Identify | Manage | Monetize
Protecting Premium Content
as High-Speed Broadband
Becomes Ubiquitous
A White Paper by Civolution, 2013
Table of contents:
1. Executive Summary
3
4
6
4. Ubiquitous Hi-Speed Internet Has Fueled Piracy 6
6
6. DMCA Takedown Notices : Protection Beyond Encryption
8
7. ‘Game of Thrones’ Dubious Honor of Being ‘Most-Pirated Show’
8
8. Scarcity is the Basis of the Pay TV Business
9
9. Better Content Protection Can Sometimes Mean Lower Quality of Service
9
10. Protecting Content Beyond Decryption with Forensic Watermarking 10
11. The Future of Content Security
13
12. Civolution’s NexGuard Track Record
14
13. Conclusion
14
2. The Growing Demand for Pay-TV Content
3. The Price of Piracy
5. Higher Quality Content Makes Pirating Simpler
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1. Executive Summary
Ubiquitous access to high-speed Internet services is transforming the global pay-TV and over-the-top
environment as the lines between pay-TV providers and owners of premium content blur. Opportunities
to develop new services and revenue streams abound, as content owners now can, if they choose,
deliver their premium assets directly to the consumer.
Increased demand for content by viewers eager to consume it has created a wealth of opportunities for
service providers as well, allowing them to leverage decades of experience in delivering a wide array
of content.
This paper looks at the challenge presented in protecting premium content from piracy, especially as
operators and content owners expand distribution to the open, unmanaged Internet, an environment
that many content owners are as fearful of as they are hopeful.
If TV Everywhere deployments are to become truly universal and over-the-top distribution of even the
most-valuable assets is a goal, then protection of content, and the ability to track it and its origins,
becomes critical.
Forensic watermarking, especially when combined with Internet monitoring and fraud detection, is well
suited to stop content piracy at its source, and efficiently and unmistakably identifying the first source
of leaked content without negatively impacting the viewer experience.
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2. The Growing Demand for Pay-TV Content
Multiscreen services like TV Everywhere and other premium over-the-top services have grown at a phenomenal pace, driven in part by consumer demand and by the expanding availability of affordable high-speed
Internet.
In the United States, Akamai1’s most recent State of the Internet report showed average Internet speeds
now exceed 7.4 Mbps. Globally, average connection speeds increased more than 25 percent, with average
peak connection speeds increasing 35% to more than 16 Mbps.
The quality of content delivery has also improved. This summer’s approval of the h.265 video format will
help guarantee that HD delivery of content becomes ubiquitous among over-the-top video distributors.
Along with HD, content owners—and consumers—are also eagerly anticipating the arrival of Ultra HD, with
image sizes four times larger than Full HD. New technology to deliver extremely high-quality content with
reduced bandwidth is developing in other sectors of the industry as well. Netflix, for example, recently said
its highest-quality deliveries now average only one-third of a subscriber’s bandwidth, compared to 2007,
when its maximum stream was larger than the average user’s bandwidth.
1
Akamai Fourth Quarter 2012 State of the Internet
Increasing Bandwidth is Opening New Doors to Content Delivery
That ubiquity of speed across the Internet has had a huge role in the deployment of TV Everywhere and overthe-top services. It is generally estimated that at least 80 percent of adult broadband users watch some video
over the Internet. Sandvine, which closely follows broadband activity, said that 68.2% of all North American
downstream traffic in the first half of 2013 consisted of real-time entertainment, and noted that Netflix
traffic made up more than 32% of that.2
In North America, more than 90% of households that subscribe to pay-TV services are expected to have
access to a TV Everywhere service by the end of 2013.3 Still, adoption has been slower than expected; the
need for multiple authentications by consumers, as well as complex DRM demands for operators have been
particular pain points. Both are hopefully in the process of being resolved.
Regardless, customers appear eager to access content on any device, at anytime and, increasingly, anywhere.
That’s making TV Everywhere a must-have product, with operators looking to it as both a tool to help reduce
churn and one more way to add incremental revenue to the bottom line.
2
3
Sandvine’s Global Internet Phenomena Report, 2013
ABI Research: TV Everywhere Grows
High-Value Live Linear Content is Coming to the Internet
For the past two years, TV Everywhere has focused primarily on delivering on-demand video content. Now,
led by content owners Disney and CNN, that has begun to change. Disney started streaming live linear
Disney, ESPN and ABC content to pay-TV subscribers in several U.S. markets, with plans to deliver live
content to more than 200 markets in the coming years. CNN, meanwhile, is delivering live news to multiple
screens in multiple markets. Research by the Diffusion Group shows that 80% of respondents to a recent
poll rate TV Everywhere as a valuable part of their pay-TV service, and 64% said real-time TV was “very
valuable.”4 Additionally, nearly 50% said they would “definitely” use a live linear multi-screen service if it
were offered by their service provider.
