One Irdeto: Looking back, moving forward

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Irdeto – West
Taurus Avenue 105
2132 LS Hoofddorp
P.O. Box 3047
2130 KA Hoofddorp
The Netherlands
Irdeto – East
F3/6, Beijing Sunflower Tower
No. 37 Maizidian Street
Chaoyang District
Beijing 100125
China
Copyright © Irdeto 2010
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TABLE OF
CONTENTS
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A message from the CEO, Graham Kill
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Irdeto Timeline
8
Determination, Foresight and Risk
10
Den Toonder in the News
22
South Africa and the Birth of M-Net
24
Remembering CEO Jac van der Merwe
34
The Italian Job
36
Entering the Digital Age
44
A profile of former CEO, Martijn Höfelt
64
Adventures in the Far East
68
Marketing the Irdeto Brand
82
A profile of Irdeto’s CEO, Graham Kill
98
Irdeto Keeps on Growing
102
Phil Weber Award
120
One Irdeto
122
Irdeto in Motion
126
Equipped for the Future
132
Colophon138
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WELCOME
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Celebrating milestones is an important part of
South African roots and parent company Naspers,
life; we mark the passing of each year, entering
and showcases how our unique technologies
a new phases of our lives, the anniversaries of
and strategies have enabled everything from the
momentous events in our personal or collective
world’s first digital satellite pay-TV network to
history. The year 2010 is indeed a momentous
the world’s first mobile broadcast TV service –
year for Irdeto; we have defined a new mission
distinguishing Irdeto on the international stage.
and vision for the company, realigned our
corporate structure and opened our brand new
Irdeto has grown to where we are now by having
Western Headquarters in the Netherlands, after
strong,
celebrating our 40th anniversary in 2009. So
innovative employees who were not afraid to
I believe it is important to mark all of these key
take a few risks along the way. This history of
milestones by taking a look back at our history, so
innovation continues today, as we expand our
that all of us as part of Irdeto can appreciate our
solution offerings to meet the demands of the
roots, and begin to write our new Irdeto history as
ever-changing connected marketplace.
visionary
leadership
and
dedicated,
we move forward together.
I know you will enjoy reading One Irdeto - Looking
One Irdeto - Looking Back, Moving Forward reflects
Back, Moving Forward as much as I did. I am
upon the past four decades, and brings the early
truly honored to lead such a dynamic organization
days of our legacy to life. The book tells the story
and look forward to adding our own chapters and
of the founding of Irdeto by Pieter den Toonder,
success stories to One Irdeto’s history.
whose fascination as a youth with radio technology
was the catalyst for the origins of the company. It
GRAHAM KILL
also details the strong connection we have with our
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IRDETO
TIMELINE
1951
TV broadcasts begin in the
Netherlands, with just 3 hours
of programming per week..
1954
- RAI begins the first television
broadcasts in Italy.
1969
- Irdeto Access B.V. registered
1975
Home Box Office (HBO) opens
its doors.
One of HBO’s first broadcasts
is the “Thrilla from Manila” boxing
match, between Muhammad Ali
and Joe Frazier.
1976
Sony introduces the Betamax
videocassette recorder.
The South African Broadcasting
Corporation (SABC) introduces
at the Netherlands Chamber of
South Africa’s first television
Commerce by Pieter den Toonder.
service.
- TV is transmitted from the moon.
Italy’s highest court approves local
Six hundred million people see
television broadcasts from private
it live.
- Ninety-five percent of U.S.
households have TV.
1970
Irdeto founder, Pieter den Toonder
continues working on antenna
companies.
1977
Pieter den Toonder continues work
with U.S. based Oak Technologies
on Pay TV technology.
technology and establishes
1980
fundamental Pay TV technologies.
Oak Technologies purchases
1972
Half of the television sets in the
U.S. are now in color.
the rights for the Ali vs. Holmes
boxing match. The match
could be viewed only by paying
subscribers.
1981
Japan’s Nippon Hoso Kyokai
(NHK) demonstrates HDTV.
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1983
1989
First commercial use of smart
Irdeto’s South Africa office is
cards by Télécarte in France.
1984
set up and work starts on
satellite platforms.
With the rapid explosion
1990
of technology in the 1980’s,
The Broadcasting Act of 1990
the information age begins.
Irdeto becomes a leading
innovator in Pay TV technology.
The South African government
starts accepting the country’s
first applications for pay
television licenses.
legalizes private television at
the national level in Italy.
1991
Irdeto begins to develop next
generation cable products.
Irdeto moves to Noordlanden
building in Hoofddorp and holds
1985
its first User Group.
Irdeto is contracted by
Irdeto helps launch Telepiù,
South Africa’s first pay television
Italy’s first pay TV network.
station M-Net.
1986
1992
The first digital-to-cable
M-Net launches South Africa’s
service is introduced.
first private subscription
The new Integrated Business
television service.
1987
Half of the U.S. TV households
(about 55 million) subscribe to
basic cable.
M-Net broadcasts the boxing
match between Marvin Hagler
and Sugar Ray Leonard to 90,000
subscribers.
System (IBS), is launched and
deployed at Lumiere TV in Cyprus.
1993
The Digital Video Broadcasting
(DVB) standards are developed
in Europe.
Irdeto introduces VideoCrypt 2.
1994
1998
2004
2008
MIH is awarded a contract for
Irdeto launches the first IPTV
Irdeto acquires IBS Interprit
DirecTV is the first high-powered
China’s Village to Village Project
deployment in North America.
direct satellite TV system in the
– a trial delivery of TV and radio
Debut of Irdeto’s Epsilon Smart
U.S.
programming to remote areas of
1995
Irdeto deploys the first digital
Irdeto celebrates 40 years
technology.
in business.
2000
Australia with Galaxy.
Entriq is founded to focus on
emerging broadband markets.
MPEG-2/DVB system.
The average American watches
about four hours of TV every day.
Irdeto’s smart card entitlement
center opens in Hoofddorp.
Lockstream launches the first
M-Net launches their digital
DRM client on a 3G network.
satellite service, DStv in South
The Irdeto smart card v2 is
released.
Africa.
1996
FCC approves standard for HDTV
Irdeto is the 1st approved foreign CA system in China.
The Salt Lake City Olympics
launches the first joint international
1997
HDTV production.
MTV reports that it reaches 250
China as its APAC regional
headquarters.
Irdeto helps Telecom Italia Media
for broadcasters.
launch their pre-paid television
service CartaPiú La7.
World’s first mobile Pay TV CA
deployed in South Korea by Irdeto.
Irdeto receives Hamel Trade
Award in South Korea.
Irdeto acquires
transition in the U.S.
Irdeto designates Beijing,
based conditional access
2006
2002
million homes worldwide.
Irdeto introduces the PIsys
conditional access system.
Irdeto launches software-
Irdeto acquires Lockstream.
to protect IPTV broadcasts.
and sets time line for digital-TV
worldwide have TVs.
2005
Irdeto introduces CypherCast
More than 1 billion people
2009
China by satellite, using Irdeto
conditional access system in
Irdeto launches world’s first
Card with FlexiFlash.
and Entriq.
Irdeto launches an upgraded,
best-in-class conditional access
system: Irdeto CAS 3
Irdeto launches SmartStart
On Demand, a digital pay-TV
platform that enables cable
operators and content rights
owners to nearly unlimited
entertainment options through
Philips Cryptoworks.
a highly customizable interface.
2007
2010
Irdeto acquires Cloakware
Irdeto’s European Headquarters
and IDway.
moves to a new high-tech and
Irdeto launches a dual HQ
ecological office on Taurus Avenue
strategy: Amsterdam and Beijng
in Hoofddorp, the Netherlands.
and CEO moves to China.
Sun Direct in India uses Irdeto
technology to secure their new
Direct-To-Home service.
Irdeto CEO Graham Kill receives
the Phil Weber Award from
Naspers.
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DETERMINATION,
FORESIGHT AND RISK
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A passionate engineer and a pioneer in television technology, Pieter den
Toonder laid the foundations for the thriving business that Irdeto has
become. From Pieter’s ground-breaking work many years ago, Irdeto has
grown from an operation with a single employee to a rapidly expanding
technology company at the top of its game, with dual headquarters on two
continents, established clients and partners across spanning the globe,
and countless new business opportunities worldwide.
He not only developed breakthrough technologies
when owning a radio was strictly verboten! With
– Pieter was also a catalyst for Irdeto’s spirit and
his crude radio sets, Pieter was able to listen to
personality. The determination, foresight and “can
signals broadcast from Great Britain, where Queen
do” attitude Irdeto is known for started with a single
Wilhelmina of the Netherlands lived in exile.
technology enthusiast in the Netherlands.
Then Nazis discovered what this bright kid was
WARTIME RADIO TINKERINGS
doing, and Pieter was deported to a German
When the Germans invaded the Netherlands, Pieter
work camp. He was only released at the end of
den Toonder was in his early teens. Perhaps it was
the war, after spending eight long months under
a touch of resistance than inspired him to begin
terrible circumstances.
tinkering with transistors and old radios at a time
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Pieter returned home determined to continue his
IRDETO IS BORN
tinkering, with plans to study radio engineering.
Pieter’s fascination with radio grew with the world
As so many others, however, he was weakened
of broadcasting, and soon he began exploring the
by the war and contracted tuberculosis. After
technology of television, too. In the Netherlands,
making a full recovery, he soon faced another
the war had suddenly halted the development of
challenge. Still eager to study radio engineering,
television. Broadcasting only began towards the
Pieter requested a university scholarship – only
end of 1951, with just 3 hours of programming per
to be denied by a Dutch government reluctant to
week – and a month-long break in the summer!
invest its scarce post-war resources in people
In 1952, only 500 homes had a television set, which
with health problems.
were prohibitively expensive. By this time, Pieter
had become a popular radio technology teacher
Instead, Pieter repaired old radios and taught
at the Radio Institute Steehouwer in Rotterdam
radio engineering at a private school. He also
– which was attracting more and more students
enrolled at the Technical University of Delft, often
each year.
corresponding with professors when work got in the
way of attending lectures. Following his graduation
Together with his top students, he built a television
in 1956, Pieter was invited to teach at the Technical
receiver from scratch in just two months, with the
School of Dordrecht, and as his reputation in radio
students making all parts themselves (except the
technology grew, he found himself being recruited
28 “radio lamps” and 200 resistors and capacitors).
by international companies eager to benefit from
Their next television set only took 2 weeks to
his expertise.
build. It not only received broadcasts flawlessly – it
also helped inspired the institute to begin holding
special television technology courses.
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Pieter, together with his students, building a television
receiver from scratch in just two months.
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A picture from the past:
Pieter teaching at the radio school
From 1952 to 1963, Pieter also worked as a
consultant for the Dutch company, Messa,
developing antennas and reception equipment.
Messa often sent him to the USA on business.
As he came into contact with more and more
Americans, people began to understand that Pieter
had unique expertise.
The American company, Oak Technologies,
wanted to expand into the European market – and
Where it all started: on Ambachtstraat
in Dordrecht, the Netherlands.
Messa was their key. Oak took over the company
and offered Pieter a lucrative full-time contract.
graduates) with his last name (den Toonder). And
But no matter how many times they asked, he
in 1969, Irdeto was born.
refused. Pieter preferred to stay in Dordrecht as
an Oak Technologies consultant – launching their
Pieter remained at the forefront of each new
European branch office in his home’s garage!
Irdeto breakthrough during this period – from
television tuners to cable television. Such was
After working more than a decade as a teacher
his dedication, that he even built the encoders for
and independent consultant, the time was ripe
Irdeto’s first multicode cable systems in his little
for Pieter to register his company with the Dutch
lab in Dordrecht.
Chamber of Commerce. It seemed only natural
for the company name to reflect his contribution,
New technologies were being discovered, and
so he combined Ir. (the Dutch title for engineering
business was growing fast – but by 1985, Pieter
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was 59 years old – a nice age to retire. Or so
United States, and ended up at Oak Technologies
he thought! Little did he know, Irdeto’s future was
in California. Their analog scrambling technology
about to change – and postpone his retirement
was just what M-Net needed.
for years.
SOUTH AFRICA’S FIRST PAY TV
In December 1984, the South African government
started accepting applications for pay television
licenses. Koos Bekker, now CEO of Naspers,
seized the opportunity and linked up with South
African media companies wanting a piece of the
action. A new company, Electronic Media Network
Limited, or M-Net was born. The early M-Net team
overcame political and financing hurdles, but
needed technology solutions for their venture. Enter
The M-Net logo in 2010
Jock Anderson of the South African Broadcasting
Corporation (SABC). Jock joined Jac van der
Merwe and Antonie Roux of de Nasionale Pers
Back in Holland, Pieter and his engineers were
(now Naspers) on the technology mission required
developing a European version of Oak’s technology.
to launch South Africa’s first pay television station.
With some modifications, it would be perfect for
South Africa. So the M-Net team purchased the
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Jac wasted no time. He took Jock, Antonie and
rights to the technology, the engineers got to work
two other consultants on a bold quest across the
– and a new era began for Irdeto.
As the emphasis shifted to South Africa, business
Dordrecht. Media legislation had recently changed
snowballed. Once the prototypes were tested, they
in Italy. So Berlusconi’s company, Fininvest,
hired new employees to industrialize and mass-
decided to create a pay television network, Telepiù.
produce the technology. So much for Pieter’s
The only thing he was missing? The technology!
early retirement! He couldn’t resist the challenge
This was an excellent opportunity to build on
and oversaw the project – regularly visiting South
the success achieved in South Africa. Pieter
Africa to help soothe the inevitable growing pains.
reunited with M-Net’s key players – Jac van der
Soon everyone realized that M-Net’s experts would
Merwe, Jock Anderson and Antonie Roux – and
be better off working closer to Irdeto’s technicians.
successfully negotiated the details of the Telepiù
For several months, Jock supervised the production
agreement. Jac was the first to move permanently
of prototype decoders and encoders for South
to Dordrecht, where he masterminded the new
Africa with a group of engineers who arrived from
support operation. Under his guidance, fourteen
South Africa to learn about the technology from
Irdeto engineers toiled for months to make the
Pieter. Thanks to their frequent trips to Dordrecht,
Italian system operational on time.
Jock, Antonie and Jac were starting to feel quite at
home in the Netherlands.
In tandem, the hardware development team worked
for six months with a team of Italian business
HIGH-PROFILE CLIENT
analysts and developers in Johannesburg. For
By the late eighties, South African pay TV had
one year, Irdeto ran a project office in Milan. And
proven to be a huge success, and the operation
Antonie moved to Italy with his team of five to
was running reasonably smoothly. But just as
implement the systems.
