The Digital Citizens Alliance said it wants the U.S. government to investigate how illegal IPTV services are helping Al-Manar, a channel designated a global terrorist entity, to "skirt" a U.S. ban on the service and get into millions of U.S. homes. 

That is one of the offshoots of a report DCA released last week with NAGRA, a company that provides legal online video distribution platform services. 

DCA said that in the course of putting together the report NAGRA monitored hundreds of pirate IPTV services and found that almost half of them included Al-Manar in their channel lists. Al-Manar was labeled a terrorist organization in 2004 and banned from the U.S. and several European countries.

The report, "Money for Nothing," asserts that illegal piracy in IP subscription services is a billion-dollar business, with an estimated 9 million fixed "subs" using pirated IPTV service from some 3,500 storefront websites, social media pates and online marketplaces. The figure grows even more when the sale of pirate streaming devices is included. 

Then there is the extra money pirates get by teaming up with hackers to install malware in the free pirate video apps, the report points out, malware that can lead to  theft of personal data, cryptocurrency mining, adware, ransomware, and botnets launching denial-of-service (DoS) attacks.

There’s no denying the likes of Facebook, Apple, Amazon, Netflix and Google (known collectively as FAANG) have altered the content landscape and made traditional TV sit up and take note. Their wide reach and subsequent ubiquity in many markets across the world has even contributed to the ushering in of the “post-OTT era” — a world where Internet delivery has now become mainstream.

In fact, the very notion of over-the-top now refers to a technology conceived to deliver media and entertainment services directly to the consumer, making a total abstraction of the broadband delivery infrastructure in between.

Findings from Nagra’s 2019 Pay TV Innovation Forum paint a picture of an industry that isn't immune to the influence of digital disruptors. That said, operators are becoming more optimistic about responding to OTT disruption. With 70% of providers now believing rapidly growing OTT consumption will have a positive impact on their business, it is arguably the time for OTT and pay TV to work together for the benefit of the consumer.

How? By bringing OTT offerings into the pay TV environment, operators can become super-aggregators of content. According to the Forum’s findings, 77% of executives expect super-aggregator platforms to emerge over the next five years — and that’s a role every operator could potentially take up, especially as consumers fundamentally don’t care where their content comes from, they just want access to it.

The Sports Wrinkle

There is one potential complication to this, though: sports. Historically a significant revenue stream for operators and content owners, live sports programming is a vital part of any pay TV business. But the supply of sports content into the market is expanding significantly, as new sports OTT services and providers proliferate, potentially reducing demand for pay TV. Eighty-five percent of executives believe that OTT sports streaming in their country will grow either moderately or strongly through to 2024, so it’s imperative to act now.

While DAZN may be one of the best-known, one of the biggest challenges currently facing the streaming sports industry comes from Amazon, should it decide to prioritize tier-one sports rights in key markets. Major sports broadcasters such as ESPN, reserving key rights for their own offerings, also pose a potential threat. According to our special report looking at the global market for premium sports OTT services, it is mission-critical for pay TV providers to maintain the rights to tier-one live sports. Thankfully, in part due to the investment sums required to purchase the licenses and protect the content, providers are well placed to maintain this control.

Providers should consider continuing investments in tier-two sports, too, the report advises, as they still encourage a wide enough customer base. Specialist sports OTT providers will often target niche products that aren’t profitable enough — but pay TV cannot simply ignore them. To ensure subscribers don’t churn away, they need to consider new bundling methods that enable subscribers to come and go alongside major sporting events as they wish. Sports OTT may have disrupted how consumers watch TV, but pay TV can take back control and offer a full suite of sporting content — but the industry must act now to do so.

With competition from OTT gaining traction on what is traditionally pay TV content, providers must act now if they’re to take back control and disrupt the disruptors. Thankfully, they’re under no illusions: Executives recognize their existing aggregation models must evolve in response to the rising popularity of OTT services and an anticipated decline in the number of l inear channels.

In the U.S. findings of the Pay TV Innovation Forum, industry participants widely expect traditional pay TV packages to be radically restructured during the 2020s — with fewer linear channels, a more diverse range of prices and packages, including bring-your-own-device offerings targeted at Smart TV owners and sell-through models similar to Amazon’s Prime Video Channels. There is also a strong consensus that channel providers will be asked to take on more risk and that up-front per-sub carriage fee payments will decline for many companies.

This changing dynamic from linear to on-demand viewing means that some smaller content products will become unsustainable for pay TV to carry alone, and which should be ripe for the disruptors to take over — and pay TV should encourage that. By shifting the burden of broadcast costs out of the business and onto third-party OTT providers that they can aggregate, pay TV providers can adapt their business models into the central gateway to all the content consumers want and love.

