Thoughts on IPTV and DRM

Thomas Jacobson www.tcjnet.com

Summary
Many prospective triple play operators appear to think that IPTV is a way to move up the value chain under a walled garden, targeted advertising, set-top-box business model. They are mislead by wishful thinking on the part of (some) vendors. Competition in the form of new entrants, existing players desperate for market share, content providers pursuing a strategy of disintermediation, and consumer demand for support of new terminal devices and access to the broadest choice of content, will drive the IPTV market in new directions. In time, IPTV VOD is going to be an extension of the Web with distributed caches, XML/Java based program guides, and Google-like video search services, which consumers will be able to access from a wide array of fixed, nomadic, and mobile devices. High speed VDSL and PON connectivity is being deployed, construction of video servers is fairly straight forward, and establishment of backbone peering agreements between competing providers is a well understood business process. The principal thing retarding a Web style IPTV business explosion is the lack of an open, interoperable DRM solution.
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Note:
For the purposes of this discussion, it is assumed that all the DRM systems mentioned work in a similar manner, i.e., they all package content into an encrypted container, securely store rights attributes as associated metadata, and have viable means of secure authentication using PKI or a token. (The reality is that there is rivalry over the ability of these systems to withstand and/or recover from hacks and abuse. It is assumed that the best insurance against this is renewability, and that any weakness could eventually be bred out of a well designed system.)

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Two Views
Media monopolies, driven by Wall Street, usually want status quo:

IPTV linear Centralized control, captive subscribers, walled gardens. In this case, IPTV becomes just another means of delivering the same old stuff.

New technologies and markets are eventually going force (. . . like it, or not . . .):

Open, interoperable, IPTV Video on Demand A major revolution, a true paradigm shift perhaps as significant as the development of the Web.

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IPTV Mantra:

What you want, when you want, where you want, on the device you want.
Content, such as entertainment video, is about to become just another extension of the larger Internet.

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Players
Content creators They write the books and articles, perform the music, produce the movies. They are the root of ownership and rights. Aggregator/Distributor They collect, store and serve the content. They might operate national, regional and local caches, updating them using multicast. Portal/Search They catalog and organize content; they might manage and sell licenses/rights to content that resides anywhere, from your nearest cache to a national archive. Pipe operator They connect a users terminal device to a local cache for popular content, or via the larger Internet to specialized caches or archives through high speed backbones and specialized video peering arrangements. Consumer They read/listen/watch the content and pay for it directly or indirectly.
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Key Network Technologies Enabling the New Paradigm

Viable implementations of MPEG-4/AVC/H.264 and/or VC-1 encoders (gate-array assisted, real time HD) and consumer decoders (low cost silicon). Makes it possible to economically store and transmit SD and HD video. Continuing increase in capability of personal computers & terminal devices. HD MPEG-4/AVC/H.264 display on dual core laptops w/high definition screens soon . . . . Fiber to the Node (neighborhood), along with Passive Optical Networks (PON) and high speed DSL (VDSL, ADSL2+, etc.) all the way to the home. Continuing plummet of $$/MB of disk storage Missing: Viable Rights Management

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Reality 1: Pipes are a Commodity

(Pipe providers are: Telcos with fiber to the neighborhood and VDSL or PON fiber to the home; cable operators with fiber to the neighborhood and coax to the home; as well as traditional broadcast/multicast such as DVB and ATSC terrestrial, DVB satellite, and some wireless (802.11, 802.16, 802.20, DVB-H, MediaFlo)) IP promotes interoperable, seamless, ubiquitous, networks which naturally enable and promote competition (and development of new technologies and corresponding businesses, as well). Competition (availability of alternative pipes to the consumer at competitive prices) will keep pipe providers from moving up the value chain.

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Reality 2: Content is King

As with the web today, almost everyone could generate IPTV content: movie studios; news providers; institutions; governments; businesses, large and small; and even individuals. On the other side, there is an ever growing and heterogeneous variety of terminal devices: from set-tops with MS and Linux based middleware (legacy, HD, home theater), to laptops, desktops, handhelds, mobile phones, pods, game boxes, Dick Tacy wrist watches, 3D displays, visors, and etc. Content providers appear have recognized the impossibility of controlling this evolution, and seem to be favoring non-exclusive arrangements with content resellers, or to sell directly to consumers (disintermediation). In the long term, for content providers, there is no real advantage to exclusive delivery relationships (with a commodity pipe provider). They will want to sell their (appropriately repurposed) product to the widest audience. Content providers have one principal requirement: that their intellectual property be protected so they can get a reasonable return on their investment in creating the content (not to mention related issues such as insuring quality of presentation and brand).

