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Irdeto – WestTaurus Avenue 1052132 LS HoofddorpP.O. Box 30472130 KA HoofddorpThe Netherlands
Irdeto – EastF3/6, Beijing Sunflower TowerNo. 37 Maizidian StreetChaoyang DistrictBeijing 100125China
Copyright © Irdeto 2010
4
TABLE OF CONTENTS
5
A message from the CEO, Graham Kill 6
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
Colophon 138
6
WELCOME
7
Celebrating milestones is an important part of
life; we mark the passing of each year, entering
a new phases of our lives, the anniversaries of
momentous events in our personal or collective
history. The year 2010 is indeed a momentous
year for Irdeto; we have defined a new mission
and vision for the company, realigned our
corporate structure and opened our brand new
Western Headquarters in the Netherlands, after
celebrating our 40th anniversary in 2009. So
I believe it is important to mark all of these key
milestones by taking a look back at our history, so
that all of us as part of Irdeto can appreciate our
roots, and begin to write our new Irdeto history as
we move forward together.
One Irdeto - Looking Back, Moving Forward reflects
upon the past four decades, and brings the early
days of our legacy to life. The book tells the story
of the founding of Irdeto by Pieter den Toonder,
whose fascination as a youth with radio technology
was the catalyst for the origins of the company. It
also details the strong connection we have with our
South African roots and parent company Naspers,
and showcases how our unique technologies
and strategies have enabled everything from the
world’s first digital satellite pay-TV network to
the world’s first mobile broadcast TV service –
distinguishing Irdeto on the international stage.
Irdeto has grown to where we are now by having
strong, visionary leadership and dedicated,
innovative employees who were not afraid to
take a few risks along the way. This history of
innovation continues today, as we expand our
solution offerings to meet the demands of the
ever-changing connected marketplace.
I know you will enjoy reading One Irdeto - Looking
Back, Moving Forward as much as I did. I am
truly honored to lead such a dynamic organization
and look forward to adding our own chapters and
success stories to One Irdeto’s history.
GRAHAM KILL
8
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
at the Netherlands Chamber of Commerce by Pieter den Toonder.
- TV is transmitted from the moon. Six hundred million people see
it live. - Ninety-five percent of U.S.
households have TV.
1970 Irdeto founder, Pieter den Toonder
continues working on antenna technology and establishes fundamental Pay TV technologies.
1972 Half of the television sets in the
U.S. are now in color.
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 South Africa’s first television service.
Italy’s highest court approves local television broadcasts from private companies.
1977 Pieter den Toonder continues work
with U.S. based Oak Technologies on Pay TV technology.
1980 Oak Technologies purchases
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.
1983 First commercial use of smart
cards by Télécarte in France.
1984 With the rapid explosion of technology in the 1980’s, 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.
1985 Irdeto is contracted by South Africa’s first pay television station M-Net.
1986 M-Net launches South Africa’s first private subscription 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.
1989 Irdeto’s South Africa office is set up and work starts on satellite platforms.
1990 The Broadcasting Act of 1990
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 its first User Group. Irdeto helps launch Telepiù, Italy’s first pay TV network.
1992 The first digital-to-cable service is introduced. The new Integrated Business
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.
IRDETO TIMELINE
9
1994 DirecTV is the first high-powered
direct satellite TV system in the U.S.
1995 Irdeto deploys the first digital
conditional access system in Australia with Galaxy.
Irdeto launches world’s first MPEG-2/DVB system.
Irdeto’s smart card entitlement center opens in Hoofddorp.
M-Net launches their digital satellite service, DStv in South Africa.
1996 FCC approves standard for HDTV
and sets time line for digital-TV transition in the U.S.
More than 1 billion people worldwide have TVs.
1997 Irdeto designates Beijing,
China as its APAC regional headquarters.
1998 MIH is awarded a contract for
China’s Village to Village Project – a trial delivery of TV and radio programming to remote areas of China by satellite, using Irdeto technology.
2000 Entriq is founded to focus on
emerging broadband markets. The average American watches
about four hours of TV every day. Lockstream launches the first
DRM client on a 3G network. The Irdeto smart card v2 is
released. Irdeto introduces CypherCast to protect IPTV broadcasts.
2002 Irdeto is the 1st approved
foreign CA system in China. The Salt Lake City Olympics
launches the first joint international HDTV production.
MTV reports that it reaches 250 million homes worldwide.
Irdeto introduces the PIsys conditional access system.
2004 Irdeto launches the first IPTV
deployment in North America. Debut of Irdeto’s Epsilon Smart
Card with FlexiFlash.
2005 Irdeto acquires Lockstream. Irdeto helps Telecom Italia Media
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.
2006 Irdeto acquires Philips Cryptoworks.
2007 Irdeto acquires Cloakware and IDway. Irdeto launches a dual HQ
strategy: Amsterdam and Beijng 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.
2008 Irdeto acquires IBS Interprit and Entriq.
2009 Irdeto celebrates 40 years in business. Irdeto launches software- based conditional access for broadcasters. 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
a highly customizable interface.
2010 Irdeto’s European Headquarters
moves to a new high-tech and ecological office on Taurus Avenue in Hoofddorp, the Netherlands.
10
DETERMINATION, FORESIGHT AND RISK
11
He not only developed breakthrough technologies
– Pieter was also a catalyst for Irdeto’s spirit and
personality. The determination, foresight and “can
do” attitude Irdeto is known for started with a single
technology enthusiast in the Netherlands.
WARTIME RADIO TINKERINGS
When the Germans invaded the Netherlands, Pieter
den Toonder was in his early teens. Perhaps it was
a touch of resistance than inspired him to begin
tinkering with transistors and old radios at a time
when owning a radio was strictly verboten! With
his crude radio sets, Pieter was able to listen to
signals broadcast from Great Britain, where Queen
Wilhelmina of the Netherlands lived in exile.
Then Nazis discovered what this bright kid was
doing, and Pieter was deported to a German
work camp. He was only released at the end of
the war, after spending eight long months under
terrible circumstances.
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.
12
Pieter returned home determined to continue his
tinkering, with plans to study radio engineering.
As so many others, however, he was weakened
by the war and contracted tuberculosis. After
making a full recovery, he soon faced another
challenge. Still eager to study radio engineering,
Pieter requested a university scholarship – only
to be denied by a Dutch government reluctant to
invest its scarce post-war resources in people
with health problems.
Instead, Pieter repaired old radios and taught
radio engineering at a private school. He also
enrolled at the Technical University of Delft, often
corresponding with professors when work got in the
way of attending lectures. Following his graduation
in 1956, Pieter was invited to teach at the Technical
School of Dordrecht, and as his reputation in radio
technology grew, he found himself being recruited
by international companies eager to benefit from
his expertise.
IRDETO IS BORN
Pieter’s fascination with radio grew with the world
of broadcasting, and soon he began exploring the
technology of television, too. In the Netherlands,
the war had suddenly halted the development of
television. Broadcasting only began towards the
end of 1951, with just 3 hours of programming per
week – and a month-long break in the summer!
In 1952, only 500 homes had a television set, which
were prohibitively expensive. By this time, Pieter
had become a popular radio technology teacher
at the Radio Institute Steehouwer in Rotterdam
– which was attracting more and more students
each year.
