Disincentivizing Online Piracy Through Innovation

You don’t have to read all the headlines about the online attacks on Sony Pictures Entertainment to understand the growing problem of piracy confronting the TV and movie industry.

While it may never be possible to stamp out illegal downloads, some studies suggest that making shows and movies easier for viewers to access and watch whenever and wherever they want without friction can act as an incentive to watch legal content.

Today, there are more than 100 legitimate online services in the U.S. alone. But to truly disincentivize piracy, content and rights owners should partner with broadband service providers, mobile network operators and smartphone manufacturers to develop a frictionless authentication system that is unique to each and every device that is owned by a customer.

For a next-generation authentication system to work and be widely adopted, it would have to be a seamless experience that is easy to set up and manage as consumers add on new services, such as HBO’s recently announced stand-alone streaming service.

For the authentication experience to be truly frictionless, it would have to be an industry standard that is driven by the wants and needs of the paying consumer — not by the content owners’ desire to create end-to-end encrypted system, such as the Prima Cinema. This high-end system, retailing at $35,000 with each movie rental costing $500, enables consumers to watch movies at home while they’re still playing in theaters.

While Prima Cinema creates value for a few, the system will not see mainstream adoption due to the current pricing structure and hardware requirements. And as consumer habits continue to evolve and change, the authentication system will have to change as well, hopefully in a way that is not noticeable to the consumer.

As the big shift to mobile continues, an authentication system will have to seamlessly work its way into the background in a way that is not visible to the consumer. A recent report from Google points out that in a typical day, 98 percent of 18- to 34-year-olds use their smartphones to watch video content. The report also notes that of all the time spent watching videos on YouTube, 40 percent is on smartphones.

The shift to mobile will also benefit content owners, as a next-generation authentication system could bind a device to a subscriber’s account by authenticating the device prior to shipping.

In the future, when consumers order their next smartphone, they will be prompted to enter their login credentials for their various streaming services. By encouraging a consumer to pre-load their credentials, streaming service providers would be able to bind the device to the user’s account without the current hassle and friction of authenticating a device.

With a pre-authenticated device, subscribers would be able to access exclusive content from Wi-Fi hotspots around the world based on their geolocation. This would create new marketing opportunities for content owners, while at the same time creating value for subscribers.

“Marrying content with who and where is a home run for consumers and content owners, as it creates value by adding context to what is being served for both parties,” says Mike Perrone, CEO of SocialSign.in, a startup focused on developing a marketing layer on top of Wi-Fi networks: Consumers would be able to watch unique geo-targeted content based upon their location.

As we embark on the next chapter of authentication systems, it is important for content and rights owners to think like a consumer and focus on unique geo-location content that creates value for subscribers.

“Everyone has a vested interest in making authentication simple,” notes Marty Roberts, Co-CEO of thePlatform, a video publishing company and an independent subsidiary of Comcast.

When the friction of authentication is eliminated and consumers can experience and enjoy new content from various locations and devices without restrictions, piracy will become disincentivized.

Disincentivizing Online Piracy Through Innovation is an article written by Brulte & Company Co-Founder Grayson Brulte that was originally published on General Electric Reports.

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