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Reality 3: Consumers Prefer Choice

have little tolerance for rights management and licensing overhead feel that they own what they pay for, and once paid for, want the ability to view it in any way they choose on a variety of devices want to view/experience content in a manner convenient to them (they want to test out, preview, start/stop, jump around, review, time-shift, and etc.) want access to variety . . . freedom to choose the content, provider and payment scheme, dont want to be locked into buying a bundle of junk just to get one item. Early adopters will discover what is possible, and the rest of the sheep will then want it too. In other words: What they want, when they want, where they want, on the device they want.

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Telco and Cable Pipe Dreams of Linear Triple Play

As new attractively packaged and priced VOD services appear, with the ability to deliver to the device of choice, consumers will rapidly abandon the old walled garden set-top-box offerings. It is an unrealistic assumption that the telco or cable operator will be able to move up the value chain. The appearance of open IPTV service, where consumers can surf for content across a broad and growing set of disintermediating content providers will finally put an end to this pipe dream.

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An IPTV Future
For IPTV to realize its full potential, it must work like the web, i.e., be an interoperable system. Using a video capable browser the user should be able to: find content using search portals like Google or some specialized/topical listing (TV Guide, professional association, favorite links, and etc.) obtain and pay for right to the content from the content owner, or through any of a number of competing content license resellers (who might get a small revenue share) obtain and play the content from some convenient and appropriate cache (nearby local telco VOD server, national aggregator, specialized archive, etc.) (commodity charge for bandwidth and/or VOD server use paid under separate means such as ISP subscription, institutional connectivity to a high speed backbone, per play charge, or one time physical media charge in the case of a CD/DVD).

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Economics So how do the players make money?

Content creator/producer sells license/right to the content they have made either directly or through reseller arrangements, to anybody, and at a price they set. Search portal/program guide sells demographically targeted advertising as part of search pages, promotes certain content to consumers on behalf of content provider for a fee, gets a small markup to street price from content provider for handling sale and processing of license/right. Pipe operator sells access bandwidth (ISP), sells use of content cache in local CO, sells use of national backbone and video peering. Gets associated revenue from co-bundled services such as VOIP and data.

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Economics So how do the players make money? (continued)

Consumers might pay a monthly subscription to a favorite search portal/program guide service, use a prepaid pay as you go scheme with the content creator/producer, use of a VISA/MC EMV smart card transaction, or PayPal third party ecash, that implements pay as you go discounts. Note: There can be some crossover. Search/portals might provide and sell use of national archive VOD content cache for specialized or low demand content, or push of popular content to local VOD caches at telco COs and cable head ends via satellite or terrestrial multicast. Pipe operators might operate their own local non-exclusive portals and sell content licenses/rights.

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The missing technology DRM Three Alternatives:

Closed proprietary: supports walled garden model Connected coexistence: Interconnected DRMs (similar to DVB Simulcrypt); encourages cartels; might be an evolutionary step to open. Open interoperable: Common platform that catalyzes an Internet style explosion of new business opportunity.

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Old DVB CAS style rights management systems are not up to the job.
Widely used today by satellite and cable operators, where EMM and ECMs are broadcast out to terminals (Irdeto, Nagra, NDS, ViaAccess, Cryptoworks, Conax, SA, etc.)

Centralized No portability of right/entitlement, usually locked to a set-top No means to amend right/entitlement at intermediate point, no concept of rights chain Often smart card based for broadcast systems, little use of PKI Several vendors have adapted traditional DVB CA to IP networks to leverage sunk investment and their understanding of current practice. (Squre peg, round hole.)

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Proprietary DRM is onerous

Examples:

ContentGuard, MS DRM, InterTrust, Verimatrix, Fairplay, Real, Webvine, Google DRM?

Must be separately implemented on each type of terminal device, not possible to leverage benefits of open source. The limited portability and limited interoperability infuriates users to the point where they are becoming rabidly anti-DRM and thus encourages piracy. N.B.: No proprietary network protocol or technology has truly flourished on the Internet (except perhaps MPEG-LA covered standards such as MPEG-1,2,and 4)

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Connected coexistence of proprietary DRM systems to achieve interworking is difficult.