Pieter started making new retirement plans,
media magnate Silvio Berlusconi contacted him in
During those hectic times, Antonie was much
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more than just the head of IT. He flew between
After Pieter den Toonder’s retirement, Jac took
continents, chased leads and searched for new
his place as the Managing Director of Irdeto. Jac
technology – and skilled staff. Antonie was so
provided the momentum Irdeto needed to expand,
dedicated to meeting production deadlines, when
but he did more than just generate new business –
the first Gulf war broke out in 1990, and new
he loved exploring new ideas with existing clients.
security restrictions delayed shipments to Italy,
In 1991, Jac started the annual Irdeto User Group,
he drove to Nice, loaded his car with chips and
giving major users of Irdeto products a chance to
completed the delivery himself.
meet and share their needs and views with Irdeto
and each other.
With plenty of hard work and no shortage of longdistance travel, the Irdeto and M-Net teams helped
Irdeto became a subsidiary of NetHold (another
launch Telepiù in November 1991. This was Irdeto’s
member of the Naspers group). Irdeto’s technology
first major breakthrough. Suddenly this small Dutch
had become an essential link in the Naspers family
company had credibility – and a high profile client.
– the key to protecting the content produced by the
various holdings of this large media group.
TRAGEDY STRIKES, IRDETO MOURNS
As Pieter eased into retirement for the third (and
In 1994, Jac accepted a new position with NetHold,
final) time, Jac, Antonie and Jock continued to
and began preparing to return to his beloved South
develop opportunities for Irdeto and branched
Africa. When flying home from a Cannes business
out into other areas beyond in pursuit of growth
trip, his light aircraft crashed into the French Alps.
opportunities for Naspers in Europe. By the
Tragically, Jac did not survive. The many tributes
early 1990s, they all lived and worked in the
that poured in were testimony to his energy,
Netherlands.
honesty, drive and vision.
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As colleague and friend Jan Steenkamp said, “Jac
Irdeto’s products. Jock left Irdeto in 1994 to head
had a way of motivating and driving you further
Orbicom, another South African media start-up,
than you could possibly imagine. And then, just
and later worked as a CTO and consultant in the
when you thought things were safe, he drove you
broadcasting and telecommunications industries.
even further. He could take people through the
Antonie returned to South Africa to work and later
best – and worst – of situations, and make them
became the CEO of the Internet Division of the
love every minute of it. And when you were down
Naspers subsidiary, MIH.
or struggling, Jac would simply pick you up and
take you along with him – without you ever noticing
After Jac’s death, Irdeto’s Chief Technology
that he did this intentionally.”
Officer, Martijn Höfelt, became CEO. As the
world transitioned to digital, Irdeto’s Commercial
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FROM ANALOG TO DIGITAL TO GLOBAL
Director, Jan Steenkamp and the Irdeto team set
The digital conditional access market was born
about to acquire as many clients as possible.
and shaped by people and companies in the frantic
Meanwhile back at base (Netherlands and South
period of the second half of the 1990s. With his
Africa) the team rushed to fulfill the development,
strong background in broadcasting, Jock became
installations and orders. Part of the team making
a leading technical force in Naspers. Based in
that happen was Graham Kill who joined in 1995
South Africa, his key role was to make Naspers’
as CFO and Operations Director. Graham later
pay TV operations digital. That analog-to-digital
became Irdeto’s CEO in 1998 when Martijn moved
transition propelled Irdeto into becoming the first
to China with MIH. Each major media operator
company in the world to offer a complete digital
had its own technology company: Naspers with
pay television solution. South Africa’s MultiChoice
Irdeto; Canal Plus with Canal Plus Technologies;
continues to be a pioneer force that helps shape
and NewsCorp with NDS.
NEW ERA, ENDURING VALUES
In the span of a few short decades, Irdeto grew
from a one-man business to a leading player in
the content security market. Navigating new
geographies and technologies, the Irdeto team
repeatedly demonstrated the innovation and
motivation required to succeed. Now, more than
40 years later, the characters that helped shape
Irdeto in its formative years live on in the company’s
enduring values. The determination, foresight and
risk that contributed to past achievements continue
to guide Irdeto in its latest endeavors.
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Inventing the future in Dubbeldam
Pieter den Toonder’s subscription TV
Dordrecht – “We could have
subscription
television
here
tomorrow. The system is ready for
it. You install a computer, you set
up decoder boxes and you broadcast
your programs by cable. Then, for
example, you could broadcast some
twenty to thirty programs here in
Dordrecht. But the Broadcasters Law
forbids it.”
Engineer Pieter den Toonder knows
all about it. He works for the
American electronics company, Oak
Communications Inc. and is busy with
designing and perfecting systems for
“pay television”, as the Americans
call it. Television that lets the viewer
determine which programs he wants
to see, and pay for.
The Dordrecht engineer heads up
an “advanced research laboratory”
in Dubbeldam, where technology is
being developed that will be available
on the American market in six or
seven years. Who knows when it will
appear in the Netherlands. Some 10
employees, who have turned their
hobby in electronics into their career,
are tinkering on equipment that
would seriously confuse a normal
person. The employees are all former
students of engineer Den Toonder,
who, aside from his world in the
laboratory, has been teaching at the
Dordrecht Technical College for 25
years.
Box
The principle of subscription
television is that the subscribers get
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Caption: Inventor Pieter den Toonder: “Subscription television is simple.
It’s just not allowed in the Netherlands.”
a small box for the top of their TV
set, which decodes image and sound.
Because the broadcasts are made to
be unrecognizable, or “scrambled”
as they call it. Otherwise everyone
could receive the programs without
paying.
A problem is that sometimes people
did not pay – in American some
twenty dollars per month – yet
still had the box, so they still could
watch. Also, handy do-it-yourself
types built their own decoder boxes.
All told, it cost the company some
twelve percent income.
One of Den Toonder’s inventions
put an end to this. He designed a
system in which the computer and
mico-processor – the “chip” – plays
an important role. He calls it an
addressable scrambling system. “The
From: Het Vrije Volk, 17 September 1981
chip in the box has a unique address.
The people who subscribe are entered
in a computer. And that computer
can add new information to that chip
from a distance. So you can change it
daily,” said the Dordrecht engineer.
As an example, he mentions the
boxing match between Mohammed
Ali and Holmes, for which Oak
Communications purchased the
rights. People who wanted to see
it could subscribe. The computer
ensured that they received a perfect
image. All other TV viewers only
saw colored snow.
It is practically impossible to break
the code that gives access to the
system. The computer makes it
possible to create 2 to the 56th power
different keys – a number that a
normal person cannot figure out,
with very many digits. If someone
wanted to break that code, it would
take years.
The chip in the box offers many other
possibilities. It can be instructed
only to respond if an adult activates
it. If parents love horror movies,
for example, but don not want their
children to be able to turn on the TV
if a horror movie is playing.
The new system is a “two-way
system”. This means that the
subscriber can also send messages
using his box. He can give his bank
instructions to transfer money or
order groceries from the shop. It can
also work as an alarm system. Den
Toonder has also developed an alarm
system for senior citizens.
Monopoly
The introduction of satellite
television has made this topic even
more current. In England a two-year
subscription TV trial is being held,
and another undisclosed European
country is interested in the system.
A request to build 8,000 stations has
been received from Canada.
Pieter den Toonder thinks that it will
not happen so fast in the Netherlands.
“You have the PTT monopoly here.
Also, politics slows things up, they
talk about things for such a long time.
As far as that goes, Heine was right
when he said that everything happens
50 years later in the Netherlands.
This happens with technology too,”
he concluded laughing.
ROTTERDAMS PAROOL, SATURDAY, 19 JULY 1952
STUDENTS BUILT
THEIR OWN TELEVISION
RECEIVERS
because they had to make all of the parts
themselves. One exception was the 28
radio lamps (or “tubes”, as they are called
these days) and the 200 resistors and
capacitors. But they had to wrap the 11
coils themselves.
After much experimenting, a loud
“hurrah!” was heard as the students of
the most advanced radio technology
class at the Steehouwer Institute saw
television images from a broadcaster
in Lopik, on a receiver that they built
themselves.
The radio technology teacher, Mr. P. den
Toonder, and six students of the most
advanced class worked on this for two
months, during which they had only one
hour of class per week to achieve this
goal.
While speaking to us in his classroom
at the Radio Institute on the Graaf
Florisstraat [in Rotterdam], Mr. Den
Toonder told us, “We made use of
existing publications and we also
combined different circuits.”
“We faced the strangest situations,”
the youthful and enthusiastic radio
technician told us. “Once we suddenly
saw two images on the screen – a socalled echo image. And then there were
there numerous times that we heard
sound but saw no image, and vice versa.
Once we spent a lot of time searching
for a malfunction. Because we just
could not manage to receive a television
image. As our last hope, we went up
on to the roof, only to discover that a
storm had blown the antenna in the
wrong direction. You must experience
these kinds of things once, then you will
never make that mistake again.”
The second television set that the students
built was ready in two weeks. Building this
most modern of receivers was especially
educational for these radio technicians,
There is great interest in radio technician,
operator, and electrician studies. “At
least twice as many students as before
the war,” Mr. L.F. Steehouwer told us.
“More than 200 students are spread
out over the three daytime and three
evening courses for radio technician,
four daytime and two evening courses
for radio operator and three evening
courses for radio electrician. People
can also work towards their Mulo-B
diploma at the same time. And if enough
students are interested, we intend to
hold a special course in television. That
would begin in September.”
Radio Institute Steehouwer boasts a 34year old reputation. Its former students
include Willem Vogt, former director of
AVRO and L. Neher, general director of
the PTT, who came here to enrich their
knowledge of radio technology.
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23
SOUTH AFRICA AND
THE BIRTH OF M-NET
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An encounter with one South African startup propelled Irdeto
from a small Dutch technology consultancy to an international
player in pay television.
TELEVISION IN SOUTH AFRICA
public demand, the South African Broadcasting
In the 1980s, South Africa was an unlikely place
Corporation (SABC) was finally allowed to offer a
to start an innovative media company with
television service, with experimental broadcasts in
international interests. The country had long been
major cities in mid-1975 and nationwide service
ruled by apartheid, a political system enforcing
commencing from January 1976.
racial segregation. Now much of the international
business
community
was
boycotting
South
Initially, the single public television channel was
African products and services. Prime Minster P.W.
funded through a license fee. Advertising began
Botha complicated matters in August 1985 with
in 1978. By 1981, SABC started broadcasting
his infamous Rubicon Speech, in which he re-
a second channel with programming in African
confirmed his government’s stance on apartheid.
languages such as Xhosa, Sotho and Tswana.
The value of the Rand plummeted, putting South
The first channel, then called TV1, offered English
Africa in an even more trying position.
and Afrikaans programming.
For decades, television broadcasting was banned in
As the popularity of television in South Africa
South Africa, as the government feared its possible
skyrocketed, newspaper publishers felt the pinch
influence on its citizens. In response to strong
of revenue loss because television was taking a
25
larger cut of advertisers’ budgets. So publishers
was named Electronic Media Network Limited,
lobbied the authorities for the right to set up a pay
or M-Net. When the South African government
television station – both to challenge the perceived
started accepting applications for pay television
monopoly held by SABC and to win back a share
licenses in December 1984, the M-Net team hit
of the advertising spend.
the ground running.
DE NASIONALE PERS (NASPERS)
To make their pay television station a reality,
First established in 1915, de Nasionale Pers
M-Net jumped the necessary political hurdles and
(currently known as Naspers) was the leading
secured the financing. But they were still missing
Afrikaans-language publishing group in South
one key element – the right technology.
Africa by the early 1980s. Like other South African
publishing houses, they recognized the need for
SEEKING (AND TWEAKING)
television – as a tool for boosting revenue streams
THE RIGHT TECHNOLOGY
and branching out into newer forms of media.
In his pursuit of the missing component, Jac van
So they quickly assembled a team to investigate
der Merwe quickly organized a whirlwind tour
opportunities in pay television.
across the USA with Jock Anderson, Antonie Roux
and consultants Willem Smit and Bob Mierhorst.
26
The initial team consisted of Koos Bekker, Jac
The M-Net team found two potential technology
van der Merwe and Antonie Roux of de Nasionale
suppliers. Negotiations with their first choice
Pers, joined by Cobus Stofberg of Coopers &
quickly came to a halt because of boycotting. This
Lybrand and Jock Anderson of the South African
left them with just one potential supplier – Oak
Broadcasting Corporation (SABC). Their new
Technologies, a California-based firm which had
company, a subsidiary of de Nasionale Pers,
developed an analogue scrambling technology.
27
28
On the surface, Oak Technologies was a less than
BUILDING SOUTH AFRICA’S
ideal option. The company had recently decided
FIRST PAY TV OPERATION
to scale down the communications side of their
Back in South Africa, Jock Anderson assembled
business and explore more profitable markets.
a team of engineers, who relocated to Dordrecht
Oak was willing to provide the technology, but
in the Netherlands to learn about the technology
would not support customization or after-sales
and develop decoder prototypes under Pieter’s
service. Also, Oak’s technology was only available
tutelage. M-Net had just one year to launch their
in NTSC (the standard US television format), and
new television operation, so Pieter and the M-Net
the M-Net team needed to convert it to PAL (the
team traveled back and forth – between Holland
standard European and African television format).
the South Africa – to get the job done. Once
the prototypes were ready, it was time to begin
To help out with the conversion, Oak recommended
manufacturing the decoders.
Pieter den Toonder, the founder of Irdeto. Pieter
had consulted for Oak in the past, and was already
During the final negotiations between Pieter,
busy in the Netherlands, modifying the system for
M-Net and Oak, Jock Anderson was called away
European standards.
by an urgent message. Back home in South Africa,
his pregnant wife had gone into labor. Or so they
A decision was quickly made that would shape the
thought. Baby Julie was born a week later, and the
future of both M-Net and Irdeto. M-Net purchased
production of the first decoders was named Project
the rights to Oak’s technology, and Pieter
Julie in her honor.
customized it for the South African market.
