October 20, 2010 – A flurry of worldwide activity centered on implementing various combinations of advanced content protection technology is setting the stage for a new generation of services and business models, from early release windows for electronically delivered high definition movies to highly integrated multi-device services to new modes of e-commerce and content monetization.
The scope and potential impact of these developments were illuminated during a session at the Media Innovations Summit in Hollywood on September 28, which included executives from some of the leading companies in digital rights management, watermarking and fingerprinting. Where, in the past, such discussions largely revolved around questions as to when and to what extent the content industry would embrace advanced protection technologies and how to overcome barriers posed by incompatibilities and diverse modes of security, the talk at MIS was about where the content and services world is going now that those issues have largely been resolved.
“The level of activity among the major operators in terms of trying to get their services, their content to as many devices as possible, has just escalated in the last six months,” said Whit Jackson, vice president for business development and studio relations at Secure Media, the supplier of next-gen DRM recently acquired by Motorola. “We have been besieged with RFPs and RFIs from any cable company you could mention in terms of how can I get to the iPad, how can I get to the iPhone, what are you doing about game consoles, all of that.”
Much of this activity goes hand in hand with service providers’ recognition that their TV Everywhere agendas for delivering premium content on demand to PCs and other IP devices dovetail with the over-the-top TV phenomenon, putting them in an excellent position to deliver a differentiated version of OTT TV that subscribers can’t get elsewhere, Jackson said. “We might see a lot of the video on demand from service providers transitioning to an OTT style delivery and certainly trying to hit as many devices as possible,” Jackson said.
Similarly, the early release of motion pictures into network distribution has brought the studios and distributors to the doorsteps of protection suppliers at a level of engagement they’ve never seen before. “In the last two months we’ve probably done more meetings [than ever] with major operators who are in that licensing process for early release windows worldwide,” said Mike Petrocelli, senior vice president for sales and business development in America for Civolution, the Netherlands-based supplier of watermarking and fingerprinting technology.
“I’ve seen a massive amount of activity compared to this time last year, because studios feel very comfortable with the tracking technologies that are out there, the watermarking and the fingerprinting, and they’re ready to license the content,” Petrocelli added. “It’s starting. No one has deployed yet. But it’s actually starting.”
One of the key security solutions opening the way for studios to pursue the early-release agenda is one known as selectable output control (SOC), which has been available for a long time but barred from application on movies by FCC regulations. SOC, built into most HD sets, DVRs and later model digital set-tops, allows a service provider to prevent copying of specified digital content onto DVDs or hard drives. In May the commission granted the Motion Picture Association of America’s request for a waiver on the ban, which the commission imposed in 2003 on the grounds that unfettered application of the technology to thwart copying could diminish consumer enthusiasm for digital content and therefore impede the digital broadcast transition.
The MPAA made clear studios would act on the early-window opportunity now that the waiver was in place. Bob Pisano, president and interim CEO of the MPAA, characterized the commission’s decision as “a major step forward in the development of new business models by the motion picture industry to respond to growing consumer demand. For those people unable to make it to the theater and interested in viewing a recently released movie, thanks to the FCC, they will now have a new option.”
Such commercial agendas on the part of content owners and service providers are drawing suppliers of content protection together in ad hoc partnerships that tap multiple technologies to provide a level of security that would otherwise be impossible. “When it comes to early release content in high definition, that’s where we partner with folks like Civolution to bring in the watermarking of that content, which many of the studios are requiring for premium VOD,” Jackson noted.
Even watermarking solutions now involve engagements across multiple suppliers, as is evident in the rigorous protection implemented on high-value Blu-ray content. Asked whether the complexities surrounding use of watermarking to detect points of theft origination across the distribution chain have been addressed, Michael Ayers, senior vice president for legal and business affairs and general counsel at audio watermarking supplier Verance, replied, “I think it’s a complementary effort of a lot of technologies that help to make that happen rather than one technology does it all.”
For example, he added, “the Verance technology is primarily a playback control technology as opposed to somebody else who’s doing identification and forensic marking, and I think we work in a complementary fashion with those technologies. We can stop the playback, and somebody else will step forward and help track down the bad guy.”
In establishing the security parameters for Blu-ray players, the Advanced Access Content System Licensing Administrator (AACS LA), working in consort with the Blu-ray Disc Association, selected the Verance Cinavia solution as a means of preventing playback of unauthorized content on Blu-ray players. While the AACS specifications were only finalized in June of 2009, manufacturers of Blu-ray players and components began integrating the Cinavia technology into their designs in 2007, and certified Cinavia components are now available from Verance and numerous third-party vendors.
“We’re seeing detectors deployed in roughly 35 million devices out in the field today,” Ayers said. “It’s interesting to see the four-letter words that come up on posts in the hacker forums to describe the difficulties they’ve had in playing back the rips of movies that have the Cinavia watermark embedded in them.”