Together with his top students, he built a television
receiver from scratch in just two months, with the
students making all parts themselves (except the
28 “radio lamps” and 200 resistors and capacitors).
Their next television set only took 2 weeks to
build. It not only received broadcasts flawlessly – it
also helped inspired the institute to begin holding
special television technology courses.
13Pieter, together with his students, building a television receiver from scratch in just two months.
14
A picture from the past: Pieter teaching at the radio school
15
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
Messa was their key. Oak took over the company
and offered Pieter a lucrative full-time contract.
But no matter how many times they asked, he
refused. Pieter preferred to stay in Dordrecht as
an Oak Technologies consultant – launching their
European branch office in his home’s garage!
After working more than a decade as a teacher
and independent consultant, the time was ripe
for Pieter to register his company with the Dutch
Chamber of Commerce. It seemed only natural
for the company name to reflect his contribution,
so he combined Ir. (the Dutch title for engineering
graduates) with his last name (den Toonder). And
in 1969, Irdeto was born.
Pieter remained at the forefront of each new
Irdeto breakthrough during this period – from
television tuners to cable television. Such was
his dedication, that he even built the encoders for
Irdeto’s first multicode cable systems in his little
lab in Dordrecht.
New technologies were being discovered, and
business was growing fast – but by 1985, Pieter
Where it all started: on Ambachtstraat in Dordrecht, the Netherlands.
16
was 59 years old – a nice age to retire. Or so
he thought! Little did he know, Irdeto’s future was
about to change – and postpone his retirement
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
Jock Anderson of the South African Broadcasting
Corporation (SABC). Jock joined Jac van der
Merwe and Antonie Roux of de Nasionale Pers
(now Naspers) on the technology mission required
to launch South Africa’s first pay television station.
Jac wasted no time. He took Jock, Antonie and
two other consultants on a bold quest across the
United States, and ended up at Oak Technologies
in California. Their analog scrambling technology
was just what M-Net needed.
Back in Holland, Pieter and his engineers were
developing a European version of Oak’s technology.
With some modifications, it would be perfect for
South Africa. So the M-Net team purchased the
rights to the technology, the engineers got to work
– and a new era began for Irdeto.
The M-Net logo in 2010
17
As the emphasis shifted to South Africa, business
snowballed. Once the prototypes were tested, they
hired new employees to industrialize and mass-
produce the technology. So much for Pieter’s
early retirement! He couldn’t resist the challenge
and oversaw the project – regularly visiting South
Africa to help soothe the inevitable growing pains.
Soon everyone realized that M-Net’s experts would
be better off working closer to Irdeto’s technicians.
For several months, Jock supervised the production
of prototype decoders and encoders for South
Africa with a group of engineers who arrived from
South Africa to learn about the technology from
Pieter. Thanks to their frequent trips to Dordrecht,
Jock, Antonie and Jac were starting to feel quite at
home in the Netherlands.
HIGH-PROFILE CLIENT
By the late eighties, South African pay TV had
proven to be a huge success, and the operation
was running reasonably smoothly. But just as
Pieter started making new retirement plans,
media magnate Silvio Berlusconi contacted him in
Dordrecht. Media legislation had recently changed
in Italy. So Berlusconi’s company, Fininvest,
decided to create a pay television network, Telepiù.
The only thing he was missing? The technology!
This was an excellent opportunity to build on
the success achieved in South Africa. Pieter
reunited with M-Net’s key players – Jac van der
Merwe, Jock Anderson and Antonie Roux – and
successfully negotiated the details of the Telepiù
agreement. Jac was the first to move permanently
to Dordrecht, where he masterminded the new
support operation. Under his guidance, fourteen
Irdeto engineers toiled for months to make the
Italian system operational on time.
In tandem, the hardware development team worked
for six months with a team of Italian business
analysts and developers in Johannesburg. For
one year, Irdeto ran a project office in Milan. And
Antonie moved to Italy with his team of five to
implement the systems.
During those hectic times, Antonie was much
18
19
more than just the head of IT. He flew between
continents, chased leads and searched for new
technology – and skilled staff. Antonie was so
dedicated to meeting production deadlines, when
the first Gulf war broke out in 1990, and new
security restrictions delayed shipments to Italy,
he drove to Nice, loaded his car with chips and
completed the delivery himself.
With plenty of hard work and no shortage of long-
distance travel, the Irdeto and M-Net teams helped
launch Telepiù in November 1991. This was Irdeto’s
first major breakthrough. Suddenly this small Dutch
company had credibility – and a high profile client.
TRAGEDY STRIKES, IRDETO MOURNS
As Pieter eased into retirement for the third (and
final) time, Jac, Antonie and Jock continued to
develop opportunities for Irdeto and branched
out into other areas beyond in pursuit of growth
opportunities for Naspers in Europe. By the
early 1990s, they all lived and worked in the
Netherlands.
After Pieter den Toonder’s retirement, Jac took
his place as the Managing Director of Irdeto. Jac
provided the momentum Irdeto needed to expand,
but he did more than just generate new business –
he loved exploring new ideas with existing clients.
In 1991, Jac started the annual Irdeto User Group,
giving major users of Irdeto products a chance to
meet and share their needs and views with Irdeto
and each other.
Irdeto became a subsidiary of NetHold (another
member of the Naspers group). Irdeto’s technology
had become an essential link in the Naspers family
– the key to protecting the content produced by the
various holdings of this large media group.
In 1994, Jac accepted a new position with NetHold,
and began preparing to return to his beloved South
Africa. When flying home from a Cannes business
trip, his light aircraft crashed into the French Alps.
Tragically, Jac did not survive. The many tributes
that poured in were testimony to his energy,
honesty, drive and vision.
20
As colleague and friend Jan Steenkamp said, “Jac
had a way of motivating and driving you further
than you could possibly imagine. And then, just
when you thought things were safe, he drove you
even further. He could take people through the
best – and worst – of situations, and make them
love every minute of it. And when you were down
or struggling, Jac would simply pick you up and
take you along with him – without you ever noticing
that he did this intentionally.”
FROM ANALOG TO DIGITAL TO GLOBAL
The digital conditional access market was born
and shaped by people and companies in the frantic
period of the second half of the 1990s. With his
strong background in broadcasting, Jock became
a leading technical force in Naspers. Based in
South Africa, his key role was to make Naspers’
pay TV operations digital. That analog-to-digital
transition propelled Irdeto into becoming the first
company in the world to offer a complete digital
pay television solution. South Africa’s MultiChoice
continues to be a pioneer force that helps shape
Irdeto’s products. Jock left Irdeto in 1994 to head
Orbicom, another South African media start-up,
and later worked as a CTO and consultant in the
broadcasting and telecommunications industries.
Antonie returned to South Africa to work and later
became the CEO of the Internet Division of the
Naspers subsidiary, MIH.
After Jac’s death, Irdeto’s Chief Technology
Officer, Martijn Höfelt, became CEO. As the
world transitioned to digital, Irdeto’s Commercial
Director, Jan Steenkamp and the Irdeto team set
about to acquire as many clients as possible.
Meanwhile back at base (Netherlands and South
Africa) the team rushed to fulfill the development,
installations and orders. Part of the team making
that happen was Graham Kill who joined in 1995
as CFO and Operations Director. Graham later
became Irdeto’s CEO in 1998 when Martijn moved
to China with MIH. Each major media operator
had its own technology company: Naspers with
Irdeto; Canal Plus with Canal Plus Technologies;
and NewsCorp with NDS.
