CDNetworks, Widevine Announce Partnership

In a move that reflects several industry trends—the increased emphasis by CDNs on providing a larger ecosystem of services, the convergence of multiple internet-connected devices, and the continuing need for DRM on the part of video content owners—CDNetworks and Widevine announced a partnership this week at the Consumer Electronics Show (CES) in Las Vegas.

"We’ve come together in an agreement to refer our respective customers to each other in a technology integration we’ve done between Widevine’s DRM capabilities and what CDNetworks offers in content distribution," says Matt Cannard, Widevine’s vice president of marketing. In essence, that means content owners looking for DRM from Widevine will also be able to avail themselves of CDNetworks’ CDN offerings, while CDNetworks’ customers will find it easier to implement multiple-format, cross-platform DRM solutions from Widevine. Widevine’s solution currently works with both Microsoft Windows Media/Silverlight and Adobe Flash, as well as QuickTime and Real, though clearly WMV and Flash are the most popular format delivery choices.

"Previously, a content owner or provider would have to implement individual security systems to support whatever formats they want to deliver in," says Cannard. "In this situation, they can implement a single security capability that supports all those formats, as well as to PCs, Macs, and other internet-enabled devices such as Blu-ray players." Widevine also offers DRM solutions for telco, satellite, and cable TV providers, so the partnership with CDNetworks provides a bridge for those providers to expand internet delivery without adding an additional DRM solution.

For CDNetworks, the partnership is both a way to expand its technology ecosystem in offering premium DRM solutions for high-value content and a way to provide more DRM solutions to the specific vertical markets it’s targeting, says CDNetworks vice president of business development John Kang. "Obviously, media and entertainment companies put a high premium on protecting and monetizing their assets, but so do elearning providers," Kang says. "In Korea (where CDNetworks is based), elearning is a billion-dollar industry, we have customers that offer the test-taking materials to get into higher education schools, and traditionally screen-scraping and the ability to rip that content has been a problem, but with encryption methodologies and DRM it allows for the protection and monetization of that content."

CDNetworks moved into the U.S. market over the last three years, and has been able to leverage its existing penetration in the Asia and Pacific region to become one of only three CDNs (along with Akamai and Limelight) that is doing more than $25 million a year in CDN revenue, according to Streaming Media executive vice president Dan Rayburn.

The Future of DRM
With Apple announcing this week that its music store is going DRM-free, many are wondering if more DRM-free video is on the way from Hollywood. Not surprisingly, Widevine’s Cannard doesn’t think so.

"It’s a matter of economics," he says. "To produce a CD with 10 or 12 songs and put it out as an album is much more affordable than to create a major motion picture or a broadcast television show. We’re talking $10,000-$20,000 for a CD as opposed to $20 million to $100 million to produce a movie or an entire television season of a series. So the economic benefit to applying DRM in video delivery I still there and will continue to be there, whether or not the companies allow it to be viewed for free and force people to watch ads or require people to subscribe to a service."

The challenge, according to both Cannard and CDNetworks’ Kang, is to get that video to as many platforms as possible while still keeping it secure. "Certainly iTunes enables you to get to one very highly penetrated set of platforms, the iPod and the iPhone," says Cannard, "but there are other ways in which they want to deliver content, especially video, to the consumer."

That explains why the companies made this announcement at CES. "Being able to access content on numerous devices, not just PCs or TVs but mobile devices, is huge for the consumer electronics industry," says Kang, who was previously director of business development for Samsung. "You see that from LG and Sony, and also from a gaming perspective in addition to a video perspective. From a content delivery perspective, it’s all moving towards internet-connected devices and the proliferation of content on not just the traditional devices but on multiple platforms."

CinemaNow is using Widevine DRM on content it delivers or plans to deliver to the Nintendo Wii, Blu-ray players from LG and Samsung, and internet-enabled TVs from Samsung and Vizio. "A large number of consumers want to buy their device of choice, plug it in in their living room, and receive content wherever they want," adds Cannard. "That may come from a service provider that’s offering traditional television services or from an online provider that’s offering streaming content. Increasingly, we’re seeing the streaming of that content becoming a much more prevalent way that consumers are accessing that content, because they get the content when they want and where they want, with the added advantage of the capabilities of a device such as a Blu-ray player. Working with CDNetworks enables any service provider who wants to provide content to those platforms a leg up over traditional television service providers."