“It’s difficult to put a dollar amount on piracy,” says Andrew Bunten, Chief Operating Officer of Video Entertainment at Irdeto. “But, there’s little mystery as to why piracy remains such a problem.” It’s a matter of supply and demand.
On the supply side, streaming providers have become dependent on exclusive content to out-do their competitors. Licensing has become far more complex and more expensive, and those costs are passed to their end users. Also, video distributors must be careful to honor which devices are permitted or prohibited for watching, and this differs by content. “Before, pay TV operators distributed well-defined service packages over their own networks, to devices that they controlled.” said Bunten. “Now they have to differentiate between distribution over privately controlled networks and the open Internet.”
On the demand side, a difficult economy makes premium video services less affordable for many consumers; most of whom are unaware and uncaring of these intricacies. Consumers are forced to choose from multiple providers to get what used to come from a single pay TV subscription and then decide which of them to keep; not to mention whether or not to continue with pay TV. Inevitably, something goes missing from what the consumer retains, driving them to find it through alternative – often, unlicensed – sources.
The evolution of security
The nature of protection has changed over time as well. “It used to be that Irdeto’s worldwide focus was to protect pay TV set-top boxes using smartcards, and in South Africa there remain millions of set-top boxes that are basically ‘channel zappers,’ he said. “But today, as streaming takes over from pay TV, we have to protect services delivered in both worlds, to a multitude of devices and not just set-top boxes.”
Approaches against piracy often differ from country to country and region to region – and sometimes Irdeto sees different problems within the same video provider. This is true with Irdeto itself as part of The MultiChoice Group, a global media company that offers pay TV and streaming video services in fifty countries. In MultiChoice’s home country of South Africa, the posture toward anti-piracy enforcement is to collaborate closely with local law enforcement. By contrast, in regions like Western Europe, there are well established processes in place to escalate copyright infringement and pursue pirate shut-down.
Where to begin, and with what
After reflecting on the challenges and all the variables involved, the first question is where to start, and the answer is “it depends.” Piracy is a multi-headed beast, “…and for that, video providers must take a multi-pronged approach to fight it,” said Bunten. “While there’s no single solution against piracy, we are happy with how Irdeto has invested in technologies and services across the board and excited with the many ways we can help customers.”
“We try to identify specific areas by taking a consultative approach. We begin by assessing the issues and then presenting the customer with what can have the greatest and broadest impact in a reasonable time. For example, we might determine that a DRM implementation can be improved, or that a pirate is spoofing accounts and stealing content. We then use metrics and testing to create a feedback loop that determines what to do next, and what might be missing.”
A feedback loop is important, to determine and report how much of a video provider’s content is available at any given time. “Irdeto is always crawling the Web and doing investigations in the social media sphere, and then we present the results of these investigations using a score card that correlates the threats and the data,” said Mr. Bunten.
How to see the world
Looking at the bigger picture, the biggest priority in establishing an anti-piracy initiative is to have an intelligent ecosystem. “It’s a holistic transition, to think not only about symptoms and products, but to recognize root causes, and that the individual pieces of technology are really part of a single conversation. Accordingly, Irdeto sees little separation between products and services, and thinks of its portfolio more of a platform for service life-cycle management, with a single roadmap, and coordinated as a single effort.”
The maturation of anti-piracy technology is another enabler of broader discussion. Watermarking is a good example: Now that watermarking scales well and can be integrated with a headend or delivered from the cloud, the video provider can more easily balance its interests in security with distribution requirements from rights-holders. In other words, the considerations aren’t only about systems integration and compatibility, are also more about business concerns.
The inevitable challenges
There’s a lot of competition in this segment of the technology industry. The business challenge today is to discover the right business formulas for the longer term. Irdeto anticipated the decline in its legacy CAS business, but the level of profitability to offset it has been slow in coming.
Margins are low, to the point where technology companies find it difficult to justify heavy R&D investments. “While there are certain pockets of profitability, a lot of capital is being burned right now,” he said. “The ability to invest will drive innovation and the strongest may survive. Irdeto feels good as a debt-free company with strong cash flow.”
While Irdeto has a widely diversified portfolio that can be directed toward a wide variety of market opportunities, no single company will ever have 100 percent of the solution, particularly when it comes to piracy. “We try to work with winning partners that are financially strong and can support an active roadmap,” he said.
Ways forward against piracy
One way to resolve the broader challenge of piracy, according to Andrew Bunten, might be to create a forum for competitors that would be willing to pool data and collaborate for the greater good, with a simple goal: to beat the pirates. How to do it? It will require a 360-degree view, a lot of data, a lot of visualization and a lot of tools. It will also require a lot of collaboration. “There will have to be a willingness on behalf of ISPs and social media platforms to cooperate,” said Mr. Bunten.
Meanwhile, customers want that silver bullet, so R&D expenditures will be biased toward customer-driven problems and less toward solving industry-wide problems. This is in contrast with standards initiatives like RDK and market-standards like Android TV, which are to create lower-cost middleware across the board.
When it comes to fighting piracy, Irdeto recommends that its customers embrace the same work ethic that Irdeto endeavors to use in its own business: to thoroughly investigate the problems and evaluate the range of potential solutions, to see what the impact is on business metrics and profitability.
By Steve Hawley, Piracy Monitor
[ Note: Piracy Monitor is grateful to Irdeto as a sponsoring supporter. However, opinions expressed by Piracy Monitor are independent. ]