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Introduction

Anyone aspiring to compete in today’s cross-platform video ser-vices marketplace must confront the twin challenges of enabling broadcast TV-caliber viewing experiences on all devices while

meeting ever more stringent content protec-tion requirements.

Amid an unrelenting global surge in view-ing of live sports and other linear as well as time-shifted TV programming on everything from smartphones to Internet-connected UHD TV sets, old, latency-intensive modes of reaching end users are no longer adequate to meeting consumer demand or to executing on personalization and ad-based monetiza-tion of the user experience. At the same time, mounting losses to online piracy have ignited worldwide efforts to crack down on illegal dis-tribution with measures that rely on per-ses-sion application of forensic watermarking to identify wrongdoers.

As a result, distributors, whether they are content owners going direct to consumer (D2C), online aggregators or network opera-tors pursuing multiscreen connectivity, must be able to pursue end-to-end distribution strategies that support:n Delivery of all content at persistent levels

of superior picture quality with immediate start-up times and no buffering delays on all devices;

n End-to-end latency on linear content streams at or close to the amount of time consumed by live broadcast TV signals from camera capture to playback;

n Automated mechanisms by which public CDN services can be utilized as backup to private caching servers to ensure optimum routing of every stream;

n Edge-managed per-session application of

digital watermarks that uniquely and imper-ceptibly associate compressed and encrypt-ed content from unicast streams with each viewer without any impact on latency or streaming capacity;

n A watermarking solution with global service backup that includes full support for foren-sics and initiation of actions against piracy, including real-time disruptions that prevent viewing of pirated sports and other live streams early in the broadcast;

n Data analytics that leverage multiple data flows from the edge and end user devices to facilitate:

n rapid execution of forensics and other anti-piracy measures employed with watermarking;

n rigorous quality control measures, includ-ing CDN routing optimization, trouble shooting known problems and preven-tive action against emerging issues.

These goals can only be met through an efficient approach to utilization of network storage and capacity that circumvents heavy reliance on public CDNs. Distributors must be able to stream the most popular linear and VOD content to all devices by utilizing a privately owned caching platform that runs on commod-ity off-the-shelf (COTS) appliances deep in local networks. In order to be useful to all types of distributors, such a platform much support cost and deployment efficiencies with advanced CDN functionalities that can be controlled by Internet-based distributors who don’t own net-works as well as by operators who do.

As shall be seen in the discussion that fol-lows, all these requirements have been met through a partnership between Broadpeak and NAGRA that has enabled tight integration of Broadpeak’s video delivery solutions, includ-ing both an operator CDN platform and the BroadCache Box local cache solution for con-

>> Market Intelligence

Broadpeak and NAGRA NexGuardSupply the Solution Distributors Need for Success in New Video EraCombination of Advanced CDN & Watermarking Solutions Meets Challenges Posed by Live Streaming & Rampant Piracy

Table of ContentsIntroductionFactors Driving a New Approach to Video Streaming & Protection Surging Demand for Streamed Linear as well as Time-Shifted Video n vMVPDs & D2C Strategies n The Growing Importance of Live Sports

to Streaming Strategies The New Quality of Experience Imperative

n The 4K UHD Factor n The Growing Risks to Providers of Sub-

Par QoEForces Driving the Mandate for Stronger Content Protection Mounting Losses to Piracy The Kodi Box Phenomenon The Intensifying Global Commitment to Battling Piracy

n The Imposition of Watermarking Requirements

n Greater Collaboration on Anti-Piracy Initiatives

The Broadpeak BroadCache Box Flexibility & Scalability The Win/Win Business Model Cost Savings & Performance Benefits

n Reducing Public CDN Service Costs n Intelligence & the Role of AnalyticsThe Power of the Integrated NexGuard/BroadCache Solution

Fundamentals of NexGuard Streaming The Benefits of NexGuard Integration with BroadCache Facilitating Fast Responses to Piracy Conclusion

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tent providers, with NAGRA’s NexGuard water-marking platform. The result is a highly scal-able premium video distribution system that is designed to serve the needs of all classes of video service providers in the new cross-plat-form marketplace, including content owners pursuing new D2C strategies as well as online aggregators and traditional MVPDs (multichan-nel video programming distributors).

We begin with an assessment of the market conditions that mandate recourse to the joint Broadpeak/NexGuard solution, including fac-tors such as the competitive pressures driving superior performance; the escalating impact of piracy; the role of live sports and other linear services, and the emergence of UHD and new business models supporting early movie releas-es into network distribution on video-on-de-mand (VOD) services. This analysis includes a review of collaborative measures taken by rights owners with distributors, CDN operators, indus-try organizations and government agencies that attest to how battling piracy has become a top priority of content owners worldwide.

We then turn to an in-depth exploration of how the tightly integrated Broadpeak CDN and NexGuard platforms satisfy all the conditions for next-generation multiscreen video operations as enumerated above. This includes an explanation of functionalities and benefits distributors gain through use of Broadpeak’s BroadCache Box technology; the technical mechanisms of NexGuard ses-sion-based watermarking, and how that tech-nology is used to track and disrupt piracy.

Factors Driving a New Approach to Video Streaming & Protection

The last three years have witnessed a two-pronged revolution in the pay TV industry, representing both the good and bad con-sequences that come with reliance on Inter-net-based distribution.

On the one hand, the market appeal of

Internet-based modes of delivering high-value linear as well as on-demand content to con-sumers, including those who don’t subscribe to traditional MVPD services, has given new life to content owners’ monetization strate-gies. But at the same time, online accessibility to the highest value content, including live sports, has fueled transformation of video piracy into a juggernaut of technically sophis-ticated and professionally managed opera-tions that are leveraging ever larger audiences to generate unprecedented levels of revenue from low-priced subscriptions and automated ad placements enabled by online ad networks.