Turning the Tables

With more direct-to-consumer (DTC) products coming onboard, and already planning how to reach a wide audience — such as Apple TV launching on Roku — service providers have their work cut out for them. But by investing and innovating in new bundling, services and content, operators cannot just disrupt the disruptors, they can have the advantage by creating a new system that works for the consumer.

Operators that adapt their business models to become super-aggregators and take steps to manage piracy will be able to successfully do more than just compete with the “FAANG” companies. They will be agile enough to no longer think in terms of “pay TV vs. OTT,” but embrace one holistic and super-aggregated solution that delivers the best of pay TV with the best of streaming to the consumer.

Swiss content security company NAGRA has partnered Korean set-top maker KAON to create a new end-to-end Android TV solution for pay TV operators.

The new platform will include content security services offered through NAGRA’s Android Fast Track program, which is an ecosystem of technologies, partners and services designed to speed the transition to Android TV.

KAON will contribute a hybrid set-top equipped with Broadcom BCM7268 chipset, allowing operators to deliver managed services alongside popular OTT apps, all in compliance with the Google Media CAS framework for Android TV deployments.

“We look forward to leveraging our expertise in securing Android TV deployments and our Fast Track ecosystem to drive even more opportunities for pay-TV operators wanting to take advantage of the Android TV opportunity while helping them protect their premium content assets from new forms of piracy,” said Maurice Van Riek, senior VP and head of content and asset security at NAGRA, in a statement.

In April, Google reported that 140 pay TV operators worldwide had deployed its Android TV platform, which lets operators mix managed service delivery of video channels alongside the Google Play store, and the popular OTT apps that come with it.

NAGRA and KAON face plenty of competition, with CommScope and TiVo among the tech vendors already offering Android TV-based hybrid products. 

TV is TV no matter how or where it is consumed, making traditional TV and over-the-top video synonymous. The viewer is now setting the tone and demanding the content they love wherever, whenever and however they choose.

To meet the increasing demands for this ecosystem, operators are reconsidering their offerings, as well as their technology and operations platforms. If pay TV players can understand and address current trends such as integrating various sources of content, running cloud operations and offering more flexibility, they are well on their way to integrating a strategy for success.

Here are the top trends pay TV service providers should address in 2019.

Fulfilling the Super-Aggregator Role: It is time for the service provider to embrace its role as super aggregator, a player that is consumer-facing, boasts a large user base, and is primarily a branded content distributor that delivers superior value for consumers through choice, flexible packages, price and convenience. Consumers are demanding the ability to get to the content they love in a simple way. This implies that UIs and backend business and security services platforms must create a bridge between content silos by elegantly harnessing multiple content bouquets even across multiple apps.

Beyond aggregating scripted drama SVOD services, sports will be the next genre to be seamlessly integrated. Sports leagues, teams and rights owners are working to create even more unique connections with fans worldwide, adding stats and exclusive content. With ESPN+ and various sports properties ramping up their investments in direct-to-consumer streaming strategies, 2019 will be a game-changer. This presents a challenge and an opportunity to both those direct-to-consumer sports providers (channels, leagues and clubs) and to MVPD players to make this content accessible to the consumer on their preferred device,

Actionable Analytics for Maximum Business Impact: Pay TV service providers must also adapt to a world where OTT and social media platforms, such as Netflix and Facebook, have built their success on the ability to capture, analyze and act on data to deliver a consumer-driven experience. 

With the right technology choices and business-focused approach, it is now possible for pay TV providers to leverage data, advanced analytics and AI to automate business decisions that reduce churn, deliver more relevant advertising, personalize content recommendations and help companies optimize the full value and cost of their content portfolio. Through actionable insight, service providers can deliver better business results and free up resources for next-generation platform investments.

Cloud-Driven Content Protection: As part of these considerations, cloud strategies are at the top of everyone’s mind to address the challenges of the next generation of content delivery. Delivering premium services directly to consumer devices implies leveraging the flexibility of a modular backend cloud-based content security infrastructure. This includes direct-to-TV security, connected set-top box security and Android TV security, while not forgetting emerging standards such as ATSC 3.0.

Android TV Going Strong: Android TV provides the opportunity to have an operator-tier branded UEX, Google TV services and direct-carrier billing. Benefits of this include easier access to third-party OTT, deep linking for additional search benefits, and advanced voice-driven technology while bringing cost savings and faster time-to-market. When implemented even in its basic form, operators can achieve a baseline “all in one place” aggregation, beyond any built-in casting capability from a vast collection of mobile apps. However, the challenge is to ensure any service built on the platform is secure, protecting both the content owners and consumers’ data. This requires end-to-end multidevice and multinetwork content value protection for broadcast and OTT premium content.

