As digital content is made available across a variety of delivery platforms, pirates are presented with new opportunities to access and distribute unencrypted material. John Parnell spoke to the industry’s top conditional access (CA) vendors about the challenges they face and how they are working to ensure their clients remain one step ahead of the hackers.
With many broadcasters investing large sums of money in order to offer new services across a variety of platforms and in new formats, maximising revenue becomes even more important in the face of these rising implementation costs.
As a result, the conditional access (CA) industry has been handed a host of new challenges to contend with. But as the stakes are raised, so too are the rewards.
The combined revenue of the global CA industry, covering cable, satellite and telecommunications services, will reach US$1.7 billion in 2013, according to ABI Research.
The conditional access vendors may be enjoying market growth, but the technological challenges and the emergence of software-based systems has shaken up an industry that had previously focused primarily on maintaining legacy smartcard-based systems.
"The availability of content via the internet has had by far the largest impact on the industry," says Doug Lowther, senior vice president of sales and marketing at Irdeto.
"In many countries, teenagers are spending more time on the PC than in front of the TV, and this trend will continue as consumers demand increasingly personalised viewing experiences."
Rather than being a threat however, Lowther believes broadcasters would be better served to utilise these new technologies suggesting that traditional transmission methods remain best for linear broadcasting whilst IP is a better solution for on-demand content.
"Content can be monetised in a variety of ways. CA companies have to enable this, regardless of the network it's transmitted on, or the device which receives it. Monetisation can occur in more ways than an exchange of money - content producers are increasingly generating revenue from advertising for their web-based content, for example," he claims.
Lowther accepts that piracy is unavoidable and as long as the broadcasters have something of value, there will be those in society who will try to obtain it by illegal means.
"It's an unfortunate aspect of human nature. And digital content is no less subject to this natural law than anything else," he says. "The challenge therefore lies not just in preventing such attacks, but in developing strategies for effectively responding to them when they occur."
Irdeto has an international network of staff that track piracy issues and specific incidents.
"It is important that we investigate and cooperate with law enforcement officials to punish pirates to the letter of the law. We implement and devise operational countermeasures and investigate the supply chain behind any suspicious activity that we uncover. We also participate in industry standards bodies and public policy organisations to secure stricter anti-piracy legislation and protect intellectual property rights," claims Lowther.
With so much at stake, broadcasters will always seek guarantees from their CA supplier. Providing absolute assurance is difficult to do, however. Whilst the future may be uncertain, Lowther says that the best guarantee a CA company can offer is its own track record. He claims that Irdeto has now operated for seven years without confronting smart card piracy.
Not so smart
The most fundamental technological change in the CA market in the past few years has been the shift away from smartcard-based solutions.
While Latens offers software-only products, the company's VP of marketing Andy Mathieson believes that smartcards are not obsolete, yet.
"I think that smartcards are the de facto standard and if you look at the huge number particularly in satellite and terrestrial one-way networks, it is the standard. NDS must have 80 million smartcards employed by satellite operators around the world and that is not going to change overnight," claims Mathieson.
"But as people accept that you don't need smartcards there will be a shift towards solutions that don't employ them. It will take a while but it will inevitably happen."
As an obvious advocate of software solutions Mathieson may not be impartial, however he does raise some valid criticisms of existing smartcard CA systems.
"One problem with smartcards is that you want to avoid changing them if you can help it because of the costs associated with doing that and its impact on subscribers. So there is a financial incentive to keep each smartcard in use for as long as possible," he claims. "With software, if you think you have a security problem or that you are going to have a security problem, you can afford to initiate a change. That is a huge difference in security terms."
Mathieson claims that security for hundreds of thousands of subscribers can be updated in a few minutes with a software system. Despite these benefits, convincing the operators to turn away from smartcards is not easy.
"The problem in the first place was convincing clients that software-based CA was safe," he explains. "Industry organisations are often sceptical of a new system. It was the same with the big studios. They often use technical audit houses to assess various systems. We had our software audited; it took nine months and cost a fortune. They looked at every aspect of our system and how it would be implemented."