29
PAY TV HITS SOUTH AFRICAN AIRWAVES
programming in South Africa. As part of their
The hard work, travel and risk-taking paid off.
licensing agreement, they were forbidden to
M-Net, South Africa’s first private subscription
broadcast news programs – a privilege allowed
television service, went live in October 1986
only to SABC. But in 1988, M-Net bravely started
with one 12-hour channel. This was a truly
broadcasting “Carte Blanche,” a current affairs
revolutionary moment in South African history.
program. The program quickly gained popularity
As the country’s first pay TV network, M-Net
by offering South Africans their first look at
offered an alternative to state-controlled SABC
unbiased investigative reporting.
programming and gave South Africans a broader
view of the outside world.
TO ITALY AND BEYOND
M-Net was growing fast. They realized that their
Despite the historical significance of M-Net’s
expertise – combined with Irdeto’s technology
launch, the company struggled to turn a profit in
– was a winning team. So they sought out new
the early years. The tide turned in April 1987. One
business opportunities in the United Kingdom and
boxing match featuring two of the world’s best
New Zealand, without much success.
(and black) fighters got South Africans lining up
to subscribe to pay TV. M-Net broadcast the fight
Then Pieter contacted M-Net with a lead on a
between Marvin Hagler and Sugar Ray Leonard
project. Media legislation was changing in Italy. So
live from Caesars Palace in Las Vegas. M-Net
Fininvest, a company run by media magnate Silvio
sold out of decoders countrywide and quickly
Berlusconi, decided to set up a pay television
grew to a total of 90,000 subscribers.
system called Telepiù. Once again, the only thing
they needed was technology - the ideal opportunity
M-Net continued to push the limits of TV
30
for Irdeto and M-Net.
31
Jac van der Merwe and Antonie Roux joined Pieter
the market. And M-Net was seen as a legitimate
in Italy to negotiate an agreement, and the M-Net
player in the European market.
team forged ahead to make this new project a
success – this time traveling back and forth
between two continents and three countries.
To mastermind the new support operation, Jac
settled permanently in Dordrecht. Under his
guidance, the Irdeto team toiled for months
to ensure that the Italian system would be
operational on time. They set up a project office
in Milan, and Antonie moved to Italy with his team
of five, working to implement the systems there.
Jock, (on the right) recieving the South African Industrial
Design Award award in 1988.
The hardware team worked from Johannesburg,
and was soon joined by Italian business analysts
PROTECTING NASPERS CONTENT
and developers.
Pieter den Toonder’s retirement was long overdue
– having been postponed several times in the
All the long hours and travel and hard work finally
excitement of new opportunities. Now Jac van der
paid off. Telepiù successfully launched in November
Merwe, Antonie Roux and Jock Anderson became
1991 – a major breakthrough for Irdeto.
the driving forces behind Irdeto’s success. Along
with other former M-Net executives, they moved to
32
Suddenly Pieter den Toonder’s little company
the Netherlands, as M-Net, FilmNet and NetHold
had a high profile, and was gaining credibility in
took over Irdeto.
M-Net grew into thriving television network,
broadcasting to subscribers in 41 countries across
Africa. The original founders went on to have
ambitious careers within the media industry, with
Cobus Stofberg, Antonie Roux and Koos Bekker
holding executive positions within various divisions
of the Naspers group.
Jac van der Merwe accepted a position at Naspersowned NetHold. Tragically, he was killed in a plane
crash in the French Alps on his way back from a
business trip in Cannes in 1994 – a painful loss
that was felt for many years. In his honor, M-Net
sponsors the Jac van der Merwe Competition for
Innovation award at Jac’s alma mater, Stellenbosch
University, which is granted to engineering students
whose work reflect Jac’s pioneering spirit.
Jock Anderson became a CTO and consultant
for the media and telecommunications industries.
And Irdeto technology remained an essential link
in the Naspers family – the key to protecting all the
content of this leading multinational media group.
33
34
JAC
VA N
D E R
ME RW E
28 JANUARY 1952 – 10 OCTOBER 1994
One day in 1985, Pieter den Toonder received a short fax message
As one of the prime movers behind Irdeto’s growth, he relocated
that would change the history of Irdeto forever. “Hello,” it said. “I
his family to Holland to be closer to the action. And Irdeto grew,
am Jac van der Merwe from South Africa and would be interested
and Jac thrived. Then, as Jac prepared to return to his beloved
in speaking with you about pay television.”
South Africa to take up new position with NetHold, he tragically
died when his light aircraft crashed in the French Alps. Jac was
Jac first learned about Irdeto as he sought missing technology for
just 42 years old.
his new company; South Africa’s first pay television station, the
Electronic Media Network Limited (M-Net). After he and M-Net’s
We fondly remember Jac for his boundless enthusiasm and drive
founders embarked on a cross-continental search of the USA,
– and his ability to motivate and united so many talented people.
he discovered that Irdeto had technology his company needed.
He is still missed to this day.
And he quickly recognized the incredible potential of Pieter den
Toonder’s fledgling company.
35
THE ITALIAN JOB
36
With the launch of M-Net under his belt, Pieter den Toonder
was ready to retire by 1985. But as with M-Net, a new and
irresistible challenge put his retirement plans on the back
burner. An encounter with Italy’s most powerful media magnate
would soon cement Irdeto’s relationship with M-Net and give
the company a firm foothold in the European market.
PUSH FOR PRIVATIZATION
advertising – private entrepreneurs fought for
Television was introduced to Italians in 1954 by the
their right to broadcast. Their demands fell on
government-controlled RAI network. Until 1976,
deaf
RAI was the only producer and broadcaster of TV
Costituzionale (Italy’s highest court) ruled that
in the country.
RAI’s television monopoly was legal.
The shift to privatization began gaining momentum
The next push for media reform was slightly
as Italy entered an era of industrialization in the
more
early 1960’s. Incomes increased, urban areas
Costituzionale passed a law allowing private
grew and the popularity of TV exploded, surpassing
companies to broadcast television on a local
radio and cinema. Suddenly TV was a political
level, with RAI maintaining its national monopoly.
issue. With the ruling political party controlling
Hundreds of local television stations sprang up
such a powerful medium – not to mention its
throughout the country.
ears.
On
13
successful.
July
In
1960,
1976,
the
the
Corte
Corte
37
38
With the law on his side, Silvio Berlusconi started
Toonder and Irdeto. Retirement could wait! Pieter
building his media empire and rapidly became a
was excited about this new opportunity, and even
dominant force in Italian media. By 1984, he had
though it was a large project, he knew he could do
three TV channels united under his holding
it – with the help of old friends.
company, Fininvest. The majority of the group’s
revenues came from Pubitalia, a subsidiary of
TACKLING A NEW CHALLENGE
Fininvest that sold advertising for his channels.
M-Net was still in the midst of perfecting their
fledgling pay TV network in South Africa when they
By the end of the 1980s, Italy’s TV viewership was
got a call from Pieter. Rather than kick back and
evenly split between Berlusconi’s channels and
enjoy the growing success of their first venture, the
RAI’s channels. Then, on 6 August 1990, the
founders of M-Net were eager for a new challenge.
private sector won another battle when the
So Jac van der Merwe and Antonie Roux
Broadcasting Act of 1990 finally legalized private
immediately hopped on a plane and helped Pieter
television at the national level. Berlusconi’s three
close the deal with Telepiù.
TV channels officially went national, and Fininvest
moved forward with their new idea – a national pay
With the contract signed and deadlines looming,
TV station called Telepiù.
M-Net and Irdeto quickly established teams in
Italy, South Africa and the Netherlands. To
IRDETO TECHNOLOGY TO THE RESCUE
mastermind the new support operation, Jac van
Fininvest was keen to get their pay TV network
der Merwe settled permanently in Pieter’s
up and running. With the financial backing of
hometown of Dordrecht.
Berlusconi, they set out to find the required
technology. Their search led them to Pieter den
39
More and more employees crowded into Irdeto’s
And they called in the help of electronics company
unheated Dutch office to focus on the new
Seleco in Pondenone, Italy.
technology thrust into Italy. Under Jac’s guidance,
the team toiled for months to ensure that the
Finally, the first decoders were ready to be shipped
system would be operational on time. Soon a
from South Africa. They arrived safely – thanks to
project office was also opened in Milan, and
sturdy Cape apple boxes and crumpled newspaper!
Antonie Roux moved there with a team of five to
Of course, Irdeto’s first major European client
implement the systems locally. Jock Anderson led
deserved more professional packaging, and soon
the hardware team in Johannesburg, supported
their regular shipments arrived in customized
by business analysts and developers flown in
boxes with Irdeto user manuals.
from Italy.
GOING THE EXTRA MILE
SECURING IRDETO DECODERS
The run-up to the Telepiù launch was the most
This job called for more than simply repurposing
intense and dynamic period in Irdeto’s history.
the decoders built for South Africa. For Italy they
While they were expanding offices in the
created better and more secure systems to
Netherlands and merging with M-Net, Irdeto was
discourage hackers. To further improve security,
also growing production and developing a new
Irdeto even convinced Texas Instruments to let
system for Telepiù. And working hard to improve
them to use a chip that was still under development.
the product and professionalize the brand.
It seemed that the whole world pitched in to meet
Telepiù’s
40
requirements.
Decoders
were
first
So Irdeto and M-Net employees became natural
produced at existing facilities in South Africa.
masters of risk-taking, decision-making and
Additional production was outsourced to Singapore.
multitasking, and often went above and beyond
M-Net Decoder, One of Irdeto’s first customers.
41
42
Peter den Toonder at his retirement in 1991.
the call of duty. For example, when new security
and an advantage over the competition. During
restrictions delayed shipments to Italy during the
this drive for professionalization, Jac van der
first Gulf War in the early 1990’s, Antonie Roux
Merwe founded the User Group as a forum for
drove to Nice, loaded his car with chips and
operators to give feedback to Irdeto. It provided
completed the delivery himself. On time!
the side benefits of helping Irdeto improve their
product and identify new business opportunities.
PAVING THE ROAD TO THE FUTURE
This dedication and pioneering spirit were a
The successful launch of Telepiù earned Irdeto
winning combination for Irdeto and M-Net.
credibility within the industry and the courage to
Deadlines were met, and Telepiù went live in
pursue ambitious opportunities worldwide – while
November 1991. But the Telepiù deal meant much
providing the necessary revenue boost to expand
more than just launching pay TV in Italy. It marked
their physical presence in Europe.
the beginning of Irdeto as we know it today.
Now Pieter den Toonder felt he could finally retire
The earlier launch of M-Net was seen as more of a
a happy man, as Jac van der Merwe took over the
partnership. Telepiù was Irdeto’s first truly external
reins and ushered Irdeto into the next era.
client, requiring Irdeto to improve its delivery of the
product and its style of communication. Irdeto was
no longer a one-man Dutch business – it was an
international brand. Italy also cemented the
enduring relationship between M-Net and Irdeto.
M-Net’s
experience
combined
with
Irdeto’s
technology offered customers a complete solution
43
ENTERING THE
DIGITAL AGE
44
The early 1990s signaled the beginning of an exciting era of
growth and progress for Irdeto and the television industry as a
whole. Irdeto helped Telepiù, their first major European client,
launch a pay television network in Italy at the end of 1991.
This deal’s success gave Irdeto the recognition and
the countries Benelux and Scandinavia. When
income they needed to expand. Suddenly Irdeto
Irdeto was put in charge of replacing FilmNet’s
was growing out of their tiny Dordrecht office, so
heavily pirated SATPAC system, they successfully
they relocated to Hoofddorp and quickly grew from
developed the new CableCrypt decoder and
7 to 300 employees during the 1990s.
began installing it across all the FilmNet territories
in 1993.
Business was booming! In their search for business
opportunities, Irdeto’s new “gypsy team” travelled
DEVELOPING DIGITAL
the globe – to Greece, Iceland, the United Kingdom,
VIDEO BROADCASTING
Latin America, Brazil, and to Cyprus, where they
As Irdeto expanded, the television industry as
deployed their new Integrated Business System
a whole was undergoing a transformation: the
(IBS) at Lumiere TV.
dawn of the digital age. In 1991, broadcasters,
manufacturers and regulatory bodies in Europe
But the most exciting deal in this period was closer
met to discuss the impending introduction of
to home. In 1991, Irdeto’s parent company acquired
digital TV. This group became known as the
FilmNet, the leading pay television operator in
European Launching Group (ELG). They defined
45
the concepts, systems and standards that would
fairly new term meaning that television broadcasts
guide the transition from analogue to digital in the
could only be viewed by legitimate subscribers with
years to come.
a suitable decoder. CA systems typically consist
of a head-end control system, set-top box client
In 1993, they finalized this new set of
software and a smart card. They often use both
regulations, and the Digital Video Broadcasting
scrambling and encryption to prevent unauthorized
Project (DVB) was born. One of the many
users from getting access to the service.
technology standards set by the DVB was the
use of MPEG for coding the audio-visual data
SMART CARDS IN THE SPOTLIGHT
into a compressed digital format.
Smart cards were a recent development with
proven potential. In very simple terms, they are
Irdeto jumped at the chance to lead the digital
credit card-sized devices that contain small chips
revolution. During their 1992 User Group meeting
for processing data. Smart cards were first used
in Venice, it was decided (together with M-Net
commercially in 1983 by Télécarte in France;
and Telepiù) to turn the company’s focus to digital
replacing coins for pay phone calls. Smart cards
compression technology.
quickly found other applications, including debit
cards and SIM cards in mobile phones.
They dug in to this new challenge with great
46
enthusiasm. In 1993, Irdeto set up a team to
By the early nineties, smart cards had debuted
research digital technology, looking particularly at
in Europe’s pay television industry. Innovators
MPEG and the best way to secure it. They explored
like the UK’s BSkyB used VideoCrypt technology
the option of using a conditional access system
to control access to their satellite broadcasts.
with a smart card. Conditional access (CA) was a
Developed by News Datacom, VideoCrypt was an
47
48
Galaxy, Irdeto’s first digital customer.
analog decoder with a smart card, which provided
DIGITAL DEBUTS DOWN UNDER
entitlement functions and decryption keys that
Irdeto had a viable digital solution and was on
allowed subscribers to view the content. Irdeto
the brink of being the first in the world to deploy
modified this technology in 1993, to produce
it. Long-time partner M-Net in South Africa was
VideoCrypt 2, featuring an Irdeto smart card.
picked for the first digital launch and resources
were accordingly re-directed. At the same time,
Although Irdeto’s parent company NetHold used
Irdeto was also adapting the digital technology
VideoCrypt 2 for their growing business in Central
for other regions including Italy and Thailand.
