CDSA

APCPS 2022: NAGRA Explores How to Turn Chaos Into Calm When Fighting Piracy

The significant growth of online video continues, with about 1.26 billion global subscriptions at the end of 2021, according to NAGRA.

Key drivers for consumers has included unique and compelling content that requires significant investment. But the most popular content tends to attract the most sophisticated pirates.

To fight the pirates, content owners and services providers are going to great pains to close security loopholes as fast as they open up. However, the inherent problem is that securing content is never one-dimensional and technology that addresses one security gap often leaves another security gap wide open.

When it comes to fighting piracy, “the way we see it is that you need to have a more holistic approach and you need to try to think more of what you’re really doing instead of trying to just do something to appease somebody,” according to David Wurgler, senior director of business development and anti-Piracy at NAGRA.

“So to set the scene, I want to let everybody imagine that you’re at a Formula One race, and we all know how this worked with the pitstop. It’s super important that you do it well. You need to have all the skillsets available. You need to have somebody who can change the tire or somebody who can add the gas to the car and you need to have it all available and do it right,” he said April 23 at the Anti-Piracy and Content Protection Summit in Las Vegas, during the session “Turning Chaos into Calm: Simplifying and Synchronizing Technology to Address Piracy Threats.”

Sometimes a race team is waiting but don’t realize when the car is “actually coming into the pitstop and they have to scramble out and try to do their best to get the car out [into] the race again,” he noted.

“And sometimes that’s really what happens with anti-piracy is that you have all the skillsets or most of the skillsets available and most of the technologies that you need, but you might not be doing it in the right order or in a strategic way. And that is not beneficial,” he explained.

“What we’re trying to do also is address the fact that you have a lot of technology available,” he said. “But you might not know what kind of technology you need or how you need to do it, or what would make the best return on investment in your anti-piracy strategies. So sometimes the whole process feels like the whack-a-mole … but it shouldn’t really be that way.”

Sometimes people at a company will say they removed 90% of unauthorized streams, he pointed out. “But what if you remove 90 percent of the streams and it’s actually the 1 percent or 10 percent we didn’t remove that’s the one [or ones] really hurting you?”

Piracy, meanwhile, remains “super popular” and maybe even more so since the start of the pandemic, he said, noting piracy has actually grown over the past two years.

All the commercial piracy is “much more difficult to assess and find because it’s hidden [and] you can’t just search for it with a normal crawl and all that,” he said.

Meanwhile, “a lot of people are subscribing and these are the worst people, because these are the people who really are willing to pay for content,” he told attendees and those viewing the session virtually.

He explained: “They want a good, stable service, which is why they’re buying a pirate service instead of just going on a regular website or something like that. They are really interested in getting the concert and they’re willing to pay for it. And these are the guys that we need to find out how we change them and get them back into the fold as paying customers.”

NAGRA estimates there are 30 million individuals across 9 million households in the U.S. who are subscribing to a pirate service, he noted. “So this is not just people or the casual piracy on Facebook or something like that. These are people who are committed and bought a service and are subscribing to piracy. And that alone allows the pirates to take home around $1 billion a year. This has nothing to do with what the industry loses. This is just to show you just how much money the pirates are actually generating for themselves, which is why if we don’t do this right, they’re going to keep being here for a long, long time – forever, basically,” he warned.

Although a media and entertainment organization might have a good business that is increasing turnover 18% a year, “that’s not the whole picture,” he said. That’s because the “whole picture is not how much money you’re making now; the whole picture is how much money could you be making if you didn’t have piracy,” he added.

“The real big problem with piracy: every time we lose a customer, it hurts the top line because we still have all the other costs that we had before,” he pointed out.

It would be unrealistic to expect we can shift all 9 million U.S. households away from pirated content, he conceded. But, if “we can just take 5 percent of these and turn them into a regular customer with an ARPU of around $60 a month, that’s a lot of money,” he pointed out.

