VOD before DVD in Korea

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Movie delivery is ruled by a strategy called “release windows”. It means that a movie is not available at the same time for all distribution channel. The traditional sequence is “Theater – Hospitality (airplanes, hotels, …) – DVD/rental – VOD – Premium channel – Pay TV – Fre To Air.”

It is believed that one of the reason of the slow take off of VOD is the availability of illegal DVDs before VOD. People are willing to pay a few dollars (euros or whatever money in their country) to get an earlier access even if an illegal one. In theory, offering VOD before DVD should thwart this type of behaviour.

Thus, Warner Bros announced the release of VOD before DVDs in Korea. If successful, this strategy may be generalized to China. Why Korea? Because Korea is probably the country with the best broadband network and the higher penetration of broadband. Thus, download times should be negligible and potential customers larger. Will it work? I am not sure. According to me, two conditions have to be simultaneously present:
1- The VOD release occurs at the same time than “release” of illegal DVDs. Currently, illegal DVDs pop up soon after (if not before) the first worldwide theatrical release.
2- The price of VOD has to be near the price of an illegal DVD.
Another solution could be that VOD offers attractive goodies not available on illegal DVDs (this is less obvious)

I find the strategy used in China more interesting. Warner and Paramount offer legit DVDs at a price near the price of illegal DVDs. Customers may be ready to pay a little more to have a guaranteed quality product.

For sure, the traditional release windows will drastically change in the coming years. We already see a sever shrinking in the duration of the different phases. The delay between theatrical release and legit DVD constantly erodes.

Financial crisis

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This morning in my my car I listened to Christian de Boissieu, a French economist. He explained that this crisis was different from previous ones do to a problem of lack of trust. Trust? as in our preferred topic?

The current crisis is due to banking organisms that took too high risks. Nobody was either seriously evaluation the acceptability of the risks, or worse they did not care. In other words the aversion to risks was extremely low. And of course, as we all know. The higher the risk, the higher the probability that the corresponding threat will be true. Here we are.

De Boissieu highlighted that the world had already many severe crisis. Just remember the deflating Internet bubble. Nevertheless, it never shook so much the world. Massive attempt to inject money by Central Banks have no serious impact. According to him, the banks do not anymore trust each others. This means that they do not anymore lend money each other. This lack of trust is such that they do not even dare to borrow money from central Banks. Their aversion to risk from extremely low jumped to extremely high. Thus, this lack of trust freezes money, and there is not enough available liquidity. Thus, companies have trouble to reimburse. Vicious circle.

It is strange that institutions such as banks which are among the ones that master the best security through the notion of risk management and trust fall in that deadly pitfall. Once behind us, security specialists should study this crisis to learn about mistakes. They were all about risk management (the crux of security)

Cracked quantum cryptography?

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Wednesday, October 8, 2008

Many media are currently reporting that a Norwegian student, Vadim Makarov, cracked quantum cryptography. According to them, he has broken the unbreakable cryptosystem.

Let’s investigate a little bit. The easiest is to go on his personal site. There is a link to a poster session from SECOQ conference. This poster session of course explains the hack. He found a weakness in the implementation of the photonics receiver. This allows him to setup a Man In the Middle attack. He can then impersonate Alice.

Thus, it is a good piece of reverse engineering and hacking. It highlights that often flaws come from implementation and that Law 1 is always true. Nevertheless, quantum cryptography is not yet broken. It would be equivalent to state that AES broken because AACS was broken:-(

Once more, media are using appealing titles. Unfortunately, they are misleading. In some cases, it is that the journalist does not understand what he is writing about. In other cases, it is to be more attractive.

Is French Hadopi law dead? (2)

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On 24th September, by voting the amendment 138 proposed by Daniel Cohn Bendit, European Parliament strongly hit the French initiative HADOPI for flexible response (see Is French HADOPI Law dead?. in a letter (pdf) , French president, Nicolas Sarkozy asked José Manuel Barosso (President of the European Commission) to drop this amendment.
It seems that yesterday José Manuel Barroso rejected the possibility for the Commission to reject it. It is not the role of EC to censorship a decision voted by 90% of the European deputies, unless democracy is at stake. It will be up the European Council of Ministers to promulgate or drop amendment 138.

[Edition 13-oct]: Here is a link to the press release by the Commission.

MPAA 1 – RealDVD 0

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A judge has ordered RealNetwork to stop selling its new RealDVD software. Here is what is currently displayed when visiting the site of RealDVDrealdvdinjunction.jpg.

RealDVD is a 30$ software that allows to backup DVDs on your PC. You may state that DeCSS is doing the same for 0$. The main difference is that the copy on PC is copy protected. Furthermore, it is supposed to limit the copies to 4 registered computers (additional 20$ per computer). Thus, RealNetworks claims not to have broken CSS and not infringing DMCA. Studios do not have the same opinion.

A rather similar started four year ago with Kaleidescape. Kaleidescape produces a video server that stores content read from DVD. The video server can then playback the movie without the presence of the original DVD. DVD Copy Control Association claimed that it was a violation of its compliance rules. In 2007, a judge ruled in favor of Kaleidescape.

Thus, a new battle of Titans started. A bet for the winner?

Is French HADOPI law dead?

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One of the outcomes of French law, so called HADOPI, was to allow flexible response against P2P users. An organism nominated by the government could decide to stop for one month the Internet access of P2P recidivists. Before this last strike, the recidivist would have received two notifications.

Unfortunately for HADOPI, on 24th September, European Parliament has voted amendment 138. The odds were 574 against 73 deputies. Amendment 138 states that it is illegal to restrict free speech and access to information of any citizen without prior judiciary decision. This is not the case with HADOPI.

French government announced that it does not expect to drop the law and the flexible response. Nevertheless, European law supersedes national laws. Will there be some adjustment to HADOPI? Wait and see.

More information about fighting P2P piracy, HADOPI, flexible response in next security newsletter due end of October.

The DRM game

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Heileman G. and Jamkhedkar P. are regular contributors for ACM DRM workshop. For many years, they have presented a paper at each workshop. An their papers are worthwhile.

Last year, they presented an interesting http://portal.acm.org/citation.cfm?id=1314287. It analyzed the different possible strategies for Vendor and Consumer using the game theory. The model was rather simplistic. Thus, there was no big surprise in the outcomes especially when analyzing the baseline game (section 2). Would DRM be unbreakable, Vendor should always sell protected content. For Vendor, it is important decrease the utility of downloaded content versus sold content. Only common sense.

The paper becomes more interesting with section 3 when it analyzes the sub-games. What does the consumer do with content and how Vendor reacts. One outcome is that the higher the penalty, the less Consumers Vendor has to sue. The interesting part is the description of a distribution mechanism with a trust valuation that defines the cost of the content and the associated bonuses. This is a trend that was initiated for many years by Philips labs based on the use of forensic watermark.

I have always problem with that philosophy because it relies on the rather strong assumption that the trust evaluation will work. I have many doubts about that, especially with B2C traitor tracing. Today, you have only limited number of sources on P2P networks, and they do not collude. Let’s now suppose that Consumers understand that they may cheat if either they collude or they issue more instances of sources just to dilute the system… I do not even speak about attacking the reputation system (look in electronic auctions).

Nevertheless, game theory seems an interesting tool to explore strategies. We may expect to see papers in the future with more complex models. I would like to see one which would differentiate authors from vendors/distributors and vendors from authorities.