Surging Demand for Streamed Linear as well as Time-Shifted Video

Subscriptions to online video services, until recently driven exclusively by SVOD (subscrip-tion VOD) aggregators like Netflix, are surging worldwide as the pace of pay TV subscription growth slows in some regions and moves into negative territory in others. According to data compiled by IHS Markit, total subscriptions to online video services reached 401 million worldwide in 2017 compared to 1.034 billion subscriptions to legacy pay TV services.1

Even with strong pay TV growth in the APAC region, the researcher projects that by 2021 the gap will narrow to 650 million sub-scriptions online versus 1.135 billion pay TV subscriptions. By far, the biggest impact on online growth and pay TV retrenchment alike can be found in the U.S. where 55% of house-holds now subscribe to at least one video streaming service compared to 49% a year ago, according to research from Deloitte.2

Outside the U.S., the percentage of house-holds subscribing to online services varies widely. Figure 1 offers a global view provided by researcher Strategy Analytics, which found the U.S. online service penetration rate to be 59% at YE 2017, slightly higher than the 55% reported by Deloitte.3

vMVPDs & D2C StrategiesAdding to the appeal of online viewing

has been an outpouring of initiatives that go beyond the traditional SVOD model, often with offerings of linear broadcast TV program-ming as well as time-shifted viewing options. This phase of the Internet TV era began three years ago when a handful of broadcast and cable networks in the U.S. began extending distribution rights for streaming linear broad-cast channels to so-called “virtual MVPDs (vMVPDs).” starting with Sling TV and now extending to dozens of similar operations across the globe.

Since then the lines have been blurring between MVPDs and vMVPDs as license hold-ers revise policies to enable traditional MVPDs to launch a new crop of branded online outlets offering linear as well as VOD content from their legacy channel lineups. Satellite MVPD OTT services like Dish’s Sling TV, DirecTV Now, Sky Now, Viasat’s Viaplay and Tata Sky TV Everywhere frequently transcend national borders, in some cases with global reach.

In just one example of what vMVPD strat-egies have led to, Google’s YouTube TV is charging $40 monthly for over 60 channels, including the four major over-the-air broad-casters, a large share of cable sports, news and other leading networks and its own premium YouTube Red content lineup. In late April 2018 the year-old service launched a TV advertising blitz telling consumers they can watch the “same teams, same games, same channels” they get with much more expensive MVPD services. Notably, the company said it planned to expand its revenue base beyond subscrip-tions later in 2018 by enabling addressable advertising targeted to demographic profiles on its inventory of TV ad avails, which are the spots reserved for local ad sales by MVPDs.4

So far, as exemplified by U.S. penetration figures shown in Figure 2, the subscriber counts for vMVPDs pale next to the penetra-tion of SVOD services. But they’re destined for rapid growth, as evidenced in the more mature U.S. vMVPD market, where total subscriptions now top 4.5 million. Clearly, multiscreen deliv-ery of linear content is becoming ever more vital to content owners’ financial prospects.

At the same time, the D2C phenomenon is spreading rapidly from the U.S. to other parts of the world, placing an even greater premium on online providers’ ability to support linear content. According to a recent research report from The Diffusion Group, all major U.S. TV networks will have launched standalone D2C services by 2022.5

Figure 1

Percent of Households Paying for Streaming Video ServiceU.S. .....................................59% Japan ..................................29% China .................................12%Canada ............................. 51% South Africa ....................22% Spain .................................. 9%Norway ............................46% Germany ...........................19% Italy ..................................... 8%Sweden ............................45% Mexico ................................19% Switzerland .................... 8%Finland .............................44% Argentina .........................18% Poland ............................... 7%Australia .........................36% Brazil ...................................17% Czech ................................. 7%S. Korea ........................... 35% Turkey .................................15% Russia ................................. 5%U.K. ....................................34% France .................................14% India ................................... 3%Denmark .........................33%

Source: Strategy Analytics

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The trends in vMVPD and D2C services are now mirrored globally with a spate of stra-tegic initiatives across Europe, Asia and Latin America. In Europe, for example, regulators are framing ongoing policies around the concept of a Digital Single Market (DSM) in recognition of the pan-European reach of such services. Out of 673 European OTT services counted by one researcher, 153 are targeted to popula-tions outside their countries of origin.6 London alone is now the hub for 215 OTT services, 40% of which are targeted to other countries.

Figure 3 projects how the revenues from online video services will break out on a regional basis by 2021 compared to 2016. While SVOD services remain dominant in all regions, linear content is becoming a key attraction in new vMVPD and MVPD online bundles everywhere.

As ever more linear content becomes avail-able through such services, growing levels of viewership validate the importance of going beyond the traditional SVOD model. This was reflected in a recent global survey conducted by the Interactive Advertising Bureau, which found that, as of May 2018, 47% of live stream-ing video viewers worldwide were streaming more live video compared with a year ago and 44% were watching less live TV as a result of live streaming.8

All of this activity points to the fact that Internet streaming has become the battle-ground for building audiences for live TV programming. Reporting on a 2017 survey of 500 industry executives worldwide, Unisphere Research and Level 3 Communications said that when respondents were asked when live-linear OTT viewing would exceed legacy broadcast TV viewing, more than 50% said the tipping point would come by 2020 while 70% said it would be reached by 2022.9

Such expectations were confirmed by a recently released study from Digital TV Research that projects subscription revenue generated globally by vMVPDs and D2C ser-vices will increase eight-fold by 2023, rising to a cumulative $23.68 billion from $4.14 billion in 2017.10 In an earlier study looking at SVOD services, the research firm predicted subscrip-tion revenues generated by those providers would rise from $17.2 billion in 2016 to $41.2 billion in 2022.11 In other words, if these pro-jections prove accurate, the share of online service subscription revenues generated by vMVPD and D2C providers will have gone from about 19% of the approximately $23 billion generated by all categories of streamed long-form video services in the 2017 timeframe to about 36% within the next five to six years.

