[Satellite News 10-14-09] Piracy is a plague that impacts pay-TV operators around the globe. People illegally accessing content drains pay-TV operators of much needed revenue and puts business plans in peril, and the problem has become even more acute in a distressed economic environment.

            The Cable & Satellite Broadcasting Association of Asia (CASBAA) estimates that in 2008 piracy cost pay-TV operators in the region nearly $2 billion in revenues. “In terms of the traditional commercial type of piracy, markets that have been particularly hard hit include Thailand, the Philippines, Indonesia,” John Medeiros, deputy CEO of CASBAA, said. “These are countries where there are substantial black market cable industries, featuring operators who take DTH signals from one source or another and distribute them to millions of homes across these three territories without any payment.”

            While the piracy situation perhaps impacts analog cable TV operators more, there are many cases of satellite pay-TV operators feeling the negative effects of piracy. “There are satellite systems in Asia which have been compromised. There have been massive numbers, hundreds of thousands, even millions, of cloned cards that have been distributed throughout Asia. The nature of the satellite business is that it doesn’t respect national borders, so one broken satellite system in one market can impact markets around it. The technology situation is worse for cable than satellite in Asia. In general, the satellite systems are newer, and have more effective conditional access controls. For cable systems — old analog systems — there are no effective conditional access mechanisms. Older cable systems are the weakest link in the piracy chain in Asia.”

            With huge markets such as India, Indonesia and China and many new pay-TV operators emerging, Asia represents a potentially lucrative market for content security vendors. Verimatrix, best known in the IPTV world, recently signed its first pure satellite deal in Asia and sees strong opportunities as operators realize there are no short cuts to dealing with the piracy issue. “Operators that are transitioning from analog to digital is a very strong market in terms of growth,” Bob Kulakowski, CTO of Verimatrix, said. “What is interesting is that a few years ago when we were trying to enter into the market, price was really a driver. Now they want a partner with a long-term vision to protect their revenue, which is where we align with operators. The price points have improved from a few years ago. Operators understand the value of security. You have operators with cable, satellite and IP plans. They know how to monetize services. They do multiple network delivery and need to protect their investments.”            

            NDS has established a strong base in India, as operators are looking to combat the problem but also keep costs low, CEO Abe Peled said. “These operators have to be economical with their expenditure but it has proved to be worthwhile. There is strong subscriber growth in these markets. In emerging markets, it goes just beyond security. We sell operator’s whole packages, so security, middleware, EPG, games, etc. For operators that really see a long-term business, we find solutions.”

            Robin Wilson, vice president, business development, Nagravision, said, “The Asian market represents continued opportunities for growth as digital TV becomes more affordable to the masses. Satellite is showing strong growth. For example, in India, our customer Reliance has over 1.5 million subscribers up and running. Recently, Nagravision was selected as Vietnam Satellite Digital Television’s sole provider of [conditional access] technology.”

Technology Will Be Key

There have been subtle changes in the way content is now protected, with the traditional smart card approach now not the only way to protect content. “On an analog cable network, it is very easy to tap into the lines on the poles,” Kulakowski said. “A pole can have 10 or more different co-ax lines, which are very easy to tap into. To combat this type of large-scale piracy in the digital world, we offer a layered security approach with technologies like renewable security, invisible watermarking and fingerprinting. Our technology roadmap includes a unique DRM per subscriber, so as subscribers are making hacks, they have to rehack the system to distribute their hacks, so for us, renewability is a key element.”

            Irdeto also is offering security options beyond the smart card, said Andrew Wajs, the company’s CTO. “We are finding now that we are able to manage all forms of piracy that go into those set-top boxes. The big change is that it is not just about the smart card but the entire system. We also have the ability to do complete upgrades of the cards in the field, so that is extremely powerful in combating forms of piracy. In addition to that, we are making strong advances in software security. We are using hybrid solutions that give us an additional layer of adaptability. We can do pure software and hybrid solutions. We are also controlling more of the software in the set-top box. It is not just about having software. You have to interoporate with all the different set top boxes in the field,” he said.

            CASBAA believes conditional access vendors are ahead of the game, although with people wanting to access content on different devices, it is a more challenging environment than ever. However, regulation, technology and laws all need to evolve to make sure the piracy problem, already huge, does not increase in scale still further. “To fight piracy in Asia with CASBAA and other [conditional access] vendors, we need to set-up a content protection eco-system that includes both technology and the law. Because what makes a pay-TV market successful is the ability to keep up with new technologies – and with the measures the industry must use to protect its content,” François Moreau de Saint Martin, CEO of France’s Viaccess, said.