“Adding live linear access to their delivery options is not only technologically feasible; it would be widely
used and increase the perceived value of the subscription (something operators definitely need as prices
continue to increase and OTT becomes more competitive)” said Michael Greeson, founding partner at TDG.
4
TDG: Bringing Multiscreen Live Linear Programming to Operator ‘TV Everywhere
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Customers appear eager to
access content on any device,
at anytime and, increasingly,
anywhere.
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3. The Price of Piracy
As attractive as TV Everywhere is, deployment of the service brings with it a potential—and huge—concern
for content owners and service providers: rampant piracy.
Depending on the source, the cost of piracy is estimated to range from $500 million a year to more than $6
billion annually in the United States alone. According to a recent report from the Motion Picture Association
(MPA), when including losses from both theft over the Internet and from DVDs, the industry’s global losses
may exceed $18.2 billion annually.5 Of those, the MPA said some 80% occurred overseas. A 2011 report
commissioned by NBCUniversal said more than 22% of all global Internet bandwidth is used for online
piracy; it estimated 67% of digital piracy sites are hosted in the U.S. and Western Europe.
5
The Motion Picture Association: The Cost of Movie Piracy
Pirates Have Seen Their Own Technology Advances
The problem is that, like the technology that delivers content across the Internet, piracy itself has been
undergoing its own technology evolution.
Before the explosion of broadband, video to the home was delivered in a one-way, closed and highly
controlled environment that was accessed by a subscriber using a proprietary set-top box (STB). The STB
was supplied to customers by operators, and was, essentially, a terminal for receiving content, with no user
access and closed to software uploads. This basic transit mode has always been considered safe, difficult to
hack (although not impossible), and security was reasonably easy to renew—at a cost.
Piracy generally was relegated to poor copies made by hackers capturing the SD output of a STB in analog
format, key (control word) sharing, or STB cloning. In the pre-broadband era, the security in place at the
time, conditional-access software (CAS) and digital-rights management (DRM) systems, generally provided
adequate protection.
4. Ubiquitous Hi-Speed Internet Has Fueled Piracy
While closed systems remain the predominant method used in the pay-TV industry today, especially by
cable and satellite operators, the allure of IP delivery, like that employed by telcos, is strong. IP delivery
allows cable companies to offer better services to residential and business customers, and to deliver traffic
reliably and with increased flexibility and multi-screen experience.
But while that bi-directional system has numerous benefits, bringing more consumer-owned and managed
devices into the loop makes preventing pirating more difficult, especially since many of them run on open
operating systems. Unfaithful subscribers can now run their own software next to that being used by
service providers, easily capturing content and distributing high-quality copies. Live content is equally at
risk of being recorded and streamed, even with new commercials inserted into the original content, almost
indistinguishable from the legal stream.
5. Increase of Video Quality Induces Higher Quality Pirated Copies
As more Ultra HD content comes to market, capturing it and distributing HD copies from it becomes simpler.
While CAS and DRM help guarantee only authorized subscribers have access to pay-TV content, hackers
increasingly are able to work around those systems, creating a massive challenge to the content protection
industry and escalating the potential level of losses by content owners.
With the growing popularity of TV Everywhere, as well as the propensity of premium content owners to
deliver more content directly to consumers over-the-top to a diversity of devices, there’s a painfully obvious
need for additional security.
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Unfaithful subscribers can now
run their own software next to that
being used by service providers,
easily capturing content and
distributing high-quality copies.
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6. DMCA Takedown Notices: Protection Beyond Encryption
The cost of piracy, obviously, is not lost on content owners, programmers and pay-TV operators. Starting
in 1998, with the advent of the Digital Millennial Copyright Act, the digital media industry began closely
monitoring the Internet, searching for illegal content. The process has become an integral piece of the
anti-piracy battle. Monitoring services can quickly locate stolen content, and “take-down notices,” which
demand content be removed from the Internet, are sent out to ISPs and OSPs, which quickly act.
But, while takedown notices usually generate prompt action, they can’t stop sharing sites that won’t
respond.
7. ‘Game of Thrones’ Dubious Honor of Being ‘Most-Pirated Show’
Part of the issue is that the general public sees little wrong with piracy, as long as assets being accessed are
for personal use. Almost 70% of respondents to a study by Denmark-based Rockwool Foundation Research
Unit said downloading illicit material from the Internet was acceptable.
