Open Source and DRM: The Netflix-Android case-study

While Open Source has become the stumbling block to Netflix riding the Android wave, Netflix has time on its side to address the small screen video streaming phenomenon for global masses

Netflix is possibly the world’s largest on-demand video service with on-demand video streaming over the internet and rent-by-mail DVD/Blue Ray service. Google’s Android and Netflix have been in discussion over attempts to monetize the platform with video streaming.

Android as a smartphone platform and the fastest growing one at that, has synergies with NetFlix. While Netflix benefits from the burgeoning Android numbers, Android would gain in terms of being able to host Netflix video streaming for its users. Inspite of the best intentions from both the parties, it is Google’s Open Source roots that is turning out to be a stumbling block for Netflix hosting on Android smartphones. The main concern revolves around platform security and content protection mechanisms which currently don’t meet with film and TV studio demands that Netflix has to adhere to. The problem is that in making the phones a place for playing the content, the DRM will undoubtedly ruin the best features of the phones, their open architecture and the ability to modify them to one’s own desires. Smartphones have memory card slots, and no movie studio is going to want users to have the ability to save the movies to a card, for later enjoyment – because they see later enjoyment being had by others, on other phones. That will generally be the steps to lock down the cards from any access, at least while the streaming is occurring. DRM issues have been worked out on XBoxes and PS3s, but then they don’t have anything close to the open code that Androids share. The movie studios are no doubt worried that it will only be a hop, skip, and a jump command for the content funneled to a phone to make its way to a PC, where it can be duplicated, modified, and made available to the greater viewing public, without any sort of prior payment arranged.

Android is working with individual handset makers to add the necessary content protection that would allow them to bundle in the Netflix app. However the exact models and required OS versions have yet to be announced. While this clearly is not the preferred solution, however, provision of services for some Android device owners is better than denying it to everyone.Thus one may expect to see some Androids sporting the Netflix by 2011.

Given that Netflix usage is mostly US and Canada based, this delay may be inconsequential. People prefer large screens for long form video viewing. Thus, Netflix CEO Reed Hastings is not hugely concerned about the impact of iPad, PS3 and Wii on viewerships of Netflix. Long-form video viewing does not translate that well to mobile platforms.The story will be very different in developing markets, where big-screen TVs are less commonplace and cheap tablet devices will soon be readily available. NetFlix plans to address the DRM-Android Compatibility over the next three to five years, via a strategically planned rollout based primarily on bandwidth constraints.

Elaborating the 3G Services

I get the feeling sometimes that 3G is more of a global buzzword amongst people around with only a shallow understanding of the services it enables. Sure, everyone is aware of the High Speed Data Access on mobile devices, but what does it do beyond that? Here are a few thoughts on services and features that 3G enables/would enable in times to come:

1. Large “Enterprise” Apps: The SAP and Oracle ERP systems run on broadband and even then are notoriously heavy on system resources and usage. 3G with its enhanced data bandwidth and higher speeds of data would be a huge enabler in terms of running these large “enterprise” applications on the mobile “on the go”. Enterprise adoption for running business and systems would thus be the biggest contributor for 3G revenues.
2. Video Streaming: This will be the most “visible” benefit of the high data speeds in 3G across a diverse set of usages
a. Video Conferencing: We have seen this (remember the Deepika Padukone BSNL ad)
b. Video Streaming/Mobile TV: TV content on the move through air on the mobile
c. Social Networking: While access to Facebook and other SNS sites is possible on 2G, video sharing is yet to catch on. Videos On Facebook and YouTube consumption will see a big fillip thanks to the data speeds of 3G
d. Mobile Surveillance: An application which has both enterprise and domestic use, video feeds of users house or work place will be enabled by 3G

3. Live Gaming: Rich media transferred through over the Internet providing a console like Gaming experience would be another domain that would benefit from high data speeds

4. Cloud Streaming: Music, Video Clippings, or Streaming Games are possibly the first phase of Cloud based services. Going beyond, the focus would shift to the Cloud wholly. The kind of stuff being spoken of here is Part OS in the cloud, Remote Software, Remote Applications. The user device would simply have to log into the cloud and choose the end service and the enablers will dynamically support the end service. Thus a lot of storage on the device (such as mobile phones), will shift to the cloud which will come into service only when required by the user. The high data speeds will support the dynamic transfer of data and services through the air.

5. Location Based Services: While most Location Based services will normally be supported on 2G networks, there may be high end applications such as LAYAR which will require speedy and dynamic link up with the central servers to feed location data to the consumers

6. m-Commerce, m-Health, m-Payments and m-Banking: All and most of these are supported by 2G services, but enhanced data and security layers for payments, banking and commerce could be facilitated by 3G. Similarly Remote Health monitoring (in absence of broadband connectivity) can be another major service enabled by 3G (remember the Deepika Padukone BSNL ad again)