Executive Interview: BuyDRM CEO & Founder Christopher Levy
BuyDRM's Christopher Levy is one of the "OGs" of the online video industry, and his company is one of the pre-eminent suppliers of DRM in our industry. We sat down and caught up with him recently to talk about the state of DRM in general, and the latest developments with BuyDRM in particular.
Eric Schumacher-Rasmussen: Let's start from the big picture question. DRM is the only studio-mandated technology, right?
Christopher Levy: That's correct.
Schumacher-Rasmussen: How are OTT operators dealing with that requirement at large?
Levy: Well, it continues to be a well-defined process, because each studio has obviously done thousands of deals over the years. So it begins with identifying which studio content you want, and basically going in through the content distribution channels and making an inquest or an inquiry, if you will, to get a license for content. Now, the area where it becomes tricky and where we come in is the studio security questionnaire. So each one of the studios has a very evolved, very complex studio questionnaire that covers pretty much every aspect of distributing their technology. There are sections in there about broadcast technology like CAS (conditional access), DVB, satellite. There are questions around where the content is going to be managed when you take possession of it from the studio. And then really everything, how it's encoded, what formats, where it's distributed, who's hosting it, how do users access it.
But when it gets to the DRM section, it gets kind of tricky. And so we've done some blogging about this on the BuyDRM blog, but the studio security questionnaire can be a complex issue. And so we help our clients by helping them answer all the questions that are in the questionnaire. And there's everything around how are keys created, how are keys managed, how are keys delivered, what versions of DRM are the studio or the DRM platform operating? How we use DRM, what rights will you use, et cetera, et cetera. So the security questionnaire pretty evolved and the DRM section's pretty complex, and so that's where we kind of help clients get through that. And then once they've successfully completed that questionnaire and got sign off from the security team, then they can continue down the road with negotiating the commercial pricing and the legal terms, et cetera.
Schumacher-Rasmussen: In addition to what's on the BuyDRM blog, you and a great panel, I think it was two years ago at Streaming Media West, gave a whole walkthrough of the studio DRM questionnaire, right? So people can look for the presentation online. [Editor's note: The panel was at Streaming Media West 2019.]
Levy: Yeah. They're confidential docs, but they're pretty readily accessible in the market. We have every studio's security questionnaire, but what we like to do is meet with the client and understand kind of what they're doing. Really the questions around DRM are the same, because they're asking basically the content license or to go to their DRM operator and get the DRM operator's version of the answers for the questionnaire. We're fortunate a lot of the studios are our clients. A lot of them are technically sophisticated studios. Sony are our clients—I would say Sony probably has the most sophisticated studio security operations group, Eric and his team there. But yeah. That's the process.
Schumacher-Rasmussen: One of the biggest developments that we've seen, one of the biggest trends in the last year or two years has been this huge growth in the AVOD market, right? And you've got some clients like Sony Crackle and Tubi TV. How is BuyDRM managing that growth with your AVOD clients?
Levy: If we put the four legs on the table in the business now we've got PVOD (premium VOD or pay-per-view), SVOD (subscription VOD), AVOD, and a combination, like if you look at UFC, it's a subscription to Disney Plus, but then it's a PVOD purchase. Those hybrid models have kind of given way to this AVOD in-between model, if you will. And for AVOD to be successful, the amount of views has to be significant, obviously much, much, much more than PVOD or SVOD. I mean, on average an AVOD title needs to be viewed a hundred times a day for the licensor to [generate revenue]. AVOD is basically a long tail of content and the top third of the tail, just like in premium video, has to be highly viewed.
And so the volume of views is significant. And yet DRM is a requirement because they want to force users obviously to view the ads and continue to come back to the site for the content. So the way we're managing that growth is really we've scaled out our network. We did a press release at the end of last year, noting that we did 10 billion licenses last year. We're on track to do about 13 and a half billion this year, close to 14, it really depends on how this last quarter goes, which it could be explosive. So the way we're managing as we scaled out our network, we've really built what I think is the best, fastest, low-latency, scalable, responsive, hybrid DRM platform in the business. We have a "Death Star" here in Austin, Texas, and then we have multiple clouds that we use.