But as dramatic as these projections are, by not including proceeds from advertising they may significantly understate the revenue potential of streamed services. A recent survey conducted by NewBay Media and nScreenMe-dia found that 56% of responding U.S. online video service providers (OVSPs) rely on adver-tising as their primary source of revenue.12 The survey targeted all types of OVSPs, including D2C providers, vMVPDs and SVOD services.

The Growing Importance of Live Sports to Streaming Strategies

Sports coverage is an especially important driver behind the shift to online delivery of lin-ear programming, led by blockbuster events like the Olympics and the World Cup, which set new streaming records with each iteration. Sports channels are now included in the lion’s share of vMVPD offerings while ever more

Figure 2

Global Subscriber Counts among Leading U.S. Online Video Service Providers SVOD Services vMVPDsNetflix 118 million Sling TV 2.2 millionAmazon 80 million DirecTV Now 1.2 millionHulu 17 million Sony Vue 670,000Vudu 12 million Hulu Live TV 450,000 YouTube TV 300,000 fuboTV 150,000 Philo n/a

Source: Compiled from company, research and press reports as of 6/1/18

Figure 3

Global OTT TV & Video Revenue Forecast ($1 million) 2016 2021North America 18,078 24,387Western Europe 8,199 14,642Asia-Pacific 7,894 18,396Latin America 1,596 3,586Eastern Europe 633 1,976MENA 339 1,328Sub-Sahara Africa 37 467 Source: Digital TV Research7

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special sports league packages have become mainstays of online viewing throughout Europe, Asia, the Middle East, Africa and Latin America as well as North America.

Often these events are offered in pay-per-view (PPV) mode by the rights holders them-selves or through affiliates who bid astronom-ical sums for exclusive rights. Sky, for example, paid about $6.5 billion for the lion’s share of exclusive rights to a three-year package of English Premier League football (soccer) games, which are now part of Sky’s new Sky Sports PPV service. 21st Century Fox’s Star India paid over $2.6 billion in a five-year deal combining glob-al rights to digital and TV PPV distribution of India’s Premier League cricket matches.

One of the latest sports organizations to launch an online PPV service is Formula One with F1 TV, which allows subscribers to view races from 20 cameras mounted on individual cars. Fight promoters like WWE (World Wres-tling Entertainment) and UFC (Ultimate Fight-ing Championship) are offering online PPV access to their events through affiliates world-wide. For example, Amazon recently acquired online PPV rights to the 2018 UFC Saturday night fight schedule.

More generally Amazon and other Inter-net tech firms have been spending heavily on exclusive live streaming rights to a wide range of sports in the U.S. and abroad. Amazon reportedly is spending $65 million for world-wide rights to webcast the NFL’s Thursday Night games in 2018-1913, adding to a portfolio that also includes a three-year package of 20 U.K. Premier League matches, U.K. distribution rights to the U.S. Tennis Open and much else. Facebook has rights to Major League Baseball, Major League Soccer and a variety of college and international sports events. AOL and Yahoo, subsidiaries of Verizon, have online rights to that company’s package of NFL games.

The New Quality of Experience Imperative

Clearly, in light of all these developments the financial stakes riding on delivering a multi-platform viewing experience that mea-sures up to consumer expectations couldn’t be higher. With ever more options to choose from, consumers can express their dissatisfaction with the quality of a service by going else-where, which means providers who deliver con-sistently superior performance have the best chance of success in this crowded marketplace.

The scope of the challenge is reflected by the range of screen sizes and video formats that will have to be served with a consistent high-performance viewing experience. At the big display level, access to online-delivered premium video services on HD and UHD TV

sets is commonplace worldwide.Penetration of smart TVs is on track to hit

300 million by 2019, according to IHS Markit,14 By that year another 220 million TV sets will be connected for online viewing via IP set-tops and game consoles, according to Frost & Sullivan.15 In the U.S. alone the combination of smart TVs and TV connected IP media players now tops 210 million, according to NPD Group.16

Equally significant to setting performance parameters in the new video marketplace is the pace of long-form video consumption on mobile devices worldwide, which in late 2016 began exceeding 50% of the time users spend viewing video on cell phones, according to a tracking report issued by online video publisher Ooyala.17 Video of all types accounts for about 60% of global mobile data traffic, according to the latest Global Mobile Data Traffic Forecast from Cisco Systems.18 By 2021 the video share is projected to reach 78% of data traffic.

Fueling these consumption trends is the rapid increase in access speeds over fixed and mobile networks. According to data collected by M-Lab, a partnership between the Open Technology Institute, Google Open Source Research and Princeton University’s PlanetLab, the average global broadband speed rose by 23% year-on-year to 9.10 Mbps in 2018, topped by Singapore and Sweden at 60.39 Mbps and 46.00 Mbps, respectively.19 The U.S. ranked 20th at 25.86 Mbps.

As for mobile connections, Cisco reported the global average hit 6.8 Mbps in 2016 and will reach 20 Mbps by 2021. These are rates driven by 4G penetration, now accounting for over 79% of total mobile traffic. There will be a sharp spike once 5G becomes widely available, which Cisco projects will happen after 2021.