Evolution of Content Protection: Offering valuable content on different devices with changing business models can be a content-protection nightmare for service providers that are not prepared. With the right tools in place, content can remain secure, successfully countering the growing and varied number of piracy threats, while also meeting the requirements of their content providers. Players in the ecosystem need a unified and flexible platform for managing all content security requirements, as well as tackling piracy head on with the latest innovations in anti-piracy services and watermarking. For example, with streaming piracy’s global impact, a smart approach is to effectively mark content delivered through set-top boxes or consumer streaming devices in order to be able to trace the source of a leak, and then use an anti-piracy service to monitor, track and take down pirate services.

This approach is especially relevant in live sports, where streaming piracy is a growing threat. Fighting off pirate streaming services with protection strategies, anti-piracy services and watermarking technology protects the value of this content, as well as the business model of sports rightsholders.

OTT Sports Streaming: With a scalable, low-latency streaming technology, sports leagues and teams can now also deliver the kind of immersive and mobile digital fan experience that younger consumers expect. Fan engagement can be boosted, before, during and far after the game is over, with sports OTT content directly delivered to consumers worldwide, to any device, including Android TV. The data that is collected through this engagement over time can be leveraged with an AI platform to optimize monetization strategies moving forward.

Evolving Business Models: According to research, industry executives anticipate a decline in the conventional and linear “big channel bundle” pay TV services. They predict growth will instead come from skinny bundles, personalized packages, subscription OTT services, advanced advertising and content owner direct-to-consumer services, including all content sources and features that can be smartly re-aggregated and added to multi-play network bundles and other adjacent Smart Home services. The key to drive top and bottom line benefits from this digital transformation phase will be to build flexibility into the core technology platform while leveraging data to make smart business-driven decisions.

With it being a dynamic time in the industry, there are many opportunities and possibilities to consider when working to evolve in 2019. Those who choose not to take proactive action take might not success. Service providers who prioritize continuous innovation and address these trends, however, will evolve with the quickly changing market and come out on top.

Ivan Verbesselt is senior vice president of marketing at NAGRA.

A year after launching its cloud-based, pre-integrated, ready-to-launch OTT solution OpenTV Signature Edition at IBC in Amsterdam, Nagra is using the show to promote Android TV support for the product.

OpenTV Signature Edition will now feature an Android TV Operator Tier solution, enabling on-boarding of apps and SVOD services in an operator-branded user experience.

OpenTV Signature combines the OS, experience/interface and player alongside pre-integrated set-top box hardware, including a 4K-ready box from SmarDTV, and support for third-party apps such as Netflix, YouTube and Amazon Prime Video.

"Operating within an end-to-end TV framework like OpenTV Signature Edition, an Android TV-based solution offers pay-TV operators a compelling TV experience that engages consumers and drives active content monetization," said Holger Ippach, senior VP of the user experience product unit for Nagra, in a statement. "We have been successfully embracing Android for mobile devices and tablets for years, and now with support for Android TV, we can help our customers benefit from everything it has to offer.”

Also at IBC, Nagra announced that its TVkey Cloud product, which brings pay-TV services directly to Internet-connected smart TVs without the need for any external device, would be available for Samsung smart TVs. 

Nagra said it has inked a deal to provide content protection technologies and services for Altice USA, the unit of Altice that recently acquired Cablevision Systems and Suddenlink Communications.

Financial terms of the deal were not disclosed, but Altice USA will tap the Nagra Connect “converged” conditional access/digital rights management platform for broadcast, IPTV, OTT and connected home services, along with the vendor’s MediaLive platform (for IP- and QAM-based multiscreen content) to enable content security for the MSO’s standard-definition, high-definition and 4K/Ultra HD services.

Altice USA has not fully detailed what future product will employ Nagra’s content security platform. However, Dexter Goei, Altice USA’s chairman and CEO, noted in the Altice Q3 earnings call last November that the company was pushing toward a new Home Hub Center that will also utilize a new user interface. Following the closure of its Cablevision acquisition last year, Altice USA also announced that it would eventually introduce an “all-in-on home center” that integrates the capabilities of the set-top box, router and WiFi modems in one device that runs on a unified interface. In 2015, Altice’s unit in France introduced a next-gen gateway, initially for FTTP networks, that could factor into Altice USA’s ambitious plan to upgrade to an all-fiber access network.

