July 24 / 25, 2002 | IndianapolisEntrepreneurs 2002 Digital Content Protection Jean-Charles Hourcade...

July 24 / 25, 2002 | Indianapolis

EntrepreneursEntrepreneurs2002

Digital Content ProtectionDigital Content ProtectionDigital Content ProtectionDigital Content Protection

Jean-Charles HourcadeJean-Charles HourcadeSenioor Vice-President, Research & InnovationSenioor Vice-President, Research & Innovation

CTO, THOMSONCTO, THOMSON

Jean-Charles HourcadeJean-Charles HourcadeSenioor Vice-President, Research & InnovationSenioor Vice-President, Research & Innovation

CTO, THOMSONCTO, THOMSON

EntrepreneursEntrepreneurs

2002

July 24 / 25, 2002 | Indianapolis July 24 / 25, 2002 | Indianapolis

An Historical Perspective (1)An Historical Perspective (1)An Historical Perspective (1)An Historical Perspective (1)

Digital Content Protection (CP) started Digital Content Protection (CP) started with Conditional Access (CAS)with Conditional Access (CAS)

CAS has been effective for protecting CAS has been effective for protecting Content, because operated within a Content, because operated within a Secure environmentSecure environment

Secure : closed, walled garden Secure : closed, walled garden business model, trustworthy devices business model, trustworthy devices (STBs)(STBs)

Digital Content Protection (CP) started Digital Content Protection (CP) started with Conditional Access (CAS)with Conditional Access (CAS)

CAS has been effective for protecting CAS has been effective for protecting Content, because operated within a Content, because operated within a Secure environmentSecure environment

Secure : closed, walled garden Secure : closed, walled garden business model, trustworthy devices business model, trustworthy devices (STBs)(STBs)


2002


An Historical Perspective (2)An Historical Perspective (2)An Historical Perspective (2)An Historical Perspective (2)

Digital Content distributed through Optical Digital Content distributed through Optical Pre-recorded Media could not be protectedPre-recorded Media could not be protected– CD was unprotected from Day 1CD was unprotected from Day 1– CD and DVD drives were integrated into PCsCD and DVD drives were integrated into PCs– PCs are open computing and networking PCs are open computing and networking

platformsplatforms– DVD-CSS was hackedDVD-CSS was hacked– PCs are connected to the InternetPCs are connected to the Internet– -> 500m music titles available, 500k video -> 500m music titles available, 500k video

transactions per day, FOR FREE…transactions per day, FOR FREE… Content moved to an Unsecure environmentContent moved to an Unsecure environment

Digital Content distributed through Optical Digital Content distributed through Optical Pre-recorded Media could not be protectedPre-recorded Media could not be protected– CD was unprotected from Day 1CD was unprotected from Day 1– CD and DVD drives were integrated into PCsCD and DVD drives were integrated into PCs– PCs are open computing and networking PCs are open computing and networking

platformsplatforms– DVD-CSS was hackedDVD-CSS was hacked– PCs are connected to the InternetPCs are connected to the Internet– -> 500m music titles available, 500k video -> 500m music titles available, 500k video

transactions per day, FOR FREE…transactions per day, FOR FREE… Content moved to an Unsecure environmentContent moved to an Unsecure environment


2002


Today’s ParadoxToday’s ParadoxToday’s ParadoxToday’s Paradox

Secure environments :Secure environments :– CAS enabled Pay-TV (Satellite, Cable)CAS enabled Pay-TV (Satellite, Cable)– Mobile Phones, Game consoles…Mobile Phones, Game consoles…– ……all closed, based on trustworthy devicesall closed, based on trustworthy devices

Unsecure environments :Unsecure environments :– CD and DVD players and recordersCD and DVD players and recorders– PCs connected to the Internet + peripheralsPCs connected to the Internet + peripherals

But more Content (movies) is available in But more Content (movies) is available in Unsecure than in Secure environments !Unsecure than in Secure environments !

Secure environments :Secure environments :– CAS enabled Pay-TV (Satellite, Cable)CAS enabled Pay-TV (Satellite, Cable)– Mobile Phones, Game consoles…Mobile Phones, Game consoles…– ……all closed, based on trustworthy devicesall closed, based on trustworthy devices

Unsecure environments :Unsecure environments :– CD and DVD players and recordersCD and DVD players and recorders– PCs connected to the Internet + peripheralsPCs connected to the Internet + peripherals

But more Content (movies) is available in But more Content (movies) is available in Unsecure than in Secure environments !Unsecure than in Secure environments !


