By Fred Dawson
April 22, 2016 – A new front in the war on premium video piracy has opened in China where rampant theft presents an especially strong test case for the measures content suppliers hope will be adopted worldwide to enable new business models to flourish.
So far, specifications issued by MovieLabs last year on behalf of the motion picture industry to better protect high-value content have yet to be implemented with any consistency in most parts of the world. But in China it’s understood that mounting demand for network access to the latest movies and TV shows can only be met if licensors are assured a safer environment for distribution of their assets.
It’s not just individual distributors who are responding to the content owners’ protection requirements, which call for rigorous DRM frameworks along with use of forensic watermarking backed by coordinated approaches to tracking and shutting down pirates. The Chinese government, too, has taken an active role in moving the market forward with a mandate calling for implementation of TVOS 2.0, a next-generation TV operating system that includes what is known as China DRM.
The rules apply to smart TVs and set-tops and may even be used to prevent streaming of high-value content to other types of devices, according to Hunan Daily. And the mandate may soon be expanded to include watermarking as well, notes Paul Ragland, vice president of sales for Irdeto.
“China hasn’t mandated watermarking yet, but they’re working on making that part of the law,” Ragland says. “We’re supplying the data we collect from our operations there to all parties involved in enforcement, and we’ve worked with Chinese officials in sting operations against pirates.”
Irdeto recently announced its Hollywood-validated DRM platform had become the first such system to be certified as compliant with China DRM. With the combination of the Irdeto Rights DRM and TraceMark watermarking platforms “we are providing studios and content providers with greater confidence to enter the Chinese market and helping operators manage technology costs while maintaining a world-class level of security,” says Marco Xie, country manager for China at Irdeto.
Irdeto is also working with e-commerce giant Alibaba Group to identify and remove ads for illegal devices designed to circumvent subscription requirements. Preventing the supply of these pirate devices, which receive content via Internet servers in jurisdictions where it is difficult to enforce intellectual property rights, has proven to be an effective deterrent to the pirates and ensures that the rights holders get paid for the content they own, says Rory O’Connor, vice president of services at Irdeto.
“We thank Alibaba for leading the way and supporting anti-piracy measures in China,” O’Connor comments. He says Alibaba.com, cooperating under terms of a memorandum of understanding reached in 2013, has played a pre-emptive role in assisting with the removal of over 5,000 ads marketing pirate devices from 71 manufacturers and suppliers who were impacting the businesses of Irdeto’s pay TV operator customers.
While Irdeto is the first to claim validated compliance with both China DRM and Hollywood standards for its DRM platform, the company is not alone in bringing support for next-generation content protection, including watermarking, to China. Notably, Intertrust Technologies earlier this year added session-based video watermarking to its Marlin-based ExpressPlay DRM service in support of early-window TV and movie on-demand services to be offered through an exclusive licensing agreement between 20th Century Fox and iQiyi, the largest combined Internet and mobile video service provider in China.
“Session-based watermarking is critically important, particularly in a large market such as China,” says Hanno Basse, CTO of 20th Century Fox. “ExpressPlay’s offering allows us to aggressively pursue new distribution opportunities that consumers want, such as early-window movie releases that are much closer to theatrical release dates, while appropriately managing the piracy risk that comes with them.”
Government-mandated DRMs and watermarking may not be a template that can be followed in more democratic countries, but the current state of limited cooperation on the MovieLabs specifications seems bound to give way to more concerted efforts as demand for 4K UHD and earlier pay TV and OTT release windows intensifies. It makes little sense to foreclose availability of high-value content through legitimate outlets when consumers have access to such content through a proliferating ecosystem of illegal streaming services.
Irdeto, which is monitoring global piracy through a sophisticated surveillance operation run out of its headquarters in The Netherlands, says the number of pirate streaming sites reached 850 worldwide in mid-March, marking a 45 percent increase over the count six months earlier. “We’re seeing brilliantly marketed sites drawing ads and generating $100-$200 per user in annual subscription fees,” Ragland says.
Indeed, notes Shelli Bernard, research analyst at ABI, it’s harder than ever to control piracy in an environment where “consumers may no longer be able to readily differentiate the legality of their downloaded content.” While governments have become more pro-active in enforcing anti-piracy laws, she adds, there needs to be more engagement by content owners and distributors in “relying on piracy prevention technologies to continuously monitor for, and gather evidence of, uploaded pirated content.”
However, as Ragland notes that’s far easier said than done, especially in a transition period when there’s still a scarcity of 4K UHD content and the cost burdens on distributors leave them inclined to ignore the MovieLabs specs, at least for now. “Not many people are enforcing 4K protection requirements, because 4K is not a big reality yet,” he says. “But when 4K takes off operators are going to push back. They’re going to ask content providers either to renegotiate licensing deals to take the costs into account or pay a share of those costs.”
Irdeto has taken pains to minimize the costs of per-session watermarking in both the legacy pay TV and OTT domains. When it comes to streaming high-value content, TraceMark, like Civolution’s NexGuard and other watermarking technologies, is designed to inject the invisible digital identifiers in each stream from the origin server. In addition, Irdeto reduces the amount of processing required by marking only two segments of any given piece of stored content and then re-arranging the digital sequences in those segments to create a unique identifier with each session.
But the bigger challenge, and cost burden, comes with managing the piracy detection and enforcement process. Pirated content must be monitored for watermarks that will identify the point at which the content was recorded off a big TV screen for illegal commercial use. Complicating matters, identifying and reading watermarks requires use of tools specific to each watermarking system supplier. And then the information about the perpetrator must be placed in the hands of someone who can take enforcement action against the offending site and the original perpetrator.
All this requires cooperation across the distribution ecosystem. “Whatever processes are established there needs to be adherence to the process on the part of all the major operators,” Ragland notes.
While Irdeto has teams of analysts to assist in identifying the sources of stolen content, there needs to be better understanding of what action can be taken before effective counter measures can be employed. “What are your legal rights to shut somebody off who’s been identified as the source?” Ragland asks. “Can you just cut off a subscriber without taking legal action to prove guilt? How do you stop an illicit site operation?”
Even where there is strong support from the law, government enforcement agencies and operators, meting out punishment can be a long drawn-out process, as evidenced by a recent anti-piracy operation in Holland. In December, following extensive collaboration between the police, the Public Prosecution Service, Dutch TV providers and Irdeto to track, investigate and raid a group of individuals offering pirate TV card-sharing subscriptions on auction websites, two defendants were found guilty and sentenced to 100 hours of community service, two months of conditional imprisonment and two years’ probation. This was four years after Irdeto and local Dutch TV providers triggered the investigation with identification of the offending parties.
Developments in China should provide useful insights into how effective the new content protection measures can be when government, content owners and distributors work in tandem on a nationwide basis to impede pirates. Subscription streaming services, after a slow start, are now taking off across China, with everyone on notice that they will have to follow the rules set for DRM in the TVOS 2.0 standard and, likely, rules for watermarking as they are adopted in the months ahead.
It won’t be hard to gauge the impact of the anti-piracy initiative. If content from U.S. studios and TV producers is flowing into these services a year from now, it will be a pretty good sign that the pirates are on the run.