21
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.
22
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.
BoxThe principle of subscription television is that the subscribers get
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
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.
MonopolyThe 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.
Inventing the future in DubbeldamPieter den Toonder’s subscription TV
Caption: Inventor Pieter den Toonder: “Subscription television is simple. It’s just not allowed in the Netherlands.”
From: Het Vrije Volk, 17 September 1981
2323
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 so-called 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,
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.
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 34-year 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.
STUDENTS BUILT THEIR OWN TELEVISION RECEIVERS
ROTTERDAMS PAROOL, SATURDAY, 19 JULY 1952
24
SOUTH AFRICA AND THE BIRTH OF M-NET
25
TELEVISION IN SOUTH AFRICA
In the 1980s, South Africa was an unlikely place
to start an innovative media company with
international interests. The country had long been
ruled by apartheid, a political system enforcing
racial segregation. Now much of the international
business community was boycotting South
African products and services. Prime Minster P.W.
Botha complicated matters in August 1985 with
his infamous Rubicon Speech, in which he re-
confirmed his government’s stance on apartheid.
The value of the Rand plummeted, putting South
Africa in an even more trying position.
For decades, television broadcasting was banned in
South Africa, as the government feared its possible
influence on its citizens. In response to strong
public demand, the South African Broadcasting
Corporation (SABC) was finally allowed to offer a
television service, with experimental broadcasts in
major cities in mid-1975 and nationwide service
commencing from January 1976.
Initially, the single public television channel was
funded through a license fee. Advertising began
in 1978. By 1981, SABC started broadcasting
a second channel with programming in African
languages such as Xhosa, Sotho and Tswana.
The first channel, then called TV1, offered English
and Afrikaans programming.
As the popularity of television in South Africa
skyrocketed, newspaper publishers felt the pinch
of revenue loss because television was taking a
An encounter with one South African startup propelled Irdeto
from a small Dutch technology consultancy to an international
player in pay television.
26
larger cut of advertisers’ budgets. So publishers
lobbied the authorities for the right to set up a pay
television station – both to challenge the perceived
monopoly held by SABC and to win back a share
of the advertising spend.
DE NASIONALE PERS (NASPERS)
First established in 1915, de Nasionale Pers
(currently known as Naspers) was the leading
Afrikaans-language publishing group in South
Africa by the early 1980s. Like other South African
publishing houses, they recognized the need for
television – as a tool for boosting revenue streams
and branching out into newer forms of media.
So they quickly assembled a team to investigate
opportunities in pay television.
The initial team consisted of Koos Bekker, Jac
van der Merwe and Antonie Roux of de Nasionale
Pers, joined by Cobus Stofberg of Coopers &
Lybrand and Jock Anderson of the South African
Broadcasting Corporation (SABC). Their new
company, a subsidiary of de Nasionale Pers,
was named Electronic Media Network Limited,
or M-Net. When the South African government
started accepting applications for pay television
licenses in December 1984, the M-Net team hit
the ground running.
To make their pay television station a reality,
M-Net jumped the necessary political hurdles and
secured the financing. But they were still missing
one key element – the right technology.
SEEKING (AND TWEAKING)
THE RIGHT TECHNOLOGY
In his pursuit of the missing component, Jac van
der Merwe quickly organized a whirlwind tour
across the USA with Jock Anderson, Antonie Roux
and consultants Willem Smit and Bob Mierhorst.
The M-Net team found two potential technology
suppliers. Negotiations with their first choice
quickly came to a halt because of boycotting. This
left them with just one potential supplier – Oak
Technologies, a California-based firm which had
developed an analogue scrambling technology.
27
28
29
On the surface, Oak Technologies was a less than
ideal option. The company had recently decided
to scale down the communications side of their
business and explore more profitable markets.
Oak was willing to provide the technology, but
would not support customization or after-sales
service. Also, Oak’s technology was only available
in NTSC (the standard US television format), and
the M-Net team needed to convert it to PAL (the
standard European and African television format).
To help out with the conversion, Oak recommended
Pieter den Toonder, the founder of Irdeto. Pieter
had consulted for Oak in the past, and was already
busy in the Netherlands, modifying the system for
European standards.
A decision was quickly made that would shape the
future of both M-Net and Irdeto. M-Net purchased
the rights to Oak’s technology, and Pieter
customized it for the South African market.
BUILDING SOUTH AFRICA’S
FIRST PAY TV OPERATION
Back in South Africa, Jock Anderson assembled
a team of engineers, who relocated to Dordrecht
in the Netherlands to learn about the technology
and develop decoder prototypes under Pieter’s
tutelage. M-Net had just one year to launch their
new television operation, so Pieter and the M-Net
team traveled back and forth – between Holland
the South Africa – to get the job done. Once
the prototypes were ready, it was time to begin
manufacturing the decoders.
During the final negotiations between Pieter,
M-Net and Oak, Jock Anderson was called away
by an urgent message. Back home in South Africa,
his pregnant wife had gone into labor. Or so they
thought. Baby Julie was born a week later, and the
production of the first decoders was named Project
Julie in her honor.
30
PAY TV HITS SOUTH AFRICAN AIRWAVES
The hard work, travel and risk-taking paid off.
M-Net, South Africa’s first private subscription
television service, went live in October 1986
with one 12-hour channel. This was a truly
revolutionary moment in South African history.
As the country’s first pay TV network, M-Net
offered an alternative to state-controlled SABC
programming and gave South Africans a broader
view of the outside world.
Despite the historical significance of M-Net’s
launch, the company struggled to turn a profit in
the early years. The tide turned in April 1987. One
boxing match featuring two of the world’s best
(and black) fighters got South Africans lining up
to subscribe to pay TV. M-Net broadcast the fight
between Marvin Hagler and Sugar Ray Leonard
live from Caesars Palace in Las Vegas. M-Net
sold out of decoders countrywide and quickly
grew to a total of 90,000 subscribers.
M-Net continued to push the limits of TV
programming in South Africa. As part of their
licensing agreement, they were forbidden to
broadcast news programs – a privilege allowed
only to SABC. But in 1988, M-Net bravely started
broadcasting “Carte Blanche,” a current affairs
program. The program quickly gained popularity
by offering South Africans their first look at
unbiased investigative reporting.
TO ITALY AND BEYOND
M-Net was growing fast. They realized that their
expertise – combined with Irdeto’s technology
– was a winning team. So they sought out new
business opportunities in the United Kingdom and
New Zealand, without much success.
Then Pieter contacted M-Net with a lead on a
project. Media legislation was changing in Italy. So
Fininvest, a company run by media magnate Silvio
Berlusconi, decided to set up a pay television
system called Telepiù. Once again, the only thing
they needed was technology - the ideal opportunity
for Irdeto and M-Net.
31
32
Jac van der Merwe and Antonie Roux joined Pieter
in Italy to negotiate an agreement, and the M-Net
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.
The hardware team worked from Johannesburg,
and was soon joined by Italian business analysts
and developers.
All the long hours and travel and hard work finally
paid off. Telepiù successfully launched in November
1991 – a major breakthrough for Irdeto.
Suddenly Pieter den Toonder’s little company
had a high profile, and was gaining credibility in
the market. And M-Net was seen as a legitimate
player in the European market.