RELATED: Altice USA to Skip DOCSIS 3.1, Roll Out All-Fiber Network

Altice USA’s selection of Nagra’s content protection platforms marks a major shift in the MSO’s legacy security platforms, and should help to unify the operator’s technology approach, as Altice and Nagra already work together in other parts of the globe.

Suddenlink has been using Arris/Motorola CableCARD security for its current TiVo-powered platform, and Cablevision has been using a downloadable security system that leans heavily on technology from Cisco Systems/NDS and boxes from Samsung.

RELATED: Altice’s Tech Synergy Challenge

To support the legacy security systems and the new one, Altice will rely on Simulcrypt, a technique with linkages to Digital Video Broadcasting (DVB), a standard that’s popular in Europe, that allows more than one conditional access system to operate on the same video program stream. There’s a relatively small bandwidth hit with Simulcrypt, but the approach does not require the operator to duplicate or simulcast the primary video streams.

Altice is expected to employ a “cap and grow” strategy to support the initial rollout and eventual migration to the new platform, Christopher Schouten, senior director of product marketing at Nagra, said, adding that the new content security systems will support Altice’s transition to a full-IP network.

Schouten said the approach is primarily DVB-based, but that Nagra’s implementation also factors in some of the specific needs of U.S. cable networks that vary from those in Europe.

He said Nagra, which also counts CableOne among its U.S. cable operator partners, is hopeful that its approach and use of Simulcrypt could help other operators break out of the existing video security duopoly of Arris/Motorola and Cisco and allow them to expand their ability to pick set-top box vendors.

“We are in a unique position to bring innovative products and services to Altice USA’s Optimum and Suddenlink customers by leveraging our global operational expertise, scale, resources, and key strategic partners like NAGRA,” Hakim Boubazine, co-president and COO of Altice USA, said in a statement. “We have been impressed by the flexibility NAGRA has shown in adapting to U.S.-specific requirements in a short amount of time, and this partnership will enable us to design integrated services to meet our customers’ expectations.”

Nagra and Samsung have jointly introduced TVkey, a USB-based direct-to-TV security platform for pay TV operators that enables consumers to sign up and pay for TV services directly on Samsung TVs.

Nagra said the device meets all key MovieLabs requirements for Enhanced Content Protection, a component required by Hollywood for 4K/UHD and High Dynamic Range HDR fare, movies offered in early release windows and other high-value content.

The product’s framework is based on a Nagra-designed root of trust in TV chips that communicates securely with the TVkey device. It also use hardware-based watermarking and operator-controlled device service revocation, the company said.

Nagra said TVkey will open up several customer acquisition models and options for pay TV operators, including retail bundling with TV sets and special content packages.  It can also be made to support free preview periods without the need for a separate set-top box.

The first TVkey market deployment will occur in Q4 2016, with multiple “leading pay-TV operators across two continents” slated to launch TVkey-based services in 2017, the companies said.

Samsung is the first announced TV partner, but the platform’s “framework” will be made available to other TV makers and security vendors.  

As part of that plan, Nagra and Samsung plan next year to create an “independent”  TVkey Trust Authority to license the TVkey technology to others.

Nagra will show off TVkey at next week’s IBC show in Amsterdam. 

The Kudelski Group said its OpenTV and Nagra France SAS subsidiaries have filed a patent infringement suit against Verizon Communications and its AOL division over claims that they are infringing on a batch of U.S. patents tied to streaming video services.

The suit, filed in the United States District Court for the Eastern District of Texas, alleges that Verizon and AOL are infringe seven patents owned by OpenTV and Nagra France, and identify a range of products and services, including FiOS TV and its authenticated TV Everywhere services, Redbox Instant by Verizon  (an SVOD service that was shut down in October 2014), Go90, Verizon’s new mobile-first OTT video offering, AOL’s Spot On advertising and streaming video services. Verizon closed its acquisition of AOL on June 23, 2015. 

Update: Verizon said it does not comment on pending litigation. 

Kudelski took control of OpenTV, a company that also specializes in set-top middleware and applications, in late 2009, but sold OpenTV’s advanced advertising business unit to Imagine Communications about a year ago.

The Kudelski Group, headquartered in Switzerland, said it currently holds over 4,500 issued and pending patents worldwide. 

Video software and security specialist Nagra said it has completed the “first steps” toward helping its pay TV provider customers offer Netflix on the set-top using Nagra’s anyCAST Connect client and its OpenTV5 middleware.

The integration update comes about nine months after Nagra’s parent company, The Kudelski Group, and Netflix dismissed all pending patent litigation in the U.S. and notched a long term stay of pending Dutch patent litigation. The settlement included a new deal involving the integration of Kudelski’s video protection technology with Netflix’s OTT subscription-VOD service.

