Monthly Archives: December 2009

Higher TV viewing: DVRs may be the reason

The UK regulator, Ofcom, has released international comparison data showing that the UK witnessed the highest average increase in TV watching during 2008 across 11 major economies, up by 3.2% to 3.8 hours a day. Ofcom also noted that the UK remained the country with the highest proportion of households with digital TV on their main set, at 88%.

It has generally been assumed that TV viewing is a counter-cyclical activity, because in a recession, consumers tend to cut down on going out and are therefore more likely to stay at home watching TV. However, the recession only began half-way through 2008, and although it was deeper in the UK than most other economies, this may not tell the whole story.

Ofcom’s second data-point suggests an additional factor: as digital TV penetration has increased in the UK, so has penetration of digital video recorders (DVRs) – and owners of DVRs watch more TV. Evidence from BSkyB’s Skyview panel suggests that users of DVRs watch in the region of 17% more television than their ‘linear’ counterparts.

Farncombe’s calculations (based on Ofcom’s quarterly digital TV reports), show that the number of DVRs in the UK (excluding Freesat) increased by 60% in 2008, putting DVRs in nearly a third of UK homes at the end of last year. This is no doubt contributing to the TV viewing increase noted by Ofcom.

This underlines the positive contribution on-demand consumption can make to viewing-levels increasingly under pressure in a traditional linear broadcast environment.

Widevine’s new satellite investor points to the future for conditional access

Widevine, a Seattle-based content security firm that offers software-based conditional access (CA) systems and DRM technology to the IP-delivered video market, has received $15m in investments from cable provider Liberty Global, Samsung’s VC arm (Samsung Ventures), and an unidentified corporation it describes as “the world’s second-largest satellite provider”.

Widevine is one of the global leaders in the software-based CA segment, alongside companies like Microsoft, Verimatrix, and Latens. The new funding is the third financial injection it has received since 2003. According to Tech Flash, an online tech portal based in Widevine’s home town, Seattle,  this brings total investments since then to more than $50m.

Since Samsung Ventures and Liberty Global are existing investors, the real news is that a major satellite company now sees a future for Widevine’s products.

Satellite networks are intrinsically one-way;  in Farncombe’s view  hardware-based CA systems using smartcards offer the most effective protection against piracy for one-way networks, rather than ones that depend solely on software.

However, satellite providers are increasingly equipping their customers’ receivers with broadband links which – if properly leveraged – can potentially offer better security using software-based systems such as Widevine’s.

This trend is common to other broadcast platforms, including terrestrial ones. It represents a major reason why Farncombe concluded in a recent White Paper that, “Since the traditional pay-TV world is slowly but surely mutating into a two-way one, it is likely that there will be a gradual shift away from smartcard-based systems in favour of cardless ones.”

This poses a challenge for the major global hardware-based CA vendors, such as NDS and Nagra, whose business has traditionally been based on the provision of smartcards to operators.