When we talked to Packet Video back in February the company sang the praises of Secure Digital Containers, a DRM system hailing out of Switzerland, which has the advantage of being entirely downloadable to any Java enabled phone. It has put its money where its mouth was and concluded the acquisition of SDC in time to announce at the CTIA show, this week.
Joel Espelien, chief business offer for Packet video got slightly annoyed when we lumped in the new Microsoft PlayReady DRM system, which it had just helped demonstrate at 3GSM, in with OMA and Intertrust’s Marlin DRM, which he said all require installation by the handset maker, and rely on some form of hardware based key. Which was why he preferred SDC.
‘What the market needs is a downloadable DRM. OMA, Intertrust’s Marlin, and Microsoft PlayReady all need to be natively built into a device by the handset maker. They rely on a embedded safe keys provided by companies like Discretix and Cloakware,’ he said at the time.
In effect he was saying that what the world needed was SDC type software and that his company looks forward to a time when DRMs will be downloadable along with other parts of the handset architecture like Flash Lite, browsers and the use of Linux on handsets.
This shift to software only, downloadable DRM for handsets represents the same change that IPTV is going through. From conditional access systems that have smart cards or security chips to Private Key Infrastructure built around AES encryption in software-only, downloadable DRMs, which are refreshable and allow multiple frequent authentications to thwart device cloning.
Already SDC is shipping a mobile Java music client which supports full track downloads and this can be used to offer DRM to video just as easily, whether it is broadcast to a handset using DVB-H or downloaded from a PC or cellular service.
Packet Video tends to take existing software such as DRM, operating systems, media players, Electronic Service Guides (ESG), and puts them all together, writing the connectors between them and making sure they work for specific implementations for a handset or other portable device, such as XM Satellite Radio’s devices. It does have its own ESG but often has to work with other company’s basic software components.
Packet Video claims it created the first software implementation to put video on the mobile phone 9 years ago, has 300 staff, and is 100% owned by Nextwave Networks, a US public company that specializes in WiMAX.
PacketVideo has already done work for Verizon VCAST, DoCoMo’s FOMA and Orange’s Orange World service in Europe and has worked with BREW, Linux, Symbian and Windows Mobile.
SDC by comparison is just an 18 man company, but it has cut deals with T-Mobile, O2, SFR, Amena, Telus, Telstra, Hutchinson 3 and Rogers Wireless in Canada and supports mobile music platforms such as Musiwave, WiderThan, Siemens and TA-Telecom. The terms of the deal were not revealed.
We would look to see Packet Video (the clue is in the name) immediately apply the container technology to video, both to streaming and potentially to DVB-H and other mobile TV implementations.
In an unrelated item this week NextWave, Packet Video’s parent, said that it would have to restate the last three quarter’s figures due to Packet Video needing to adjust its revenue recognition and cost recognition policy. It said that on certain contracts there was ‘inappropriate’ deferral of certain software development costs and that the amounts involved totaled around $5.2 million.