| Avni Rambhia - Frost and Sullivan
Apr 25, 2017

Avni Rambhia, Industry Principal, Digital Transformation at Frost & Sullivan, sat down with SVP of Marketing Steve Christian for an in-depth discussion of the global trends, challenges and opportunities of a connected revenue security platform.

The first quarter of 2017 has sped by with Convergence India, CABSAT and TV Connect behind us.  And now NAB. I caught up with Steve Christian to chat about tactics, strategies and megatrends for video service operators (VSOs) and content companies worldwide.

Avni: You’re just back from a hectic few weeks of travel around the world, from India to the Middle East and then to Western Europe. What are some of the similarities and differences in the key opportunities and challenges that VSOs are facing around the world?

Steve: Across all regions, there is tremendous momentum building around the winning combination of broadcast or multicast combined with OTT. On-demand services are the norm across all markets, and hybrid networks are going to be the de-facto standard moving forward. Your colleague Vidya Nath talked expansively about next-generation video operators and the role of hybrid networks, which we see as spot-on. Of course the security challenges with hybrid networks and OTT delivery become considerably more complex, with multi-DRM becoming essential to protect the content as well as the revenue. Understanding the consumption patterns within these hybrid networks is also crucial, which will drive investment in analytics.

Avni: Multi-DRM and analytics are both areas where Verimatrix as a company has made solid investments. These are generally perceived as being more ready for primetime in major, developed markets, but you’re right that they are quickly coming of age in emerging markets as well.

Steve: Absolutely. OTT and hybrid networks are worldwide trends. With global OTT services now launched and YouTube engagement soaring, VSOs are pushing to up their own game. Instances of "online piracy,” in which seemingly legitimate OTT services are actually pirated streams being redistributed via OTT using customized streaming media devices, point to growing customer interest that is not yet being fulfilled by legitimate services. So we definitely expect continued investment and growth in on-demand content in all regions, which will rely on cardless CAS as well as multi-DRM.

The same secure channels and last-inch context visibility that we implement for multi-DRM give us a strong position in analytics as well. We are in a unique position to securely gather comprehensive usage data that can power in-depth analytics while preserving user privacy. We believe analytics will continue to grow in importance as a top-of-mind consideration for VSOs this year.

Avni: In the context of "online piracy,” we’re seeing growing reliance on watermarking as a persistent security mechanism to control long-tail VOD piracy, as well as to diagnose and shut off illegal stream retransmission in real time. Do you see this as a major market initiative, or is this global in impact as well?

Steve: There is definitely a renewed emphasis on watermarking as a security mechanism, and it spans many different types of premium content services. In the United States and in Western Europe, watermarking is an important tool in protecting early release window content, ultra HD services and also live sports broadcasts. Watermarking is also being used extensively in the Middle East for similar use cases.

Avni: Watermarking is interesting to me as a security tool, because it is necessarily a proprietary, closed technology – which is in stark contrast to the increasingly standardized nature of multi-DRM ecosystems. Is it possible for VSOs to leverage the native DRM in a device such as Widevine or PlayReady – whether in the context of browser-based secure playback via HTML5/EME or even in an app – while also leveraging watermarking?

Steve: The challenge with watermarking is that it needs both server-side and client-side components to be most effective. In addition to inserting the watermark, it is necessary to have a payload manager that keeps track of when and where a given watermark was inserted. This way, when a mark is found, the system has a reference point for diagnosis and remediation. The system needs secure communication channels to communicate the payload used in watermarking back and forth. In theory, one could use whatever native DRM is on the device along with watermarking from a third-party vendor like Verimatrix, but this is likely not as effective in the long term as leveraging an integrated solution such as  VCAS Ultra.

Avni: We talk about the issues of multi-DRM in our recent white paper. The debate between native and downloadable DRM is becoming increasingly relevant, as security requirements are becoming more complex and also as intensifying competition among service providers makes differentiation more and more critical.

Steve: Absolutely. One trend that is already underway, and will continue to gain momentum, is that pay-TV services are no longer confined to specific geographic boundaries in the way that MSOs were in the United States for a long time. Boundaries for services are now fuzzy and porous, and so you need to be competitive on a national or trans-national basis in order to remain relevant and grow. This requires VSOs to be much more competitive, not only in terms of content selection and interface experience, but also in terms of cost structures and scalability.

Differentiation will also depend more and more on the use of analytics to understand how to make your service more relevant, sticky and competitive compared to the alternatives. Analytics, DRM and watermarking all work optimally when they are tightly integrated within a single framework. That requirement is very much global in nature – the urgency is worldwide.

Avni: You make a good point. Differentiation is a business-critical challenge for VSOs everywhere, which requires continuous adjustment and evolution of the service. For VSOs to be adequately agile and insightful requires independent control over delivery and playback. That of course ties back to the debate between native and downloadable security – our new paper talks extensively about tradeoffs between the apparent simplicity of relying on native DRM and the actual challenges of retaining control over a service’s quality and differentiation over the long term.

Steve: We have certainly seen that downloadable security is key for operators to manage their own revenue risks and interests more actively. We’re looking forward to demonstrating our multi-DRM and analytics solutions at NAB this week.

To learn more about the pros and cons of native vs. downloadable DRM, download the new Frost & Sullivan white paper, sponsored by Verimatrix, at www.verimatrix.com/downloadableDRM