As part of the agreement, Nagra will integrate the Netflix application SDK 4.2 into its OpenTV 5 connectware platform. Netflix is also adopting Nagra PRM (persistent rights management) platform as a Netflix-supported DRM. Nagra PRM is part of its anyCAST Connect client. Nagra said it will ensure content protection for Netflix content using Nagra-on-chip security for set-tops and TVs. 

Nagra said its Netflix-facing handiwork will be on display at this week’s IBC confab in Amsterdam, and that the first pay TV operators to adopt the joint solution are expected to be announced in 2016.

“We are pleased to be working with Netflix to further increase the value of the pay-TV services our clients provide to their subscribers, especially with the advent of 4K UHD,” said Maurice van Riek, SVP, head of content and asset security for Nagra, in a statement. “We have worked closely with Netflix to ensure that NAGRA PRM becomes a trusted part of the Netflix platform. Together with our DECE and DTLA endorsements, this puts PRM in a class of its own as an operator-controlled, multi-platform DRM for the protection of premium services like Netflix.”

Nagra said its digital rights management platform, MediaAccess Persistent Rights Management, has been given the green light from the Digital Transmission Licensing Administrator (DTLA).

DTLA had previously approved Nagra’s DRM system for the storage of Digital Transmission Content Protection (DTCP) content. The latest stamp also clears the use of MediaAccess PRM for the retransmission/streaming of premium DTCP-IP-protected content over a home network.

Sling Media, maker of the video placeshifting technologies  such as the Slingbox 500 (pictured above) and in integrated devices such as Dish Network’s Hopper with Sling whole-home HD-DVR, is one of the adopters of Nagra’s DRM.

“PRM ensures that pay-TV operator content is protected while giving consumers a flexible, easy-to-use experience,” Michael Hawkey, vice president and general manager of Sling Media, said, in a statement. “DTLA’s endorsement of PRM further confirms our decision to work with Nagra to make a secure Sling experience possible for millions of consumers.”

“This latest approval puts Nagra on a very short list of trusted and approved providers of home networking DRM technologies in the world and is another vote of confidence in our solution,” added Philippe Stransky, Nagra’s chief architect. “Nagra MediaAccess PRM enables highly popular and flexible home networking consumer use cases that help pay-TV operators win and keep their customer, while offering peace of mind through robust Hollywood studio-approved content security.”

Earlier this month, Nagra announced that MediaAccess PRM was approved by the Digital Entertainment Content Ecosystem (DECE), the organization behind UltraViolet, the digital rights locker for electronic sell-through products.

Nagra said it has inked an extended video security deal with Dish Network and EchoStar Technologies -- Charlie Ergen’s set-top and technology unit -- that factors in digital rights management for multiscreen services.

Financial terms were not disclosed, but the deal paves the way for Dish and EchoStar to deploy the Nagra Media Live Player with Media Access Persistent Rights Management technology, which was recently approved by the Digital Entertainment Content Ecosystem (DECE), the organization that operates the UltraViolet digital locker system for electronic sell-through (EST) products.  

While the new deal could provide Dish with a way to provide security for a possible EST offering, Dish and its technology corporate cousin will use Nagra’s multiscreen DRM system to secure the Dish Anywhere video-on-demand service for PCs, smartphones and tablets. Dish currently uses Nagra MediaAccess to protect Hopper Transfers, a feature in the Dish Anywhere app that lets Hopper with Sling HD-DVR subs to port recorded content to mobile devices for offline viewing.

Dish, EchoStar and Nagra have a long-standing video security relationship that began at the set-top level. NagraStar, for example, is a joint venture of EchoStar and the Kudelski Group, Nagra’s parent company.

“Content has to be secured throughout the entire ecosystem, whether on the set-top box, personal computers, smartphones or tablets,” said Pierre Roy, chief operating officer and executive president of Nagra, in a release.

“More and more consumers are demanding greater flexibility in the way they enjoy their DISH content,” said Vivek Khemka, DISH SVP of product management, in a statement. “To successfully provide this service, we chose the NAGRA MediaLive Player with PRM because of their proven ability to effectively protect our content investment while at the same time meeting the requirements of our premium content providers. What’s more, our close security partnership with NAGRA allows us to focus on creating innovative new services.”

“While providing consumers with the best possible viewing experience, both inside and outside the home, we recognize the need of content creators to protect their rights. NAGRA’s solutions will add an extra layer of security to protect those rights,” added EchoStar Technologies president Mark Jackson.