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27 January 2022

Intertrust identifies NFT opportunity, with DRM parallels

When you have been around the block as many times as Talal Shamoon, the long-serving CEO of Intertrust Technologies otherwise known as the founding father of digital rights management (DRM), a growth opportunity can be pinpointed from a mile off.

Trends are cyclical in nature, and although Shamoon catches us off guard with the comment “DRM is pretty much finished,” in the context that smaller DRM providers are dying off, he whets our whistle with the reveal that Intertrust is sliding into delivering rights management from the service provider back to the creator.

“Power to the creator,” he proclaims over Zoom, during our first face-to-face catch-up since the real-life IBC 2017 (we learn that, unlike us, he hates trade shows).

Unfortunately, Shamoon could not reveal too much about Intertrust’s latest DRM dealings, not until the finishing touches are put on an announcement due out in Q2 this year. Joining a few dots, we are confident this move will relate to NFTs (non-fungible tokens) – aka 2021’s buzzword of the year.

“I can tell you it’s going to be in an area that’s extremely hot right now,” he adds, in between the many anecdotes and history lessons that absorb our call, spanning in and beyond his nearly-25-year tenure in the Intertrust CEO seat.

We are conscious of heading irreversibly down an NFT rabbit hole, just in case Shamoon has sold us a red herring, but what we will note is that since the explosion of NFTs over the past year, as records stored on blockchains connecting purchases to purchasers as a means of authenticity, primarily in sales of digital art, many comparisons have been drawn with DRM.

Like with how DRM began life in the music industry protecting artists’ content from being stolen and resold via cryptography keys, and then moving this into the film and TV ecosystem where it remains a key revenue protection mechanism in Hollywood, NFTs are essentially a way of managing rights. As a result, content creators have control over online artwork for the first time, managing licensing and distribution to make actual money from royalties. The rapid rise of NFTs has in turn created opportunities for DRM platforms to use NFTs to manage rights, one such as a US start-up called RAIR that caught our eye, and Intertrust evidently wants a slice of that pie.

“This growth in the back-end creator-to-consumer value chain – this is DRM,” explains Shamoon. “With the bitcoin generation, people will go their bosses and demand that assets are managed digitally throughout the value chain.”

Backing cautiously out of the entrance to this blockchain rabbit hole, we should remind readers that Intertrust recently carved out its ExpressPlay DRM business as a separate division under the Intertrust umbrella, with a standalone website and marketing. This was executed with a vision for emphasizing the new Intertrust Platform in emerging growth areas, so that an energy executive, for example, has a better understanding of the value of Intertrust to their industry.

That said, we have no idea on which side Intertrust’s newer creator platform-centric protection product roadmap will fall. It seems obvious that it would come under ExpressPlay, but then the Intertrust Platform is positioned specifically for growth areas, so who knows.

In the meantime, sticking with our media remit, we still cannot shake the feeling that Intertrust is putting ExpressPlay at arm’s length with a view to making it easier to sell. We heard reassurances from ExpressPlay’s new VP of Marketing, Ali Hodjat, back in September, but we couldn’t leave without hearing it from the horse’s mouth too.

The Intertrust boss accuses us of nit-picking, and we wholeheartedly agree. “There are no plans to sell anything,” he reiterates, pointing to tremendous growth for the ExpressPlay business in China, India, Europe, the US, and even Africa.

Of course, ExpressPlay’s special positioning in the Chinese market, where it is trusted by TV manufacturers and silicon suppliers like no other Western digital security outfit, has given it a head start in almost every facet of business, the latest being smart TVs. The cloud-based ExpressPlay XCA multi-DRM platform is being used by giants like Hisense and Sony to protect pre-installed operator apps on smart TVs, which are virtually unrecognizable from the OTT-delivered smart TV streaming apps that consumers are accustomed to navigating.

There is a special mention for India as a particularly fast-growing market. “The true miracle is that consumers actually pay for media. Back around 2006/2007, it wasn’t clear to anyone that millions of people around the world would pay for something like Netflix. There is no reason why people won’t pay for it in Latin America, Africa, India,” says Shamoon.

He is completely right, but in the knowledge that these must come at a significantly lower ARPU, which means a smaller fee for ExpressPlay, although he is under no illusion that the industry paid way over the odds for DRM back in its heyday. Now is the time to replicate that success in pastures new.

As for what the future holds, Shamoon tells us we should write a piece exploring the fusion of home services, as he describes a society where telcos and energy companies are indistinguishable from one another. “The Intertrust Platform is targeted at horizontal markets – this vision is spreading across the entire world,” he says. We bookmark that story for another day.