The recent season premiere, for example, of HBO’s “Game of Thrones” saw more than one million users
illegally download copies of the show within hours of it being aired. That illegal sharing went on for days
and experts said the episode was downloaded by more than 5.2 million users, an audience almost as large
as the 5.5 million viewers who paid to see the content! The cost of being the most pirated show ever? In
excess of $170.7 million in lost revenue to HBO. Some 90%of the torrent downloads of the episode occurred
outside of the U.S., with Australia’s 10.1%being the largest offenders.
“Game of Thrones” is one example of a premium cable channel losing revenue. But pirates attack more than
just cable networks. In 2012, for example, the Top 10 most-pirated shows included five from major broadcast
networks, and two from ad-supported AMC Network. (See chart below).
Online video platform Ooyala estimated that the cost for an entire season of illegal downloading could
exceed $1.5 billion for those shows alone.
It is to be noted that the global piracy impact is not just about domestic revenues related to subscription,
but also to revenues from international distribution. If content is freely available on the net, international
purchasers will not pay a premium for that content.
Estimates for Other Shows that Lost Big to Piracy in 2012
Show
Dexter
The Big Bang Theory
How I Met Your Mother
Breaking Bad
The Walking Dead
Homeland
House
Fringe
Revolution
Network
Showtime
CBS
CBS
AMC Network
AMC Network
Showtime
Fox
Fox
NBC
Illegal Downloads
3.9 million
3.2 million
3.0 million
2.58 million
2.58 million
2.55 million
2.4 million
2.4 million
2.28 million
Revenue Lost
$138.1 million.
$229.6 million.
$212.4 million.
$100.3 million.
$99.1 million.
$86.1 million.
$153.9 million.
$150 million.
$140.1 million.
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Piracy is a Global Problem
Content owners in the U.S. are not alone in their struggle to keep their assets safe; it’s a global problem.
The Netherlands, for instance, has one of the most robust VOD markets in the world, according to the
Film Research Foundation (FRF). While the market is small (the population is just 16 million), the number
of viewers has doubled to nearly two million in just three years and generated more than $96 million in
revenue in 2012. The FRF, however, said revenue growth has slowed despite the increased viewing. While
VOD makes up 25% of home entertainment revenue, growth has slowed from 62% in 2011 to 41% in 2012.
The slowdown, according to analysts, is likely linked to piracy.
8. Scarcity is the Basis of the Pay TV Business
As TV Everywhere and over-the-top rollouts have riveted consumer interest and fed demand for more
programming, content owners and studios have maintained that newer content generally is more valuable
than catalog content. In other words, scarcity of content drives up its price. A theatrical release, after all,
makes its most money the first weekend it plays. Pirates know that, too, which is why, for example, “Games
of Thrones” saw its greatest replication on the night it was aired.
Sporting Events and Live Concerts Have Immediate Appeal
For sporting and other live events, the stakes are equally as high, and the danger of piracy is very serious.
Major events like the Super Bowl, World Cup or live concerts all have a small window of extreme value.
In short, time does, in fact, equal money with regard to live content. And that’s why it’s critical that
“perishable” content be managed carefully especially with new multi-screen distribution.
One way that studios and content owners can help is by designing release windows to moderate demand,
shortening the windows between theatrical release, VOD release, etc. That’s something not all content
owners - nor service providers - have historically been eager to adopt, preferring a more gradual, traditional
release. With live events, of course, there are no release windows that matter as much as the initial one.
9. Better Content Protection can Sometimes Mean Lower Quality of Service
In lieu of adapting release windows to better meet consumer demand, and to lessen the value of content to
pirates, an alternative is to place more stringent security on those assets.
But, any security that makes content difficult to access, requires user authentication, limits the amount of
times it can be watched or on what devices it can be viewed, or narrows the access window in any way is
met with consumer resistance, which opens a door for pirates to capitalize by giving viewers a better and
easier experience, than service providers do.
When Quality Suffers, Viewers Abandon Video
Studies have found that quality of the viewing experience is critical. Research released in 2013 by UMass
professor Ramesh Sitaraman found that a simple five-second buffer during an online video results in the
loss of nearly a quarter of the audience. Take that freeze to 10 seconds, and likely half of the audience will
abandon the video.
Meanwhile, programs like UltraViolet have seen slow adoption by consumers who have balked at the
complexity of accessing their content. Likewise, iTunes users are often aggravated to learn that the content
they purchased via an iPhone may not be viewable on tablets from other manufacturers.
