Content Protection Summit: NexGuard’s Nakano Looks at Piracy’s Costs

Earlier this year, Nagra, the content protection sister company of watermarking specialist NexGuard, came up with an interesting figure around piracy: Take one out of four people pirating content, and convert theme to legitimate content subscribers, and the result could add roughly $7 billion revenue globally in the media and entertainment space.

But today, more and more challenges are making piracy easier, and paying for content less attractive, according to Mark Nakano, senior director of product marketing and partnerships for NexGuard.

Speaking at the Dec. 6 Content Protection Summit in Los Angeles, Nakano looked at all the challenges facing legacy pay TV providers especially, with constant competition from OTT and streaming providers, who have also been upping the ante when it comes to original content.

And because of the ubiquity of broadband, even more players are entering the scene, with traditional content providers increasingly offering direct-to-consumer services, cutting out the middle men. “Everyone is obsessed with pleasing and keeping the consumer, so, very much, seduction is the new game,” Nakano said. “Overall, the demand for content is increasing.”

A recent Nagra study found that 82% of pay TV executives saying that competition is going to increase dramatically, with 71% agreeing that their businesses will struggle to grow business over the next five years. And part of the concern is how to handle piracy along with all these content competitors. Half of executives said content piracy will lead to greater pressure on the pay TV industry, up from 41% in 2016.

“Video content piracy is growing rapidly … fueled by the uptake of these streaming devices,” Nakano said. “[Piracy outlets] are very sophisticated, and premium content is under attack.”

IPTV streaming devices are making it harder on content providers, with the Android-based devices often coming pre-loaded with open-source media player software applications like Kodi. Low-resolution, poor-quality pirated content is no longer the norm, with high-quality, pirated content easily available, sometimes for a subscription fee.

“Our research has shown that 72% of pay TV providers see the benefit of engaging in anti-piracy activities, with more cooperation coming down the road,” Nakano said. To fight piracy, content owners have to go beyond just finding the links and shutting them down, he added. A combination of technology (watermarking, DRM), enforcement, and legal with investigative services are all required.

To tackle content sharing, monitoring programs must be integrated with a takedown program, “and this ensures that the technical proof that is gathered can be used to support enforcement activities with partners — your ISPs, your cloud infrastructure vendors — and also drive legal action if necessary,” Nakano added.

“With all this content, this rising appetite for consumption, it’s not surprising to see why TV and video piracy has become some a key issue around the world,” he concluded. “People love their content, and if they can’t get it [legally], they’ll [use] illicit means to get it.”

The Content Protection Summit was produced by MESA and CDSA, presented by MediaSilo, and sponsored by Independent Security Evaluators, Aspera, the Digital Watermarking Alliance, Menlo Security, Microsoft Azure, NAGRA, NexGuard, Convergent Risks, HGST, PwC, Thinklogical, Avid, Militus Cybersecurity Solutions, Amazon Web Services and Bob Gold & Associates.