Title: Protecting Early Window VOD with Forensic Watermarking
Author: Harrie Tholen – Managing Director, NexGuard

Over the last months, we have seen the return of the discussion on the need to enable consumers to have home access to movies soon after their theatrical release. Right now studios seem to be looking at a 17-day window – naturally, at a higher rental or purchase price. Many of these discussions include partnerships between studios and in-home delivery platforms like Universal & Comcast, Warner Bros & AT&T, and of course, Sony & PlayStation. These partnerships should help to soften any impact to box office revenues.

Restarting this conversation now seems surprising given that theaters grossed a record $11.1 billion in 2015. Yet revenue from physical media is continuing to fall, so industry players are turning to digital revenue streams to make up for the diminishing DVD and Blu-ray sales. An important sticking point of the ongoing discussion is that studios and theater circuits have yet to agree on a written guarantee that will ensure the existing home entertainment window is not shortened further. At present, a movie is released on disc 90 to 120 days after it opens in theaters, providing enough time for a large number of consumers to attend the cinema screenings before renting the movie on VOD, or purchasing it on Blu-Ray or DVD.

Interviewed by Bloomberg recently, analyst Hal Vogel believes that the shortening of windows will take place as early as this year: “Three of the studios have (or will have) direct relationships with in-home delivery platform — Universal/Comcast, Warner Bros./AT&T and Sony/PlayStation…There appears to be a considerable acceleration in efforts to at least have a framework for an in-home window sometime in 2017.” According to insiders such as Warner Bros. chief Kevin Tsujihara, this would enable popular streaming services to offer early access to new movies. This, in turn, ensures that consumers that may not have gone to the theater in the first place are provided with a legal way to watch their movie of choice in the comfort of their home. By reducing the appeal of illicit downloading or streaming, the shorter windows could act as a very effective piracy deterrent.

This leads to an ongoing challenge that the content industry faces: tech-savvy pirates. At present, the content protection arsenal comprises three complementary steps: Conditional Access / Digital Rights Management; takedown notices; and forensic watermarking, which we presented in detail in a previous blog. In an early release VOD environment, forensic watermarking constitutes the most crucial step. It consists of the insertion of a unique, invisible identifying code into a media asset to serve as contractual compliance between the content owners and intended viewer regardless of how it might be transcoded, resized, downscaled or otherwise altered for distribution. The process works across the entire quality spectrum from standard resolution live streaming apps, through to 4K/UHD and HDR. Forensic watermarking has already been proven very effective in commercial deployments globally: firstly, by warning consumers that the content has been individually watermarked, they will be deterred from illegally sharing content, and secondly, watermark detection is effective at identifying the source of any remaining leaks.

As all content becomes digital, it is clear that similar discussions will take place all over the world. Studios, theater circuits and streaming platforms will need to ensure that all assets are fully protected at every step of the distribution chain in order to deter piracy, to support their effort to maintain revenue, and to continue to create high value content that resonates with consumers and increases their footprint.

We will be attending CES (Las Vegas, NV, on January 5-7), HPA Tech Retreat (Indian Wells, CA, on February 20-27), CABSAT (Dubai, UAE, on March 21-23) and NAB Show (Las Vegas, NV, on April 24-27) to showcase the importance of early window VOD protection with forensic watermarking. Please contact us on our website, LinkedIn or Twitter to book an appointment at either of these shows.

On behalf of the NexGuard team, I wish you a Happy New Year and hope to see you soon.