Azhar al-Malik, VP of marketing and PR at Showtime
"Piracy is one of the biggest issues that we face in the Middle East. We require a great deal of government support, which we are beginning to see. Sports broadcast rights are generally very expensive to attain, not to mention the associated cost of infrastructure investment. Piracy is bad for our business and for the industry as a whole.
"I think its fair to say that exclusive sporting events generally and the very popular leagues like the EPL particularly, will be, and are a popular target for pirates. And as they continue to try and crack our encrypted transmissions we will continue to work to challenge their activities.
"It's hard to equate precisely what the financial impact of piracy is here, but it is rampant. It is worse in certain markets such as Lebanon and Egypt. Millions of people are watching the EPL in the Middle East but we know we don't have millions of subscribers.
Mathieson claims that the Latens system received a higher rating in this audit than any of the smartcard solutions, allaying fears that once a software system was hacked, it was defunct.
"We really had to go through the entire structure of the system and show them what worked to dispel those concerns," adds Mathieson.
The reputation and momentum behind software solutions is now growing, particularly in emerging markets, where Mathieson says operators are more open-minded about the system compared to the conservative developed markets.
"The challenge lies not just in preventing [piracy] attacks, but in developing strategies for effectively responding to them when they occur. - Doug Lowther, Senior VP of sales and marketing, Irdeto."
The company has secured deals across Eastern Europe and India and is now looking to expand in the Middle East.
"The Middle East is very important and we now have a great reference from our client du, in the UAE, and we are beginning to make headway. We don't have a permanent presence in the region but we are reviewing the situation. Dubai seems to be the natural location to do that," says Mathieson.
Shift in focus
Another company embracing software based security, despite being better known for producing smartcard technologies, is Nagravision.
"The only viable content security solution relies on a mix of hardware and software mechanisms. There is no such thing as a software-only or hardware-only solution," says Ivan Verbesselt, senior VP of marketing at Nagravision.
"Any content security solution intensively relies on software and hence has among others the capability for software countermeasures in that respect. The real decision parameter, however, is the security level of the hardware platform on which that software runs."
Verbesselt identifies the trend among broadcasters for hybrid delivery platforms, citing the example of Portugal Telecom, which recently implemented a hybrid DTH-IPTV system after concluding this was more effective than an IP-only approach.
"If there is one key trend materialising in this respect it is 'hybrid'. This is increasingly shaping the kind of solutions an operator needs to be future-proof," says Verbesselt. "The entire service creation, content management and content protection will need to happen seamlessly across multiple delivery platforms."
"In a way, this strong hybrid trend can be seen as a pragmatic precursor to full convergence of networks and devices. So we see this as an even more important growth driver going forward - beyond the current business hybrid deployments are generating," claims Verbesselt.
"In a one-way environment like DTT, DTH and one-way cable, the attack model is such that no compromises can be taken and one needs the highest level of security infrastructure, which is offered by a smartcard."
Verbesselt recognises another trend in the industry saying that he is confident that small and large screen entertainment will happily co-exist rather than cannibalise the other's marketshare.
"There is increasing evidence to suggest the internet is proving complementary to existing distribution channels. This is particularly clear when looking at the BBC's iPlayer consumption patterns, which have not diminished the broadcaster's traditional linear viewing patterns in any way," claims Verbesselt.
"As an industry we could be even better at leveraging this trend by creating a truly consistent entertainment experience across multiple media devices. Matching the interests of content owners, service providers, consumer electronics manufacturers and end users is not a trivial challenge, which requires some compromises. Success will be heavily predicated on a truly open approach that creates a real level playing field across media devices."
Mass market approach
Whilst acknowledging the impact of IPTV and other delivery platforms, Jonathan Beavon, director of segment marketing at NDS, believes the company's biggest success story has come from the Digital Video Recorder (DVR).