PROTECTING NASPERS CONTENT
Pieter den Toonder’s retirement was long overdue
– having been postponed several times in the
excitement of new opportunities. Now Jac van der
Merwe, Antonie Roux and Jock Anderson became
the driving forces behind Irdeto’s success. Along
with other former M-Net executives, they moved to
the Netherlands, as M-Net, FilmNet and NetHold
took over Irdeto.
Jock, (on the right) recieving the South African Industrial Design Award award in 1988.
33
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 Naspers-
owned 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.
34
35
One day in 1985, Pieter den Toonder received a short fax message
that would change the history of Irdeto forever. “Hello,” it said. “I
am Jac van der Merwe from South Africa and would be interested
in speaking with you about pay television.”
Jac first learned about Irdeto as he sought missing technology for
his new company; South Africa’s first pay television station, the
Electronic Media Network Limited (M-Net). After he and M-Net’s
founders embarked on a cross-continental search of the USA,
he discovered that Irdeto had technology his company needed.
And he quickly recognized the incredible potential of Pieter den
Toonder’s fledgling company.
As one of the prime movers behind Irdeto’s growth, he relocated
his family to Holland to be closer to the action. And Irdeto grew,
and Jac thrived. Then, as Jac prepared to return to his beloved
South Africa to take up new position with NetHold, he tragically
died when his light aircraft crashed in the French Alps. Jac was
just 42 years old.
We fondly remember Jac for his boundless enthusiasm and drive
– and his ability to motivate and united so many talented people.
He is still missed to this day.
J A C V A N D E R M E R W E2 8 J A N U A R Y 1 9 5 2 – 1 0 O C T O B E R 1 9 9 4
36
THE ITALIAN JOB
37
PUSH FOR PRIVATIZATION
Television was introduced to Italians in 1954 by the
government-controlled RAI network. Until 1976,
RAI was the only producer and broadcaster of TV
in the country.
The shift to privatization began gaining momentum
as Italy entered an era of industrialization in the
early 1960’s. Incomes increased, urban areas
grew and the popularity of TV exploded, surpassing
radio and cinema. Suddenly TV was a political
issue. With the ruling political party controlling
such a powerful medium – not to mention its
advertising – private entrepreneurs fought for
their right to broadcast. Their demands fell on
deaf ears. On 13 July 1960, the Corte
Costituzionale (Italy’s highest court) ruled that
RAI’s television monopoly was legal.
The next push for media reform was slightly
more successful. In 1976, the Corte
Costituzionale passed a law allowing private
companies to broadcast television on a local
level, with RAI maintaining its national monopoly.
Hundreds of local television stations sprang up
throughout the country.
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.
38
39
With the law on his side, Silvio Berlusconi started
building his media empire and rapidly became a
dominant force in Italian media. By 1984, he had
three TV channels united under his holding
company, Fininvest. The majority of the group’s
revenues came from Pubitalia, a subsidiary of
Fininvest that sold advertising for his channels.
By the end of the 1980s, Italy’s TV viewership was
evenly split between Berlusconi’s channels and
RAI’s channels. Then, on 6 August 1990, the
private sector won another battle when the
Broadcasting Act of 1990 finally legalized private
television at the national level. Berlusconi’s three
TV channels officially went national, and Fininvest
moved forward with their new idea – a national pay
TV station called Telepiù.
IRDETO TECHNOLOGY TO THE RESCUE
Fininvest was keen to get their pay TV network
up and running. With the financial backing of
Berlusconi, they set out to find the required
technology. Their search led them to Pieter den
Toonder and Irdeto. Retirement could wait! Pieter
was excited about this new opportunity, and even
though it was a large project, he knew he could do
it – with the help of old friends.
TACKLING A NEW CHALLENGE
M-Net was still in the midst of perfecting their
fledgling pay TV network in South Africa when they
got a call from Pieter. Rather than kick back and
enjoy the growing success of their first venture, the
founders of M-Net were eager for a new challenge.
So Jac van der Merwe and Antonie Roux
immediately hopped on a plane and helped Pieter
close the deal with Telepiù.
With the contract signed and deadlines looming,
M-Net and Irdeto quickly established teams in
Italy, South Africa and the Netherlands. To
mastermind the new support operation, Jac van
der Merwe settled permanently in Pieter’s
hometown of Dordrecht.
40
More and more employees crowded into Irdeto’s
unheated Dutch office to focus on the new
technology thrust into Italy. Under Jac’s guidance,
the team toiled for months to ensure that the
system would be operational on time. Soon a
project office was also opened in Milan, and
Antonie Roux moved there with a team of five to
implement the systems locally. Jock Anderson led
the hardware team in Johannesburg, supported
by business analysts and developers flown in
from Italy.
SECURING IRDETO DECODERS
This job called for more than simply repurposing
the decoders built for South Africa. For Italy they
created better and more secure systems to
discourage hackers. To further improve security,
Irdeto even convinced Texas Instruments to let
them to use a chip that was still under development.
It seemed that the whole world pitched in to meet
Telepiù’s requirements. Decoders were first
produced at existing facilities in South Africa.
Additional production was outsourced to Singapore.
And they called in the help of electronics company
Seleco in Pondenone, Italy.
Finally, the first decoders were ready to be shipped
from South Africa. They arrived safely – thanks to
sturdy Cape apple boxes and crumpled newspaper!
Of course, Irdeto’s first major European client
deserved more professional packaging, and soon
their regular shipments arrived in customized
boxes with Irdeto user manuals.
GOING THE EXTRA MILE
The run-up to the Telepiù launch was the most
intense and dynamic period in Irdeto’s history.
While they were expanding offices in the
Netherlands and merging with M-Net, Irdeto was
also growing production and developing a new
system for Telepiù. And working hard to improve
the product and professionalize the brand.
So Irdeto and M-Net employees became natural
masters of risk-taking, decision-making and
multitasking, and often went above and beyond
41M-Net Decoder, One of Irdeto’s first customers.
42Peter den Toonder at his retirement in 1991.
43
the call of duty. For example, when new security
restrictions delayed shipments to Italy during the
first Gulf War in the early 1990’s, Antonie Roux
drove to Nice, loaded his car with chips and
completed the delivery himself. On time!
PAVING THE ROAD TO THE FUTURE
This dedication and pioneering spirit were a
winning combination for Irdeto and M-Net.
Deadlines were met, and Telepiù went live in
November 1991. But the Telepiù deal meant much
more than just launching pay TV in Italy. It marked
the beginning of Irdeto as we know it today.
The earlier launch of M-Net was seen as more of a
partnership. Telepiù was Irdeto’s first truly external
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
and an advantage over the competition. During
this drive for professionalization, Jac van der
Merwe founded the User Group as a forum for
operators to give feedback to Irdeto. It provided
the side benefits of helping Irdeto improve their
product and identify new business opportunities.
The successful launch of Telepiù earned Irdeto
credibility within the industry and the courage to
pursue ambitious opportunities worldwide – while
providing the necessary revenue boost to expand
their physical presence in Europe.
Now Pieter den Toonder felt he could finally retire
a happy man, as Jac van der Merwe took over the
reins and ushered Irdeto into the next era.
44
ENTERING THE DIGITAL AGE
45
This deal’s success gave Irdeto the recognition and
income they needed to expand. Suddenly Irdeto
was growing out of their tiny Dordrecht office, so
they relocated to Hoofddorp and quickly grew from
7 to 300 employees during the 1990s.
