Indie Telco Local Content Workshop Information

More About Content Protection

by Ken Pyle ([email protected]), Viodi, LLC

About Viodi, LLC

September 15, 2004 Issue

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So, it really is not too surprising that a content aggregator such as ViewNow would be concerned about content protection. This has been my personal experience for a number of years in dealing with various content owners. The surprising thing to me was when I heard that basic networks are starting to require encryption for IPTV networks. There are a number of reasons for this and a few of these were given in the last issue of the Viodi View. In this article, there are a few more quotes and direct views from content providers.

Bill Fogarty, Vice President of New Distribution for The Weather Channel probably gave the most detailed reasoning for why content protection is critical to any content owner. His comments are probably applicable to most content licensors. Fogarty wrote:

“Even though basic programmers may receive advertising revenue, license fees from distributors continue to be a substantial revenue source for all the major programmers. A licensing structure that would cause one type of distributor to access the same programming for a substantially lower cost, or, in the extreme, for free, undermines the justification programmers have for charging their existing distributors. A new entity that creates a business model that does not consider payment of license fees for content reasonably consistent with that being paid by others receiving the same content does not obligate a programmer to accommodate that business model.

A programmer must consider what's being proposed in the context of existing arrangements with current distributors. The language of programming agreements contains legacy elements composed when the only type of agreement being done was between a cable company and programmer. That relationship is well understood by both parties. It is only appropriate that if an existing programmer already has a substantial business, it's worthwhile to consider the impact on that business of any new type of relationship with a distributor. Any agreement that calls for new language that deviates from that template is going to receive a lot of scrutiny and "what if" analysis by the programmer. This process takes much more time than most new distributors expect it will, but should be anticipated.”

Of course, any time there is a new agreement, that means getting lawyers involved and that slows the process. Content owners only want to go through that process once, so they try to create templates that they can use for all distributors. To create a template, the content owner must have a very good feel for the distribution network. And clearly, they must feel comfortable that the distribution network will sufficiently protect their content.

In general, the content owners are still grappling with these questions. They are trying to understand what their policies are going to be. While doing so, they want to ensure consistency among platforms, whether the platforms are HFC, IPTV or Internet. This means understanding how conditional access and DRM fit together. It also means that the language in a programmer's distribution contracts (i.e. with telcos) must reflect the contracts they have with their content sources.

In short, content protection is mostly a business issue. Most of the programmers are fairly pragmatic, but it is better for them to be cautious and ensure that the contracts they sign will not upset their existing or future business. The process of obtaining cable programming for IPTV networks will get easier, just as it has with Video on Demand over the past few years. The key thing, as mentioned in earlier issues of the Viodi View, is that content protection needs to become an integral part of a telco’s process. Further a telco must do a good job of documenting and showing a programmer that it serious about content protection.

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