"NDS technology resides in more than 13.1 million DVRs in use worldwide, making NDS the global leader in this respect. This technology is definitely proving popular with viewers and pay TV operators," says Beavon.
"IPTV is now only just beginning to become part of the pay TV mix in some countries. It competes with existing broadcast systems or complements broadcast when it is deployed in a hybrid IP-broadcast set top box (STB). Mobile broadcasting is still being trialled in many countries, but it is taking longer than expected to reach a real mass market."
Beavon acknowledges that content owners are experimenting with new ways to deliver their product, such as through "catch-up" services online, however he is confident that these remain only complementary services and are used by broadcasters to expand their offering or to carve out a new opportunity to generate advertising revenue.
"New networks for delivering content have definitely created new opportunities for content protection, digital rights management and conditional access. IPTV is becoming an established pay TV business and internet TV and download services are beginning to show some promise."
Beavon agrees that the future of the industry will require it to experiment and seek out profitable business models built on the convergence between TV STBs, computers, mobile devices and the internet.
Silver Screen Security
Broadcasters are not the only enterprises with a vested interest in content security. Further up the chain, Hollywood movie studios also invest large sums of money to protect the revenues of their own productions.
According to the Motion Picture Association of America (MPAA), the industry lost $6.1 billion to piracy and counterfeiting activities in 2005.
A number of CA vendors also operate in this space, including Verimatrix.
"Unlike encryption, which creates an envelope around content that can effectively secure delivery from point to point, a watermark is embedded in the content itself and remains even if it has been decrypted, decoded and possibly re-encoded to another file," says Stephen Christian, VP of marketing at Verimatrix.
"The most robust watermarks will survive the transition from digital to analogue and back. In particular, forensic watermarking can help establish a virtual 'chain of custody' for content that accurately identifies the source of unauthorised copies and that provides a valuable tool in legal actions against the source of such copies."
With new platforms however come new challenges.
"You must understand the threats. We keep up to date with international piracy activities and operate one of the most extensive research facilities in the industry," claims Beavon.
"We monitor discussion from around the globe on pay TV piracy-related issues in 22 different languages and maintain constant vigilance for any indications that piracy threats may be developing."
"The only viable content security solution relies on a mix of hardware and software mechanisms. There is no such thing as a software-only or hardware-only solution. - Ivan Verbesselt, Senior VP marketing, Nagravision."
Despite recognising the growing presence of IPTV solutions in the pay TV market, NDS remains adamant that hardware will continue at the core of the CA industry.
"Obviously, a well-designed system using secure hardware and software is safer than a software-based system running a wide-open processor. Hardware will continue to secure revenues for the largest pay TV operators but there might be some circumstances where a software implementation could be more appropriate, such as lower definition services with content of less value or small or trial deployments," says Beavon.
One vital component of that hardware is the customer-facing STB. Traditionally, this would include the tuner and the smartcard reader with customers having little other interaction with the device. All this has now changed.
"End-users want to be able to take content from any source, and view it on any device, anytime, anywhere. While this provides exciting opportunities for growth across the industry as a whole, it also potentially presents some significant challenges both technically and commercially," concedes Shane McCarthy, group account director at Pace Microtechnology.
"We are seeing increased demand from our customers to have STB products which are IP capable allowing content to be delivered over IP in addition to the standard broadcast method. This combination opens up additional revenue streams for our customers, through on-demand services for example."
Developing the technology required to provide these services, and ensuring the consumer has invested sufficiently in the hardware and subscription charges necessary to receive them is only half of the battle however.
"Two of the biggest challenges the industry will face is providing end-users with the capability to receive content from multiple sources, and then provide them the rights to move that content to other devices, whilst protecting revenue streams on behalf of broadcasters. At the heart of this challenge is digital rights management (DRM)," says McCarthy.
As STBs become increasingly sophisticated, so too do the associated CA requirements needed to safeguard the signals, and the DRM systems necessary to protect the revenues.