Europe, Irdeto decided not to pursue analog
The South Africans prepared to launch the PAS
smart card decoders for other clients. Smart card
4 satellite for beaming down the broadcasts. The
research now had a singular focus – the future
satellite launch was scheduled for June 1995,
of digital TV. Irdeto’s digital priorities were clear,
with service commercially available in September.
but they needed a partner to help develop their
Everything seemed to be on track until they hit
groundbreaking new technology. They selected
a serious bump in the road. The satellite was
NTL in the UK, and a team of Irdeto technicians
grounded until August.
moved across the channel for eight months to
build the components for the digital future.
With progress in South Africa stalled, Irdeto
was left with incredibly advanced technology
The result was the I-Chip. This descrambling chip
they could not deploy. Time for plan b… a brand
became the first DVB-compliant MPEG-2 chip to
new territory, Australia. Australia’s Media’s pay
be mass-produced. It was a crucial element in
TV subsidiary, Galaxy, had just launched a few
Irdeto’s pioneering conditional access module
months earlier, broadcasting eight channels using
(CAM) – and the first of its kind.
analog cable technology. But they were eager to
49
find a standardized digital system. Irdeto was the
was up and running. This was the world’s first
obvious choice.
commercial digital TV deployment - a milestone
for Irdeto and the television industry as a whole.
GOING INTO OVERDRIVE
To this day, a plaque hangs in the Irdeto lobby
As was the custom by now, a small Irdeto team
in Hoofddorp to commemorate this historic
relocated to Australia to oversee the local
moment. From the start, Galaxy’s digital pay
development and implementation. Work began
TV offerings were a huge success. And Irdeto
with setting up the control system for Galaxy’s
happily supplied more than 100,000 smart cards
digital pay TV network. Once the final shipment of
and conditional access modules within the first
equipment arrived, the Irdeto team buckled down
few months of launch.
for an intense six-week period, working 100 hours
per week to get everything ready on time.
DIGITAL GOES GLOBAL
With the world’s first digital launch successfully
Back in the Netherlands, Irdeto’s smart card
completed, Irdeto turned their attention back to
entitlement center in Hoofddorp went into overdrive.
existing clients, including M-Net. The South African
The digital launches required the production,
satellite was finally launched into orbit in August
customization, and distribution of an unthinkable
1995. Irdeto wasted no time. Only one month after
number of cards. Since Irdeto did not produce the
the debut of digital in Australia, South Africa had
smart cards, the entitlement center allowed them
digital pay TV, too, with the introduction M-Net’s
to control the programming and distribution of the
digital satellite TV service, DStv, in October 1995.
cards in this crucial introductory phase.
From that point on, Irdeto took digital to markets
worldwide in rapid-fire succession. Through the
By September 1995, the Galaxy digital system
50
M-Net company Multichoice, Irdeto introduced
Irdeto M-Crypt artwork used for Advertising and Tradshows.
51
digital pay TV across Europe in 1996, including the
PIsys – launched in 2002 – was developed for
Benelux, the Nordic countries and Central Europe.
large-scale conditional access solutions, and
Telepiù launched their digital service in Italy in
could be adapted for between 500,000 and
September 1996. Irdeto also helped Thailand’s
32 million subscribers. It was also modular –
Shinawatra launch their digital service.
additional features could easily be added, as
The first digital pay TV launches were major
required by the client.
achievements. Now that Irdeto was recognized
as the industry leader, they needed to keep
SMART CARD DEVELOPMENT
innovating to maintain that position. So Irdeto
These new conditional access systems continued
spent the next decade improving and expanding
to rely on smart cards to let subscribers “unlock”
their digital capabilities. They first went to work
the content. And like the rest of Irdeto’s products,
improving their conditional access system (CAS).
smart cards continued to evolve.
Ongoing innovations led to three updated versions
of this CAS - called System 2000, 3000 and 4000
In 2000, a second smart card was introduced:
of course!
Irdeto 2. At the same time, Irdeto kicked off a new
smart card development strategy, known as the
52
CAS evolved further into two distinct new systems:
“rolling” smart card strategy. This strategy, which
M-Crypt and PIsys. Released in 1998, M-Crypt was
is unique to Irdeto, called for new smart cards
a compact conditional access system targeted at
to be developed every 18 to 24 months. New
smaller clients and niche content providers in the
subscribers get the latest cards, while existing
cable, satellite, and terrestrial arenas. The system
subscribers
operated on a Windows platform, and was very
today’s clients have a variety of cards in use at
easy to set up and maintain.
the same time.
keep
older
versions,
meaning
The continued supply of new cards ensures that
subscribers record live programs to watch at a
clients always get the latest technology. More
later time. In addition, providers bundled IPTV with
importantly, it’s less attractive and more expensive
other IP-based services like high speed Internet
for pirates to attack Irdeto’s many different cards.
access and telephone services (Voice over Internet
In the rare instance of a security breach, a client
Protocol or VoIP).
only needs to swap cards for a small portion of their
subscribers. To date Irdeto has the best security
record in the industry, with more piracy-free years
and fewer smart card swaps than competitors.
Irdeto CypherCast product logo
ENTER IP
Irdeto’s area of expertise was securing terrestrial,
The technology behind IPTV had already been
cable, satellite or digital broadcasts for television.
available for years, but companies were hesitant
But the introduction of Internet protocol television
to adopt it because they had no way to protect
(IPTV) meant that content was no longer confined
the broadcasts from being intercepted. In 2000,
to the television set. In addition to TVs, consumers
Irdeto offered a solution to this problem. Using
wanted on-demand content on their computers,
CypherCast,
mobile phones, and gaming consoles – and
broadcast. Only users with a set-top box and
providers wanted to secure it.
corresponding smart cards would be able to view
content
was
encrypted
during
it. Clients could easily manage user rights with
IPTV also offered new interactive services for pay
software that ran on a Windows platform. It was
TV subscribers, such as Video on Demand (VOD).
these early engagements that shaped technology
The personal video recorder (PVR) allowed
in the IP area going forward.
53
THINKING OUTSIDE THE SET-TOP BOX
satellite transmissions, much like digital pay TV.
Now that consumers were ready to watch TV outside
TU Media also had to secure the content of their
their living rooms, mobile phones became the next
subscription-based service. They turned to Irdeto
pay TV target. And in keeping with Irdeto history,
and its proven track record in conditional access
every new technology project seemed to indicate a
solutions. Like TU Media, Irdeto was also new to
launch in a new geography. This time it was South
mobile broadcasting, and developed a brand new
Korea. TU Media was established in 2003 in South
conditional access system for mobile, based on
Korea. A consortium of mobile operators, device
their existing digital TV system.
manufacturers, and other industry players, TU
Media oversaw the country’s mobile broadcasting
SOLVING THE MOBILE CHALLENGE
industry. They were the world’s first company to
Though the concept was essentially the same,
decide to offer a paid mobile TV service via S-DMB
working with mobile phones presented many
(Satellite Digital Multimedia Broadcasting).
challenges for Irdeto. The mobile solution had to
perform the same function as a set-top box for
But deciding and implementing are two different
digital TV, and deal with bandwidth constraints
things. TU Media had a few major hurdles to
on security messages and the precious battery
jump before they could proceed. They needed a
life that conditional access functions could not
broadcasting system that could deliver audio and
drain. Set-top boxes relied on smart cards, and
video better than the existing mobile network. So
a mobile’s SIM card was not yet able to perform
SK Telecom, a primary shareholder in TU Media,
the same function as the Irdeto smart card. And
developed their new S-DMB service. This solution
it was also impossible to fit both a SIM card and
added a new layer over the existing network, which
a standard smart card inside a mobile phone.
was optimized for broadcast using terrestrial and
54
To solve this challenge, Irdeto developed a new
The TU Media mobile broadcast entertainment
surface mounted device (SMD), which was fixed
service was launched in South Korea in May 2005.
directly to the circuit board of the phone. However,
It proved immensely popular, especially with the
the solution presented yet another obstacle –
country’s many commuters. More than 300,000
convincing telephone manufacturers to add the
subscribers signed up in the first six months and
Irdeto SMD to new mobile phones for the South
there are now more than one million subscribers.
Korean market.
Since this notable deployment, Irdeto has continued
to improve and expand its mobile CAS services in
line with evolving industry standards.
HARD WORK REWARDED
Irdeto’s work in South Korea garnered attention far
beyond the mobile industry. In November 2005, Irdeto
received the Hamel Trade Award. This annual award
is presented to Dutch companies that have made a
significant impact on South Korea’s economy and
promoted business and trade relations between the
Irdeto succeeded, and eventually partnered with
two countries. In response to this prestigious award,
20 device manufacturers, including renowned
H.E. Radinck J. van Vollenhoven, Ambassador of
Korean brands like Samsung and LG. About 25
The Netherlands in Korea commented, “Irdeto’s
different devices were modified to receive the new
growth in South Korea is very impressive and it’s
service, including mobile phones, portable media
a significant contributor to the mobile TV industry
players, and in-car devices.
and economy here. South Korea was the first to
55
launch a Satellite Digital Multimedia Broadcasting
to improve their TV experience without paying for
service and its success was ensured with Irdeto
expensive yearly subscriptions. This new service
making content on the platform secure. Without a
would offer cultural and sports programs, with a
doubt, South Korea is world leader in technology
major focus on Italian football games.
developments and Irdeto is playing a significant role
in enabling that.”
Irdeto helped TIM address a couple key
challenges for their new service: it had to be
EXPERTISE BRINGS
affordable and flexible for subscribers, and it
EXCITING NEW CLIENTS
needed to be robust enough to support large
Irdeto delighted in the challenges brought by
numbers of simultaneous viewers.
new formats like IPTV and mobile TV, but never
lost sight of their core focus: digital pay TV. By
now, Irdeto had gained fame worldwide for their
expertise in digital TV. New business was rolling in
from all corners of the globe.
One of these deals brought Irdeto back to Italy.
DVB-T, the recommended format for TIM
Thanks to their previous work with Telepiù, Irdeto
already had good contacts and a strong reputation
56
in Italy. Their expertise attracted the attention
The Irdeto team put their heads together,
of Telecom Italia Media (TIM), who wanted to
presented their solution to TIM and got to work
introduce a rechargeable prepaid pay-per-view
on the implementation. They recommended a
card. TIM wanted to offer viewers the opportunity
digital terrestrial television (DTT) broadcasting
operation in the DVB-T format for its technology
Anyone who pirated the system could stand to
advantages and high population coverage in Italy.
make millions. The heart of the system was housed
This was combined with multi-CA client set-top-
in secure rooms, complete with guards, cameras
boxes and Irdeto’s impulse pay-per-view model
and access controls. On the day of the launch,
to ensure maximum reach, flexibility and security
Irdeto Programme Manager Rory O’Connor arrived
at an affordable price. Irdeto had the right team
early to make sure the security was up to scratch.
to handle the technical challenges, as well as the
He posed as one of Irdeto’s competitors and asked
less technical speed bumps along the way. In one
to see the security system. The guard let him enter,
instance, Irdeto needed to deliver a head-end
assuming anyone speaking English must be from
equipment rack to Rome at the last minute. When
Irdeto. The TIM team was shocked to discover a
the driver arrived, he refused to lift the rack into
competitor’s name on the visitors list. They were
the truck out of fear that he would injure his back.
relieved to discover that only Rory was waiting
One of Irdeto’s engineers came to the rescue.
for them in the ‘secured’ area. From that moment
After multiple attempts to get the rack on board,
on, the security guard only admitted visitors after
including one which dented the rack and nearly
checking their passport – including Rory. He arrived
crushed everyone involved, he successfully
the next day without his passport and was forced to
loaded the cargo for its journey to Italy. The team
retrieve it from his hotel.
joked that the dent brought good luck, as the
system was installed and tested in record time
With the security tested and ready to go, TIM
once it arrived in Rome.
launched their new service called CartaPiú La7 in
January 2005. It was an immediate success. The
Security was paramount for this new TV service,
launch coincided with the start of the second half
especially given the Italian passion for football.
of the Italian Serie A football season. To watch the
57
matches, viewers could buy a CartaPiú La7 pre-
Sun TV was launched in 1992 as the first fully
paid card. Credits were subtracted only for the
privately owned cable television station in India.
games they watched. When a viewer’s credit
Cable television was immensely popular, but the
was gone, he could simply add more credit to the
physical infrastructure required meant that many
card over the phone, online or in a store.
of India’s residents did not have access to the
service. In 2007, Sun TV created a new division
With Irdeto’s help, one of Italy’s leading media
called Sun Direct to offer a new Direct-To-Home
companies was able to quickly introduce a
(DTH) service. DTH meant that viewers received
successful
secure,
satellite transmissions directly to a small dish at
affordable and easily adaptable to future needs.
their home. Because of this, DTH could reach even
TIM’s CartaPiú La7 service quickly grew to nearly
the most remote areas, since there was no longer
a million subscribers.
a need to lay cable connected to each home. In
new
product
that
was
addition to wider reach, DTH also offered superior
DIRECT TO HOME IN INDIA
picture quality and a greater choice in programming
Worlds away from Italy, Irdeto discovered
thanks to digital compression techniques. Finally,
another like-minded partner in India. Based in
it offered viewers interactive channels, program
Chennai, India, Sun Direct was an enthusiastic
guides, and customized preferences that weren’t
new division of Sun TV Group. Their vision was
available with analog cable services.
to offer secure, high-quality Direct-To-Home
(DTH) TV services across India. They needed
Sun TV had previously used Irdeto’s security
a technology partner with the same vision and
technology for their cable TV services. Irdeto
drive. Irdeto was an obvious choice.
was an obvious choice for their Sun Direct DTH
service. According to Kalanithi Maran, CEO for
58
Worlds away from Italy, Irdeto discovered
another like-minded partner in India.
59
Sun Direct TV, “Irdeto’s security solutions for Sun’s
has now become the fastest growing DTH provider
cable operations have proven to be excellent, so
in India and went on to accomplish a series of
it was natural for us to select Irdeto to protect Sun
television firsts in their country. They became the
Direct’s new satellite TV platform.”
first provider to adopt MPEG4 technology offering
better compression as well as the first to offer
In September 2007, the Indian Space Research
Organization launched a next-generation Insat
satellite into orbit. Sun Direct would use this
satellite combined with Irdeto’s PIsys conditional
access system to send encrypted TV transmissions
to small dishes at individual homes. The encrypted
transmissions would then be decoded by set-topboxes in each home.
The DTH television service was launched in
December 2007. Sun Direct placed an initial order
of 500,000 Irdeto smart cards for the new system.
