An update on DRM support

[tmm1]

First the good news- after months of research and experimentation, we’ve found a round-about way to enable and detect HDCP on tvOS using existing public APIs. It’s not as ideal as a real API to directly control HDCP would be, but it is workable for our purposes. This gets us past the existing roadblock which was preventing progress on the DRM support feature request.

Unfortunately there’s still lots of bad news. Our attempts at getting a DTCP-IP license from the DTLA have stalled out. The DTLA Adopter Agreement has a clause which imposes a $1 million - $8 million liability in case the DRM keys or methods are leaked by us or our app. Since we are a tiny company with nowhere near one million dollars, the DTLA has deemed us ineligible to be DTCP-IP licensees.

Further, we’re having a really hard time making the economics of DTCP-IP work. Yearly costs for a DTCP-IP license keys start at $20k/year. Once we have the keys, we also need to license an SDK which implements the DRM algorithm. Then there are R&D costs to actually implement and test DTCP-IP in our app. These add up quickly, and even if we were to pass them onto the customers who want DRM support, it would be quite expensive per user.

So far, 300 users have responded to our DRM survey. Let’s say that all of them agreed to subscribe to the DRM feature right away (which is unlikely). With 300 users, we would need to charge $15 per month per user to cover our costs. This makes it even more unlikely people would sign up, since the price is much higher than anticipated. However, the fewer users that subscribe, the more the price would need to increase. And the more it costs, the fewer people who will end up signing up. It’s a catch-22. Over time it’s possible more and more customers would sign on and the cost would decrease for everybody, but we have no idea how many more PRIME users are out there who might be interested in Channels if it had DRM support.

We’ve spent a lot of time and energy trying to figure out how to make DRM support work, but so far it seems the odds are stacked against us. The cable companies and content providers have a vested interest in keeping customers renting their equipment, so they can continue to collect monthly fees, push their ads, and promote channels/content from their preferred partners. Small players like us are explicitly left out in the dust. Even with FCC mandates like the availability of CableCARDs, the big players have found a way to maintain their monopolies.

[chasut]

Sad to hear, but not an unexpected outcome. I truly appreciate you guys fighting the good fight. I find it ironic that had you been able to solve the DRM issue, TWC would have kept me as a video subscriber for the foreseeable future. As it stands, they will likely lose my sub within the next month or two (unless of course they change their policy on DRM).

Channels will continue to be an important part of my solution for OTA. The user experience for Channels is better than anything else i have seen. My wife is a difficult user to please, and she loves it. And I do not see a streaming solution competing with the quality and reliability of the terrestrial broadcast for Networks/locals anyway.

Keep up the great work. We both eagerly anticipate the announcement of the DVR Beta!

[photosmike]

Bright House is my current provider and all the channels I need are not DRM. Channels that would be DRM, I subscribe to directly through ATV4.

I will buy/subscribe to your DVR when it is ready.

Mike

[OurFamilySpot]

I am of the Camp that OTA is 90% of what i want, and anything past that i will use apps for or subscribe direct (Like HBO). Sad to see they have found a way to make the entry barrier so high.

Thanks for the effort in trying to find a solution.

[timstephens24]

No way to work with Silicondust and use theirs via a partnership of some sort since they don’t have an Apple TV app?

[emiliosic]

It’s a very long shot, but what about writing a letter or petition to the FCC, with user’s signatures, so these egregious fees are not enforced?

[tmm1]

No way to work with Silicondust and use theirs via a partnership of some sort since they don’t have an Apple TV app?

The DTLA agreement prohibits them from sharing DTCP-IP confidential info with anyone who is not licensed.

It’s a very long shot, but what about writing a letter or petition to the FCC, with user’s signatures, so these egregious fees are not enforced?

Millions of people complained to the FCC about high set-top-box rental fees, yet they’ve been unable to pass any new regulations. The cable lobby just has too much political power. Hate to say it, but a letter from us with a few hundred signatures won’t make a difference.

[blackbird]

These are disappointing news. Nevertheless, thank you very much for looking into it and trying to make it work. Hopefully there will be a more convenient way of implementing it in the future.

[DebbieFL]

Disappointing, but understandable. Thank you for your efforts.

Guess I’ll have to work on Comcast to reverse their one-sided decision to refuse to authorize Starz (DRM) on ATV app, even though Starz is included in our Comcast fees.

AFAIK, they are the only cable provider which has instituted this restriction.

[nicholass817]

That stinks. If only there was a good way to gain a larger appeal…you would need less than 1% of the 130 millionish households to try it in order to make DRM viable and sustainable. Maybe worth it to go the Kickstarter route similar to SD.

[jnwright]

From where I sit, the lack of DRM support is a minor issue and, if it were available for a price, I would forego it. The few premium services in my Comcast subscription are already available through separate ATV apps. The key for me is access to local programming through an intelligent, elegant, and functional interface on Apple TV–which is finally the only thing connected to my screen. If I never see another Xfinity box or remote, it’ll be too soon.

[JerseyDevil62]

It’s a shame Apple doesn’t pick up their sword in this fight. Maybe if Channels were also on Android they would as Android devices don’t seem to have this issue. The native Siliconedust app on the Fire TV works just fine with DRM content…but it is no way near as good as Channels is.

[nicholass817]

The SD Android app took a long time and a lot of money to finally support DRM…and the latest version broke the DRM keys in order to expand it to a software DVR.

The big difference between SD and Channels is that SD has been producing hardware tuners for many years and has created a name by doing so…and thus an international following of sorts. Channels is an infant company doing something that would appeal to many (I think) if it were easy to setup, easy to maintain, cheap, and didn’t have issues with restrictions like DRM support.