2002


Post-theatrical revenues represent three Post-theatrical revenues represent three quarters of total industry revenuesquarters of total industry revenues

Post-theatrical revenues represent three Post-theatrical revenues represent three quarters of total industry revenuesquarters of total industry revenues

Piracy primarily impacts post-theatrical revenue streams Piracy primarily impacts post-theatrical revenue streams (in the US and Europe) and compresses window release (in the US and Europe) and compresses window release strategy :strategy :– Content must be made available sooner (derived from in-Content must be made available sooner (derived from in-

theater piracy)theater piracy)– Content must be made available globally (which calls for Content must be made available globally (which calls for

international day-and-date release)international day-and-date release)

Piracy primarily impacts post-theatrical revenue streams Piracy primarily impacts post-theatrical revenue streams (in the US and Europe) and compresses window release (in the US and Europe) and compresses window release strategy :strategy :– Content must be made available sooner (derived from in-Content must be made available sooner (derived from in-

theater piracy)theater piracy)– Content must be made available globally (which calls for Content must be made available globally (which calls for

international day-and-date release)international day-and-date release)

Film-Based Theatrical Release

Airline & HotelHome Video

e.g., DVD/VHS Rental & Sell-Through)

Pay TV (e.g., HBO, Showtime)

Networks/ Cable TV

PPV (e.g., inDemand, DirecTV)

3 – 6 months

6 – 9 months

6 – 14 months

12 – 15 months

24 – 30 months

Syndication

36 – 42 months

28% 2% 0.7% 57% 4% 4% 3%

Typical revenue numbers for a >$10m box-office movie


2002


Preserving Integrity of Content through Preserving Integrity of Content through Distribution Windows is CriticalDistribution Windows is Critical

Preserving Integrity of Content through Preserving Integrity of Content through Distribution Windows is CriticalDistribution Windows is Critical

MPAA estimates that the US Film industry loses MPAA estimates that the US Film industry loses in excess of in excess of €€3B annually in potential WW 3B annually in potential WW revenue due to piracyrevenue due to piracy– In 2000, over 20m pirated optical discs were seized In 2000, over 20m pirated optical discs were seized

(mostly in Asia)(mostly in Asia)– Between 400,000 and 600,000 copies of movies would Between 400,000 and 600,000 copies of movies would

be downloaded illegally each day (be downloaded illegally each day (source: Viant Consultingsource: Viant Consulting))

Men in Black II DVD is already available on e-Men in Black II DVD is already available on e-Bay, but won’t officially hit the street until the Bay, but won’t officially hit the street until the end of the yearend of the year

MPAA estimates that the US Film industry loses MPAA estimates that the US Film industry loses in excess of in excess of €€3B annually in potential WW 3B annually in potential WW revenue due to piracyrevenue due to piracy– In 2000, over 20m pirated optical discs were seized In 2000, over 20m pirated optical discs were seized

(mostly in Asia)(mostly in Asia)– Between 400,000 and 600,000 copies of movies would Between 400,000 and 600,000 copies of movies would

be downloaded illegally each day (be downloaded illegally each day (source: Viant Consultingsource: Viant Consulting))

Men in Black II DVD is already available on e-Men in Black II DVD is already available on e-Bay, but won’t officially hit the street until the Bay, but won’t officially hit the street until the end of the yearend of the year


2002


Current security measures are often Current security measures are often limited in scope limited in scope

Current security measures are often Current security measures are often limited in scope limited in scope

Reels of films and master tapes are hand-delivered via Reels of films and master tapes are hand-delivered via courier throughout North America and internationallycourier throughout North America and internationally

Film prints can be left in un-manned projection boothsFilm prints can be left in un-manned projection booths

But :But :– MPAA approves traditional building security (video MPAA approves traditional building security (video

surveillance, tracking measures, etc.)surveillance, tracking measures, etc.)

