With all the disruptions to pay-TV, we’re watching the major operators reinvent themselves – as ISPs, OTT providers, etc. That is why we thought it was the perfect time to take on the theme of “Rethinking Content Distribution” in our latest webinar.
I recently sat down with Petr Peterka, CTO of Verimatrix, and Pete Wood, Sr. VP of Digital Distribution for Sony Pictures Home Entertainment to talk about how we can reimagine content distribution today, beyond just adapting legacy systems that ultimately were designed for a different era of content distribution.
If you’re looking for a recap of the webinar, check out this insightful recap by Peter White with Rethink Research. Here, I’d like to add to the webinar discussion by sharing our answers to the questions submitted by the audience during the live broadcast, particularly around the architecture we put forward known as federated rights management (FRM).
Q: What does Verimatrix's federated rights management offer in distribution efficiency that isn't already on the market today? What is new here?
Petr: What we’re talking about with the FRM architecture is not a new component in the video distribution chain, it is a completely reimagined workflow for distributing content. The current workflow is inefficient, with redundant encoding processes that cost operators millions. Not to mention the lack of tools that enable content owners to meaningfully enforce their contracts and get consumer insights they need to improve their operations.
The FRM workflow allows for content to be encoded once, packaged once, encrypted once using common encryption, and allowing multiple DRM keys to be deliver. It is a secure, hierarchical distribution with a single point of integration for operators and content owners. It streamlines security workflows with persistent encryption, policy definition and enforcement, and automated consumption reporting and analytics.
Q: We were talking about visibility and data collection. One of the questions that came through is “What kind of data are you talking about collecting and sharing?” I guess the question is what data are studios like Sony Pictures Home Entertainment looking for.
Pete: I break it down into two things. One is sort of housekeeping and getting accurate reporting on the transactions that are occurring – and making that seamless and efficient so that instead of someone having to sit there with a ton of Excel spreadsheets and trying to work out license fees and so-on and so-forth and then reporting that and then we raise invoices – having that be automated and something you can trust. I think that for the studios and the operators is a good thing.
On the flipside, we’re learning that the days or where you could just make a pretty picture, put it on a DVD and sell a million units are diminishing rapidly.
This is not about us understanding if ‘Jenny in Arkansas’ is stealing files and we now want to get her credit card information to transact with her directly. This is about getting closer to the consumer and understanding how we can use this data to make better movies.
Q: Petr, you talked a lot about standards. What is the challenge with various streaming formats? Isn’t it good to have MSS, Apple HLS and MPEG-DASH?
Petr: This isn’t about picking a single format and DRM. This is about an ecosystem where you have choices and flexibility. Today content owners have to deliver all these various formats for all their operator partners, over and over. The FRM architecture lets you create them once and distribute them to the next distribution point, and save the cost and bandwidth of that redundant workflow.
The same thing goes for DRM. We are not saying, “standardize on a single DRM,” but, use a common encryption and then allow multiple DRMs to be attached to that service. Then DRM becomes a choice the operator makes, not necessarily the starting point.
Q: How does watermarking fit into a solution like federated rights management?
Petr: As we talked about the workflow and how to make things faster, easier, and cheaper and not replicate work, here’s another opportunity where content can be preprocessed. There are different ways of implementing watermarking, but one of the methods is called a two-step watermarking where the perceptual model is built during the pre-processing step. In this case it can be done only once, saving that cost for all people down the line who have to do watermarking.
The other advantage is that let’s say that the content owner can only put bits and pieces of the watermark in the content to mark the next-level distribution. For example, an operator mark can be done at that point. But, as the operator is distributing content, they add session-based watermarking – or end-user watermarking – and it’s all building on top of each other without replication.
Q: How do you see the roll of independent film makers as opposed to the majors and the high liquidity streamers, like Netflix?
Pete: If we sort of rest for a second and evaluate what we’re talking about here, it’s “how do you remove cost and friction so that you can distribute content more efficiently?” That’s really what we want to focus on. Independent filmmakers can struggle with trying to get really good distribution of their content because with the old systems there is limited shelf space and a limited amount of content our partners can actually process.
So, we need to find ways to remove that friction and those barriers so that you can get content out there, whether it’s by a major studio or an independent. Again, putting content in front of the consumer and letting them have an opinion is the first part. Letting them decide what they want is consumer choice.
Lu: So, it’s more about access, right?
Lu: Getting independent filmmakers that connection to all of those operators out there, and federated rights management can enable that and make it faster.
Pete: Yes. And, the beauty about digital is unlimited shelf space, but that doesn’t mean that just because you’re on a shelf – you might be below the fold, 12 pages back. It’s kind of like no one goes more than 5 search results down on Google, right? That’s all consumers look for, so I think it’s two-fold: This is about how you reduce friction and cost. I also think the filmmakers need to think about how they market their movies more efficiently so that they get that exposure.
Petr: I agree. I think optimizing the content distribution workflow will create an unprecedented opportunity for a dynamic marketplace for content that enables a many-to-many ecosystem.
We hope this helps answer your questions about how we at Verimatrix and Sony Pictures Home Entertainment are rethinking content distribution. Let us know in the comments if you have any additional questions and if you’re ready to take the leap and redefine content distribution for yourself, contact us here.