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Consumers Want to Watch When, and Where, They Desire
The bottom line is that consumers want more control of their entertainment experience than ever before.
It must be a TV-like experience that is simple, painless and ubiquitous, with HD quality. And, reasonably
priced.
Content isn’t free; the costs - and the potential revenue - associated with its creation and distribution are
enormous and need to be protected.
The alphabet soup of security, CAS, DRM and DMCA is a good, and necessary, start to putting a stop to
piracy. But to truly nip it in the bud, short of actually shutting down the sharing site (which will only spawn
another sharing site), you have to go deeper and identify the first seed of piracy.
That’s where forensic watermarking comes in.
10. Protecting Content Beyond Decryption with Forensic Watermarking
The genesis of pirated copy is a simple one. Like a pandemic, it starts with an “index case” and spreads
rapidly outward. As a show is aired, a pirate makes the first copy. That copy can be shared multiple times,
or copies of the original copy can be shared and more copies created, to the tune of millions of downloads
or live streams propagated over the Internet.
The best point to disrupt that chain of events is at the source.
With forensic watermarking, each copy made carries a unique identifier. A forensic watermark is an
imperceptible and non-removable unique identifier that is embedded into the video or audio signal. It
enables content owners to trace - all the way back to the original source - those who attempt to illegally
distribute content.
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Making Tracking Content Easier
When a monitoring service identifies illegal content,
the rights owner may issue a takedown notice to
the site from which the content is streaming, even
if the content is streaming from a different network.
If, however, a site won’t accept or acknowledge a
takedown notice, a watermark will allow an operator
or rights holder to trace the content and backtrack
straight to the original source.
Then there is the issue of the massive administrative
headache of managing a sea of takedown notices, in
far-flung countries with different languages and legal
regimes. Also, takedown notices address the effect of
piracy, not the root cause. It’s better to get as close to
the initial source of piracy as possible.
The French government, for example, in July amended
its ground-breaking—and tough—Internet piracy law.
Adopted in 2009, the “Hadopi law” was one element of
the anti-piracy legislation that several other nations—
notably Australia, South Korea and New Zealand—took
to heart, enacting similar provisions. The law cost
an estimated $15.91 million a year to administer. The
original “three-strikes” provision allowed courts to
disconnect repeat offenders from the Internet, using IP
addresses as evidence. The penalty was rarely enforced.
Although 1.6 million first warnings were sent out, just 29
cases made it into the courts. Only one ever proceeded
to the final stage that brought legal action: a 15-day
sanction. The French government contends laws that
targeted end-users and individuals have had little effect
on reducing piracy. Instead, it plans a new campaign
that will target websites involved in illegal content
downloading.
The United Kingdom adopted a similar approach as part
of its Digital Economy Act 2010, but also has struggled
to implement it successfully. To date, reports say no
copyright infringement notices have been issued. Some
observers say they are unlikely to become operational
until the latter half of 2015. As one executive of an ISP
noted: “There’s a mountain of reasons why this Act
would never fully work… The use of proxies and VPNs
already exist to circumnavigate the DEA’s plans and
avoid detection. There’s also the fact that pursuing
potential infringers through the courts based on a
single IP address is fundamentally flawed, especially
with public Wifi hotspots and wireless networks that
have been left unsecured.”
Forensic watermarking would provide a more efficient
solution as it would be impossible to bypass through
VPN or other systems
Source : Google
An attempt to fight piracy
Watermarking Works with Pay-TV,
or Over-the-Top Content
In the case of a pay-TV operator, if the source of
piracy is a subscriber, operators have several options,
including reducing the quality of that subscriber’s
service, revoking the subscription or downgrading the
subscriber experience, for instance by stopping the
multi-screen experience. Forensic watermarking can
be applied at receiver, headend or network level, and it
can be applied to digital content. It has been optimized
over the years to seamlessly integrate with pay-TV
providers, including cable, IPTV and satellite operators.
Already deployed in millions of STBs, it can be rapidly
activated by operators. It can also be used for adaptive
bitrate delivery over the open Internet or through a
telco-managed network for multi-screen services.
A deterrent against illicit redistribution
The combination of leveraged Internet monitoring and
subscriber-level watermarking provides a powerful
deterrent to pirates—and in a sense provides a “psychological” DRM that holds a subscriber accountable
if they illegally distribute watermarked content.
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content protection without watermarking
content protection with watermarking
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High-Impact Security with No Impact on Content Quality
A watermark is imperceptible to pirates - and to viewers, leaving the content unblemished.
