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Verimatrix and Sony double act talks up a Federated Rights future

It was back in 2003 before the first issue of Faultline went out to customers, that we wrote the Faultline Manifesto. One of its many promises was that one day after theatrical distribution and DVD production, movies and TV series might be available in an online marketplace for any distributor around the world to serve up online to its customers.

We even went further and suggested an automated content marketplace where transactions could be done in real time, after a request for the content was issued by a customer to any distributor, with the terms locked in at the time and the contract policed in software. Tall order, but that’s how energy markets work, so why not.

That was perhaps the only prediction of many in that original forecast not to come true, in a 28,000 word treatise which described most of the changes that the internet would bring to the entertainment industry.

But this week a webinar hosted by Verimatrix and featuring a senior official from Sony began to take tentative steps towards that kind of future, but trying to eliminate some, if not all, of the technical difficulties involved with generic distribution of content.

Verimatrix did this through the introduction of a Federate Rights Management system, in what was couched as a discussion between Pete Wood, Senior VP Digital Distribution at Sony Pictures Home Entertainment, and Petr Peterka, CTO, Verimatrix.

The Q&A session really presented a vision with immediate benefits to both Online Video Operators and to content producers like Sony, mostly rethinking how OTT content is currently brought to market.

Peterka talked about how it is done today, describing how the relative simplicity of sending an MPEG2 file, wrapped in an MPEG2 transport stream, had become complicated over time, with a variety of codecs, HEVC, H.264, VP9 and VC1; a variety of file formats for OTT manifests, and variety of encryption mechanisms, and transcoding into multiple sizes for adaptive bit rates.

His favorite subject of security came up as he reminded us that every time it was transcoded at each operator, the content went back into the clear and was once more re-encrypted and this whole process reduces security.

But complex as this route to market is, Sony’s Wood showed how much more complicated it is to be a studio. First he described the problem.

“If you had told me ten years ago that there would be movies on cellphones I would not have believed you, but now if you don’t have that, you are irrelevant. Generation Z barely looks at a TV. Back then all video was geo filtered. And a few years ago Sony decided to lead on 4K and had 60 titles converted to 4K – 18 months later, we moved to an entirely new format which included HDR and then we have to add watermarking.

“In the coming years we will have to accommodate 360 degree video, AR and VR. All of this is more complexity. This world will not get any easier. A CMS built for full UHD content is very different from an older CMS. We also need richer metadata to provide the modern video experience,” said Wood, warming to his theme.

“And Sony needs to get real time feedback,” he said. “We want insights. We need to understand in real time, who is watching our video and how are they consuming it.”

When you consider that each content producer has 1,000s of licenses around the world and Wood talked about upon deal completion how dismayed operators were when they heard it might take 8 months to get them the content. Instead they want content to be fluid and manageable.

“The bandwidth alone is a massive challenge. Because each customers says, they want it watermarked, or a special variant like non-English subtitles or a French language dub. Imagine doing variants on every video in every market, and everyone expecting it tomorrow.”

If Sony had better defined the problem, then Verimatrix was ready with at least its own answer, which is to dust off an old product which was aimed at the wholesale retail market, called Federated Rights Management, where it encoded once, and packaged video once, encrypted it once using common encryption, and allowed multiple DRMs copies of the keys to deliver. And he added that instead of Sony simply managing the entire enterprise with a written legal contract and no tools, Federated Rights management would include the feedback that Sony has always craved and police the rules of that contract in software.

This takes us back to the days when Rights Description Languages claimed to be able to safeguard usage, a trend from the early noughties.

Peterka put forward the idea that some of the data, anonymized from the customer, can go back to the original rights holder for insights, but also the rules and rights of a contract could be encoded in the technology – and he listed adhering to exploitation windows, the number of views each customer was allowed, output controls, viewing online or offline, and reporting

Verimatrix is pretty much ideally suited for this if you think about it. It does not encode, but has partners which do, and it encrypts, and it runs multi-rights databases, it has Verspective analytics which come from both the calling of decryption keys, and also from on-device client software. If a contract was created which said that Sony or the content owner could get certain information, it could come straight to it from a cloud server and be monitored by the operator, and the key detail could go to the operator which is billing for the instance and who owns the customer relationship. .

Peterka talked about the Verimatrix ability to collect and deliver to operators QoS, QoE and navigation data, with an agreed subset of that relevant to the content owners.

But the real appeal is to the costs that would be cut out. Sony would encode it once, and encrypt it once using common encryption, a common file container, CMAF (Common Media Application Format) and standard metadata.

Such a system would reduce repetitive workflow and connect studios to their affiliates and would then have ample ability to cope with the special variants that Sony talked about.

They made the point that theatrical windows could shift dynamically based on success factors. So if a movie did not make as much money as hoped for during theatrical release, it could accelerate revenues from OTT distribution, without it taking months to prepare the way.

But the key element which brings us full circle, was the idea that up front licensing commitments could go down. So instead of Sony charging $100,000 up front because it had tons of work to do to get you a version exactly as you needed it, it would all be standardized and as a result lower the cost of entry for OTT services – which would mean many more would proliferate.

The reason consumers end up pirating content is because they cannot get it quickly enough and with this in place studios like Sony could release it far faster and without a reduction in quality.

At no stage did Sony say that it had hired the services of Verimatrix to do all this, but if it did Sony could move to negotiating reporting into its agreements and the use of Federated Rights management.

But we suspect that it is only a matter of time before at least one studio does this and thereafter it will catch on like wildfire. As they pointed out, it is no longer a market where 6 studios send tapes to 6 networks, this is a many to many content future with many more companies producing content too. And so how long before our envisaged real time automated marketplace emerges? We hate being wrong.

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