So, the issue isn’t with Apple. It’s with DTLA, funding, and powerful cable companies creating barriers to protect their bottom line.

[gary]

so is there a new timetable for Channels DVR w/o DRM?

[kwiknip]

Spectrum (aka TWC) has a monopoly in Hawaii and just about all of there HD channels are DRM. This was a shocker because there was no mention of this limitation on their CableCard & SDV adapter website pages, plus the representative told me I would receive all my paid channels with the exchange of the set top boxes for the card with the exception of HBO, Cinemax, Showtime type of premium channels. Then I got home and set up my SDHDHR-Prime and all only to find out the hard way.
The only work around I’ve discovered currently is I had to download all my DRM HD channels individually from the Apple TV App Store. So Channels is used for watching all the local chennels and we have to switch to each individual app (those required a cable subscription ironically) to watch HD shows. Puts a stall on my future DVR hopes also.

[Andro101010]

If you really want to offer the DRM support the solution would be to take out insurance for any potential action by the DTLA. An $8m liability insurance would be expensive but is a lot more affordable (In the $10s of thousands pa?) and could be laid off against a higher subscription for those that want it. Talk to your broker for details.

[rosnow]

Would really hope you can find a solution here. Not having DRM is a deal breaker for me and not sure how far this can go as a solution without it. DVR seems like a HUGE step forward but not having DRM will poison a lot of customers who get down the road and can’t benefit from all the good work you guys have done.

At the same time, I can’t see paying more for this. $8 a month plus supplying my own hardware is already a big ask. My DVR is basically free from the cable company now and I am already paying extra for the cableCard so that I can play with this stuff. Willing to pay for DVR and hardware but at a certain point it starts to feel silly. Realize this puts you guys in a tough spot but if this application area starts to grow will certainly be more than 300 users wanting this.

[rotax]

First I want to thank you and your team for the deep dive in trying to figure this out. I have some suggestions.

Its seems that Channels and Silicon Dust are somewhat partners and competitors, but have a vested interest in a relationship that is mutually beneficial. Users of the HD Homerun app as well as their DVR solution also, I am sure, want DRM support and having DRM support is good for both companies. I would recommend considering a software architecture that would allow the DRM component to be a stand alone process / library that both companies could own and pay for the license to spread the cost to a much wider user base. Then Silicon Dust and Channels could integrate the component into their apps as well as potentially other 3rd parties who have the same issue to resolve. OR, it could be an add on component that we as end users purchase through an in app purchase directly from the partner company / lincencee from DTLA if sub-licensing is not allowed. This could be a nice solution for many other apps that need such a capability like VLC or any other app that could see Silicon Dust Tuners … I imagine there are others. If the licensing permits it and the software architecture can support it as well then there could be an annual recurring fee that reduces over time as the user base grows. You could start with a kickstarter campaign to sign up a minimum number of users to get cash up front to get things moving.

[sejmann]

tmm1: Has anything changed since November?

1. HDCP on tvOS: No API, but workaround still possible.
2. Number of users interested in DRM support: 300
3. DTCP-IP License Costs: $20k/yr + up to $8mil liability
4. Projected break-even price: $15/mo

You’re basically saying you need $54k a year to break even. Given that 20k per year would be $5.56/mo for 300 users, or 37% of the $15/mo price, that leaves 63%, or $34,000/yr as unspecified additional costs. I’m presuming that’s liability insurance and your amortized R&D costs. A quick Google search, not sure how applicable, shows a $2 million general liability policy as costing as low as $500 per year, so even if it costs up to 30 times that, it would still leave R&D as your greatest expense, which is an upfront cost.

a) What governs the range of liability, between 1 million or 8 million? Is it the extent of the possible compromise? Or is the max liability yet to be determined?

b) Given R&D mostly being a fixed upfront cost, at some point, even with just 300 users, our $15/mo would have paid you back, so the monthly price should then drop to between $6 and $10, depending on the liability insurance cost, right?

c) If 600 people signed up for DRM rather than 300, then the initial monthly price should run around $7.50 a month, with a future drop to between $3 and $5? Likewise, if a thousand people signed up, initial price would be $4.50/mo, dropping to $2 or $3 a month?

d) Would you consider a launching Kickstarter for the R&D costs? See if you can cover the dev costs up front.

It seems your biggest issue is getting enough people interested. Also, obviously, having DRM support isn’t just for initial 300 people. It makes your app hugely more marketable, safe for a much larger audience, and removes the largest caveat hindering your users from evangelizing your product and service.

I’m increasingly passionate about DRM, because Cox Cable keeps adding DRM to additional channels on a monthly basis, and while I love Channels and subscribe to the DVR service, I’m not sure how much longer I can continue to use it. I also bought my mother an AppleTV and HDHomeRun Prime only to realize her cable provider (formerly Time Warner Cable) DRM’s everything. I can’t recommend Channels to anyone these days. Solving the DRM problem seems like the cost of doing business. You can’t play ball without a bat.

As an aside, it’d be awesome if you became more of a one-stop-shop. For instance, becoming an in-app reseller of blessed or preferred Silicon Dust and NAS hardware. And built more self-service/self-install onboarding/trouble shooting into the app for new users, even telling users onscreen how to connect things, who to call at their cable company, and what info to give them. Lower the barriers to entry.

[djcastaldo]

The majority of hdhomerun users do not have or want cable. Along with the Channels app, this is a full-service solution for cable-cutters. The barrier to entry for users still paying for a cable subscription is that you don’t get a whole lot of new functionality with a prime. You can do essentially everything the cable company can do for you already with different hardware and a different interface. So you are buying extra hardware and subscribing to additional services only to save on some of the cable fees (but still paying a large chunk of money to the cable company for service).