The 4K UHD FactorNot only do these trends underscore the

need to meet viewing standards set by 1080p HD. They also highlight the fact that there is a rapidly growing bandwidth environment for delivering 4K UHD content to the growing market of households with 4K TV sets. Serving this demand is becoming a competitive imper-ative, given the profound improvements in viewing experience enabled by high dynamic range (HDR) enhancements, including wide color gamut, amid rising penetration of HDR-enabled 4K TVs.

And it may be a monetization opportunity as well. A recent global survey conducted by SNL Kagan found that 64% of MVPDs and 73% of content producers among the nearly 500 respondents believe consumers will be willing to pay 10% to 30% more on their subscriptions for access to 4K UHD content.20 96% of all respondents believe 4K UHD TV services will be widely adopted by 2020.

So far, the dominant sources of 4K UHD con-tent in North America have been OTT provid-ers, including Netflix, Amazon, Hulu, UltraFlix, Fandango Now, VUDU, iTunes and YouTube. Nearly all of the original content produced by Netflix and Amazon is offered in 4K, much of it enhanced with HDR. But MVPDs are starting to get involved, including DirecTV, the first to market, as well as Dish, Comcast and a handful of smaller cable operators taking direct feeds of 4K content from satellite operator SES.

In Europe the rollout of 4K services has been led by MVPDs, including Sky and BT in the U.K. Orange and Free in France and others elsewhere. Worldwide, according to statistics compiled by the Ultra HD Forum, 45% of the 4K services launched so far are Europe based, 31% come from the APAC region and 20% originate in North America.21

The Growing Risks to Providers of Sub-Par QoE

With the onset of linear streaming as a top business priority, growing consumer reliance on connected TV sets, including 4K UHD dis-plays, and surging consumption of long-form content on mobile devices, content providers face a much more daunting set of service per-formance requirements than they did when everything was delivered on demand from SVOD providers or as an adjunct to MVPDs’ TV Everywhere services. This requires new thinking about distribution architectures and modes of operation that move beyond long-standing approaches to reaching consumers in the best-effort Internet environment.

Part of the challenge in making the case for viewing TV programming on connected devices involves ensuring a consistent viewing experience commensurate with what con-sumers are accustomed to getting over legacy TV outlets with respect to things like startup time, buffering delays, picture quality and, in the case of linear programming and especially live sports, end-to-end latency. The negative effects of underperforming on these parame-ters are well documented.

For example, excessive buffering can sig-nificantly impact subscriber retention, accord-ing to a study assessing the impact of impair-ments on consumer engagement with live video streams that was presented at the IEEE’s 2017 International Conference on Network Protocols.22 Researchers reviewing behavior of 625,626 users in nine U.S. cities found that average daily viewing time decreased from more than 210 minutes for users who expe-rience little or no buffering to less than 30 minutes for users experiencing 0.5 buffering events per minute.

Subscriber discontent with what is arguably

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the most valuable component of linear pro-gramming, namely sports, was documented in a recent study conducted by YouGov, which found that 72% of sports fans who stream live sports expect bad service experiences.23 In one manifestation of this phenomenon, at the out-set of 2018 the Amazon Thursday Night Football stream review rating was registering just 2.5 out of 5 stars, with many users reporting laten-cy problems and stalling.24

YouGov reported that 64% of fans expect buffering, 42% expect start-up delays, 32% expect poor picture quality and 30% expect a complete loss of service. The upshot is that 63% of the survey respondents said they were reluctant to subscribe or re-subscribe to live sports streaming services.

Better end-to-end latency performance even when buffering or start-up delays aren’t a factor is also essential for live event streaming, especially when it comes to sports. Online users want to view what’s happening at the same time the action is displayed on TV screens over legacy outlets, especially when engaging in group viewing through social media or when the viewer is on a second screen in proximity to a TV set showing the same event. This means end-to-end latency from camera capture to playback shouldn’t exceed eight seconds.25

Of course, there’s more to meeting users’ expectations than providing streaming performance suited to today’s multiscreen service requirements. Users are also looking for personalization of content discovery and special features. When it comes to sports pro-gramming, the YouGov study found that 36% want to gain more insights into player stats and information, and 17% said they want to engage with other viewers.

At the same time, there’s a performance challenge that has to be met as dynamic adver-tising on linear content becomes a major factor in monetization. Anyone seeking to benefit from providing addressable advertising inven-tory must be able to ensure persistently seam-less, low-latency placement, which is easier to do with server-based just-in-time execution.

Forces Driving the Mandate for Stronger Content Protection

Mounting Losses to PiracyParalleling the need for a new approach

to delivering multiscreen video services is the need to combat piracy more effective-ly. Globally, losses to online distribution of purloined content incurred by distributors

and rights owners in 2016 came to $26.7 billion worldwide, not counting the damage caused to legacy pay TV operations, accord-ing to an extensive study of the impact of piracy on streaming services performed by Digital TV Research.26

Over the period from 2016 to 2022, the researcher projects the losses in subscription and advertising revenue will total $52 billion. The trend lines mapped by the 2017 report suggest APAC now supersedes North Amer-ica as the worst-hit region. But, on a coun-try-by-country basis, the report projects the U.S. will remain the leader in losses to piracy, followed by China. Other piracy hot spots include Brazil, India, the U.K., South Korea, and Mexico.