Business was booming! In their search for business
opportunities, Irdeto’s new “gypsy team” travelled
the globe – to Greece, Iceland, the United Kingdom,
Latin America, Brazil, and to Cyprus, where they
deployed their new Integrated Business System
(IBS) at Lumiere TV.
But the most exciting deal in this period was closer
to home. In 1991, Irdeto’s parent company acquired
FilmNet, the leading pay television operator in
the countries Benelux and Scandinavia. When
Irdeto was put in charge of replacing FilmNet’s
heavily pirated SATPAC system, they successfully
developed the new CableCrypt decoder and
began installing it across all the FilmNet territories
in 1993.
DEVELOPING DIGITAL
VIDEO BROADCASTING
As Irdeto expanded, the television industry as
a whole was undergoing a transformation: the
dawn of the digital age. In 1991, broadcasters,
manufacturers and regulatory bodies in Europe
met to discuss the impending introduction of
digital TV. This group became known as the
European Launching Group (ELG). They defined
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.
46
the concepts, systems and standards that would
guide the transition from analogue to digital in the
years to come.
In 1993, they finalized this new set of
regulations, and the Digital Video Broadcasting
Project (DVB) was born. One of the many
technology standards set by the DVB was the
use of MPEG for coding the audio-visual data
into a compressed digital format.
Irdeto jumped at the chance to lead the digital
revolution. During their 1992 User Group meeting
in Venice, it was decided (together with M-Net
and Telepiù) to turn the company’s focus to digital
compression technology.
They dug in to this new challenge with great
enthusiasm. In 1993, Irdeto set up a team to
research digital technology, looking particularly at
MPEG and the best way to secure it. They explored
the option of using a conditional access system
with a smart card. Conditional access (CA) was a
fairly new term meaning that television broadcasts
could only be viewed by legitimate subscribers with
a suitable decoder. CA systems typically consist
of a head-end control system, set-top box client
software and a smart card. They often use both
scrambling and encryption to prevent unauthorized
users from getting access to the service.
SMART CARDS IN THE SPOTLIGHT
Smart cards were a recent development with
proven potential. In very simple terms, they are
credit card-sized devices that contain small chips
for processing data. Smart cards were first used
commercially in 1983 by Télécarte in France;
replacing coins for pay phone calls. Smart cards
quickly found other applications, including debit
cards and SIM cards in mobile phones.
By the early nineties, smart cards had debuted
in Europe’s pay television industry. Innovators
like the UK’s BSkyB used VideoCrypt technology
to control access to their satellite broadcasts.
Developed by News Datacom, VideoCrypt was an
47
48Galaxy, Irdeto’s first digital customer.
49
analog decoder with a smart card, which provided
entitlement functions and decryption keys that
allowed subscribers to view the content. Irdeto
modified this technology in 1993, to produce
VideoCrypt 2, featuring an Irdeto smart card.
Although Irdeto’s parent company NetHold used
VideoCrypt 2 for their growing business in Central
Europe, Irdeto decided not to pursue analog
smart card decoders for other clients. Smart card
research now had a singular focus – the future
of digital TV. Irdeto’s digital priorities were clear,
but they needed a partner to help develop their
groundbreaking new technology. They selected
NTL in the UK, and a team of Irdeto technicians
moved across the channel for eight months to
build the components for the digital future.
The result was the I-Chip. This descrambling chip
became the first DVB-compliant MPEG-2 chip to
be mass-produced. It was a crucial element in
Irdeto’s pioneering conditional access module
(CAM) – and the first of its kind.
DIGITAL DEBUTS DOWN UNDER
Irdeto had a viable digital solution and was on
the brink of being the first in the world to deploy
it. Long-time partner M-Net in South Africa was
picked for the first digital launch and resources
were accordingly re-directed. At the same time,
Irdeto was also adapting the digital technology
for other regions including Italy and Thailand.
The South Africans prepared to launch the PAS
4 satellite for beaming down the broadcasts. The
satellite launch was scheduled for June 1995,
with service commercially available in September.
Everything seemed to be on track until they hit
a serious bump in the road. The satellite was
grounded until August.
With progress in South Africa stalled, Irdeto
was left with incredibly advanced technology
they could not deploy. Time for plan b… a brand
new territory, Australia. Australia’s Media’s pay
TV subsidiary, Galaxy, had just launched a few
months earlier, broadcasting eight channels using
analog cable technology. But they were eager to
50
find a standardized digital system. Irdeto was the
obvious choice.
GOING INTO OVERDRIVE
As was the custom by now, a small Irdeto team
relocated to Australia to oversee the local
development and implementation. Work began
with setting up the control system for Galaxy’s
digital pay TV network. Once the final shipment of
equipment arrived, the Irdeto team buckled down
for an intense six-week period, working 100 hours
per week to get everything ready on time.
Back in the Netherlands, Irdeto’s smart card
entitlement center in Hoofddorp went into overdrive.
The digital launches required the production,
customization, and distribution of an unthinkable
number of cards. Since Irdeto did not produce the
smart cards, the entitlement center allowed them
to control the programming and distribution of the
cards in this crucial introductory phase.
By September 1995, the Galaxy digital system
was up and running. This was the world’s first
commercial digital TV deployment - a milestone
for Irdeto and the television industry as a whole.
To this day, a plaque hangs in the Irdeto lobby
in Hoofddorp to commemorate this historic
moment. From the start, Galaxy’s digital pay
TV offerings were a huge success. And Irdeto
happily supplied more than 100,000 smart cards
and conditional access modules within the first
few months of launch.
DIGITAL GOES GLOBAL
With the world’s first digital launch successfully
completed, Irdeto turned their attention back to
existing clients, including M-Net. The South African
satellite was finally launched into orbit in August
1995. Irdeto wasted no time. Only one month after
the debut of digital in Australia, South Africa had
digital pay TV, too, with the introduction M-Net’s
digital satellite TV service, DStv, in October 1995.
From that point on, Irdeto took digital to markets
worldwide in rapid-fire succession. Through the
M-Net company Multichoice, Irdeto introduced
51Irdeto M-Crypt artwork used for Advertising and Tradshows.
52
digital pay TV across Europe in 1996, including the
Benelux, the Nordic countries and Central Europe.
Telepiù launched their digital service in Italy in
September 1996. Irdeto also helped Thailand’s
Shinawatra launch their digital service.
The first digital pay TV launches were major
achievements. Now that Irdeto was recognized
as the industry leader, they needed to keep
innovating to maintain that position. So Irdeto
spent the next decade improving and expanding
their digital capabilities. They first went to work
improving their conditional access system (CAS).
Ongoing innovations led to three updated versions
of this CAS - called System 2000, 3000 and 4000
of course!
CAS evolved further into two distinct new systems:
M-Crypt and PIsys. Released in 1998, M-Crypt was
a compact conditional access system targeted at
smaller clients and niche content providers in the
cable, satellite, and terrestrial arenas. The system
operated on a Windows platform, and was very
easy to set up and maintain.
PIsys – launched in 2002 – was developed for
large-scale conditional access solutions, and
could be adapted for between 500,000 and
32 million subscribers. It was also modular –
additional features could easily be added, as
required by the client.