“That’s a potential revenue of $324 million across the business in the U S.,” he noted. “Now you can say compared to $100 billion in the U.S. overall for pay TV … this is not a lot of money, but this is just a small example. And it’s top line. It’s something that you add on top, and it wouldn’t really cost you anything to get this money,” he added.

The explanation was to highlight just “how much money is being left on the table,” he said, adding: “Personally, I think it’s a lot more than this, but this was just to give you a rough example of just how much money it actually can be.”

What is needed is a “holistic approach to piracy,” he went on to say. “You need to think about how you do this and make everything work together. So some of the main tools being used to combat piracy” include watermarking, cybersecurity, streaming protection, device protection and anti-piracy services, he said, adding: “A lot of companies have some of these, some have all of these.”

What NAGRA has tried to do is “have a log of all of these and build them into one service,” he noted.

Watermarking’s Importance

“Why is watermarking so important?” Wurgler asked rhetorically. He noted that somebody earlier at the event said, “much to my dislike, that watermarking wasn’t really important.”

But he said: “For me, watermarking is one of the most important technologies …  we have right now.”

“You have to think of it this way,” he explained. Once upon a time, there were conditional access systems (CAS) traditional access systems that kept cable and satellite TV business “viable for a long time,” he said.

Now, however, “we are finding content piracy online,” he said, adding: “How many tools do we really have online that can actually pinpoint back to the source of piracy? Not that many unless you’re an ISP or you have access to privileged information [and] you can follow this traffic all the way through. Most of the time, you’ll just end up with some Ukrainian or Dutch or Swedish and apologies to all the Dutch and the Swedes in the audience, but they don’t really comply.”

What often happens is “you just end up with one of those CDNs that are placed there, and then you have to send a takedown notice or something like that, or you have to start a lawsuit… But that’s not really helpful,” he said.

Watermarking, however, “can actually tell you which account is being used, and then you can shut down that account or you can start harvesting these accounts and you can then use them in a strategic way to combat piracy as much as you want,” he said.

“That’s just one of the great things about watermarking. There’s several others,” he noted, adding: “Cybersecurity is also super important because you’ve got to protect your brand and your data and your business.”

After all, if your company’s brand takes a hit and “people don’t really like it, and you’re not being careful about it, you’re losing a lot of value,” he pointed out. Therefore, it is “really important that you reduce the risks and you grow resilience [to] keep your company viable,” he said.

“The same goes for streaming protection. You can’t just have an open door for everybody so that they can just go in and take everything you have. You’ve got to have a good system set up and you’ve got to secure your video content on everything,” he advised.

“For device protection, it’s the same thing…. You’re protecting your player, but you’ve also got to protect the devices,” he explained. “Sometimes the marketing department will just push [and say] ‘we’ve got to release this soon because we’ve got to go to market. This is the time. It doesn’t really matter about security.’ But then two or three years later, you really have the problem…. You’ve got to think about it. You’ve got to do it at the right time.”

And then there are anti-piracy services, he said. “There’s no way around this. You have to combine content protection with anti-piracy…. You can’t just do one or the other. You have to do something about it because anti-piracy is when the shit has already hit the fan: it’s online, it’s not protected and you have to do something to take it away.”

NAGRA took all these tools and combined  them “into one solution with a holistic approach, and we’re pulling it all together with analytics and intelligence,” he said.

He added: “Intelligence is something I didn’t mention already before. But in order to do this right in order to really make an effort. And in order to really have an impact on piracy, you need to use your tools in the right order, based on the right information with the right data.”

The 2022 Anti-Piracy and Content Protection Summit was presented by Richey May Technology Solutions, with sponsorship by Convergent Risks, NAGRA, Verimatix, BuyDRM, EZDRM and Vision Media. Produced by MESA, in association with the Content Delivery and Security Association (CDSA), the media partner for the show was Piracy Monitor.

To learn more about CDSA visit: https://CDSAonline.org

To find out more about upcoming MESA events or to get involved as a sponsor please contact Evie Silvers at [email protected].