Anxieties surrounding the combination of increased competition and mounting losses to piracy were reflected in a survey of content and MVPD executives in Europe, Asia Pacific, Latin America and North America conducted for the Pay-TV Innovation Forum by the inter-national research and consulting firm MTM.27 Piracy was one of three disruptive challenges, along with the proliferation of cheaper OTT services and changing consumer behavior, list-ed by respondents as their top concerns.

The 2017 research found that 50% of exec-utives, up from 41% the year before, believe piracy, driven by a surge in online streaming of live and on-demand content, will lead to greater pressures on the industry over the next five years. The study estimated the pay TV industry could stand to gain $7 billion in annual revenue if at least one in four consum-ers of pirated pay TV services would switch to a legitimate option.

In research that provides farther confirma-tion as to the high level of consumer reliance on pirated content in North America, Internet technology supplier Sandvine recently report-ed that 6.5% of North American households access illegal live TV services every month, equating to $4 billion in lost revenue for legit-imate providers in 2017.28 The primary threat comes from cheap subscription services with monthly fees averaging $10, accessed by pur-pose-built set-top boxes and other hardware that use embedded software to view pirated TV streams.

The Kodi Box PhenomenonTypically these devices, known as “Kodi

boxes,” are embedded with media players utilizing the legitimate Kodi open-source soft-ware to provide users access to pirate apps. Pirates leverage Kodi server software to aggre-gate purloined content into multichannel

streams with professional-quality EPGs that deliver a user experience comparable to legal pay TV services.

Sometimes apps offering pirate services also offer access to legitimate services at much higher prices, leaving the impression that the illegal sites are just legitimate aggressive com-petitors. Ad agency Anatomy Media, drawing on a 2016 Google survey of 2,700 18-24 year-olds in the U.S., recently reported that 69% view pirated video and that 24% of people in that age group think such activity is legal.

These illegal services frequently organize the content into multi-language presenta-tions, giving them international reach from anywhere in the world. They can add features and use interactive communications between clients and servers to tabulate device usage data, gauge the popularity of content offer-ings and perform troubleshooting in con-junction with sophisticated customer support services. And they often benefit from ad rev-enues generated by online ad networks that mistake them for legitimate operations.

Sandvine found that Kodi boxes support-ing pre-loaded pirate apps account for 95% of the illegal live content consumption it measured in North America. There’s also a DIY component to illicit Kodi usage, where users who buy legitimate fully loaded Kodi devices manually load illegal apps. The DIY approach accounts for the lion’s share of the remaining 5% in illegal live streaming, Sandvine said.

Pirates have found several ways to get around the traditional conditional access and DRM modes of protecting content delivered over legacy and online outlets. The least tech-nically sophisticated approach, which is used not only by professional pirate operations but by amateur users sharing content illegally with friends, takes advantage of today’s high-quali-ty 4K TV displays and video cameras to simply record and retransmit programming directly from the screen.

More advanced methods commonly used by professional pirate operations include use of High-bandwidth Digital Content Protection (HDCP) strippers to pull in-the-clear video from HDMI links to TV displays from set-top boxes, game consoles, PCs and tablets. This content can be instantly fed to origin servers for distribution of live content, imposing a latency penalty but otherwise measuring up to the quality levels of the originally streamed content.

Pirates can also capture in-the-clear con-tent from device memory as it awaits playback in the buffering process. And there are even methods hackers can employ to capture encryption keys without trying to decode AES

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(Advanced Encryption Standard) algorithms by using logic analyzers to read electronic wave or power consumption patterns.

The Intensifying Global Commitment to Battling Piracy The Imposition of Watermarking Requirements

Battling piracy through concerted action that addresses all the approaches thieves have taken to enable illicit streaming of encrypted content has become a top priority among TV producers, motion picture studios, MVPDs, vMVPDs and SVOD aggregators worldwide. As a result, content producers are more com-mitted than ever to mandating forensic water-marking as the starting point for identifying thieves and disrupting their operations.

This marks a big change from where things have stood since the motion picture industry’s technology arm MovieLabs first issued its Enhanced Content Protection (ECP) recommen-dations in 2015. Those recommendations, which stipulated watermarking of movies earmarked for ECP, including 4K UHD-formatted releases and movies distributed in early-release windows, were not widely implemented until recently. Now the emphasis is on using watermarking much more pervasively, going beyond movies to include not only 4K TV programming but ever more HD programming, especially live sports and linearly streamed channels, and, in the case of movies, films in either format that fall into release windows close to theatrical release dates.

The MovieLabs stipulations require that the enabling technology “securely forensi-cally mark video at the server and/or client to recover information necessary to address breaches” with assurance the technology is “robust against corruption of the forensic information.” In other words content needs to be marked by undetectable digital coding on a per-session basis whether delivered on demand or linearly.

Greater Collaboration on Anti-Piracy Initiatives

The industry is also acting on the fact that effective use of watermarking in the campaign to identify and disrupt pirates is now being facilitated by wide-scale cooperation involv-ing content producers, distributors, vendors and government agencies. In the previously mentioned Pay-TV Industry Forum survey, 72% of respondents said they see benefits to engaging in concerted anti-piracy activities combining technology, legal action and con-

sumer education.The industry’s commitment to fostering

an ecosystem-wide, pan-regional approach to beating piracy was underscored in mid-2017 with announcement of the Alliance for Cre-ativity (ACE), a coalition of some 30 industry giants, including all the major U.S. motion picture studios, several pay TV networks, Ama-zon, Netflix and others dedicated to cooperat-ing on protecting the legal market for creative content from online piracy.

