Build Or Buy? Verimatrix SVP Tackles DRM Strategy, Revenue Security

The Donohue Report caught up recently with Verimatrix SVP of Marketing Steve Christian, whose company has made a business of securing video delivery to 110 million screens worldwide.

Donohue: For years, operators relied on set-tops to protect premium content. How can they prevent piracy in a world where all a consumer needs to view pay TV content is a login and password?

Christian: The actual nature of the beast hasn’t really changed. Consumers are going to watch TV on a device, which has a unique identifier. The device ID is associated with a subscriber account, which provides access to the programing that has been paid for on that device. The same model applies whether it’s a set-top box or an iPad or Amazon Fire TV. At that very high level, the mechanisms are quite similar.

We are securing video and delivering it to 110 million devices around the world in different forms today. Sometimes that’s transmitted over satellite, sometimes it’s transmitted over TC/IP, but the encryption mechanism is very similar. We control access to the decryption keys by using the best security techniques available on every kind of consumption device. That’s how we control who does and doesn’t see content – consistent what they’ve paid to see, and also ensure that operators have the option to upsell and improve their revenue over time.

Donohue: How does conditional access need to change in an IP video world?

Christian: Conditional access as a technology is really an outdated way of approaching the problem. We have been successful at framing the core issue as being revenue security for service providers. Our revenue security solutions give operators control over their revenue streams by enabling them to entitle and dis-entitle subscribers. They can also offer different types of business models for those subscribers, such as video-on-demand, subscription VOD or electronic sell-through. It could be pay-per-time, pay-per channel, pay-per bundle. If you have control over what people can or cannot see you can enforce the payment process.

Donohue: How much potential do you see in operators using over-the-top (OTT) distribution to market broader programming packages or to upsell subscribers to premium networks?

Christian:  Operators around the world are experimenting with a number of options to provide a more complete offering to their customer base. Among the many types of expanded pay-TV services include multi-screen access to subscribers programming – including extensions of favorites, preferences and recommendations across all client interfaces – and low-end “skinny” content bundles only available via broadband services. All kinds of business models are being tried out, and our point of view is we don’t try to argue that one is better than another. We just enable an operator to switch on and switch off content services on any combination of devices and networks according to the business model they want to operate. That could be a premium approach where a certain number of channels or a certain amount of content is offered on a free basis, and then you upgrade to watch more recent movies, particular genres or some live action.

Donohue: Verimatrix can secure content on many different devices and platforms. Are there some programmers that are uncomfortable making content available on devices because they are concerned about piracy?

Christian: It’s been a world over the past 20 years where the variety of devices has multiplied many, many times. And it has been necessary for the content owners to scratch their heads quite a bit about whether it’s good or bad business to try to deliver to some of those kind of devices.

Android is a case in point, particularly mobile Android, where there is such a wide variety of the quality of implementations that some may not be very good candidates for premium video services, and would open the door to significant amounts of piracy if premium services were allowed to those kinds of devices.

The most recent attempt to rationalize this was an initiative started by the MovieLabs organization to define a particular security standard that would apply to ultra high definition (UHD) services. We’ve designed our VCAS Ultra solution to meet or exceed those expectations for the delivery of UHD services as operators launch these new services around the world.

Donohue: How do you see the video business evolving?

Christian: Having one app to maintain on their iPad or Roku would be a really good thing for the average consumer. And having one credit card bill to pay for a service that satisfies all of their needs for content – wouldn’t that be nice. The current, somewhat chaotic, state of the market will settle down over the next 5 years.

In terms of technology, there will more differentiation between services delivered to very premium devices such as ultra HDTVs with HDR capabilities – what I call true premium UHD services. There will be a distinct range of very premium services for that kind of device, and potentially lower priced services that just service mobile phones with lower resolution.

Donohue: How can operators manage multi-screen services with native digital rights management systems (DRMs) and remain competitive?

Christian: Research from Frost & Sullivan suggests that 70% of operators switch to a commercial multi-DRM system after trying the do-it-yourself (DIY) approach. As the OTT market matures, we are finding that operators have a limited understanding of the true levels of cost and complexity associated with a DIY approach to DRM. Working with a security specialist, like Verimatrix, makes a lot of sense from core competency and business agility points of view.

For more on the buy vs. build debate, sign up for the Sept. 28 webinar that Verimatrix will host on the topic. To register for “DRM Is Not Free: The True Cost of DRM,” click here.