So, unlike the visible marks or smart card numbers that some pay-TV providers stamp on content, pirates
can’t identify what they need to remove. That makes it more difficult to circumvent, even when it undergoes
the common video and audio processing used by hackers to capture and re-stream content.
The result? The viewing experience of authenticated viewers—the vast majority of an operator’s subscriber
base—won’t be affected. That’s an important consideration for service providers looking to maintain
customer loyalty.
11. The Future of Content Security
Pirates have found what they believe to be an easy mark in the form of screen-capturing content being
streamed in the clear. With the arrival of H.265 and as HD streaming becomes nearly universal, not to
mention Ultra HD, it will be easier than ever for them to capture quality content, repackage it and re-stream
it. Professional pirates already have begun to construct their own “subscription sites,” something that
could become even more prevalent.
While CAS and DRM are integral in protecting copy distributed via pay-TV, the newer multi-screen and overthe-top distribution calls for more stringent controls.
Session-based watermarking, like that designed by Civolution, is scalable and agnostic to different CAS and
DRM technologies, and it doesn’t affect security strategies that already are in place.
It also addresses a number of concerns outside the marketplace, like privacy.
Privacy and Content Watermarking
A watermark is unique to an individual household or subscriber, similar to an IP address, and Civolution
is capable of generating millions of exclusive identifiers. That uniqueness could create a problem in some
countries, depending on privacy laws. Civolution’s solution is to allow operators to select and manage
watermark identifiers directly.
Civolution is not involved in the identifier allocation, nor does it maintain any database. If Civolution performs
detection, the information it collects consists only of a hexadecimal number that can be interpreted solely
by the operator.
The ROI of Forensic Watermarking Investigation
Forensic watermarking can point an operator directly to a rogue subscriber who is pirating content. It’s a
scalable solution that can be used as legal evidence and that usually is enough to involve legal authorities
who can then directly collect evidence for a criminal prosecution.
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12. Civolution’s NexGuard Track Record
Originally designed for use in a B2B environment with low to medium volumes of content (i.e. pre-release and
digital cinema), Civolution’s forensic watermarking technology has been approved and used by Hollywood
studios for many years.
Now, Civolution’s NexGuard – Streaming forensic watermarking solutions can be applied in B2C applications
for delivering high volumes of content in any distribution network.
NexGuard – Streaming will be instrumental in helping to unleash the full potential of broadband delivery
to any device, as well as playing a critical role in the introduction of Ultra HD content in the near future,
helping to protect the investments of content owners, video aggregators and service providers
13. Conclusion
The evolution of streaming video on the Internet has been nothing short of a revolution in the digital
media industry, and it’s ongoing. Consumer uptake is strong, service providers have begun to sort out
monetization, and content owners see it as an important stream of revenue.
It’s critical that VOD content be easily accessible, and that it be available on any device on which a viewer
wants to watch, which increasingly can be a table or smartphone. Not only has video-on-demand become
important, but, as Disney and CNN have shown, live linear content has a place in the OTT world as well.
Other content owners likely will follow suit.
A major challenge, in fact, the major challenge, for premium channels, studios and service providers will be
keeping that content secure as well as easy to view by authenticated viewers.
Piracy, especially as content is delivered in HD and UHD, already is an issue that costs the ecosystem
potentially billions of dollars a year. Unchecked, it could become a plague that has the potential to decimate
PayTV/Internet video.
NexGuard forensic watermarking, especially working in concert with DRM and CA solutions, provides the
tools needed today to identify the source of pirated content, to react promptly, and relevantly in a manner
that will protect the Pay-TV industry.
About the Author
Jim O’Neill has been a business journalist since 1992, and has been writing about the digital media industry since 2007. He formerly was the editor of
industry journals FierceIPTV and FierceOnlineVideo, and has worked as an industry analyst for international research firm Parks Associates. He currently is
Editor of theConvergence.tv, a newsletter that takes a deeper look at the trends and happenings in the digital media industry, and is Vice President of New
media at Radi8 Creative. He can be reached at jim@radi8creative.com
About Civolution
Civolution is the leading provider of technology and solutions for identifying, managing and monetizing media content. The company offers an extensive
portfolio of cutting edge applications for digital watermarking and fingerprinting which enable media protection (content filtering and forensic marking
of media assets in prerelease, digital cinema, payTV and online), media interaction (accurate and real-time video synchronization for 2nd screen
and SmartTVs) and media intelligence (audience measurement and media monitoring for television, radio and internet). Civolution offers the most
comprehensive solutions to manage and facilitate profitable content distribution and use.
For more information please contact us: info@civolution.com | www.civolution.com | @Civolution
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www.civolution.com | @civolution