ACE organizers said the coalition will draw on “the antipiracy resources of the Motion Picture Association of America (MPAA) in con-cert with the internal antipiracy expertise of the ACE coalition members.” Specifically, they said, “ACE will conduct research, work closely with law enforcement to curtail illegal pirate enterprises, file civil litigation, forge coop-erative relationships with existing national content protection organizations, and pursue voluntary agreements with responsible parties across the internet ecosystem.”

Other instances of broader cooperation amid heightened concern over piracy abound. Regional and global anti-piracy activities are now underway through the auspices of orga-nizations such as the U.S.-based International Broadcaster Coalition against Piracy (IBCAP), which is pursuing a mandate to prevent illegal distribution of international television content in coordination with embassies, government and trade offices worldwide.

Others involved in such activities include the globally oriented Coalition Against Online Video Piracy representing sports, entertain-ment and broadcasting concerns; Alianza contra Piratería de Televisión Paga (Alliance against Pay TV Piracy), which is battling con-sumer use of pirated content in Latin America; the Arabian Anti-Piracy Alliance; STOP Nordic Content Protection, and CASBAA, an Asian trade association that has devoted significant resources to anti-piracy activities.

Another manifestation of the growing worldwide commitment to the anti-piracy fight is the success of studios and other content owners in persuading ad agencies and Internet entities to take action to ensure advertising for their products and services does not appear on websites dedicated to theft. These entities’ initiatives, which also include activities aimed at fraudulent advertising, are being orches-trated through the Trustworthy Accountability Group (TAG), a global organization created by the American Association of Advertising Agencies (4A’s), Association of National Adver-tisers (ANA), and Interactive Advertising Bureau (IAB) to work collaboratively with companies

throughout the digital advertising supply chain. The four leading ad agencies, Interpub-lic, Omnicom, Publicis and WPP’s GroupM, and a growing list of individual advertisers such as GoDaddy, Bayer and Google are among the entities committing to the TAG agenda.

Clearly, it’s now incumbent on distributors of high-value TV programming and movies to have in place a firm foundation for per-session execution of a watermarking platform that satisfies ECP requirements with all the foren-sics and other follow-up measures essential to effective use of the technology. Tight integra-tion of NAGRA’s NexGuard Streaming solution with Broadpeak’s BroadCache “CDN-in-a-Box” platform provides content owners, vMVPDs, SVOD aggregators and MVPDs the means to address both the performance and the security challenges of the new multiscreen services mar-ket with greater efficiency than ever before.

The Broadpeak BroadCache Box Flexibility & Scalability

Broadpeak’s BroadCache Box solution tar-gets content providers who don’t own access networks to achieve performance goals com-mensurate with the capabilities of managed networks.

The highly scalable platform is modularly configured to maximize efficient implementa-tion of the technology in large service areas. One module executes storage and streaming tasks. The other, acts as the platform controller for one or more local cache servers, process-ing all user requests from across the service area and choosing the optimum caching loca-tion when more than one BroadCache server is deployed in the network.

By placing Broadpeak caching and stream-ing servers deep in managed ISP networks distributors are able to establish asset- and user-aware caching points of presence in close proximity to end users. This greatly reduces the costs incurred through sole reliance on pub-lic CDN services while enabling a broadcast TV-caliber user experience with the most pop-ular streamed linear and on-demand content.

The Win/Win Business ModelBroadCache Box represents a win/win

opportunity for Internet-based distributors and network service providers (NSPs) alike. Consuming just two rack units on COTS appli-ances, BroadCache Boxes can be deployed in virtually any NSP point of presence, including headends, central offices and hubs or other facilities deeper in the networks.

In instances where NSPs host BroadCache

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Boxes for distribution partners, NSPs benefit from the fact that BroadCache eliminates tran-sit costs that would be incurred with access to popular content through peering points with CDNs. In addition, the deployments contribute to NSP subscriber satisfaction by improving QoE with the locally cached content.

Consequently, NSPs typically welcome distributors’ use of their facilities to host BroadCache Boxes. This results in an equitable division of costs where the distributor pays for the platform and the NSP covers electricity, space and connectivity costs. Broadpeak is responsible for installing the equipment in the premises of the partner operator and ensures 24/7 support for the boxes.

Cost Savings & Performance BenefitsReducing Public CDN Service Costs

As illustrated in Figure 4, distributors who utilize BroadCache Boxes as caching points for their most popular content, which typically accounts for 80% or more of a given provider’s traffic, eliminate the need to use public CDN caching servers (CDN-as-a-Service) for that share of their traffic wherever the Broadpeak boxes are deployed. Figure 5 offers an exam-ple of cost savings in a hypothetical scenario where BroadCache is used to cache traffic reaching 100,000 end users.

But as significant as these direct cost savings are, the far greater value distributors realize with use of the BroadCache technology stems from the fact that the cached services

are streamed from points much closer to end users, resulting in far less disruption to session flows caused by network congestion and high levels of contention for streaming and storage capacity on origin servers. Delays in viewer ses-sion start-up times and buffering disruptions to session flow are eliminated when users access content cached by BroadCache Box servers.

Intelligence & the Role of AnalyticsDistributors who deploy BroadCache Boxes

also benefit from intelligence and analytics capabilities that CDN service platforms don’t have. For example, with the ability to distin-guish between linear and VOD assets, the ses-sion management system is able to correlate individual chunk requests to the type of asset.

The BroadCache Box also ensures com-pliance with latency requirements through a unique tiered approach to caching where the most popular content is positioned in the most efficient storage layer, namely RAM (random access memory)-based stor-age, while allocating other content to SSD (solid state drive) or HDD (hard disk drive) tiers based on degrees of popularity. Along with cache tiering the BroadCache Box employs mechanisms such as proxy caching, inter-server content fetching, pre-caching and an adjustable approach to setting cache purge parameters.

