While the technology has been slow to mature, the past few years have seen Internet Protocol Television (IPTV) quickly gaining momentum. The Telecommunications Management Group (TMG) puts global IPTV subscribers totaling 10 million at the end of 2007, more than double compared to 2006. Another organization, Management Research Group (MRG) anticipates that the number of subscribers will hit 72.6 million by 2011.

IPTV promises to revolutionize the way content is delivered. Consumers, not networks, will determine what content is viewed and when. Consumers will no longer need to subscribe to hundreds of channels just to gain access to a few hours of content. Instead, they will have a single stream of content which they want to watch. Consumers will also have more choices on how they will view content - in high definition (HD) quality on television screens, through computer, or even on the move via a mobile Internet device. The IP-based video paradigm frees content from traditional delivery models to provide prime time at any time and on any screen.

The most successful IPTV deployments to date are to be found in Asia and Europe, and they all have one thing in common: the availability of premium content. As delivery models move away from the controlled environs of movie theaters, cable networks and DVDs, towards on-demand, IP-based platforms, the task of keeping premium content safe from theft and piracy becomes increasingly critical. Owners of high quality content will need to assure that their products are delivered safely across IP networks.

The very word "Internet" sends shivers down the spines of many studio executives as they look back on the plight of the music industry. The music industry spent years trying to resist the online distribution model in an attempt to protect the high margin on CD sales. The downward trend of revenue from the legal sale of music has long been blamed on the increasing popularity of illegal file sharing. Despite this, many start-up companies that tried to provide security products to protect digital music floundered because the industry was unwilling to pay for such products. Even when some digital right management (DRM) schemes were finally put in place, consumers who were by now accustomed to DRM-free music, balked at the new restrictions. To make matters worse, the protection placed on music files were improperly applied, causing problems for consumers of legal content, while doing little to stop the proliferation of illegally obtained content. Only until Apple and the iPod arrived to spectacular success did the music industry start to embrace the online distribution model. There are several clear lessons to be learnt from this example.

Parallels can be drawn between this and the movie industry's attitude towards the video cassette recorder when it first arrived decades ago. Many conservative executives claimed it would be the demise of the movie industry and the death of the movie theater. Instead, the opposite happened. Once they were convinced to embrace the technology and make content available on video tape, they discovered a unique new revenue opportunity which today actually generates more than double the revenues per title achieved at the box office.

Today the industry is faced with a similar situation with IPTV. Movie studios have a well established distribution system with cable and satellite providers paying substantial guaranteed minimum royalties for content. The studios are hesitant to embrace new channels that may erode revenues from the existing, established channels. In particular, the Internet in IPTV conjures up images of perfect digital copies flying across the Web, cannibalizing the traditional distribution channels.

The first lesson from the music industry is that consumers do not want content fed to them; they want the freedom to choose what, when, and how they consume it. And when they cannot get that through legitimate channels, they find other ways of getting it. The fact of the matter is that IPTV provides a unique opportunity to enhance the way content is delivered while opening new revenue opportunities for content owners, large and small.

But this will only happen if content owners can be convinced that it is safe to allow their content to be distributed over the Internet.

The second lesson from the music industry experience is that protection of content must be easily related to the service value proposition where subscription, rental or purchases are obvious examples. This is more critical in the video world where rental is often a more attractive proposition than purchase for a single viewing. As IPTV begins to flourish, it too is bound to become a target for piracy. When IPTV started to become reality, many traditional conditional access (CA) vendors mounted a campaign to convince operators that they would need smart-card based security in order to protect content and secure rights to distribute premium content from the major content providers.

However, smart card-based systems present a few problems. Despite the best efforts of security vendors, encryptions can be broken and smart cards can be cloned. According to the latest survey of revenue leakage from Cable & Satellite Broadcasting Association of Asia (CASBAA) and Standard Chartered Bank, losses are conservatively estimated to stand at USD 1.54 billion. Producing new smart cards on a regular basis to combat losses is expensive, and the logistics behind distributing these new cards to subscribers can be a nightmare. Because of these complications, stopping content piracy is not viable, and much of the loss is written off as unrecoverable.

Unlike traditional cable and satellite delivery, an IP network enables two-way communication allowing the operator to communicate with an STB, and for the STB to communicate back. IPTV has been an ideal proving ground for software-based content security, which brings real cost and security advantages when compared with legacy CA vendors. A downloadable solution can be cost-effectively renewed without a card swap, preventing revenue loss. For the consumer, this can be entirely transparent with no disruption to the service.

Without the burden of additional hardware, software-based content protection can be deployed easily on devices like laptops or portable video devices, freeing the consumer to enjoy content from almost any location.

Software-based content security solutions, combined with multiple layers of protection that span multiple devices, provide consumers with the freedom and flexibility they want, while giving content owners and distributors the peace of mind they need. By understanding and addressing the challenges that the music industry faces, the broadcast industry is free to capitalize on the unique revenue opportunities that IPTV presents.

One such opportunity can be found in the "movie release window," which is the time lapse between the premiere of feature films and their availability on various other media or distribution channels. The biggest revenue stream for the movie industry is the DVD/home video release, which takes place three to six months after theatrical distribution. What many people do not realize is that only one in five movies ever recoups its production costs at the box office. That means they are heavily reliant on secondary distribution channels, such as home video, to have a chance to turn into profit. Release windows are carefully managed to create maximum return on investment for the studios.

The cable and satellite pay-per-view model generates only one percent of total revenue for a movie because the release window is very late and the consumer has to watch it at set times. A shorter release window and a greater flexibility in consumption would make this model more attractive to consumers and provide the operator with an opportunity to improve its viewership share, and its revenue. Despite the benefits of shorter release windows for all parties, the studios will definitely show concern over the estimated USD 1.54 billion in loss to piracy. The earlier the piracy occurs, the higher are the potential losses to the studio.

A significant opportunity for IPTV operators is to convince content owners to start shrinking release windows for premium content. And that means ensuring that content protection systems deployed, meet or even surpass the content owner's stringent requirements in order to allay fears of piracy.

For this purpose, software-based solutions bring many functional and security benefits. From fueling new business models based on increasing consumer choice, to protecting revenues by providing the ability to detect and prevent theft of service, next-generation content security plays a significant role in the future of IPTV.