Rube Goldberg, operationally complex, requires synchronization and cooperation between competing entities. Limited to least common denominator features Confusing for consumers Probably increased vulnerability. By the time this cobbled together solution is made to work, it may be eclipsed by a standards based solution Similar efforts in other venues have rarely succeeded. Some believe translator variant might provide stepping stone to interoperable DRM

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Open interoperable DRM would be best. Just as it took the development of the internet protocol (IP) to catalyze the internet explosion, the appearance of an open, interoperable, DRM method and/or standard is key to realizing the full potential of IPTV & VOD for both providers and consumers.

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A good (open) DRM design should . . .

Be based on a flexible rights chain: author/creator, publisher/producer, distributor/aggregator, retailer/value add, reseller/installer, consumer/parent, etc. Support disconnected read only media, broadcast/multicast, and bidirectional connectivity. Support everything from text documents to video, professional and consumer. Include authentication, encryption, watermarking, and audit trails meeting content owners requirements. Be renewable and upgradeable to meet the challenge of hacks and new media inventions and business paradigms.

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A good (open) DRM design should . . . (continued) Can be implemented on a wide variety of platforms without specialized hardware and/or onerous technology licensing requirements. Be portable and perhaps identity based, not locked to a particular terminal or provider. (VISA/MC EMV smart card SIM USB Key?) Support some certain means of privacy or anonymity if it is to be adopted across a wide spectrum of political, religious, or sexual mores, or by individuals who are concerned about the subpoena powers of government. License/right can be made permanent, just as if you purchased a CD or DVD. Some form of anti-screen scraping, such as dynamic watermarking (on a per view/per display)

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EFF criticism of DRM suggests some interesting points: Need to support fair use doctrine DRM often retards innovation in terminal devices Content owners cant resist abusing DRM to impose monopolistic restrictions (for example, using renewabiltiy to impose new functional limits) Need to accommodate special use cases such as in the developing world, public libraries, local performers, individuals, national data privacy laws, etc. For example, should all use restrictions automatically cease when a content object ages into public domain (regardless of what the content owner wants)?

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The Landscape today

Traditional CAS/DRM vendors pushing adaptations of old style centralized rights management architectures to telco and cable operators who dont know any better. Several consortia for open DRM attempting to harmonize things: Coral, OMA, MPEG-21, DReaM, OPERA, DMP, etc. Some new services testing the water with home grown DRM systems because they cant wait, such as Google, Real, Apple FairPlay, etc. Microsoft trying to control the world with its Windows Media DRM. General consensus seems to be that coexistence and connected proprietary interoperability is the most realistic approach. (This idea is often promoted by DRM companies hoping to make $ on providing the expensive custom glue.)

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Lessons from the browser wars

You can rapidly capture significant market share by making the client software open and free. (For high performance laptops and desktops, game boxes, pods, etc., or in the case where you provide an open settop-box for an existing TV, almost free, such as the Sun examples) Consumers intuitively know that open services are preferable. (For example, several web like proprietary services were fielded and failed in the early 90s)

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How the Internet was built still holds:

Develop an architecture that protects the privacy of individuals, the property of content creators, is fair, open, and interoperable, with no hidden agendas Prove it in use (trial and error, step by step) Embark on a campaign of consensus building Develop a new constellation of alliances. Such as with content providers who want to disintermediate, credit card and device companies who have technology for license/right portability, governments who want to allow access to more content but are restricted by political or religious issues, and consumer groups. Work to get it adopted by key players, engineering, and standards groups. Provide free viewers/browsers and low cost open set-top-boxes Help a few key early adopters to succeed with it.

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The rest is easy

Building caching VOD servers is a straight forward engineering problem Network bandwidth and (video) peering agreements will naturally grow to meet market needs, and is well understood by Internet Service/Backbone Providers. With WDM, router, and VDSL ESLAM technologies, backbone capacity is not really an issue for MPEG4/AVC/H.264 video. Search companies (Google, Yahoo, etc) will naturally organize the content, provide program guides, and perhaps act as license resellers.

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Closing point:
IPTV VOD might simply further separate content consumers into political, religious, and economic groups. However, it just might give people access to higher quality content, with less dogma, violence, and abuse.

That would be good.

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