SMART CARD DEVELOPMENT
These new conditional access systems continued
to rely on smart cards to let subscribers “unlock”
the content. And like the rest of Irdeto’s products,
smart cards continued to evolve.
In 2000, a second smart card was introduced:
Irdeto 2. At the same time, Irdeto kicked off a new
smart card development strategy, known as the
“rolling” smart card strategy. This strategy, which
is unique to Irdeto, called for new smart cards
to be developed every 18 to 24 months. New
subscribers get the latest cards, while existing
subscribers keep older versions, meaning
today’s clients have a variety of cards in use at
the same time.
53
The continued supply of new cards ensures that
clients always get the latest technology. More
importantly, it’s less attractive and more expensive
for pirates to attack Irdeto’s many different cards.
In the rare instance of a security breach, a client
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.
ENTER IP
Irdeto’s area of expertise was securing terrestrial,
cable, satellite or digital broadcasts for television.
But the introduction of Internet protocol television
(IPTV) meant that content was no longer confined
to the television set. In addition to TVs, consumers
wanted on-demand content on their computers,
mobile phones, and gaming consoles – and
providers wanted to secure it.
IPTV also offered new interactive services for pay
TV subscribers, such as Video on Demand (VOD).
The personal video recorder (PVR) allowed
subscribers record live programs to watch at a
later time. In addition, providers bundled IPTV with
other IP-based services like high speed Internet
access and telephone services (Voice over Internet
Protocol or VoIP).
The technology behind IPTV had already been
available for years, but companies were hesitant
to adopt it because they had no way to protect
the broadcasts from being intercepted. In 2000,
Irdeto offered a solution to this problem. Using
CypherCast, content was encrypted during
broadcast. Only users with a set-top box and
corresponding smart cards would be able to view
it. Clients could easily manage user rights with
software that ran on a Windows platform. It was
these early engagements that shaped technology
in the IP area going forward.
Irdeto CypherCast product logo
54
THINKING OUTSIDE THE SET-TOP BOX
Now that consumers were ready to watch TV outside
their living rooms, mobile phones became the next
pay TV target. And in keeping with Irdeto history,
every new technology project seemed to indicate a
launch in a new geography. This time it was South
Korea. TU Media was established in 2003 in South
Korea. A consortium of mobile operators, device
manufacturers, and other industry players, TU
Media oversaw the country’s mobile broadcasting
industry. They were the world’s first company to
decide to offer a paid mobile TV service via S-DMB
(Satellite Digital Multimedia Broadcasting).
But deciding and implementing are two different
things. TU Media had a few major hurdles to
jump before they could proceed. They needed a
broadcasting system that could deliver audio and
video better than the existing mobile network. So
SK Telecom, a primary shareholder in TU Media,
developed their new S-DMB service. This solution
added a new layer over the existing network, which
was optimized for broadcast using terrestrial and
satellite transmissions, much like digital pay TV.
TU Media also had to secure the content of their
subscription-based service. They turned to Irdeto
and its proven track record in conditional access
solutions. Like TU Media, Irdeto was also new to
mobile broadcasting, and developed a brand new
conditional access system for mobile, based on
their existing digital TV system.
SOLVING THE MOBILE CHALLENGE
Though the concept was essentially the same,
working with mobile phones presented many
challenges for Irdeto. The mobile solution had to
perform the same function as a set-top box for
digital TV, and deal with bandwidth constraints
on security messages and the precious battery
life that conditional access functions could not
drain. Set-top boxes relied on smart cards, and
a mobile’s SIM card was not yet able to perform
the same function as the Irdeto smart card. And
it was also impossible to fit both a SIM card and
a standard smart card inside a mobile phone.
55
To solve this challenge, Irdeto developed a new
surface mounted device (SMD), which was fixed
directly to the circuit board of the phone. However,
the solution presented yet another obstacle –
convincing telephone manufacturers to add the
Irdeto SMD to new mobile phones for the South
Korean market.
Irdeto succeeded, and eventually partnered with
20 device manufacturers, including renowned
Korean brands like Samsung and LG. About 25
different devices were modified to receive the new
service, including mobile phones, portable media
players, and in-car devices.
The TU Media mobile broadcast entertainment
service was launched in South Korea in May 2005.
It proved immensely popular, especially with the
country’s many commuters. More than 300,000
subscribers signed up in the first six months and
there are now more than one million subscribers.
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
two countries. In response to this prestigious award,
H.E. Radinck J. van Vollenhoven, Ambassador of
The Netherlands in Korea commented, “Irdeto’s
growth in South Korea is very impressive and it’s
a significant contributor to the mobile TV industry
and economy here. South Korea was the first to
56
launch a Satellite Digital Multimedia Broadcasting
service and its success was ensured with Irdeto
making content on the platform secure. Without a
doubt, South Korea is world leader in technology
developments and Irdeto is playing a significant role
in enabling that.”
EXPERTISE BRINGS
EXCITING NEW CLIENTS
Irdeto delighted in the challenges brought by
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.
Thanks to their previous work with Telepiù, Irdeto
already had good contacts and a strong reputation
in Italy. Their expertise attracted the attention
of Telecom Italia Media (TIM), who wanted to
introduce a rechargeable prepaid pay-per-view
card. TIM wanted to offer viewers the opportunity
to improve their TV experience without paying for
expensive yearly subscriptions. This new service
would offer cultural and sports programs, with a
major focus on Italian football games.
Irdeto helped TIM address a couple key
challenges for their new service: it had to be
affordable and flexible for subscribers, and it
needed to be robust enough to support large
numbers of simultaneous viewers.
The Irdeto team put their heads together,
presented their solution to TIM and got to work
on the implementation. They recommended a
digital terrestrial television (DTT) broadcasting
DVB-T, the recommended format for TIM
57
operation in the DVB-T format for its technology
advantages and high population coverage in Italy.
This was combined with multi-CA client set-top-
boxes and Irdeto’s impulse pay-per-view model
to ensure maximum reach, flexibility and security
at an affordable price. Irdeto had the right team
to handle the technical challenges, as well as the
less technical speed bumps along the way. In one
instance, Irdeto needed to deliver a head-end
equipment rack to Rome at the last minute. When
the driver arrived, he refused to lift the rack into
the truck out of fear that he would injure his back.
One of Irdeto’s engineers came to the rescue.
After multiple attempts to get the rack on board,
including one which dented the rack and nearly
crushed everyone involved, he successfully
loaded the cargo for its journey to Italy. The team
joked that the dent brought good luck, as the
system was installed and tested in record time
once it arrived in Rome.
Security was paramount for this new TV service,
especially given the Italian passion for football.
Anyone who pirated the system could stand to
make millions. The heart of the system was housed
in secure rooms, complete with guards, cameras
and access controls. On the day of the launch,
Irdeto Programme Manager Rory O’Connor arrived
early to make sure the security was up to scratch.
He posed as one of Irdeto’s competitors and asked
to see the security system. The guard let him enter,
assuming anyone speaking English must be from
Irdeto. The TIM team was shocked to discover a
competitor’s name on the visitors list. They were
relieved to discover that only Rory was waiting
for them in the ‘secured’ area. From that moment
on, the security guard only admitted visitors after
checking their passport – including Rory. He arrived
the next day without his passport and was forced to
retrieve it from his hotel.