– ““Hot” features demand extra security as illustrated by Star Hot” features demand extra security as illustrated by Star Wars Episode II Wars Episode II

• Feature identified under an alias titleFeature identified under an alias title• Master elements are stored in specific locked cabinetMaster elements are stored in specific locked cabinet• Reinforced video surveillanceReinforced video surveillance• Limited number of people working on the projectLimited number of people working on the project

Reels of films and master tapes are hand-delivered via Reels of films and master tapes are hand-delivered via courier throughout North America and internationallycourier throughout North America and internationally

Film prints can be left in un-manned projection boothsFilm prints can be left in un-manned projection booths

But :But :– MPAA approves traditional building security (video MPAA approves traditional building security (video

surveillance, tracking measures, etc.)surveillance, tracking measures, etc.)

– ““Hot” features demand extra security as illustrated by Star Hot” features demand extra security as illustrated by Star Wars Episode II Wars Episode II

• Feature identified under an alias titleFeature identified under an alias title• Master elements are stored in specific locked cabinetMaster elements are stored in specific locked cabinet• Reinforced video surveillanceReinforced video surveillance• Limited number of people working on the projectLimited number of people working on the project


2002


The Analog to Digital transition is forcing content The Analog to Digital transition is forcing content owners and their vendors to think about content owners and their vendors to think about content

and content protection differentlyand content protection differently

The Analog to Digital transition is forcing content The Analog to Digital transition is forcing content owners and their vendors to think about content owners and their vendors to think about content

and content protection differentlyand content protection differently

Transition to digital creates new risks for piracy :Transition to digital creates new risks for piracy :– Mass replication of digital content with pristine qualityMass replication of digital content with pristine quality– Uncontrolled distribution of digital content across Uncontrolled distribution of digital content across

digital networks (P2P)digital networks (P2P)– De-CSS enables access to DVD quality content.De-CSS enables access to DVD quality content.

Studios fear Napsterization of film contentStudios fear Napsterization of film content– The music industry example is a harsh lessonThe music industry example is a harsh lesson– Movies.com and moviefly.com are studios’ attempt to Movies.com and moviefly.com are studios’ attempt to

deal with demand for digital delivery of content in a deal with demand for digital delivery of content in a structured waystructured way

– The Napster fear does not necessarily lead to rational The Napster fear does not necessarily lead to rational behavior behavior

Transition to digital creates new risks for piracy :Transition to digital creates new risks for piracy :– Mass replication of digital content with pristine qualityMass replication of digital content with pristine quality– Uncontrolled distribution of digital content across Uncontrolled distribution of digital content across

digital networks (P2P)digital networks (P2P)– De-CSS enables access to DVD quality content.De-CSS enables access to DVD quality content.

Studios fear Napsterization of film contentStudios fear Napsterization of film content– The music industry example is a harsh lessonThe music industry example is a harsh lesson– Movies.com and moviefly.com are studios’ attempt to Movies.com and moviefly.com are studios’ attempt to

deal with demand for digital delivery of content in a deal with demand for digital delivery of content in a structured waystructured way

– The Napster fear does not necessarily lead to rational The Napster fear does not necessarily lead to rational behavior behavior


2002


Five Questions a Content Owner Must Ask Five Questions a Content Owner Must Ask Themselves Regarding Content Protection Themselves Regarding Content Protection

Technologies…..Technologies…..

Five Questions a Content Owner Must Ask Five Questions a Content Owner Must Ask Themselves Regarding Content Protection Themselves Regarding Content Protection

Technologies…..Technologies…..

1.1. What am I trying to protect and when am I What am I trying to protect and when am I trying to protect it?trying to protect it?

2.2. Who am I trying to prevent copying my Who am I trying to prevent copying my content?content?

3.3. What proportion of the illegal copying do I What proportion of the illegal copying do I expect to prevent with this content protection expect to prevent with this content protection technology?technology?

4.4. Who is going to “police” the anti-piracy Who is going to “police” the anti-piracy measure?measure?

5.5. How much will it cost me to implement the How much will it cost me to implement the copy protection?…..Is it financially worth it?copy protection?…..Is it financially worth it?

1.1. What am I trying to protect and when am I What am I trying to protect and when am I trying to protect it?trying to protect it?

2.2. Who am I trying to prevent copying my Who am I trying to prevent copying my content?content?

3.3. What proportion of the illegal copying do I What proportion of the illegal copying do I expect to prevent with this content protection expect to prevent with this content protection technology?technology?