Irdeto Epsilon smart card
debuted with FlexiFlash.
It was soon clear that 500,000 smart cards were
not nearly enough. Within the first 200 days,
60
Sun Direct had already surpassed one million
HDTV content. Irdeto’s solutions continue to allow
subscribers. Less than two years after their launch,
them to successfully manage the speed and scale
they reached four million subscribers. Sun Direct
of their rapid growth.
FLASHY NEW FEATURES
renewable smart card idea one step further –
As the digital age advanced, Irdeto continued to
and cut out the card completely. They acquired
revolutionize smart card technology. In October
Cloakware, a former partner specializing in software
2004, the Irdeto Epsilon smart card debuted with
and security technologies. According to the press,
FlexiFlash.
the acquisition of Cloakware was a smart strategic
move. Bill Rosenblatt of DRM Watch wrote,
Irdeto’s clients often wanted to add new functionality
or respond to piracy threats. This normally
required them to physically put a new smart card
in their set-top box – a hassle for subscribers and
a large expense for operators. Irdeto’s FlexiFlash
technology allowed operators to securely update
“This deal will not only help Irdeto improve its own
smart cards through the air.
products; it should also help it gain traction in new
markets, with a good degree of independence
For the first time ever, smart cards became
from current DRM standards wars in the mobile
renewable. Irdeto’s clients could now add new
and digital home arenas.” The newly formed
functions, perform security updates, and quickly
relationship with Cloakware helped Irdeto develop
respond to piracy without replacing the smart
its latest service: Irdeto Universal Client. This
card. All without disrupting subscribers or their
ground-breaking
viewing experience.
solution was launched in September 2009. Irdeto
software
conditional
access
could now offer a software-only security solution
A SMART CARD-FREE FUTURE
– smart card functionality without the smart card.
In 2007, Irdeto positioned itself to take the
Another industry first for Irdeto.
61
LEADING THE WAY
recognized
Throughout the years, from analog to digital to IP
Management Innovation Lab as groundbreaking.
to mobile, Irdeto’s pioneering sensibility continues
Irdeto has collaborated with London Business
to shine through. But being a pioneer comes with
School and IMD to develop case studies on its
challenges as well as rewards. Irdeto’s transition
dual HQ innovation for use in their curriculum.
to the digital era led to many significant industry
Professor Julian Birkenshaw of the Lab said, “This
and company firsts.
shift allows the company to get much closer to new
by
London
Business
School’s
market opportunities in Asia and to tap into ideas
and skills wherever in the company they arise.
We are excited to be partnering with Irdeto in this
change, and we see it as an excellent example of
a carefully-thought out management innovation.”
Being the leader means learning as you go, solving
problems no one has faced before, and paving the
Irdeto has collaborated with London Business
School and IMD to develop its dual HQ strategy
To better meet the growing needs of the digital
world, in 2007 Irdeto’s Chief Executive Officer
Graham Kill devised a strategy to divide the
responsibilities of the company’s headquarters
across two locations, creating a dual HQ in
Hoofddorp and Beijing. This concept has been
62
way for followers to build on your expertise. Being
the leader requires evolution and agility to stay in
that position. Irdeto has continued to rise to this
challenge, and looks forward to the developments
that lay ahead.
63
“I FELT LIKE I WAS GROWING
ONE YEAR YOUNGER FOR
EVERY MONTH AT IRDETO.”
PROFILE OF
FORMER CEO,
MARTIJN HÖFELT
64
INSPIRED BY VISION
STRONG PIONEERING SPIRIT
AND DETERMINATION
Inspired by the hands-on pioneering spirit and
Back in 1993, Martijn Höfelt was working for Philips,
determined
developing new transmission and distribution
quickly decided to join the team. Irdeto had the
systems for TV as well as access control
determination to start up with digital as quickly as
technology. So he knew the European Union and
possible. He also appreciated the company’s quick
USA markets well. But nothing about Irdeto.
decision-making process and the high degree to
vision
he
encountered,
Martijn
which Irdeto delegated responsibilities, compared
Then he was approached by a headhunter, who
with his former employers. And not least of all, he
introduced him to Irdeto’s CEO, Jac van der
thrived on the fresh and young mentality of his
Merwe. Together at a dinner in Hoofddorp, Jac
new colleagues, who were all more than 10 years
and his small crew of four or five told Martijn more
younger than Martijn.
about their company, and discussed his potential
future with Irdeto.
“I felt like I was growing one year younger for
every month at Irdeto!” he often said.
The following week, Jac took him to Johannesburg.
This visit to M-Net and Africa inspired him even
Martijn began his Irdeto career as Technical
more. And while visiting the M-Net decoder center,
Director, responsible for all of the technical
Martijn was delighted to see how progressive the
operations in Hoofddorp and Johannesburg.
company was in its management of interracial
Irdeto’s target was to develop the first digital pay
employment.
TV system, based as much as possible on formal
or de facto standardization.
65
He spent that first half-year or so selecting the best
To achieve this vision (prior to Mindport), all
partners for digital decoder development. Jock
development was done within Irdeto, except for the
Anderson was also active in this process. They
Open-TV developments. Initially, the relationship
ended up with IBA (later NTL lab), where Irdeto’s
with decoder manufacturers was problematic,
demultiplexor and descrambling component (I-chip)
because prices were high, demand low and
and the N-chip for Sky (NewsCorp) were developed
quality questionable. So Irdeto worked really hard,
in parallel – separated by Chinese walls.
in coordination with Multichoice. When Thomson
appeared to lose interest in Open-TV, Irdeto
BECOMING IRDETO’S CEO
supported MIH in its acquisition of a fair stake in
Early in 1994, Jac declared that he wanted to devote
the company.
his time fully to the development of the Eastern
European FilmNet market, and asked Martijn to take
THE CHALLENGES OF DEVELOPING
over his duties as Irdeto’s CEO. Martijn remained
PAY TV TECHNOLOGY
CEO until the creation of Mindport in 1997.
What was Martijn’s biggest challenge? To manage
to develop all of the necessary elements of
As he lead the company, Martijn felt that Irdeto
Irdeto’s pay TV technology. In fact, Irdeto was the
needed to offer the market an integrated product,
first party to launch a working DVB system. This
such as decoders (as standardized as possible,
challenge was amplified by the need to have this
supplied by external manufacturers) together with
system installed and working with Multichoice
Irdeto smart cards, access control systems, and
Africa, Shinawatra (Thailand) and Telepiù (Italy) –
customer and business management systems. He
practically at the same time!
wanted decoder software for interactivity that was
as open as possible.
66
Making the system work and solving its infancy
problems in three locations around the world
is proud to see the company in such excellent
proved extremely difficult. Especially with such
hands. Irdeto has shown fantastic growth, and he
demanding customers, who had to be handled in a
is delighted to see the company firmly planted in
highly personal manner.
important corners of the world.
On the one hand, Irdeto needed to pay full
attention to internal activities to solve real and
perceived bugs and introduce improvements in
the system. On the other hand, the company also
was distracted as they supported impatient and
demanding customers.
They tried to keep the development team as
focused as possible, while Jan Steenkamp and
his sales and support team exercised diplomacy
with these initial clients. At the same time, for
group strategic reasons, Irdeto was urged to build
up client relationships with many other important
pay TV operators, which made it difficult to stop
bringing in new clients at this early stage.
All in all, Martijn spent more than six years with
Irdeto. Now he is enjoying his retirement, and
67
ADVENTURES IN
THE FAR EAST
68
As the digital age dawned the mid-1990s, Irdeto emerged as a leader in
new technology. By successfully completing digital TV implementations
around the globe, the company began reaping the rewards of their
expertise. Then Irdeto decided it was time to take another risk. For their
next challenge they looked to uncharted territory – the Far East.
EXPLORING THE ASIAN MARKET
Both countries had a motivated and educated
Irdeto had already dipped its toes into the waters
workforce. However, India was still debating
of the Asia Pacific (APAC) region in the early
regulation that would determine how quickly its
1990s, completing the world’s first digital pay
industry would develop. So China had some
TV launch in Australia, introducing mobile TV to
advantages over India. Not just because China
South Korea and bringing digital TV to Thailand.
had over one billion residents and an outdated
By the mid-1990s, Irdeto began monitoring the
television infrastructure ripe for an overhaul.
Asian markets in search of new opportunities –
Some analysts were speculating that China would
with an eye to opening a regional office. The ideal
become a leading global economy before India.
location? At that time, the stability of Hong Kong
Thinking far ahead of its time, Irdeto decided to
and Singapore were attractive, but not felt to be
enter “The People’s Republic” – and Beijing in
sufficiently connected to where the economic
particular, because of this city’s proximity to the
centers of gravity would be: India and China.
Chinese regulatory bodies.
69
It was a brave decision. After all, at that time, it
The business strategy, as usual, was to “lead with
was not fashionable to locate an Asian-Pacific
technology.” So Irdeto began slowly, by joining forces
headquarters in Beijing.
with broadcasters and set-top box manufacturers
on the technology side, which would open the
doors for other Naspers group opportunities.
Such was their belief in the future of this market
and Irdeto technology, that they rapidly recruited
local employees. European employees also began
emigrating, Former Irdeto CEO Martijn Höfelt
moved from the Netherlands to supervise Mindport
Mindport opens the China office in 1998, Steve Oldfield,
Amerio Paraccini, Guy Tennant, Jan van Woudenberg,
Lulu Yin, Andrew Curle and Gerdus van Eeden
70
– and Thierry Raymaekers was hired to become
General Manager of North Asia for Irdeto.
In 1998, Irdeto set up a small regional base in
SLOW AND STEADY WINS THE RACE
Beijing, sharing the office with other members of
Historically, China’s economy was controlled
the South African Naspers group, including MIH
by state-operated enterprises. In 1978, the
and Mindport. However, entering the Chinese
government decided to permit limited foreign
market would not be as straightforward as other
investment in a few select regions of the country.
markets had been. China was gradually opening
But that wasn’t enough. China’s leaders needed
up to private sector and foreign investment, but
a better understanding of international business
entering this emerging market called for patience.
practices, and to update the legal infrastructure.
And a long-term commitment.
Throughout the 1980s and 1990s, China boosted
71
tax advantages, minimized red tape, developed
MAKING FRIENDS
new contract and patent laws, and expanded
Initially, potential partners wanted to see and
the business areas open to foreigners. In some
understand Irdeto’s encryption technology. As
industries, however, regulations were still unclear –
relationships developed, Irdeto supported key
and companies were expected to form joint ventures
Chinese partners in developing aspects of the
with Chinese firms or transfer intellectual property
business for themselves – while retaining an
to their Chinese counterparts.
opportunity for itself to develop business. In
But entering the Chinese market called for more than
carefully navigating the rapidly emerging legislation.
Cable TV had been introduced in China quite late, in
the 1980s. Broadcasting was the sole responsibility
of governmental organizations – there simply were
no private broadcasters. However, like the rest of the
world, the digital age was revolutionizing China.
So it was no wonder that China appreciated Irdeto’s
ability to expose them to technology and business
72
The State Administration of
Radio, Film, and Television or SARFT
models used elsewhere in the world. This helped
particular, Irdeto’s work helping to equip emerging
the Chinese organizations shape their thinking as
set-top box companies for the new digital industry
to how to develop their own industry. Key parties in
not only served them well domestically, but also
China also appreciated the technology, service and
gave the companies export opportunities by
advice that Irdeto could provide.
partnering with Irdeto.
From these early discussions, Irdeto was armed
which could then evolve, so they could see Irdeto
with solid knowledge about the Chinese market
as reliable partners.
and technology requirements, and contacted the
relevant Chinese authorities – including the State
So they got to know and understand each other
Administration of Radio, Film, and Television, or
better. Executives traveled from the Netherlands
SARFT, for short.
to give presentations. And a Chinese delegation
traveled to South Africa to executives from
SARFT supervised or directly controlled all state-
the Naspers group, and see firsthand Irdeto’s
owned enterprises related to TV, radio and film.
accomplishments for M-Net and Multichoice.
It also had the last word on the control of content
deemed inappropriate to Chinese cultural or
Irdeto was eventually allowed to start trials with
government standards. A good relationship with
broadcasters in provinces throughout the country.
SARFT was absolutely crucial – so the Irdeto
But closing new deals revealed another layer of
team increased its resolve to gain the Chinese
Chinese culture. By now, Irdeto was viewed as a
officials’ confidence.
friend, which meant that their Chinese counterparts
trusted them – and were content to sign two-page
Contrary to the business customs in the West,
contracts. But Irdeto’s standard contract was 80
Irdeto quickly realized that in China, business
pages, and in English!
partnerships were not built on mere proposals
and handshakes. To be successful, the parties
As with good friends, a compromise was soon
involved had to connect on a meaningful and
struck. Contracts were duly signed, and Irdeto
personal level before agreeing to any business
prepared for more hard work.
ventures. This established a platform of trust,
73
CONNECTING EVERY VILLAGE
In
1999,
the
People’s
Republic
CCTV’s
of
new
satellite
service,
CBSat,
was
China
successfully launched in January 1999 – and
celebrated its 50th anniversary. Festivities were
became first non-cable broadcast in Chinese
being planned years in advance, including special
history.
television programs. One such activity was the
Village to Village Project – a trial delivery of TV
PATIENCE PAYS OFF
and radio programming to remote areas of China
The Village to Village Project was a major
by satellite.
stepping stone for Irdeto, but it would take a few
more years for activity in China to truly take off.
In 1998, Irdeto’s parent company, MIH, won the
Their next major deal came from the province
contract from China’s state television broadcaster,
of Guangdong. In 2000, Guangdong VNet was
CCTV, which relied on Irdeto’s technology expertise
introduced as the first unified cable network
to secure the content. Time to get things working
covering the major cities in the Guangdong
– and fast!
province. Irdeto was short-listed to provide
the security technology, but still had to prove
74
Set-top boxes had to be modified to support
themselves. They travelled to each of the
the Chinese language, especially for subtitles
participating cities to present their solutions and
– quite a challenge, with so many and such
expertise. The presentations were strong, but
complex characters. SARFT first asked for at
Irdeto had another distinct advantage – they were
least 20,000 characters, far too much data for
the only foreign company capable of integrating
the existing system’s memory. It took a bit of
their solutions with local set-top-boxes. Irdeto
discussion, but finally SARFT approved an initial
beat out one of their biggest competitors and
system with only 3000 characters.
won the contract.
During the BIRTV 1998 exhibition in Beijing, China, more than 20,000 people
75
visited the Mindport stand, making it one of the two most popular stands.
