home DVR or multi-room DVR. This scenario was partially driven by the fact that content is already present in the home on the DVR and the destination devices are compatible as far content format and resolution are concerned. 

Such architecture has been standardized to some extent by UPnP and DLNA and even OCAP-HN. But as one starts adding devices requiring different file formats, video codecs and resolutions, this architecture may no longer be sufficient. The lack of remote access to home content is another serious limitation. As bandwidth is becoming ubiquitous, it will become easier to stream transcoded content in the appropriate format, optimized for the destination device directly from the head-end. 

DLNA may still be used to discover the content in the home but the rights and the device-optimized content may be reacquired for the best user experience. Thus DTCP-IP may not be the only way to protect content in the home. By taking advantage of the more flexible way of signaling content protection and other content attributes using UPnP content discovery services, allows the destination device to copy the content locally, request its own rights and access keys or request a more suitable instance of the content altogether from the service provider. 

Psychology of ownership plays a role here as well, but I believe that over time consumers will become comfortable with the idea of owning rights to content rather than owning the content itself in the DVD form or the digital form. The ultimate challenge is to make this complexity completely transparent to the end user – “search, select and play” nothing more.   

I look forward to continuing these conversations at NAB. See you in Vegas.

Gotta go – last call for boarding!

What our work with ABS-CBN most profoundly represents is the nature of the transitions underway in the pay-TV world globally. Not everyone may know of the global diaspora and intense viewer loyalty that makes Filipino TV content a hot product.

Set against the background of a transition to digital TV standards even in developing markets, ABS-CBN has taken on the challenge of global multi-network content availability that optimizes revenue sources through a single security head-end.  And they have chosen VCAS cardless solutions to address this challenge – emphasizing that the choice is driven by a shared vision of how operators must address revenue security not only for IP delivery, but also in the traditional satellite and cable broadcast world as well.

Congratulations to everyone that made this landmark deployment a success!

Please come see us this week at the Philippines Cable Television Show (PCTA), where we will have VCAS for DVB and VCAS for IPTV security solutions on display.

Now, we’ve all complained about tradeshows – they are costly, require a large amount of company resources to make them successful and can be murder if you don’t have the right footwear.

But at the end of the day, it provides us with a great opportunity to meet with customers, partners and prospects and have meaningful conversations about their conditional access and content security plans. In speaking with service providers – cable, satellite, IPTV – we have picked up on a major theme. They are all contemplating landmark updates to their network to improve their competitive profile, capture additional revenue or simply better serve current subscribers.

More specifically, we are seeing four main trigger points for operators to transition their network and upgrade their content security platform.

• Analog-to-digital transition
• Digital cable-to-IPTV migration
• Cable switch-out to all IP
• Hybrid digital terrestrial/IPTV
• The adoption of IP for video delivery of satellite

Fortunately for us, these transition scenarios take advantage of proven IP-based standards and technologies. It also reinforces our position that eventually all pay-TV networks will be categorized as simply digital TV. Two-way interactivity of IP will underpin almost every aspect regardless if it is a telco TV network or a hybrid satellite/broadband combination. 

Based on strategy sessions with customers, we have identified a unique set of complex issues operators need to consider when upgrading their content security. Namely, they need to make decisions around their long-term “revenue security” strategy.

 Our team has developed a white paper that explores these issues and provides common migration approaches that can be downloaded from our site, “New Content Security Strategies Transform Pay-TV Service Migration: What Operators Should Consider when Upgrading their Networks.”

We have received positive feedback on the paper so far. Please let us know what you think.

And we’ll see you at our next tradeshows: Philippines Cable Television Show (Mar 16-19), IPTV World Forum in London (Mar 23-25) and Convergence India (Mar 23-25), with comfy shoes! 

But even as we trip over the potholes, perhaps it’s important to focus on the positives, which is truly important for a company like ours that stands to gain so much from the dramatic moves towards an IP infrastructure for our information and entertainment content. Luckily the show was filled with senior-level execs who were conducting due diligence in order to make some major decisions as they build their pay-TV platforms.

Let’s see at next year’s show whether those potholes get filled in.

Operators didn’t want to get stuck with the last MPEG-2 only set-top box. They were waiting to see how Microsoft’s VC-1 was going to compete with the H.264/MPEG-4 AVC standard. Cablevision and its plans for network DVRs were embroiled in legal battles with film studios and television networks (their latest victory appears to be the final word). And telcos wanted to be sure that software-based content security would deliver on its promise of scalability, performance and cost-effectiveness. 

Now the majority of these outstanding issues have been largely resolved, which frees operators to make solid investment decisions and launch exciting, new services. I call this a “mainstreaming” of the most viable concepts. For operators, the future clearly includes HD, MPEG-4 broadcasts with time and place shifting capabilities, which really have become the standard. 

A contributing factor of this type of standardization is the activity and changes within each technology vendor category. Consolidation and market conditions have produced some obvious winners along the entire development platform. There is generally a handful of established players and a lot less, yet innovative, companies that are offering disruptive technologies.

The irony is that despite the current market conditions, service providers are actually operating on more solid ground. Outstanding issues have been resolved, technologies have caught up with the hype and research suggests people are finding more time to watch TV.

Our VCAS 3.0 release is a good example. We have extended its functionality and focus to secure new revenue streams from content portability (such as supporting adaptive rate streaming for three screens and securing content over unmanaged networks).

Because we have proven software-based security in large IPTV deployments and have executed on our technology roadmap, we are engaged with major TV operators with complex issues. We have been able to mainstream our approach to content security to effectively address issues well beyond IP-based networks.  

Customers have a better understanding of their challenges and know what they want in order to launch their new services.

Fast forward to today, there’s no question that IPTV is here to stay. And depending on who you talk to, the growth prospects look good at nearly every corner of the globe: Asia, Europe and Americas.

Now we are seeing video service operators of all kinds embrace the technologies that have enabled the growth of IPTV. The current analog to digital transition is fueling major upgrades as operators see the upside potential of extending their reach and services. IP-based technologies are becoming the essential framework that underpins these competing, converged pay-TV services.

The intent of our blog is to share our experiences, insights and opinions about how pay-TV is changing on a global basis. We conduct business with operators in the hottest digital TV markets on the globe across many different networks – IPTV, cable, satellite, DVB hybrid, etc. We participate in many industry conversations – customers, partners, organizations, conferences – and we are known to have strong opinions! We feel this provides us with a unique perspective that we’d like to share with you.

You can read more about our bloggers here and visit our website for more information on Verimatrix.

We encourage you to post comments and look forward to new interesting conversations!

-Tom Munro, CEO