4.4. Who is going to “police” the anti-piracy Who is going to “police” the anti-piracy measure?measure?

5.5. How much will it cost me to implement the How much will it cost me to implement the copy protection?…..Is it financially worth it?copy protection?…..Is it financially worth it?


2002


Copy Protection Technology ChallengesCopy Protection Technology ChallengesCopy Protection Technology ChallengesCopy Protection Technology Challenges

TransparencyTransparency– Will it affect the viewing / user experience?Will it affect the viewing / user experience?

Robustness / EffectivenessRobustness / Effectiveness– Will it truly prevent copying and for how long?Will it truly prevent copying and for how long?

RenewabilityRenewability– Can the copy protection be renewed if it is broken by Can the copy protection be renewed if it is broken by

utilizing new keys etc.?utilizing new keys etc.?

CompatibilityCompatibility– Will the copy protection work on the installed base of CE Will the copy protection work on the installed base of CE

devices?devices?

TransparencyTransparency– Will it affect the viewing / user experience?Will it affect the viewing / user experience?

Robustness / EffectivenessRobustness / Effectiveness– Will it truly prevent copying and for how long?Will it truly prevent copying and for how long?

RenewabilityRenewability– Can the copy protection be renewed if it is broken by Can the copy protection be renewed if it is broken by

utilizing new keys etc.?utilizing new keys etc.?

CompatibilityCompatibility– Will the copy protection work on the installed base of CE Will the copy protection work on the installed base of CE

devices?devices?


2002


Security measures need to be adapted to Security measures need to be adapted to threatthreat

Security measures need to be adapted to Security measures need to be adapted to threatthreat

Organized Organized piracypiracy

Legal response Legal response Issues are primarily overseasIssues are primarily overseas

Critical importance of tracking systemsCritical importance of tracking systems

Individual Individual hacker, hacker, College College student …student …

Damage control at that stage :Damage control at that stage :– limited access to mass replication limited access to mass replication – limited capacity for digital distribution limited capacity for digital distribution (for a quality experience) … at that stage (for a quality experience) … at that stage

Technology raceTechnology race

ConsumerConsumer ““Keep honest people honest”Keep honest people honest”

Security vs. ease of use trade-offSecurity vs. ease of use trade-off


2002


Multiple Solutions are Emerging across Multiple Solutions are Emerging across the Content Value Chainthe Content Value Chain

Multiple Solutions are Emerging across Multiple Solutions are Emerging across the Content Value Chainthe Content Value Chain

Access and SecurityAccess and Security

Conditional access/Triple DES encryptionConditional access/Triple DES encryptionDigital Digital TransmissionTransmission


Encryption, fingerprinting, secure Encryption, fingerprinting, secure transmissiontransmission

Digital Digital CinemaCinema

In-Theatre Camcorder copyingIn-Theatre Camcorder copying

““Fingerprinting” and anti-copying technologyFingerprinting” and anti-copying technologyRelease PrintsRelease Prints


Fingerprinting, watermarking, conditional Fingerprinting, watermarking, conditional access, Triple DES encryptionaccess, Triple DES encryption

Post Post ProductionProduction

Issues & SolutionsIssues & SolutionsWindow:Window:


2002


Pre-recorded DVD-Video Copy ProtectionPre-recorded DVD-Video Copy ProtectionPre-recorded DVD-Video Copy ProtectionPre-recorded DVD-Video Copy Protection Physical / AuthenticityPhysical / Authenticity

– 3dcd Holographic Discs 3dcd Holographic Discs – Holographic stickers and other anti-theft devices on retail packageHolographic stickers and other anti-theft devices on retail package

Electronic Copy-defeating TechnologiesElectronic Copy-defeating Technologies1.1. Analog DomainAnalog Domain

– Macrovision (upsets VCR’s AGC circuitry) Macrovision (upsets VCR’s AGC circuitry) 2.2. Digital DomainDigital Domain

– CSS (Content Scramble System)CSS (Content Scramble System)– DVD Forum-approved digital copy protection system. Non-renewable in hardware.DVD Forum-approved digital copy protection system. Non-renewable in hardware.– Widely defeated since release of DeCSS programWidely defeated since release of DeCSS program

– Easydivx, Smartripper etc. DVD-to-CD utilities available on WWWEasydivx, Smartripper etc. DVD-to-CD utilities available on WWW