Users of the BroadCache platform can also benefit from the multiple applications of Broadpeak’s BkA100 advanced analytics system, starting with facilitating control over Quality of Experience (QoE) with use of data gathered at the player level. The BkA100 server

delivers persistent feedback about quality of experience on all viewing sessions by assessing start-up time, rebuffering ratio, completion rate and other data generated at the user level.

The rich set of dashboards and graphs pro-vided by BkA100 deliver real-time indicators that make it possible to quickly troubleshoot video delivery problems. Distributors can also use the data to identify audiences, categorized by time of day, location and what they are watching. And, as noted below, the analytics platform plays a key role when it comes to pro-tecting the content against piracy in conjunc-tion with the NexGuard watermarking solution.

The Power of the Integrated NexGuard/BroadCache Solution

With integration of NexGuard Streaming, NAGRA’s server-side, session-based watermark-ing solution, into the BroadCache platform, Broadpeak has provided customers a laten-cy-free, highly efficient and scalable way to iden-tify pirates that are illegally redistributing video content while preserving all the benefits that come with use of BroadCache. Distributors, by taking advantage of these watermarking capa-bilities, also gain access to all the forensics and other anti-piracy services provided by NexGuard.

Fundamentals of NexGuard Streaming

NexGuard Streaming leverages ABR streaming technology to create a unique watermark for each live and file-based video stream on the server side without requiring

Figure 4

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that encrypted files be decrypted. The tech-nology works with all ABR formats and is com-pliant with all popular DRM methods.

The NAGRA watermarking platform sim-plifies and lowers the costs of per-session watermarking by producing just two water-marked versions of each stored or linearly delivered video. Using algorithms that assign a unique sequence of watermarked chunks from the two versions to each unicast stream, NexGuard Streaming avoids the costly process of on-the-fly injection of watermarks into each unicast stream.

At the same time, NexGuard Streaming meets all the requirements bearing on imper-ceptibility and robustness of the digital water-marking codes. NexGuard automated detection service and forensics experts are able to extract the watermark payload from pirated content regardless of any transformations or degra-dations to the video that might have been imposed by the illicit distributors. Rigorous lab and field testing worldwide have shown Nex-Guard watermarks to be impervious to removal or detection by third parties, even in the high-resolution and high dynamic range (HDR) environment associated with 4K UHD content.

The Benefits of NexGuard Integration with BroadCache

In the case of the integrated Broad-Cache/NexGuard solution, the fact that the two watermarked versions of each video are cached locally on the BroadCache Boxes for unicast streaming to each user aug-ments the cost efficiencies of the NexGuard approach to watermarking (see Figure 6).

Leveraging the BroadCache session stream-ing management system, NexGuard Stream-ing utilizes the data generated through the BroadCache controller to identify each user with client requests for chunks from the streaming server, thereby eliminating the need for a separate means of identifying users for application of the unique water-marked chunk sequences.

Facilitating Fast Responses to Piracy

With the growing prominence of illicit streaming of sports and other linear TV pro-gramming, the ability to perform watermark-ing forensics and other measures quickly enough to immediately disrupt illicit live streams has become a major industry priority. In response NAGRA has made it possible to speed NexGuard customers’ action against this activity with implementation of the cloud-based NexGuard Live Detection service.

The NexGuard Live Detection service works in tandem with session-based tracking to enable identification of live re-streaming of protected content within minutes after the stream launches. The service is scalable and operated by NexGuard in its private cloud hosted by AWS with detection results accessi-ble to authorized users on the NexGuard Live web portal.

Live Detection does not rely on tradi-tional “non-blind” approaches to watermark detection, which require comparison of the watermarked video with original non-water-marked source material and related metadata

in order to extract the marks. Instead, the ser-vice employs a “blind” approach that extracts the marks directly from the video without reference to source material, thereby enabling quick action against pirated live content. As a result, the service is able to look for a water-mark payload in a constant stream of video and return the unique identifier for the source of the pirate stream within minutes.

Farther expediting the process, NAGRA’s piracy monitoring uses automated content recognition fingerprint technology to enable immediate identification of any content offered by a customer that appears on a pirate service. This makes it possible for the anti-pi-racy service to bypass the time-consuming search for metadata that otherwise would have to be used to confirm that the purloined con-tent violates rights held by the customer rather than another entity, thereby narrowing and greatly accelerating the application of Nex-Guard forensics in the search for illicit sources.

The watermark identifier extracted from a pirate video stream is then used in Broadpeak’s BkA100 analytics server to identify the origin of the illegal streaming that can then be ter-minated through the BroadCache Box. Instead of termination, the operator may configure the delivery network to stream an alternative video, such as a promotion video for the legit-imate service, which is then seen by all people currently watching the pirate service.

Another fundamental component of NAGRA’s forensic follow-up process entails automated generation of warning notices to all parties identified as distribution points in the illicit streams monitored by NAGRA.

Figure 5

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Backed by documentation sufficient to meeting evidentiary standards in the event they are needed in follow-up litigation, these notices go out to all involved parties worldwide within two to three minutes of initial detection.

It’s also essential that content providers have support for taking direct technical countermeasures against a pirate operation. This is accomplished through leveraging NAGRA’s technical capabilities to identify sin-gle points of failure in the pirate infrastructure such as authentication servers that have been hard-coded within pirate boxes and Kodi and other open-source protocols that facilitate aggregation and display of pirated content.