We've also renovated the way that we acquire DRM tokens or licenses, so we've streamlined that for our clients. Helped our clients implement proxies, which actually speed it up and create that anonymity and less private information (PI). And lastly, we've completely overhauled our statistical analytics engine inside KeyOS. We announced about three weeks ago KeyQ is now live. We have a whole new generation of statistical analysis, and that's how we're handling the scale. The other thing is we're starting to see more clients wanting to have their own DRM server on prem or in their cloud for failover. And so we're starting to work with clients on those kinds of strategies too, where they want to even extended into their own network in some cases.
Schumacher-Rasmussen: One of the coolest things you've been working on the last couple of years has been your work with the Academy Awards. The awards use your multi-DRM Platform to protect screeners. How does KeyOS integrate with other solutions involved in that pretty complex process?
Levy: We started talking about this in Streaming Media East three years ago, about how there's this big move to go in the direction of forensic watermarking on every piece of content. So if you look at how the studio's manage pre-release and behind the firewall digital dailies and screener content, it's all managed with forensic and in some cases visual watermarking and DRM. And the reason being is that DRM helps close most of the doors in your home, and watermarking closes all the windows too. Because what it does is it takes people who are casually pirating your content, and it quickly identifies them to you and then enables you to cut those channels down. Like all the recasting and streaming piracy that's being done on OTT and live sports, it's an authenticated user who was in there with the stream and they're recasting it.
So the combination as we talked about several years ago, and as we've worked with Jan Ozer on streamingmedia.com, how the studios are handling piracy. The reality is that today every piece of content is pre-released and behind the firewall, digital daily, screener, et cetera, they're all forensically watermark before they're distributed. That model is now crossing the chasm into consumer and public screener access. Like what we've done with the Academy, and we worked with a pretty big cadre of A-list people in the business. We worked with our client Brightcove who provided the OVP platform, Akamai did all the delivery. And of course, they used NAGRA's NexGuard technology, which is the preeminent watermarking technology in the business.
And then when all those companies were done adding all their value with the Academy's content, the different movies, the last thing they do is wrap it with DRM. So the DRM encapsulates the visual and forensic watermarking with the payload of the content and travels with the content, no matter where it goes. So what we're seeing is that model is moving into the B2C space now. As I've said over the years, I personally believe—and having been there since the beginning of the CDN business, which I'm pretty long in the tooth about, as you well know—the CDN business is going to change dramatically over the next five to six years.
The idea of caching copies of HLS or DASH content that are managed with FairPlay or Widevine at the edge, that's going to go away entirely. And what's going to happen is CDNs' edge compute and networking components are going to explode. Because what's going to happen is there going to be one glass master file sitting securely at the edge, at rest encrypted, and every user who requests it, the edge is going to watermark that file uniquely and DRM it, and then hand it off to the user, because that is the only way to eliminate consumer piracy across the board. So that's the direction we're headed.
Schumacher-Rasmussen: Let's look big picture. What are the biggest challenges around DRM to scale right now, when you've got such a fragmented device market, you've got geographically diverse users, you've got constant changes in codecs, containers, protocols, operating systems, on down the line?
Levy: Yeah. It's complex. It is an ever-shifting flow of ice. The only difference is the ice is surrounded by lava, not cold water. And just the heat of the lava keeps you on the ice, which of course is also shrinking. There are even additional complexities—you name the big ones, right? So there's constant change and evolution and lack of stasis on the operating systems and the codecs and the formats, and the DRMs and the player platforms and the CDNs, I could go on and on, but there's constant evolution of the streaming consumption side of the table. And so if you look at how DRM is siloed by Microsoft, Google, and Apple across their operating systems and browsers, what you see is that each one of them is doing things differently, right?