In 2001, digital TV was officially introduced, and
The drive for digital secured Irdeto’s position in the
trials gradually turned to contracts in provinces
Chinese marketplace and marked the first major
across China. From Gansu to Jilin, Irdeto was
deployment of Irdeto technology for basic cable
recognized as the go-to provider of secure
service – an important milestone in and of itself.
television technology. This growing business led
Irdeto to set up their first Chinese research and
COVERING THE WORLD MORE EFFECTIVELY
development center in Beijing in 2004, with a focus
The Chinese market grew at a remarkable pace.
on digital conditional access.
And Irdeto’s clients and sales skyrocketed.
Inspired by this success – and looking towards
In 2003, the Chinese government ambarked upon
the future – Irdeto CEO Graham Kill and his team
on an ambitious plan to convert the most of the
devised a plan. To ensure that Irdeto had the right
country to digital TV by 2010 and to switch off all
people and capabilities in place, Graham wanted
analog TV by 2015. The plan relied on getting
to divide the company’s key responsibilities and
a new set-top box into the hands of every cable
top executives between the two countries. If Irdeto
television viewer. To ensure rapid adoption of the
was going to continue to flourish, it needed to
new service, the government created a unique
be closer to the rapidly growing markets in the
business model. Operators received interest-free
Eastern hemisphere and ensure that its team there
loans so they could provide the boxes to users,
developed quickly enough to rise to the challenge
free of charge. Each household then paid a small
of future opportunities.
monthly fee for the digital TV service. To manage
76
the overwhelming demand for set-top boxes and
The bold plan was to expand the office in Beijing
smart cards, Irdeto ramped up production – with
to serve as a second corporate headquarters. And
great success.
Graham would be there – in person – to ensure its
success. So in August 2007, the Kill family packed
To help Chinese executives learn more about to
their bags and relocated. The dual-headquarters
operations in the Netherlands, Irdeto set up a
plan had become a reality.
program of temporary and long-term exchanges
between the two headquarters, to improve
MAKING IT WORK
integration and unity.
Implementing a dual-headquarter strategy was
uncharted territory, and Irdeto mapped out its
own path to success. To make the transition as
smooth as possible, adjustments were made on
both continents.
Irdeto committed to developing Chinese and other
Eastern personnel, so they would be eligible for the
most senior positions. But in this crucial starting
Irdeto’s New Western Hemisphere HQ
phase, the company was in a hurry and more time
was needed to develop people and prepare them
Both locations worked to support employee
for such roles. As a consequence, many senior
motivation and development. Graham reduced
executives moved from the Netherlands to China.
his operational duties and transferred more
This helped to prove Irdeto’s long-term commitment
responsibility to top managers – a necessity as
to China, as Graham was quickly joined by Doug
Irdeto grew rapidly. In China, a new training program
Lowther, Senior Vice President of Digital TV and
helped local managers build their independence
Barry Coleman, Senior Vice President, Global
and decision-making skills. A building for a brand
Talent Community.
new Western headquarters in Hoofddorp was
77
78
The Wall Street Journal article about
Irdeto’s Dual Headquarters strategy.
designed, built and opened in early 2010. Both
A CASE STUDY FOR SUCCESS
offices introduced an open floor plan with flex
Irdeto’s dual headquarters (HQ) strategy was
desks in order to open lines of communication and
recognized as revolutionary, far outside their office
increase collaboration across all departments.
walls. Professor Julian Birkinshaw of London
Finally, logistic and administrative adjustments kept
Business
both Irdeto offices working together, seamlessly.
Lab used Irdeto as a case study in his book,
Meeting schedules were modified to accommodate
“Reinventing Management: Smarter Choices for
School’s
Management
Innovation
Getting Work Done” (John Wiley & Sons Ltd.,
2010)*. According to Birkinshaw:
…In 2007, Graham Kill, began thinking deeply
about the exciting global prospects for Irdeto,
and about the things that might get in the way
of its growth. At the top of the list was what he
called the “dominant mothership” syndrome – the
tendency for people at HQ to implicitly assume
that they should be the sole custodians of new
The seven-hour time difference
was one of the challenges.
directions and technologies, and a corresponding
the seven-hour time difference between offices.
to defer back to HQ in a more subservient
New video conferencing rooms, web cams and
fashion. According to Graham Kill’s analysis,
software helped employees deal with reduced
this problem would constrain growth in the very
face-to-face communication.
geographical areas that had the greatest long-
tendency on the part of its overseas operations
79
term growth potential – those largely away from
the hierarchical distance between executives and
the Netherlands HQ. It was causing dynamics
employees, in an office that had been used to
ranging from investment to be less aligned with
being largely subservient to the Amsterdam HQ…
the future growth areas to causing promising
employees in those other geographies to leave
…In order to get a real fix on what had happened,
the company because of their perceived lack of
Graham was careful to measure the changes in
career development outside the mothership…
attitudes and behavior over time. Before moving
to Beijing, he developed some clear hypotheses
The change Graham Kill came up with was to
about what he expected to happen… He surveyed
replace the Amsterdam HQ with a dual-core HQ
the 30 senior and middle managers before he left
split between Amsterdam (Western Hemisphere)
for Beijing, and then surveyed them again nine
and Beijing (Eastern Hemisphere)...
months and 18 months afterward... Irdeto is not
the first company to try to cure the “dominant
Irdeto provides a nice example of how to monitor
mothership” syndrome, but it may well be the first
progress… On moving to Beijing, he [Graham]
to know whether it has succeeded.
located his desk in the middle of an open-plan
suite, rather than taking any kind of office, let
London Business School and IMD in Switzerland
alone the large corner office people had expected
also collaborated to produce two case studies on
him to choose… For the managers in Beijing,
Irdeto’s Dual HQ strategy. These cases are now
Graham’s open-plan office layout was not what
taught in MBA and Executive Education case
they were expecting, but it allowed them to build
classes at those two top institutions.
stronger personal relationships with him than they
had before. It was a tangible way of decreasing
80
RISKS BRING REWARDS
The history of Irdeto is colored with calculated risks
that paid off. The company found opportunities in
China when much of the outside world had yet
to see its potential. Little did they know that this
brave business venture would expand to become
a second headquarters.
What helped Irdeto become one of the leading
players in the Chinese market? A passion for longterm commitments and a willingness to relocate and
offer tailored solutions certainly played an important
role. But as with any business, the people are the key
to success. Irdeto’s local team, supportive partners
and international staff were all a defining factor in
China’s success. And the employees behind the
Irdeto brand will continue to play a starring role in
Irdeto’s achievements in the future.
* published with the written permission of the author
81
MARKETING THE
IRDETO BRAND
82
From a simple design created by the den Toonders to full-color advertising
campaigns in international trade media, the “look and feel” of Irdeto has
evolved throughout the years – representing the changes in technology as
well as the growth of the company’s scope.
Irdeto marketing has come a long way from the
time that decoders were shipped in sturdy Cape
apple boxes, wrapped in crumpled newspaper. At
that time, Irdeto’s South African partners, M-Net,
had a youthful, vibrant, energetic company image.
Its staff exuded energy and vitality, and its zippy
multi-colored logo matched this.
The first Irdeto globe logo, introduced around 1983.
The Irdeto Globe was a solid design – and was
used throughout the early 1990’s. But it gradually
THE EVOLUTION OF THE LOGO
became clear that this logo confused clients. Some
Irdeto, by contrast, went for a more sober image
people could not figure out the correct company
and logo. As the M-Net and Irdeto businesses
name, which is exactly the opposite effect a logo
took off, the company felt that a more discreet look
should have. Was it Rdeto? Or Airdeto? Was
would perhaps serve Irdeto better in its dealings
this an airline company perhaps? Of course, as
with a wider global market. The most conservative
Madelon Kaspers, then communications manager
color they could think of was maroon, so that’s the
at Irdeto said, “We traveled a lot, but we were still
color that came to be used for the Irdeto Globe.
a technology company!”
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Ad Campaign for the NAB Las Vegas 1999
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“Indaba (-dah’-) in South African “Meeting, Discussion, Indaba, from the Zulu
word Indaba, usually refers to a gathering of people to discuss common issues.
These were a series of events organized by Irdeto to discuss Technologies and
Strategies at a senior level.
The 25 Years Irdeto ad, Introducing the first MPEG2 System
to be fully DVB compliant.
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The 2007 corporate campaign focused on natural protection, partnership,
security and strategy in a colorful way. This campaign was also used on
billboards during the 2007 IBC
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THE STRENGTH OF THE IRDETO BRAND
Towards the end of the 1990’s, a new company
name had to be found for all of the M-Net
International
Holdings/Naspers
technology
businesses. After a brainstorm session at HQ in
The satellite dish logo, introduced around 1993.
Hoofddorp in 1997, the decision was made to call
the entire entity Mindport, with all subsidiaries
This confusion inspired Irdeto to change the logo,
registered using the Mindport name. The business
with stylized satellite dishes placed atop the “I” as
units of Mindport included Irdeto Access -
a sign of the new focus on digital technology. The
conditional access, CLASS – a contract library
font was stronger and the color was new. People
and scheduling system to keep track of contractual
easily recognized the company name – and they
obligations for movies, IBS- billing systems for
understood the type of company Irdeto was.
subscription applications, Interactive applications
and Mindport Solutions, a Systems Integrator.
When the company name changed its name to
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Irdeto Access, the word “access” was added to the
There was even talk of dropping the Irdeto name
logo. However, Irdeto’s communications specialists
altogether, because people found it difficult to
soon realized that the logo reproduced poorly in
pronounce. But this was the company’s unique
small print. And, as Irdeto kept on growing, the
heritage, a name constructed by the founder
stylized satellite dishes soon became outdated.
himself, combining his engineer’s title (“ir.” in
After all, by now Irdeto offered a broad package
Dutch) and his last name (den Toonder) and this
of products and services for cable, satellite and
talk was strongly opposed by CEO Graham Kill
terrestrial broadcasts.
and the Irdeto team. Research also revealed that
the Irdeto name carried significant brand value.
of security technology for Internet video content.
So the name, Irdeto Access, remained – with the
The initial findings revealed that the solutions for
logo adapted to comply with the new Mindport
this new medium would be fundamentally different
graphic identity.
from the systems which Irdeto had developed for
broadcasters of pay TV. Development of a Media
Authorization Network (dubbed MAN) was started
from Irdeto’s offices in the Netherlands and then
moved to San Diego in 2000. The activity was
The dancing man logo, introduced at the 1998 IBC.
spun out of Irdeto and became known as Entriq.
The new logo now included the dancing man
As the marketplace continued to evolve, in
symbol,
Mindport
2002, Mindport IBS became part of Entriq and
subsidiaries. The change in logo also brought with
became Entriq IBS. The Mindport brand was
it new and more vibrant colors: blue and lime
then completely dissolved. In 2006, Entriq IBS
green. The new Irdeto “look and feel” was presented
split into two companies - IBS Interprit, offering
at IBC 1998 in Amsterdam.
customer care and billing solutions and Entriq
which
was
used
for
all
was once again a stand-alone brand, offering payIn 1999, with the rapid changes in the technology
media security to Internet and mobile providers.
and pay TV markets, the business units evolved
In 2008, Entriq enhanced its product offering by
into two separate technology companies: Irdeto
acquiring Dayport, a solution provider for content
and Mindport IBS and the other units were
management and distribution of digital media
dissolved. In that same year, Irdeto commenced
over the Internet.
work on a project to consider the development
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94The Mindport stand at the 1998 IBC.
IBC 2001
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IBC 2010
CCBN 2004
REFINING THE COMPANY NAME
to show the dynamism and movement associated
As time passed, Irdeto Access grew to become a
with Irdeto’s market. “The first green block is
prominent business entity and the word “access”
more than just a graphic device,” said Christopher
was limiting and somewhat misleading (as new
Schouten, part of the logo team. “It is an allusion
customers believing that Irdeto offered services
to the founder’s Dutch honorific, “engineer” (or “ir.”
such as physical cabling). Irdeto was clearly
in Dutch), much like Dr. in English”.
heading towards multiple products and services,
and because the mother company Mindport
The colors are strong and authoritative, yet wise
had dissolved back in 2002, a new logo was
and approachable – a reflection of the original
developed in 2005.
“serious” maroon. Thanks to foresight and vision,
Irdeto now has a graphic identity that it fully owns
and manages, without the added costs of outside
agencies. And one that is strong enough to face
the challenges of future growth and development.
The new branding was launched in September
The current logo, introduced at the 2005 user group.
This new logo was a radical change for Irdeto.
Developed together with agencies, Wunderman
(part of the Young & Rubicam Brands and global
communications giant WPP) and Consult Brand
Strategy, the current logo appears to be in motion,
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2005 to an enthusiastic public at the Irdeto User
Group meeting in San Sebastian, Spain, and at
the IBC trade show in Amsterdam.
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“WHEN OUR CLIENTS
GROW, WE GROW.”
PROFILE OF IRDETO’S
CEO GRAHAM KILL
Coming from a career in mining management at
British Gypsum and the British Coal Corporation,
as well as management consulting at USC,
Graham Kill first came in contact with Irdeto was
while working for the FilmNet (later NetHold)
Group in corporate finance and business
development. In this role, he was actively involved
in supporting initiatives for pay TV business
development and a variety of acquisitions and
financing transactions. So from the start, it was
clear to Graham that Irdeto was important to the
strategy of FilmNet – at a corporate level. But
at that time, Graham and the FilmNet team paid
relatively little attention to Irdeto.
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THAT WAS ABOUT TO CHANGE.
Graham, as he didn’t want to remain in a corporate
In late 1994, Graham was asked to join Irdeto.
staff role much longer.
A massive investment had just been approved
to help Irdeto make the transition from analog to
So, as all those pieces came together, Graham
digital technology. The shareholders wanted that
made a decision that would shape his life for
investment “looked after”, and to improve the
many years to come. He became the CFO and
business discipline within the company. It’s no
Operations Director of Irdeto.
wonder that Graham’s first impressions of Irdeto
was of a bunch of crazy technology people who
WRESTLING FOR CONTROL
needed focus to deliver to the numerous high
These were exciting – yet challenging – years for
expectations set as part of this transition!
the company. Irdeto was about to grow rapidly
due to digital technology and acquiring new
A SUBSTANTIVE MANAGEMENT ROLE
customers all over the world. Things looked good
But that didn’t discourage Graham from wanting
at Irdeto and the first couple of years were truly
to be part of Irdeto. In the time with FilmNet,
exciting, dealing with the challenges of fulfilling
he’d been involved in business development
demand from all the new customers with early-
projects linked with technology. And what with
stage technology and products.
his engineering background, Graham had always
been interested in technology. Then there was
However,
more
corporate
(as
opposed
to
that massive investment, made at what was
operational) challenges were on the horizon. In
clearly a pivotal moment in Irdeto’s history. On
1997 MIH did a deal with Canal Plus that resulted in
top of this, the position offered was a substantive
50% ownership of Irdeto, with management control.
management role, which was important to
This changed everything and put the current
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strategy, vision and growth of the company at risk.