With the security tested and ready to go, TIM
launched their new service called CartaPiú La7 in
January 2005. It was an immediate success. The
launch coincided with the start of the second half
of the Italian Serie A football season. To watch the
58
matches, viewers could buy a CartaPiú La7 pre-
paid card. Credits were subtracted only for the
games they watched. When a viewer’s credit
was gone, he could simply add more credit to the
card over the phone, online or in a store.
With Irdeto’s help, one of Italy’s leading media
companies was able to quickly introduce a
successful new product that was secure,
affordable and easily adaptable to future needs.
TIM’s CartaPiú La7 service quickly grew to nearly
a million subscribers.
DIRECT TO HOME IN INDIA
Worlds away from Italy, Irdeto discovered
another like-minded partner in India. Based in
Chennai, India, Sun Direct was an enthusiastic
new division of Sun TV Group. Their vision was
to offer secure, high-quality Direct-To-Home
(DTH) TV services across India. They needed
a technology partner with the same vision and
drive. Irdeto was an obvious choice.
Sun TV was launched in 1992 as the first fully
privately owned cable television station in India.
Cable television was immensely popular, but the
physical infrastructure required meant that many
of India’s residents did not have access to the
service. In 2007, Sun TV created a new division
called Sun Direct to offer a new Direct-To-Home
(DTH) service. DTH meant that viewers received
satellite transmissions directly to a small dish at
their home. Because of this, DTH could reach even
the most remote areas, since there was no longer
a need to lay cable connected to each home. In
addition to wider reach, DTH also offered superior
picture quality and a greater choice in programming
thanks to digital compression techniques. Finally,
it offered viewers interactive channels, program
guides, and customized preferences that weren’t
available with analog cable services.
Sun TV had previously used Irdeto’s security
technology for their cable TV services. Irdeto
was an obvious choice for their Sun Direct DTH
service. According to Kalanithi Maran, CEO for
59
Worlds away from Italy, Irdeto discovered another like-minded partner in India.
60
Sun Direct TV, “Irdeto’s security solutions for Sun’s
cable operations have proven to be excellent, so
it was natural for us to select Irdeto to protect Sun
Direct’s new satellite TV platform.”
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-top-
boxes 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.
It was soon clear that 500,000 smart cards were
not nearly enough. Within the first 200 days,
Sun Direct had already surpassed one million
subscribers. Less than two years after their launch,
they reached four million subscribers. Sun Direct
has now become the fastest growing DTH provider
in India and went on to accomplish a series of
television firsts in their country. They became the
first provider to adopt MPEG4 technology offering
better compression as well as the first to offer
HDTV content. Irdeto’s solutions continue to allow
them to successfully manage the speed and scale
of their rapid growth.
Irdeto Epsilon smart card debuted with FlexiFlash.
61
FLASHY NEW FEATURES
As the digital age advanced, Irdeto continued to
revolutionize smart card technology. In October
2004, the Irdeto Epsilon smart card debuted with
FlexiFlash.
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
smart cards through the air.
For the first time ever, smart cards became
renewable. Irdeto’s clients could now add new
functions, perform security updates, and quickly
respond to piracy without replacing the smart
card. All without disrupting subscribers or their
viewing experience.
A SMART CARD-FREE FUTURE
In 2007, Irdeto positioned itself to take the
renewable smart card idea one step further –
and cut out the card completely. They acquired
Cloakware, a former partner specializing in software
and security technologies. According to the press,
the acquisition of Cloakware was a smart strategic
move. Bill Rosenblatt of DRM Watch wrote,
“This deal will not only help Irdeto improve its own
products; it should also help it gain traction in new
markets, with a good degree of independence
from current DRM standards wars in the mobile
and digital home arenas.” The newly formed
relationship with Cloakware helped Irdeto develop
its latest service: Irdeto Universal Client. This
ground-breaking software conditional access
solution was launched in September 2009. Irdeto
could now offer a software-only security solution
– smart card functionality without the smart card.
Another industry first for Irdeto.
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LEADING THE WAY
Throughout the years, from analog to digital to IP
to mobile, Irdeto’s pioneering sensibility continues
to shine through. But being a pioneer comes with
challenges as well as rewards. Irdeto’s transition
to the digital era led to many significant industry
and company firsts.
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
recognized by London Business School’s
Management Innovation Lab as groundbreaking.
Irdeto has collaborated with London Business
School and IMD to develop case studies on its
dual HQ innovation for use in their curriculum.
Professor Julian Birkenshaw of the Lab said, “This
shift allows the company to get much closer to new
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
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.
Irdeto has collaborated with London Business School and IMD to develop its dual HQ strategy
63
64
PROFILE OF FORMER CEO,
MARTIJN HÖFELT
“I FELT LIKE I WAS GROWING ONE YEAR YOUNGER FOR
EVERY MONTH AT IRDETO.”
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INSPIRED BY VISION
AND DETERMINATION
Back in 1993, Martijn Höfelt was working for Philips,
developing new transmission and distribution
systems for TV as well as access control
technology. So he knew the European Union and
USA markets well. But nothing about Irdeto.
Then he was approached by a headhunter, who
introduced him to Irdeto’s CEO, Jac van der
Merwe. Together at a dinner in Hoofddorp, Jac
and his small crew of four or five told Martijn more
about their company, and discussed his potential
future with Irdeto.
The following week, Jac took him to Johannesburg.
This visit to M-Net and Africa inspired him even
more. And while visiting the M-Net decoder center,
Martijn was delighted to see how progressive the
company was in its management of interracial
employment.
STRONG PIONEERING SPIRIT
Inspired by the hands-on pioneering spirit and
determined vision he encountered, Martijn
quickly decided to join the team. Irdeto had the
determination to start up with digital as quickly as
possible. He also appreciated the company’s quick
decision-making process and the high degree to
which Irdeto delegated responsibilities, compared
with his former employers. And not least of all, he
thrived on the fresh and young mentality of his
new colleagues, who were all more than 10 years
younger than Martijn.
“I felt like I was growing one year younger for
every month at Irdeto!” he often said.
Martijn began his Irdeto career as Technical
Director, responsible for all of the technical
operations in Hoofddorp and Johannesburg.
Irdeto’s target was to develop the first digital pay
TV system, based as much as possible on formal
or de facto standardization.
66
He spent that first half-year or so selecting the best
partners for digital decoder development. Jock
Anderson was also active in this process. They
ended up with IBA (later NTL lab), where Irdeto’s
demultiplexor and descrambling component (I-chip)
and the N-chip for Sky (NewsCorp) were developed
in parallel – separated by Chinese walls.
BECOMING IRDETO’S CEO
Early in 1994, Jac declared that he wanted to devote
his time fully to the development of the Eastern
European FilmNet market, and asked Martijn to take
over his duties as Irdeto’s CEO. Martijn remained
CEO until the creation of Mindport in 1997.
As he lead the company, Martijn felt that Irdeto
needed to offer the market an integrated product,
such as decoders (as standardized as possible,
supplied by external manufacturers) together with
Irdeto smart cards, access control systems, and
customer and business management systems. He
wanted decoder software for interactivity that was
as open as possible.
To achieve this vision (prior to Mindport), all
development was done within Irdeto, except for the
Open-TV developments. Initially, the relationship
with decoder manufacturers was problematic,
because prices were high, demand low and
quality questionable. So Irdeto worked really hard,
in coordination with Multichoice. When Thomson
appeared to lose interest in Open-TV, Irdeto
supported MIH in its acquisition of a fair stake in
the company.