Watermarking will likely be widely used in content distributed via the new electronic sell-through platforms under development through the Digital Entertainment Content Ecosystem’s UltraViolet and Disney’s KeyChest initiatives (see p. 1), Ayers and other said. So far, DECE has not identified watermarking parameters and may well leave those up to the individual content owners participating in UltraViolet, whereas the organization has set specific parameters to be met in the protection afforded by digital rights management systems. DECE has left the field open for multiple DRM solutions, so long as they comply with the specifications.
Jackson, noting that Secure Media would be submitting its solution for DECE approval in the next certification round, applauded DECE’s decision to go with multiple DRMs. “It is nice the approach they took there in terms of allowing support from multiple DRM systems, because, at the end of the day, some DRMs work better for different distribution platforms,” he said. “This way the retailers can make their choices in the DECE world and say this is what I’d like to use, or maybe I support a couple.”
Petrocelli made clear Civolution, as a supplier of watermarking as well as fingerprinting technology, sees UltraViolet and KeyChest as major opportunities for the firm. “Those are the next big things, and we’re right there sitting on the precipice of that,” he said. “Subscribers are going to be able to use content and share with their friends, buy different types of content under different entitlements. Distributors are going to be able to add value and also change their positioning, stem churn and grow the subscriber base, because they’re going to have different types of content to go to release windows and different ways of selling that content. And content owners are in much better position, too, because they want to put content on the table that generates a great deal of revenue.”
Forensic watermarking, where, in contrast to use-prevention watermarking, the goal is to identify the point of origin of stolen content, has been impeded by the fact that there is no single repository for coordinating detection across the multiplicity of codes used by different vendors, which makes it hard to know what type of detector to use when searching for a watermark on stolen content. The music industry, under the auspices of the Recording Industry Association of America, solved that problem in the campaign to thwart music piracy with selection of Media Science International as the registration agent for the industry’s standard, noted Graham Oakes, CEO of Media Science International and Ezee Studios and chairman of the Digital Watermarking Alliance.
“We have worldwide contracts with all the major record labels and currently store in excess of 26 million watermarks in our data base,” Oakes said. He suggested the video industry would do well to follow the RIAA’s lead, joking that “the easiest thing would be if everybody just adopts our technology as they did with the music business. I can’t see any reason why it wouldn’t work for the video industry.”
Indeed, Oakes said, if the recording industry’s history is any indication, the video industry is likely to discover that watermarking is the most vital factor in theft prevention. “If you look at historically what’s happened with the music industry, we tried litigation, we tried copy protection,” he said. “We had every DRM in the world. And it’s all stopped. There’s no more litigation. There’s no more DRM.”
In the end, he added, there was no point because “when you have barriers, you have ways around them. From there it’s all a question of what actually works, and the one thing we’ve actually found that works in terms of the pre-release market is a forensic watermark that identifies the person who owns that piece of content.”
This is what will work for electronic sell-through as well, he continued. “In my opinion,” he said, “whether you’re KeyChest or UltraViolet, [you must have] a situation where you can actually put your bar code on that piece of media that says, Fred, you own this, and whatever you do, wherever that goes it’s going to take your name with it. At that stage you have responsibility for that piece of content.”
One of the compelling developments discussed at the MIS session was the new fingerprinting technology now in beta testing from GenuFi, a new company whose focus is on driving would-be users of unauthorized content to sources of legal versions of what they’re looking for. As described by GenuFi CEO and founder Craig Winter, the company’s message is that the biggest cause behind piracy is users’ demand for convenient access where and when they want content.
“Our mission is to make legitimate versions of content on the Internet more attractive than pirated versions,” Winter said. “We want to convert piracy into a revenue stream rather than to try and spend all that time money and effort to take pirated content off the Internet.”
An ISP that deploys GenuFi’s platform in its network generates messages to users when they go to sources of unauthorized content, explaining where they can find the content legitimately and possibly offering incentives to do so, such as a discount on a gadget of some kind. Beyond working with various customers to test this mode of operation, GenuFi is also looking at other ways to use its fingerprinting technology to increase sales of digital content, Winter noted.
For example, in the case of digital sell-through where research shows consumers devalue content by about $6 when it’s sold electronically compared to its price on DVDs, content owners could use the GenuFi technology to create new business models where the total value received for content would equate to the price they’re looking for based on how various payment methods are valued. “We’re working on a social payment system where you can actually pay by referring to your friends,” Winter noted. “If you’re a Twitter follower or you’re posting it on Facebook and they view an ad or they buy something, you get a credit for that.”
“You may end up getting [the piece of content] for free,” he continued, “but we actually collected revenue through a variety of means. Somebody bought something; somebody watched something; somebody referred something. We put that altogether and maybe the actual transaction as perceived by the content owner is that $18 they’re looking for. So, basically, we’re doing a deal with them based on an $18 transaction, but we actually in the back end are melding things together, doing a mashup of business models to collect that $18.”
All of this adds up to unprecedented opportunities for the application of content protection technologies, Petrocelli noted. “Right now there is more opportunity and more change that goes on every day with new devices and new ways to consume content, new models like social models for payment and social credit,” he said. “We’re in a very interesting time.”