Following this success, Graham became Irdeto’s
The Irdeto Board was a challenging forum, as two
new CEO in 1998 and Martijn moved to China to
shareholders with very different views frequently
establish Mindport in China, based in Beijing.
clashed, putting Martijn Höfelt and Graham in a
very difficult position. As the leaders of Irdeto, they
IN CONTROL OF ITS DESTINY
faced a simple choice. Take instructions from the
In Graham’s experience, pioneers like those who
board or – if they couldn’t change the negative
founded Irdeto often face a moment when they
direction the board was taking – resign.
get bogged down – and fast followers overtake
them. So after becoming CEO, his vision turned
At times Graham felt as though Irdeto was being
to growth and getting a few important things on
pushed up against the wall and that the company
a stronger footing after the distractions of the
would be irreparably damaged – risking everything
Canal Plus shareholding, so Irdeto could be
that everyone had achieved over so many years.
more in control of its destiny. Independence (and
Graham and Martijn held many sessions together,
intellectual property rights ownership) from difficult
wrestling with how to navigate the politics to
joint ventures (Digco and Joco) was important,
keep as much of the growth momentum going
as both relationships were hindering Irdeto’s
as possible and get the best outcome for Irdeto
ability to operate. And Irdeto needed to catch up,
in these trying circumstances. To summarize a
technologically, and particularly, security-wise.
story probably best told with a beer in hand, with
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great support from the South African Naspers
Another goal was to deal with the company’s
group company, MIH, a situation presented itself
position in some of the established European
in which MIH could exercise its call option. And
markets. Irdeto was under threat due to changes
thus regain 100% control of Irdeto.
in ownership of major pay TV operations with
different CA preferences. Graham also felt that
when Irdeto’s clients grow, Irdeto grows.
Irdeto needed to expand.
So many company milestones and successes
An already carved up North American market,
have shaped Graham’s career with Irdeto. “To
and pressure in EMEA as a consequence of
mention them all,” says Graham, “would take far
technology changes due to shareholders meant
too much time, and would belittle the seemingly
that Asia was the natural choice, building on
small, but critically important, things done day-
some solid customer relationships in certain
in and day-out by dedicated people. All these
territories. This was the start of the company’s
efforts add up to milestones, and to a company
Asian expansion and the significant market
that is growing stronger by the day.”
shares there that Irdeto now enjoys – together
with the basis for the Dual HQ strategy. All this
called for the right people, the right focus. And
tenacity. This proved to be a challenging time
filled with excitement and passion.
Today Irdeto is continuously working to improve
how the company serves its customers. By
anticipating the future, Irdeto successfully stays
ahead of the competition and other threats.
This helps the company to remain relevant for
existing and future customers – so they, in turn,
can fulfill their business aspirations. After all,
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IRDETO KEEPS
ON GROWING
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As Irdeto entered the 21st century, the company could be
characterized by one word: growth. Each passing year brought
with it new employees, new clients and new geographies. Irdeto
took the opportunity to explore a new kind of growth as well. They
achieved rapid expansion by acquiring like-minded companies in
their market. With each new family member, Irdeto moved closer to
the goal of offering a comprehensive selection of content security
services to their clients.
LOCKSTREAM
distribution rights. But despite declining revenues,
LockStream was founded in Seattle, Washington
the entertainment industry was not yet ready to
in 1999 by Scott Searle and Floyd Rose. The
adopt this new business model.
company sprang up as a response to the rise of
Napster – the first major online platform for peer-
LockStream swiftly adjusted their focus. To
to-peer file sharing. Online content had suddenly
make it possible for the entertainment industry to
became a mainstream issue. LockStream set
embrace digital distribution while preserving its
out to create a digital content superstore, and
revenues, they developed a range of digital rights
approached major labels and studios to negotiate
management (DRM) software. LockStream’s DRM
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2005
LockStream, Seattle, USA
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solutions were available for a range of platforms,
need for an investor neatly coincided with
including computers, mobile phones, set-top
Irdeto’s search for a mobile DRM provider. The
boxes, and gaming devices.
executives at LockStream were impressed with
the knowledge Irdeto brought to the industry
As time passed, the market for secure delivery of
and were confident that they had found the right
online content became more and more crowded.
partner to help them achieve their goals.
The growing popularity of services like iTunes
meant smaller vendors needed to re-think their
In
2005,
Irdeto
acquired
LockStream. The
niche. So LockStream revised their focus and
LockStream staff was thrilled by the news of
moved into mobile – quickly becoming the leader
the acquisition. While many other technology
in mobile DRM technology.
companies were collapsing, Irdeto’s support
allowed LockStream to grow and flourish. Irdeto
As they were reaching the top of their game,
took a gradual and careful approach to integrating
LockStream realized they were not big enough
the two companies, allowing LockStream to
to keep up with the demands of the major mobile
continue executing on their existing deals,
operators and device manufacturers worldwide.
supplemented by Irdeto’s resources. Members of
Thriving in the midst of such growth called for the
Irdeto’s senior management travelled to Seattle
backing of a large and established company.
to ensure the LockStream team felt comfortable
about their future. By taking this approach, Irdeto
Irdeto first worked with LockStream during
was able to keep the key staff in place and slowly
their early explorations in IPTV. Together they
merge the two cultures.
completed the first ever IPTV deployment in
North America. A few years later, LockStream’s
This acquisition supported LockStream’s goals,
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while allowing the technology and the team
Philips CryptoWorks was poised to start producing
to thrive. Irdeto gained strong new customer
new DVB standard scrambling chips, but a major
relationships, innovative personnel, and a proven
barrier stood in their way. The government
portfolio of mobile DRM solutions.
agencies in the UK, France and Germany
responsible for overseeing encryption technology
PHILIPS CRYPTOTEC
were fighting against the DVB standard, and
At the start of 1994, three entrepreneurial men
wanted to prohibit the new scramblers because
from Philips Research (Rob van Oostenbrugge,
the encryption keys were stronger than legally
Pieter Noordam and Marcel Fuhren) got the go-
permitted. Recognizing that their new product
ahead to build a digital video system. Forming
was at stake, Philips director and DVB board
the new CryptoTec division, they set out to create
member, Theo Peek, sprung into action.
a complete offering of digital TV services – from
camera lens to TV screen. Their efforts attracted
Pushing for a compromise, Theo attended
the attention of companies like Viacom and
meetings between the government agencies and
Turner, who put in orders without even laying
technology vendors, as did Irdeto executives. It
eyes on the product. The team had their work cut
called for a lot of tough decisions, but finally they
out for them!
did it. The government approved designs with
weaker encryption keys - and chip design required
Mathieu Goudsmits was named product manager
no modification. The tenacity of this new start-up
for the conditional access system, one of the
was a big win for CryptoWorks, as well as industry
key components of the digital video system. His
leaders like Irdeto, Canal Plus and NDS, who had
task was to build the first fully digital CA system,
originally developed the DVB standard.
christened CryptoWorks.
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2006
CryptoTec, Eindhoven, Netherlands
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With a small but dedicated team working on the
With more than 100 CryptoWorks customers
digital video offering, CryptoWorks signed up their
worldwide, the acquisition strengthened Irdeto’s
first big customers in 1996, and in two short years
market position and helped them reach more than
began turning a profit. By 2005, it was one of the
300 customers on six continents. The acquisition
top-rated conditional access systems in Europe.
also brought Irdeto a highly skilled staff with an
CryptoWorks grew and became more profitable, but
innovative entrepreneurial spirit and one clear
other elements of Philips digital video system were
goal: “We want to be the best.”
far less successful. Philips was also changing their
strategy as a whole, and CryptoWorks no longer
CryptoWorks is now fully integrated into Irdeto.
seemed to fit in the mix. So the senior management
As technology changed, their system was largely
of Philips started looking for a buyer.
phased out, and replaced by current generations
of Irdeto security systems to meet changing needs
In April 2006, Irdeto acquired Philips CryptoTec,
of customers.
and with it the CryptoWorks conditional access
system. Other industry leaders like NDS and Nagra
CLOAKWARE
had also been considered for acquisition, but the
In September 1997, five co-founders (Harold
goals, drive and atmosphere of CryptoWorks best
Johnson, Yuan Xiang Gu, Paul Litva, Stanley
aligned with Irdeto. The two companies were
Chow and a part-time CEO) formed Fallingbrook
already acquainted through shared involvement in
Technologies in Ottawa, Canada. They began
industry-wide organizations concerning DVB and
to work on a new technology called Cloakware,
anti-piracy standards. And Philips was confident
which lent its name to the entire company a
that their CryptoWorks customers would be well
couple years later.
served by Irdeto’s expertise and its systems.
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2007
Cloakware, Ottawa, Canada
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Cloakware was developed to address new
offering) on the stock market, the patent budget
Internet-based
went
was reduced to focus on other short-term goals
beyond the capabilities of traditional cryptography
and quick revenue gains. These changes got the
and network security. They worked hard to
founders thinking about the benefits of finding a
understand the needs of this growing market, but
stakeholder with a more long-term strategy, to
their early attempts proved too advanced for the
ensure that their technology had the opportunity to
average operator. By 2002, they had found their
make a difference in the world.
security
concerns
that
niche, developing an enterprise-based software
tool that could be adapted to each client’s own
In 2003, Irdeto became one of Cloakware’s
security requirements.
customers. From the outset Graham Kill had
wanted its license of the Cloakware technology
Until 2004, Cloakware remained small and
to be accompanied by a strategic stake and a
operated like a family. The employees all knew
seat on the Cloakware board. The then owners
each other, and the company executives went out
of Cloakware did not feel that such a relationship
of their way to support their staff professionally
was beneficial at that time. So Irdeto licensed the
and personally. Cloakware was known as a good
Cloakware technology.
local employer.
The relationship grew, and Cloakware’s founders
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After Jeff Waxman took over as CEO, the company
began believing that they may have found an ideal
put a greater focus on sales and international
candidate to acquire their business – and that
business. It began to resemble a more traditional
partnering with Irdeto could help them achieve
North American high-tech company. As the
their long-term goals, including a new generation
company prepared for an IPO (initial public
of Cloakware technology. So in 2007, Cloakware
was adopted into the Irdeto family, and the founders
spread, more and more people approached him to
gained renewed faith in their future. This was the
give presentations on Cloakware’s products and
best imaginable option for their company.
technology. In total, he gave nine presentations
and had 15 meetings in China, despite the fact that
Irdeto also recognized Cloakware as an ideal
Cloakware’s management doubted the business
partner. Historically, Irdeto’s content security
opportunities there.
relied on hardware platforms like smart card
chips. As the market evolved, Irdeto began to
In 2007, Irdeto set up a dual headquarters in
develop software-only solutions for IPTV, mobile
Beijing. It was now clear to all that China and
TV and mobile DRM. Cloakware was essential for
the Asia Pacific region were a priority. As part of
these new technologies. Together, they created a
their new strategy in China, Andrew Wajs, Irdeto’s
revolutionary way to secure digital content. Their
CTO, came to Yuan with the idea of developing
solutions completely eliminated the need for set-
relationships with select Chinese universities.
top boxes and smart cards.
So the two of them traveled extensively across
China, carefully reviewing universities for potential
In the beginning, Irdeto took a reserved approach
partnerships.
to day-to-day management but provided excellent
new opportunities for Cloakware’s executives.
As a result of their year-long investigation, Irdeto
One of those opportunities allowed Yuan Gu to
now has formed collaborate research agreements
travel back to his native China. He was invited to
with the State Key Laboratory of Information
give seminars on software security by Northwest
Security (SKLOIS) of the Institute of Software
University, and also took the time to re-connect
of Chinese Academy of Sciences, Northwest
with many past contacts across China. As word
University, and Beijing University of Post and
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Telecommunications. And both Cloakware and
IDWAY
Irdeto gained valuable recognition within the
IDway was founded in Paris in July 2002 by three
Chinese universities and research community.
friends – Gerard Pazuelo, Faraj Sair and Patrick
The fusion of these two companies was a win
Finkelstein. Their company provided Java-based
for both sides. The acquisition of Cloakware
open software solutions for digital TV devices.
brought with it revolutionary technology, world-
The IDway-J middleware product was an essential
class security experts and a strong reputation.
element for interactive digital TV, allowing operators
It also exposed Irdeto to new industries and
to customize the user interface of set-top boxes in
prestigious clients like Texas Instruments, Pioneer
terms of layout, language, and available services.
Electronics and Vodafone. By joining the ranks of
Although Irdeto was based in the Netherlands
Irdeto, the Cloakware product quickly gained new
and IDway in France, the two companies first
opportunities in Asia and other emerging markets
encountered each other in South Korea. Together
with expanded marketing and sales support. Now
they helped a Korean set-top box manufacturer
they could realize their goals, thanks to the backing
prepare their products for a European market
of an ambitious executive team.
using IDway solutions and Irdeto’s conditional
access system. IDway had worked with some of
As a result of this collaboration, both teams
Irdeto’s competitors in the past and was surprised
can better serve existing customers, expand
by how easy it was to cooperate with Irdeto.
their business and offer an unbeatable range of
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innovative solutions to protect digital content.
IDway had a strong product offering and plenty of
Cloakware has now been fully integrated into its
technical expertise, but its small size meant it had
parent company and their name continues to be
difficulty winning business from large operators.
an important one under the single brand, Irdeto.
When Irdeto came knocking with an acquisition
2007
IDway, Paris, France
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offer, the IDway team clearly understood the
engineers from IDway faced the familiar challenges
benefits of joining this industry leader, including
of tight deadlines and limited resources.
strong financial credibility and access to bigger
deals through Irdeto’s extensive sales team.
