April 19, 2006 9:16 AM PDT
Cisco backs DRM start-up
Cisco, along with several other investors, contributed a total of $16 million to Widevine's third round of funding.
Widevine's technology secures on-demand movies and television shows by placing digital watermarks in content at each stage of the video distribution chain. These watermarks remain traceable when a video is distributed beyond the set-top box to PCs and mobile devices.
Marking content that is distributed over an Internet Protocol network is intended to ensure that digital content from all major studios and broadcasters is protected from piracy. Many broadcasters and movie studios have been reluctant to distribute their programs over the Net because they are afraid they could be easily copied and shared with millions of other people.
The Widevine technology is a good fit for Cisco, which has already begun its push into the video market. Earlier this year, Cisco completed its $7 billion acquisition of set-top box maker Scientific-Atlanta.
Cisco's vision of the digital home is that TV shows and movies not only will be delivered via broadband over an Internet Protocol pipe, but that the content will be distributed throughout the home using an IP-based network. Cisco's strategy is to provide the components that make that network possible. The company also hopes to provide some of the consumer electronics devices that make viewing or listening to digital media possible.
But if the threat of piracy makes content owners and broadcasters too afraid to distribute their movies and TV programs over the Internet, Cisco's strategy can't work. That's why the company is adding security features, such as the ones offered by Widevine, to its products.
Canadian telecommunications company Telus also invested in Widevine. Telus is building a network to deliver TV service to its customers. Other investors in the recent round of funding included VantagePoint Venture Partners, Bear Stearns Constellation Ventures, Pacesetter Capital Group and Phoenix Partners.
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