Irdeto pinpoints piracy problems in Russia, on back of MTS deal

Dutch content security firm Irdeto has been busy stirring up a whirlwind around content piracy in the media, having recently published results of a survey claiming 87% of Russians do not believe sharing or producing pirated content is illegal. Irdeto won a conditional access contract at mobile specialist MTS in Russia last month, so it certainly has its work cut out.

Faultline Online Reporter spoke to Irdeto’s VP Services, Rory O’Connor, at the recent Cable Congress show. He spoke of Irdeto’s footprint in Russia, claiming it is a country of “great connectivity,” which may be true in the urban regions, but 27% of the population live in rural areas – that’s 38.7 million people who are proving much harder to reach.

Irdeto’s CA technology has been deployed in hundreds of head ends of MTS digital TV, to set tops and CA modules using a single Key Management System (KMS) across multiple time zones.

O’Connor suggested that the way to tackle regions where the extent of piracy is as widespread as it is in Russia, is to embark on intensive educational campaigns, and he also cited a strategy used by Ziggo in the Netherlands to reduce piracy, offering a free tablet as part of its Horizon Go bundle – which apparently has been successful in driving consumers not to pirate content because they want the tablet so much.

It is likely that its suggestions on solving content piracy will take some time to come to fruition and piracy is likely remain rampant across Russia for some time to come.

If giving away a free tablet makes people go down the “honest” subscription route in the Netherlands, it will be even more effective in Russia, one might think, where that tablet is an even greater novelty. But does MTS have sufficient margin in its products to give away a tablet for each subscription? Probably not.

But the more operators that are concerned by the thought of losing money to pirates, the more business will come Irdeto’s way, particularly for expensive sports rights – with results showing that 25.2% of respondents watch pirated baseball content, followed by soccer at 23.3%.

The survey results also showed that an additional 66% of Russians believe that streaming or watching pirated content is not illegal. Given how long it took to make a dent in piracy in the Western Economy, it will take at least a decade before the bulk of the Russian population is clued up on content piracy. And then, because most of  the content is not made in Russia, they may not care. It took China until it became a rising player in movie production before it took an interest in policing its piracy laws.

Irdeto also told Faultline Online Reporter that it protects content in 2 million homes, and could not reconcile this with the fact that MTS has around 2.7 million subscribers – perhaps it uses two separate content protection systems.

O’Connor added that we can expect more IoT announcements this coming year from Irdeto, primarily in connected cars and e-payment services, noting that Irdeto uses cloaked Javascript to enable the development of apps for the likes of PayU, which claims more than 200,000 merchant users worldwide.

A rise in these types of deals is perhaps fitting as the cable market shrinks in pay TV. Irdeto will be up against the likes of Kudelski’s Nagra, as well as Verimatrix, in the connected IoT world? O’Connor shrugged and implied that he thought Nagra was not strong in automotive. Irdeto says it has gained traction in the automotive market in partnership with Tata Elxsi to secure in-car display systems.

There is plenty of opportunity for conditional access and DRM players to tap into the cash flows that are increasingly emerging from the IoT, and perhaps O’Connor missed the announcement from Nagra at the start of this year, in which it signed its first route to market deal with French LPWAN player Sigfox, as well as setting up an IoT Security Center of Excellence. That announcement suggests that Nagra will be a serious contender in IoT. Nagra says it will offer advice on hardware and software configuration, and in particular control frameworks, such as what to do in the event that an IoT device is hacked.

Irdeto’s survey of 25,000 adults in 30 countries also revealed a surprising result that the Swiss are the second biggest pirates behind Russia. Latin America was also covered, showing that 70% of consumers in Argentina, Brazil, Colombia and Mexico are also viewing pirated content.