Physical / AuthenticityPhysical / Authenticity– 3dcd Holographic Discs 3dcd Holographic Discs – Holographic stickers and other anti-theft devices on retail packageHolographic stickers and other anti-theft devices on retail package

Electronic Copy-defeating TechnologiesElectronic Copy-defeating Technologies1.1. Analog DomainAnalog Domain

– Macrovision (upsets VCR’s AGC circuitry) Macrovision (upsets VCR’s AGC circuitry) 2.2. Digital DomainDigital Domain

– CSS (Content Scramble System)CSS (Content Scramble System)– DVD Forum-approved digital copy protection system. Non-renewable in hardware.DVD Forum-approved digital copy protection system. Non-renewable in hardware.– Widely defeated since release of DeCSS programWidely defeated since release of DeCSS program

– Easydivx, Smartripper etc. DVD-to-CD utilities available on WWWEasydivx, Smartripper etc. DVD-to-CD utilities available on WWW


2002


SmartRightSmartRightSmartRightSmartRight

SmartRight : a Thomson proposal to expand SmartRight : a Thomson proposal to expand the Secure Environment into the homethe Secure Environment into the home

Expands Security to all compliant Consumer Expands Security to all compliant Consumer Products Products – Part of a Personal Private NetworkPart of a Personal Private Network– Enables detachable Rights and Renewability Enables detachable Rights and Renewability

through SmartCardsthrough SmartCards Enables new business models, in connection Enables new business models, in connection

with CAS/DRM, to content owners’, with CAS/DRM, to content owners’, distributors’, and consumers’ benefitdistributors’, and consumers’ benefit

SmartRight : a Thomson proposal to expand SmartRight : a Thomson proposal to expand the Secure Environment into the homethe Secure Environment into the home

Expands Security to all compliant Consumer Expands Security to all compliant Consumer Products Products – Part of a Personal Private NetworkPart of a Personal Private Network– Enables detachable Rights and Renewability Enables detachable Rights and Renewability

through SmartCardsthrough SmartCards Enables new business models, in connection Enables new business models, in connection

with CAS/DRM, to content owners’, with CAS/DRM, to content owners’, distributors’, and consumers’ benefitdistributors’, and consumers’ benefit


2002


SmartRight Implementation StatusSmartRight Implementation StatusSmartRight Implementation StatusSmartRight Implementation Status

Recognized as a credible solutionRecognized as a credible solution– Studios/MPAA Studios/MPAA

• OK with concepts and technical solutionOK with concepts and technical solution• Legal/business discussions startedLegal/business discussions started

– Partnership:Partnership:• Canal + Technologies, Canal + Technologies,

Gemplus,Micronas,Nagravision, Gemplus,Micronas,Nagravision, Pioneer,Schlumbergersema, STPioneer,Schlumbergersema, ST

– DVB : SmartRight under examination as DVB : SmartRight under examination as baseline architecture for DVB-Copy Protection baseline architecture for DVB-Copy Protection SystemSystem

Recognized as a credible solutionRecognized as a credible solution– Studios/MPAA Studios/MPAA

• OK with concepts and technical solutionOK with concepts and technical solution• Legal/business discussions startedLegal/business discussions started

– Partnership:Partnership:• Canal + Technologies, Canal + Technologies,

Gemplus,Micronas,Nagravision, Gemplus,Micronas,Nagravision, Pioneer,Schlumbergersema, STPioneer,Schlumbergersema, ST

– DVB : SmartRight under examination as DVB : SmartRight under examination as baseline architecture for DVB-Copy Protection baseline architecture for DVB-Copy Protection SystemSystem


2002


ConclusionConclusionConclusionConclusion

Protection of High-Value Digital Protection of High-Value Digital Content will shape the Media Content will shape the Media Industries’ future development Industries’ future development and business modelsand business models

Solutions will only come from Solutions will only come from convergence between Content convergence between Content Industry and CE IndustryIndustry and CE Industry

Protection of High-Value Digital Protection of High-Value Digital Content will shape the Media Content will shape the Media Industries’ future development Industries’ future development and business modelsand business models

Solutions will only come from Solutions will only come from convergence between Content convergence between Content Industry and CE IndustryIndustry and CE Industry

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