Content protection and management company Irdeto Access has started legal proceedings in the UK against an alleged counterfeiter accused of selling fake pay-TV smart cards over the Internet, writes Steven Hamlen.

This follows on from news back in the summer that many Middle East companies were looking to switch from Irdeto’s encryption system to that offered by NDS. Industry sources told Interspace that Irdeto had been well hacked and many questioned its security (see Issue 696).

That said, Interspace was recently told by one source that there are two types of encryption service available at present – those that have been hacked and those that are about to be hacked. Although this was a tongue-in-cheek comment, it does underline just how vulnerable the industry feels to piracy and how it understandably wants to fight back. It also highlights how companies must constantly update technology to keep ahead of the pirates.

On the prosecution front, Mr David Mainwaring appeared before the Didcot Magistrates Court in Oxfordshire, England, on Tuesday November 14 to face two allegations of breaching the amended Copyright, Designs and Patents Act 1988 by selling an unauthorised Irdeto Access smart card.

“The prosecution follows an undercover probe by an anti-piracy team at Irdeto Access, as well as law firm DLA and private investigators,” said Irdeto in a statement. The revised legislation makes it an offence to distribute, sell, offer to sell, or advertise any unauthorised decoder, including smart cards.

Mr Mainwaring is also alleged to have committed an offence under Section 1 of the Trade Descriptions Act 1968, of supplying a smart card that he tried to pass off as being made by Irdeto Access. He entered pleas of not guilty to each of the three allegations and the case was adjourned until January 9 next year.

Fighting The Pirates

Commenting on the whole piracy issue Irdeto chief executive Graham Kill said, “This is an important business issue – investors will not pay for the creation and development of content, or for the broadcast and IP networks that distribute it, unless the content can be protected and the integrity of these networks secured.”

Around 25 million smart cards currently protect global content revenues of around GBP2.5 billion (E4.17 billion) annually, with the market growing at 20 per cent a year. This sum of money will surely attract pirates eager to cream off the profits.

Andrew Curle, special projects manager for Irdeto, told Interspace that to combat the pirates his company has an ongoing team of investigators in each of the 27 countries in which it is active. “I try to have at least two undercover agents in each country,” he said, adding that these agents keep a track of suspect activity by potential pirates and gather evidence as they go.

If the Irdeto technology is then compromised the pirates are hopefully already known and a stronger case exists to use as a platform to prosecution. This system was responsible for getting Mr Wainwarring into court. “We’ve had him in our sights for quite a while.”

On top of individual action, Curle said Irdeto often works closely with its industry competitors when it comes to the subject of piracy. “We obviously compete for business, but when it comes down to the grass roots of security we often compare notes.”

Curle said that with the average pay-TV subscriber paying $50 a month, pirates are looking to divert the flow of revenue to themselves. He said that a typical ploy is to offer people a smartcard that will last two years instead of one and ask for one year’s fees.

Although he stressed the figure is probably high, he used an example by saying, “If they [pirates] achieve a 10 per cent penetration over 200,000 subscribers, that is around $7 million a year”.

Curle noted that the company is constantly developing new technologies. “If we are compromised we need a new model available.” Irdeto came in for strong criticism earlier this year as its systems were severely hacked, a situation that prompted many companies to consider switching providers. Interspace knows of some that are still thinking of doing so.

In response to the threat of pirates, Curle said, “Our first generation system has been pirated and we have started shipping out the second generation now. We have the third generation in the pipeline.” He said the third generation should be ready “in less than 18 months”. Irdeto will hope this time frame will keep them ahead of the pirates that have caused them so many problems.

Future Business

In terms of the future markets, Curle said, “We are very interested in South America and have two kinds of business to offer – pay-TV and Internet.” The pay-TV sector is established, but the Internet trade is new to Irdeto, and currently has four customers in Indonesia, the Philippines, Germany and South Africa. Curle added the company is currently working on 10 systems to boost this area of revenue.

China is another key market for Irdeto, although Curle noted that the country would need to accommodate much more content that it does at present in order to be able to support a pay-TV industry.

Also, he said another new business idea it is keen to develop is personal video. For this there would be a hard disc in the set-top box that could store around a dozen films or programmes and download them when you wish to see them. It could also track content by subject matter and store material for the customer without a direct request for that particular show.

“This is a way around the current bandwidth problem of both cable and Internet. The way around it is by using a relatively narrow band pipe to deliver data and hold it a broadband form in the set-top box,” said Curle.