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!

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.

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.

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.

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!