Microsoft PlayReady is a very small portion of the market now, but still very critical because of the legacy—probably 80% of the smart TV's legacy are running it. You got Google Widevine, it's a non-revenue product and Google doesn't sell it. And Google gives it away for free and Google even hosts it when they can, when they're not having their network go down. And same thing with Apple—they don't sell DRM, they just license it to content members. But the big three DRM OEMs, they're not really designing and developing their operating systems and browsers and content decryption modules and DRM bits for you, they're doing it for themselves to advance their video business models. You're just along for the ride.
So when you add in that kind of obfuscated interface with the DRM OEMs and that all these other complexities, it creates sincere amount of challenges on a regular basis to keep up with what's going on. A great example was the new Apple OS and Android OS came out relatively around the same time, all kinds of stuff that are going on there. And when you introduce like CMAF, et cetera, you have to really stay on it. You've got to be constantly testing, constantly evolving, constantly documenting, you make one fix for one client, and you can expect that many of your other clients are going to have that same issue come rolling up. And so we see that all the time, like recently Google made some updates to Widevine, and now some of the smart TVs, like LG OS, are having some issues. We're working with Google and other companies to resolve that, but it affects everyone. So being the canary in the coal mine on these issues early on before they manifest into a huge forest fire is very important.
Schumacher-Rasmussen: One of the things that you've of course had to stay on top of is consumer expectations for low latency viewing of live content—they want their content and they want it now, even if it's on demand. DRM can't get in the way of that, so how does BuyDRM address low-latency streaming with low-latency DRM?
Levy: That's a great question. So as we all well know the history of DRM has not been that great. We started out with a very rudimentary Windows Media Rights Manager platform. We had license acquisition windows. We constantly had standalone Windows Media Players and Silverlight players that needed updates. Apple came along and made it a little cleaner. Google Widevine came along and made it a little more cleaner. And today we have a pretty transparent kind of seamless, invisible-to-the-user experience with DRM. It's taken a lot of work, but now that we're moving towards these low latency formats, and with the arrival of CMAF and the arrival of low-latency HLS spec by Apple, there's a lot of focus on now making the DRM component of it as low latency as the streaming component.
So last year we did a webinar, we kind of started this whole dialogue in the industry about low-latency DRM. We did a webinar with Bitmovin that's on our DRM Blog, and we did a presentation with them at the last IBC that we had in person. And we'll be doing more around the low-latency DRM, it's become a critical factor to the low-latency experience, because you can't have low-latency streaming if you don't have low-latency DRM. So there's some talk, if you look at some of the stuff with some of our competitors.
Axonom did a webinar where one of their main partners talked about how many milliseconds are acceptable for DRM to scale. These are the types of focus that we're going to have more and more in the industry. And they're kind of exploiting the holes and how players are configured, how proxies are configured, how rights are created, how DRM companies create and deliver your licenses. So that whole discussion is starting to really rise, the rising tides are raising all ships on our business.
Schumacher-Rasmussen: Well, I don't envy you having to stay on top of these things, to stay three, four steps ahead of the game all the time, but I admire the way you've done it. And it's been great catching up here.
Schumacher-Rasmussen: Too bad we couldn't catch up at Streaming Media West or IBC, but hopefully next year.
Levy: And I appreciate your time and shout out to all of our friends and family and the Streaming Media community. Hi, Joel!
This article is Sponsored Content
We spoke with BuyDRM CEO and co-founder Christopher Levy about how his company is keeping up with the demand, how CMAF is changing the video landscape, and how watermarking and DRM are working hand-in-hand to thwart piracy.
Netflix's Cyril Concolato, Hulu's Nick Brookins, and Disney's Bill Zurat discuss how the three leading OTT services approach DRM and the role CMAF plays in this clip from their panel at Streaming Media West Connect 2020.
Streaming Media contributing editor Tim Siglin interviews BuyDRM CEO & Founder Christopher Levy at Streaming Media West 2019.
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