From Irdeto’s perspective, the acquisition of IDway
and its technical architecture allowed it to provide
In 2007, Irdeto acquired IDway. After the agreement
a wider range of integrated solutions to operators
was signed, Irdeto CFO Allen Pheiffer shook
and set-top box manufacturers. For the first time,
hands with IDway’s founders and welcomed them
Irdeto combined middleware and conditional
to the family. And within a few months, the newest
access under one roof.
members of Irdeto did indeed feel like family.
Despite being a large company, Irdeto chose a
IBS INTERPRIT
smooth and slow approach to help slowly merge
IBS was born in 1993 as a new department in
IDway’s managers into Irdeto’s processes with
Irdeto’s Hoofddorp office. Headed by Loefie
minimal conflict.
Engelbrecht, the department was created to
centralize the customer care and billing solutions
Thanks to joining a larger company like Irdeto, the
for FilmNet, a leading pay-television operator
IDway team got the opportunity to see their goals
active in the Netherlands, Belgium, Denmark,
executed in a much greater scale than they could
Sweden, Norway and Finland.
have achieved on their own. They got to handle
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large projects in India and South Africa and gained
Each of the countries where FilmNet operated had
a new sense of pride as their software gained
developed their own independent systems supported
exposure to millions of users worldwide. But
by local personnel or external consultants. Irdeto’s
there was one thing that remained the same – the
newest team set out to create a unified customer
2007
IBS Interprit, San Diego, USA
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care and billing system to replace all of FilmNet’s
valuable asset to their solutions for the pay
fragmented systems. The project was led by chief
television market.
architect Peter Cilliers.
ENTRIQ
Even though IBS started as an internal division of
Entriq grew out of a project within Irdeto, initiated
Irdeto, they felt like a small company trying to take
by Robert Fransdonk and Graham Kill, to develop
on the world. IBS continued to perfect their new
security technology for Internet video content.
system, and followed a complicated path out of,
Because broadband Internet was taking off in the
and then eventually back into the Irdeto family. First
US faster than in Europe, Robert moved to San
the team spun out of Irdeto to become a division of
Diego to start building a small team there. In 2000,
Mindport, a former Naspers group subsidiary. Then,
his California-based team created a new Media
in 2002, IBS was absorbed by the company Entriq,
Authorization Network (MAN) for on-demand and
which was renamed Entriq IBS. By 2006, Entriq IBS
live media streams.
became two companies: Entriq and IBS Interprit.
The newly independent IBS Interprit continued to
Because of the dramatic differences between TV
focus on customer care and billing solutions.
and Internet broadcasting at the time, the decision
was made to spin the department out of Irdeto. It
In the end, in 2007 Irdeto acquired IBS Interprit and
became a separate company named Entriq. The
formed a new group called Irdeto BSS (Business
first major application of Entriq’s content protection
Support Systems), located in Carlsbad, California.
and subscriber management technologies was
The IBS team welcomed the acquisition and looked
for a pay-per-view broadcast of a World Wresting
forward to the positive influence of belonging to a
Entertainment (WWE) event.
larger organization. And Irdeto gained yet another
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2008
Entriq, San Diego, USA
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If Entriq was to grow, they needed to look beyond
As fast broadband Internet connections become
securing online content. So in 2002, Entriq
a reality outside of Europe and North America,
absorbed the IBS group out of a former Naspers
this acquisition let Irdeto provide pay-television
group subsidiary called Mindport. The company
operators worldwide with integrated solutions
was renamed Entriq IBS, and expanded their
for online content and to have a strong basis for
expertise to include subscriber billing services.
addressing pure broadband video customers.
The company continued to build its reputation in
digital storage and content protection with high-
MOVING FORWARD
visibility sporting events like the 2004 Summer
Through these acquisitions, Irdeto has become
Olympics and 2006 Winter Olympics.
much more than a content security expert. It
has transformed into an organization offering a
In 2006, Entriq IBS split into two distinct
complimentary array of solutions to enable the
companies: Entriq and IBS Interprit, both largely
evolving digital marketplace and become a vital
based in Carlsbad, California. In 2008, Entriq
part of the consumer’s connected day.
increased its scope of business by acquiring
Dayport, based in Mankato, Minnesota – adding
Irdeto’s partners and employees continue to
content management and distribution to target
help the company stay at the forefront of the
the packaging and distribution of digital media
industry. New services and capabilities help
over the Internet.
Irdeto’s customers benefit from the evolutions in
technology. In the words of Irdeto CEO Graham
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Entriq rejoined Irdeto in 2008. This addition
Kill, “We owe our success to being able to adapt
represented an important new element in Irdeto’s
to, and anticipate the ever evolving demands
end-to-end suite of solutions for its customers.
of our industry and, of course, to our valued
partnerships with customers and core vendors
and partners worldwide and a team of dedicated
professionals on our staff.”
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During the Naspers Group’s 93rd annual general
including the Far East, and strengthened the
meeting in Cape Town on 24 August 2007, Irdeto
company’s market share by acquiring interests
CEO, Graham Kill, was the recipient of the Phil
in international businesses that specialize in
Weber Award. Named for Dr. Phil Weber, the
content protection. Irdeto also continued its global
award is Nasper’s top honor for leaders who
participation in mobile technology trials.
show exceptional achievement. Weber was the
managing director and chairman of the board of the
IRDETO TEAMWORK
former de Nasionale Pers. The high standards he
In his acceptance speech, Graham said, “I want to
set for himself are reflected in the award: initiative,
thank you for the recognition that this award gives
perseverance,
Irdeto. It has named me as its winner, but for me,
leadership,
drive,
expertise,
integrity, loyalty, and ethical conduct.
it represents the work that the team at Irdeto has
done over the years. Any leader is only as good as
TREBLING IRDETO’S VALUE
his or her team, and I am no exception. I work, and
Naspers chairman Ton Vosloo praised Graham’s
have worked over the years, with remarkable and
leadership, which helped the company grow from
dedicated people who have diligently applied their
a single-technology organization into the third
skills – and that have made Irdeto what it is today,
largest
and its prospects for the future.”
multi-technological
content
protection
enterprise in the world.
As Ton pointed out, between 1998 and 2006,
Graham succeeded in trebling Irdeto’s value,
despite the downswing experienced by the
technology sector. Irdeto entered new markets,
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ONE IRDETO
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One Irdeto – the origins of the employee battle cry come from
the roots of the company upward. It was Irdeto employees who
identified the importance of having well-defined corporate values
in a Staff Engagement Survey (SES) in 2005. As a result, a group
was set up to define Irdeto’s values and create a program to
introduce them to the company. Workshops were held in a number
of Irdeto offices worldwide, and the top four values were chosen
from a range of possibilities. – these values were: (1) Teamwork
(2) Respect (3) Innovation and (4) Communication.
Because of the importance for Irdeto employees
trainings, and most importantly in the way that
worldwide to work as a single team using these
employees dealt with one another as well as
values as a foundation, the tagline “One Irdeto”
Irdeto customers and suppliers.
was chosen as the theme for the corporate
values program and a logo was designed to
In 2006, the One Irdeto initiative was launched
visually represent the concept. Under the One
worldwide through a series of trainings and
Irdeto banner, the values were implemented
workshops, a poster campaign and through other
into all aspects of the organization including
employee touch-points including the employee
performance appraisals, the hiring process,
magazine.
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Accountability and
Sense of Urgency
Loyalty and
Respect
Trust
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Innovation
Ef fective
Communic ation
and Teamwork
Irdeto’s corporate values, like the organization
itself, have continued to grow and change
over time. As more companies were acquired
and the staff numbers grew, a need to sync up
all of the staff was required. In 2010, the One
Irdeto concept was re-launched globally through
numerous channels to further integrate the
evolving corporate philosophy: These values are
visualised on the left page.
At Irdeto, these values are not just words but
are carried out in actions on a daily basis both
internally and externally – they provide a solid
foundation for everything at Irdeto and are part of
the collective spirit of the organization.
ONE IRDETO!
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IRDETO IN MOTION
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Irdeto is a company that truly believes in the value of teamwork
and collaboration. From the very start of the company, the founders
understood the importance of close-knit teams, and that the sense
of family and friendship was a factor that really made a difference
– especially when times were challenging and business needed
that extra something to push Irdeto into the future.
Such belief in one’s co-worker was one of the pillars
Irdeto believes it is important to break down
of the company’s global growth and success. And
hierarchies – and build on their strong sense of
as Irdeto grew, the company was challenged to
community. So Irdeto in Motion gives everyone the
find new ways to bring their people together, and
opportunity to interact with their colleagues, and
bridge the distances and differences between all
actually experience what it means to be on the
members of the Irdeto team.
same team, working together for the same goals.
The original Irdeto in Motion was launched in 2007
So the Irdeto in Motion initiative was launched. This is
in Hoofddorp, with activities that included graffiti art
an annual “fun day” and is held at each participating
and building a giant Meccano vehicle. That same
Irdeto location. All employees in that office are
year in Beijing, CEO Graham Kill participated
treated to a day of team building, adventure and
in the team’s three-legged race, among other
excitement, to help ensure that everyone at Irdeto
activities. By 2010, the fun and action moved to
continues to work as an effective team.
Irdeto Canada in Ottawa, Canada, where the team
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CARLSBAD OFFICE - Sailboat racing at the Marina in San Diego
and a happy hour afterward at the Sheraton.
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OTTAWA OFFICE - Zip lining through the treetops and a tour of an adventure cave. Lunch
and a mingling party at the end of the day are included. Employees are also given an Irdeto
in Motion t-shirt.
BEIJING OFFICE - Sports Day at the Beijing Eastern Garden, including a golf workshop,
rafting, rowing/canoeing at the Olympic Canoeing Park, a counter-strike game, t-shirt DIY
and a tai chi quan workshop. Employees then go to a hotel for dinner. At night, everyone joins
in the indoor activities, including bowling, snooker, billiards and table tennis.
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HOOFDDORP - Workshops on learning to be a d.j., shaking and making
cocktails, writing graffiti, and creating a life-sized Meccano vehicle. At
night, a band consisting of Irdeto employees performs (a surprise!),
followed by dinner and dancing.
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faced a challenging high-rise climb through the
tops of trees. As one can imagine, some people
were stronger, and others more fearful. In order to
succeed, the team members had to work together
and help one another.
Irdeto in Motion has also been held at Irdeto USA
in Mankato, Minnesota and in Carlsbad, California,
where employees sailed the bay in teams. Those
with more experience helped those with less
experience, and everyone learned the joy of
working well together.
In the coming years, all Irdeto locations should
have a chance to hold their own Irdeto in
Motion day, so everyone has the opportunity to
communicate, interact – and most importantly –
have fun as a team!
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EQUIPPED FOR
THE FUTURE
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On 7 April 2010, Irdeto opened its Western headquarters in
Hoofddorp, the Netherlands, as part of a unique dual HQ concept
along with an Eastern headquarters in Beijing. But the newly
constructed building was more than “just” working space for the
company’s employees. It was designed to be the office of the
future, as Irdeto seeks to decrease its ecological footprint and
become a more sustainable organization.
The ultramodern HQ was created using green
ATTENTION TO ENERGY-EFFICIENCY
architectural principles. To cut down on the amount
Large skylights bathe the atrium, restaurant and
of fuel needed for transportation, local vendors
mezzanine in natural light – and there are lots of
were used as often as possible. Concrete use was
windows throughout the rest of the building, which
minimized, as the means of concrete production
was constructed to allow as much light to enter the
demands so much energy. The façade was
building as possible. But Holland can be dark and
constructed from 100% sustainable wood. Even
rainy, especially in the winter – so when electric
the carpets and wall coverings were made from
lighting is needed, it comes from energy-efficient
recycled materials, to reduce the use of trees and
compact fluorescent lighting with high-intensity
other natural resources.
reflectors to disperse the light.
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Energy use within the building is kept as low as
no set workplaces. The building is an open plan
possible, thanks to sensors in areas that are only
office with different work areas designed to suit the
used from time-to-time, like toilets and meeting
needs of the type of work being done. This helps
rooms. And by placing the IT department directly
to foster greater interaction and the flow of ideas
above the servers, Irdeto only needed one cooling
between people.
system and saved on kilometers of cabling.
ENCOURAGING ECOLOGICAL BEHAVIOR
Heating and air conditioning makes use of
But it’s not just about the building itself. Creating
geothermal heat sink system, with hot and cold
the office of the future also means finding ways for
water stored in two 80-meter deep pits. This cuts
employees to decrease their ecological footprint,
down on the amount of energy needed to maintain
too. So the Western headquarters was strategically
temperatures indoors, while keeping everyone
located opposite the train station. Employees are
comfortable regardless of the Dutch weather.
also encouraged to bike to work – so there are
plenty of bike racks to park, and showers inside
FLEXIBLE WORKSPACE
for freshening up.
Because more employees balance working hours
between home, office and elsewhere, the building
To further reduce the need for travel, audio and
would not be fully used at all time. So the architects
video conferencing technologies are readily
anticipated that only 70 percent of the workforce
available. Irdeto introduced a means of saving
would be present at any one time – and designed
paper (and trees) that had proven successful in
accordingly. Which saved on materials, lighting
the Beijing HQ. If employees want to print anything
and other costs. And when the workforce arrives,
– or make copies – they need to log in first!
they don’t go straight to “their” desks, as there are
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“We believe the space we have created aligns
well to the expectations and requirements of the
future,” said CEO Graham Kill. “Our goal was
to create an environment that allows for total
flexibility, focusing on delivery rather than hours
in the office. Our workspace reflects the way we
interact with the market. It’s all about collaboration,
communication and less structured business
settings.” Which allows Irdeto to react more quickly
to developments in the market, to better meet their
customer’s changing needs.
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COLOPHON
Editors:
Susan Brown, Claire Taylor, Daniel Thunberg
Design and layout:
Bram van den Broek
Authors:
Elizabeth Keel, Claire Taylor
Based in part on interviews and
correspondence with:
Jock Anderson
Robbert van den Bogaardt
Julian Birkinshaw
Robyn Collins
Brian Dinneen
Loefie Engelbrecht
Patrick Finkelstein
Robert Fransdonk
Mathieu Goudsmits
Yuan Gu
Martijn Höfelt
Harold Johnson
Michael Karp
Madelon Kaspers
Graham Kill
Michelle La Vita
Norman Lievaart
Rob Mills
Wim Mooij
Rory O’Connor
Chris Raats
Thierry Raymaekers
Antonie Roux
Faraj Sair
Christopher Schouten
Werner Strydom
Tania Usher
Andrew Wajs
Neil Watson
Brendan Woo
Klaas Zuidema
and others, all of whom who we wholeheartedly
thank for their contributions.
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