ConclusionOld approaches to delivering and secur-

ing multiscreen video services have been

outmoded by the challenges that come with securely streaming live and on-demand con-tent at levels of quality essential to drawing and keeping viewers.

The need to deliver TV-caliber viewing experiences is growing ever more acute as consumers are presented ever more options from a rising tide of vMVPDs, SVOD aggre-gators, content owners, MVPDs and pirates vying for their attention. At the same time, the surge in losses to piracy, now in the billions of dollars worldwide, has triggered a global response that has made support for forensic watermarking an essential requirement for licensing increasing volumes of 4K UHD and other high-value content.

The need for an advanced distribution system that makes it possible for every type of distributor to meet these challenges has been met by Broadpeak and NAGRA with the integration of NAGRA’s NexGuard Stream-ing watermarking solution into Broadpeak’s BroadCache Box platform. Whether deployed by distributors for their own use in NSPs’ broadband networks or by NSPs as the linch-pins to mounting their own CDN services, the service- and user-aware BroadCache modules go far beyond the capabilities of conventional CDNs to enable performance on streamed ser-vices that matches the low-latency and high quality performance of TV channels delivered over managed networks.

With integration of NexGuard Streaming into the BroadCache platform, distributors are now able to implement the world’s leading watermarking solution as a cost-effective and

hassle-free step in the distribution process. Moreover, through use of NexGuard they benefit from the superior modes of identifying and taking fast action against illegal services, including live sports streams, that are a hall-mark of NAGRA’s worldwide anti-piracy efforts.

The battle against piracy has become more effective than ever by virtue of NAGRA’s engagement with an expanding network of CDN operators, ISPs and datacenters who are committed to terminating illicit streams from sources identified by NexGuard watermarks immediately upon notification from NAGRA. And NAGRA has become the key technology player in initiatives undertaken by industry alliances such as IBCAP and Alianza.

All of these measures improve the pros-pects for timely disruption of illegal live streaming to the point where users will get the message that there’s a great risk of missing their favorite sports events and TV programs if they continue using illicit sources. The more progress content rights holders make in turn-ing consumers away from pirated content, the more committed they’ll be to requiring the use of watermarking with an ever broader range of their high-value assets.

Consequently, distributors must ensure that in taking steps essential to enabling man-aged network-caliber delivery of their services they’ll be able to get rights to what is sure to be an increasing amount of content that can only be licensed if watermarking requirements are met. There’s no better way to meet these goals than through deployment of the inte-grated BroadCache/NexGuard solution. n<

Figure 6

The third-party ABR encoder with watermark Preprocessor library creates two pre-watermarked versions of the video asset (A and B). The video fragments are then cached in the CDN or BroadCache Box. The forensic watermark is applied by streaming a unique sequence of pre-watermarked fragments to the client player, typically HLS or DASH streams. The unique sequence is defined by the watermark Embed-der library integrated in the BroadCache Box to build a scalable server-side watermarking solution.

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Endnotes 1 Telecom Asia, APAC Leads Growth in

Digital Pay TV Market, March 2018

2 CNBC, More than Half of US Homes now Subscribe to a Streaming Ser-vice, March 2018

3 Telecom Asia, Global Streaming Video Service Penetration Breaks 250m Mark, March 2018

4 Variety, YouTube Takes New Aim at TV Advertising Budgets, April 2018

5 The Diffusion Group, All Major TV Networks Will Offer Direct-to-Con-sumer Streaming by 2022, March 2018

6 Broadband News, Quarter of Europe-an OTT Platforms Target Cross-Border Audiences, November 2017

7 eMarketer, Live Video Streaming Continues to Gain Stream, July 2018

8 eMarketer, Live Video Streaming Continues to Gain Stream, July 2018

9 Multichannel News, Live OTT Viewing Expected to Eclipse Broadcast TV in Five Years, April 2017

10 Digital TV Europe, vMVPD and Di-

rect-to-Consumer Revenues Set for Eight-Fold Growth, April 2018

11 Digital TV Europe, Global OTT Reve-nues to Double between 2016 and 2022, October 2017

12 NewBay Media, Scale My Service: OTT Video Providers Closing in on the TV Benchmark, March 2018

13 Streaming Media, Amazon Exclusive Streamer for ’18, ’19 NFL Thursday Night Games, April 2018

14 Telecom TV, From MPEG to Open Source, April 2018

15 Streaming Media,Google Leads the Global Set-Top Device Market, Febru-ary 2017

16 NPD Group, Connected Home Fore-cast, January 2015

17 Marketing Land, Long-Form Video now Makes Up Majority of Time Watched Across all Devices, June 2017

18 Cisco Systems, Global Mobile Traffic Forecast, February 2016

19 Euronews, Europe Dominates Global

Broadband Speed Ranking, July 2018

20 SNL Kagan, A Clearer Picture of Growth: 2016 Global 4K UHD Indus-try Survey, July 2016

21 IBC, UHD in Europe, August 2017.

22 IEEE, Suffering from Buffering? Detecting QoE Impairments in Live Video Streams, October 2017

23 96 Streaming Media, Majority of Viewers Expect Problems in OTT Sports Streams, November 2017

24 Multichannel News, Will Big Sports Streaming Bets Pay Off? January 2018

25 The Broadcast Bridge, Latency Chal-lenge for Super Bowl 2017 Streaming, February 2017

26 Digital TV Research, Online TV & Mov-ie Piracy Losses to Soar to $52 billion, October 2017

27 Pay TV Innovation Forum, Global Finding on the State of the Industry, September 2017

28 Multichannel News, Study Finds 6.5% of North American Homes Get Illegal Live TV, November 2017