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Growing the Chinese media market

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By Phil Keys

At Intertrust’s fourth annual summit event in Beijing, content industry luminaries from China, the US and Europe gathered together for a dialogue on how all participants can work together to grow the legitimate media market in China for both the Chinese and overseas content producers. At the event, Talal Shamoon, Intertrust’s CEO, noted that the way to make this happen is to expand content protection to cover the end-to-end video distribution cycle while helping local service providers create attractive experiences for their audiences. “We need to respect local rules and distribution norms and bring entertainment to the doorstep of every consumer,” said Shamoon.

One of the drivers of this cooperation is of course, the ever expanding size of the Chinese entertainment market, particularly in the OTT (over-the-top) video market. In 2015, Chinese OTT revenues were over 40 billion RMB ($5.9 billion US, iResearch), an increase of 61.2% year to year. While 23.1 billion RMB ($3.4 billion US) of revenue was driven by advertising based monetization, user paid video services brought in 5.13 billion RMB ($761 million US), an increase of 270.3% year to year.

While the event featured presentations from executives from 21st Century Fox, Sony Pictures and Universal Pictures, much of the discussion really focused on how Chinese distributors and content producers are introducing new services for distributing local content while integrating content protection. One example is Ruyi Films. Ruyi Films not only produces original movie and television content; it has invested in its own Internet video distribution platform called Pumkin Movie for both local and overseas content. Using ExpressPlay and Marlin DRM to protect content, Ruyi is the second fastest growing new media platform in China with over 3 million registered users and growing by an average of 25,000 users per day.

Much of the discussion from the Hollywood side was focused on technologies, notably in production, distribution and content protection, needed to support the next generation of UHD (ultra-high definition, also known as 4K) and HDR (high dynamic range) video now coming on to the market. The Chinese market is already working actively to make these and other advanced OTT video experiences a reality. ExpressPlay has already announced it is working with Civolution to integrate their NextGuard session-based video watermarking solution to support Hollywood initiatives to roll-out UHD/HDR content as well as early-window video on demand movie release in the Chinese market.

Beyond watermarking it was also stressed that hardware security measures such as implementation of HDCP (high-bandwidth digital content protection) 2.2 for the HDMI (high-definition multimedia interface) output, again something which ExpressPlay supports as part of the ExpressPlay UHD offering. At the event, Rambus, whose security solution is used in in the ExpressPlay UHD service, discussed some of details their technologies and how it is used to protect UHD content in connected TVs.

The overseas contingent was not just talking about content protection, however. Alberto Sigismondi, the CEO of the Italian digital satellite and OTT service provider Tivù, talked about how Tivù’s success in the Italian market was built on their platform composed of open standards, including Marlin DRM, MPEG-DASH with HbbTV support coming up. Tivù’s free-to-air digital TV has been adopted by over 2.9 million households, over 10% of the Italian market, and was the first in Europe to broadcast encrypted UHD content. Thanks to the open platform approach, tivùon!, Tivù’s OTT service, launched in July, 2016, is available on more then 3 million devices in the Italian market.

Intertrust also brought up another important subject: monetization. With the strength of the mobile device market in China and video services on those devices, Intertrust’s CTO Dave Maher introduced Personagraph, Intertrust’s mobile audience segmentation solution for mobile video advertising. Personagraph takes a wide variety of signals from sensors and software on mobile phones to create anonymous audience profiles for advertisers to target their messages to. Maher stressed several points. First, as more and more connected devices with sensors come online, there will be even more sensor data available for more accurate audience segmentation. Second, Personagraph’s technology allows it to reduce costs by not having to rely on 3rd party data that can be quite expense. Third, there is a time in the near future where ad slots in video programming could be uniquely targeted to a consumer’s specific profile and context and auctioned to advertisers. In the fast-growing Chinese OTT market, such a system could make for lucrative advertising supported OTT services benefitting both Chinese consumers and the entire industry.

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