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.

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 . . .

We are very proud of our continued growth in IPTV. We feel we have been able to keep this top spot for several reasons. 1) We have built a very strong partner ecosystem that includes global and regional system integrators, which allows each vendor to focus on what they do best 2) We offer effective security solutions that address changing business needs and gives operators the freedom and flexibility to growth their businesses.

Since launching VCAS 3, what we’re calling the next generation of digital TV security solutions, we have received tremendous response on how we support operators’ “cash registers” that enable them to grow their subscriber base and add revenue streams. We are able to create value for our customers by understanding the complex business issues for multi-screen video delivery and delivering solutions way beyond content protection. 

You can see some examples of this from our library of white papers and other resources.

This recognition also reflects the dedication of our customer care team to respond to the unique needs of our customers. 

Thanks to everyone that has contributed to this noteworthy feat!

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!

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!