The threat of piracy
Piracy is one of the key threats that pay-TV operators face today. As well as safeguarding pay-TV operators’ subscription revenues, ensuring that only those authorized are able to access broadcast programming, conditional access (CA) systems are also becoming vital in enabling new revenue streams including pay-per view films and events and a growing range of interactive applications.
To date, piracy has been a major problem for the digital TV industry, seriously holding back the development of some markets. Breaches have been costly. When the Canal Plus Technologies MediaGuard solution was cracked, Canal+ Technologies who provided the solution was forced to swap-out 6.5 million smart cards in areas where piracy was highest, namely Spain, Poland and Italy.
Indeed in Italy, at one time there are thought to have been more ‘illegal’ viewers of the digital satellite services than there were actual subscribers.
As the digital TV market continues to grow, piracy will continue to be a major problem, as the potential rewards for overcoming CA systems will increase. As a result, CA vendors will have to continue to invest heavily in R&D to continue to improve the security of their technology, as well as investing in personnel and systems to investigate and track piracy.
Pay-TV operators break the ties
Relationships between pay-TV operators and CA vendors are normally ongoing and long term, due to the continual threat of piracy and the addition of new services to the pay-TV platform, normally only ending as a result of mergers or major service problems.
This was re-enforced further as changes of CA vendor involved extremely high costs, took a long time and presented major technical challenges. However, the situation has changed significantly with the development of over the air CA upgrade capabilities by leading CA vendors such as NDS.
While the cost remains high and the process difficult, pay-TV operators will now be able to change their CA supplier with broadcast upgrades to their existing set-top boxes, as opposed to having to replace these expensive devices. This has made it viable for Nordic pay-TV operator Viasat, which has long suffered from high levels of piracy, to replace its existing CA solution with Videoguard from NDS.
Similarly, French cable operator Noos has announced its intention to change CA system and more operators could follow suit, radically altering the European conditional access market.
CA vendors well placed for application-provision
Revenues from the provision of CA technologies and services are coming under increasing pressure as the growth of the digital TV market slows.
However the shift in operator focus, from subscriber growth to average revenue per user maximization, has led operators to develop an ever-growing range of sophisticated services and development of closer subscriber relationships. Operators will need a rapidly growing number of secure applications as well as the means to help subscribers exploit them and to manage the associated information.
CA vendors are ideally placed to exploit this by providing a broad range of technologies and applications, taking advantage of the CA system to protect content and to provide the secure management of transactions and usage information.
This in turn would allow CA vendors to provide applications and expertise across the full range of digital and interactive TV services. Providing applications would also open up a new customer base for CA vendors, enabling them to sell into broadcasters and other third-party content providers in addition to platform operators.
While a move up the value chain from CA systems towards application provision will be a necessary progression, vendors will face increasing competition from middleware providers moving into this space, such as OpenTV and Microsoft, and from independent iTV application providers and developers.
It is therefore of the utmost importance that CA vendors make their CA technology as flexible and open as possible, providing a broad range of options; allowing third party applications to link with the CA system, provide toolkits for application development and provide complete applications and consultancy services.
If you enjoyed this article, you may be interested in Datamonitor’s report Anti-piracy measures in digital and interactive TV, which details opportunities in the market and what lessons can be learned from past mistakes.