Pace will be displaying multi-room wireless solutions at this month's IBC Exhibition in Amsterdam, which will boast full compatibility with third-party devices. If you consider what a satellite TV STB could do even just five years ago, the rate of technological development becomes clear. The fact that the industry now counts device manufacturers and formerly telecoms and IT technology specialists, adds new dimensions to this challenge.
"CA and DRM platforms are often categorised as an anti-consumer technology, but using these systems to protect content from unauthorised access does not have to be as intrusive or as restrictive as is often portrayed," claims Whit Jackson, VP of business development at SecureMedia.
"The industry must continue to work to not only increase the security of their systems but also to ensure that the functioning of their systems is as unobtrusive to the consumer as possible."
Far from being a necessary evil, Jackson says that DRM interoperability is in fact a highly desirable consumer feature.
"This capability is being addressed through industry groups like the Coral Consortium, Open IPTV Forum and Open Market. This is a challenging undertaking as content security may ultimately be compromised to some degree and there are resource requirements that need to be addressed on the receiving devices. There is also the concern that DRM interoperability in some cases may actually restrict the flexibility of some DRM systems. It may also be unable to handle evolving business models and consumption patterns over time," says Jackson.
Flexibility is a major issue in the eyes of Jackson, who says the best designed software CA/DRM systems are those that allow for flexible server deployment enabling encrypted content and viewing rights to be "sold" from various service providers and trusted websites.
"By their nature, software CA systems don't require any special hardware such as a smartcard reader on the consumer receiving device which makes software security systems ideal to secure content distribution across a range of devices including set-top boxes, PCs, portable players and mobile handsets," says Jackson.
Stephen Christian VP of marketing at Verimatrix, also sees software solutions matching up with the changing nature of the content delivery business at large.
"We feel that one of the big shake ups in technology is the extent to which the internet is influencing security product development - and particularly the use of IP technologies for the delivery of content independent of network type," says Christian.
"Certainly supporting the multi-screen world will be both complex and rewarding for the vendors of content protection. The number of devices per subscriber household or domain is likely to rise dramatically, but so will expectations of content portability."
Christian predicts that the cost structure and what he describes as the "obtrusive nature" of smartcard systems will be increasingly threatened by software-based offerings.
"We firmly believe the future is software-oriented along with increasingly capable chips at the heart of new client devices, trusted and robust IP security protocols and an emphasis on pre-emptive replenishing," claims Christian.
While acknowledging the vast range of free media content currently available on the internet, Christian remains certain that pay TV operators will be able to retain customers given the superior resolution they offer and the choice of premium, full-length programming.
"The availability of content on the internet has certainly got operators and content owners the world over scrambling to provide legitimate internet portals (often advertising-supported) to showcase their offerings, rather than see everything reduced to YouTube clips," says Christian.
"We try to exploit the flexibility and robustness of security protocols proven for everything from internet commerce to the delivery of media - and maintain a moving target for those who would try to crack the technologies."
There is a clear agreement among the CA operators that there is extra business to be garnered as the broadcast business develops. There is also a consensus that there are now additional parameters, out of the hands of the conditional access industry itself, as new services bring additional variables to the equation, such as cross media delivery platforms, VOD offerings and of course mobile TV. There is also the unresolved problem of smartcard versus software-based protection.
There may still be questions regarding these answers, but there is no questioning that there is a problem.
Mohammed al-Shahi, senior director, du Broadcast Services
du Broadcast Services provides teleport and transmission services to domestic and international channels broadcasting in the Middle East.
"We provide a basic conditional access service that operates at the teleport facility, while our customers have their own CA systems which they implement themselves.
"Some broadcast organisations prefer to handle their own CA and to personally ensure their signals are completely secure. Other operators are happy to rely on the encryption we provide at the teleport.
"Clients are generally happy that the same steps and investments to tackle piracy are being made in the Middle East as they are in other markets."