THE CHALLENGES OF DEVELOPING
PAY TV TECHNOLOGY
What was Martijn’s biggest challenge? To manage
to develop all of the necessary elements of
Irdeto’s pay TV technology. In fact, Irdeto was the
first party to launch a working DVB system. This
challenge was amplified by the need to have this
system installed and working with Multichoice
Africa, Shinawatra (Thailand) and Telepiù (Italy) –
practically at the same time!
Making the system work and solving its infancy
67
problems in three locations around the world
proved extremely difficult. Especially with such
demanding customers, who had to be handled in a
highly personal manner.
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
is proud to see the company in such excellent
hands. Irdeto has shown fantastic growth, and he
is delighted to see the company firmly planted in
important corners of the world.
68
ADVENTURES IN THE FAR EAST
69
EXPLORING THE ASIAN MARKET
Irdeto had already dipped its toes into the waters
of the Asia Pacific (APAC) region in the early
1990s, completing the world’s first digital pay
TV launch in Australia, introducing mobile TV to
South Korea and bringing digital TV to Thailand.
By the mid-1990s, Irdeto began monitoring the
Asian markets in search of new opportunities –
with an eye to opening a regional office. The ideal
location? At that time, the stability of Hong Kong
and Singapore were attractive, but not felt to be
sufficiently connected to where the economic
centers of gravity would be: India and China.
Both countries had a motivated and educated
workforce. However, India was still debating
regulation that would determine how quickly its
industry would develop. So China had some
advantages over India. Not just because China
had over one billion residents and an outdated
television infrastructure ripe for an overhaul.
Some analysts were speculating that China would
become a leading global economy before India.
Thinking far ahead of its time, Irdeto decided to
enter “The People’s Republic” – and Beijing in
particular, because of this city’s proximity to the
Chinese regulatory bodies.
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.
70
It was a brave decision. After all, at that time, it
was not fashionable to locate an Asian-Pacific
headquarters in Beijing.
In 1998, Irdeto set up a small regional base in
Beijing, sharing the office with other members of
the South African Naspers group, including MIH
and Mindport. However, entering the Chinese
market would not be as straightforward as other
markets had been. China was gradually opening
up to private sector and foreign investment, but
entering this emerging market called for patience.
And a long-term commitment.
The business strategy, as usual, was to “lead with
technology.” So Irdeto began slowly, by joining forces
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
– and Thierry Raymaekers was hired to become
General Manager of North Asia for Irdeto.
SLOW AND STEADY WINS THE RACE
Historically, China’s economy was controlled
by state-operated enterprises. In 1978, the
government decided to permit limited foreign
investment in a few select regions of the country.
But that wasn’t enough. China’s leaders needed
a better understanding of international business
practices, and to update the legal infrastructure.
Throughout the 1980s and 1990s, China boosted
Mindport opens the China office in 1998, Steve Oldfield, Amerio Paraccini, Guy Tennant, Jan van Woudenberg,
Lulu Yin, Andrew Curle and Gerdus van Eeden
71
72
tax advantages, minimized red tape, developed
new contract and patent laws, and expanded
the business areas open to foreigners. In some
industries, however, regulations were still unclear –
and companies were expected to form joint ventures
with Chinese firms or transfer intellectual property
to their Chinese counterparts.
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
models used elsewhere in the world. This helped
the Chinese organizations shape their thinking as
to how to develop their own industry. Key parties in
China also appreciated the technology, service and
advice that Irdeto could provide.
MAKING FRIENDS
Initially, potential partners wanted to see and
understand Irdeto’s encryption technology. As
relationships developed, Irdeto supported key
Chinese partners in developing aspects of the
business for themselves – while retaining an
opportunity for itself to develop business. In
particular, Irdeto’s work helping to equip emerging
set-top box companies for the new digital industry
not only served them well domestically, but also
gave the companies export opportunities by
partnering with Irdeto.
The State Administration of Radio, Film, and Television or SARFT
73
From these early discussions, Irdeto was armed
with solid knowledge about the Chinese market
and technology requirements, and contacted the
relevant Chinese authorities – including the State
Administration of Radio, Film, and Television, or
SARFT, for short.
SARFT supervised or directly controlled all state-
owned enterprises related to TV, radio and film.
It also had the last word on the control of content
deemed inappropriate to Chinese cultural or
government standards. A good relationship with
SARFT was absolutely crucial – so the Irdeto
team increased its resolve to gain the Chinese
officials’ confidence.
Contrary to the business customs in the West,
Irdeto quickly realized that in China, business
partnerships were not built on mere proposals
and handshakes. To be successful, the parties
involved had to connect on a meaningful and
personal level before agreeing to any business
ventures. This established a platform of trust,
which could then evolve, so they could see Irdeto
as reliable partners.
So they got to know and understand each other
better. Executives traveled from the Netherlands
to give presentations. And a Chinese delegation
traveled to South Africa to executives from
the Naspers group, and see firsthand Irdeto’s
accomplishments for M-Net and Multichoice.
Irdeto was eventually allowed to start trials with
broadcasters in provinces throughout the country.
But closing new deals revealed another layer of
Chinese culture. By now, Irdeto was viewed as a
friend, which meant that their Chinese counterparts
trusted them – and were content to sign two-page
contracts. But Irdeto’s standard contract was 80
pages, and in English!
As with good friends, a compromise was soon
struck. Contracts were duly signed, and Irdeto
prepared for more hard work.
74
CONNECTING EVERY VILLAGE
In 1999, the People’s Republic of China
celebrated its 50th anniversary. Festivities were
being planned years in advance, including special
television programs. One such activity was the
Village to Village Project – a trial delivery of TV
and radio programming to remote areas of China
by satellite.
In 1998, Irdeto’s parent company, MIH, won the
contract from China’s state television broadcaster,
CCTV, which relied on Irdeto’s technology expertise
to secure the content. Time to get things working
– and fast!
Set-top boxes had to be modified to support
the Chinese language, especially for subtitles
– quite a challenge, with so many and such
complex characters. SARFT first asked for at
least 20,000 characters, far too much data for
the existing system’s memory. It took a bit of
discussion, but finally SARFT approved an initial
system with only 3000 characters.
CCTV’s new satellite service, CBSat, was
successfully launched in January 1999 – and
became first non-cable broadcast in Chinese
history.
PATIENCE PAYS OFF
The Village to Village Project was a major
stepping stone for Irdeto, but it would take a few
more years for activity in China to truly take off.
Their next major deal came from the province
of Guangdong. In 2000, Guangdong VNet was
introduced as the first unified cable network
covering the major cities in the Guangdong
province. Irdeto was short-listed to provide
the security technology, but still had to prove
themselves. They travelled to each of the
participating cities to present their solutions and
expertise. The presentations were strong, but
Irdeto had another distinct advantage – they were
the only foreign company capable of integrating
their solutions with local set-top-boxes. Irdeto
beat out one of their biggest competitors and
won the contract.
75During the BIRTV 1998 exhibition in Beijing, China, more than 20,000 people
visited the Mindport stand, making it one of the two most popular stands.
76
In 2001, digital TV was officially introduced, and
trials gradually turned to contracts in provinces
across China. From Gansu to Jilin, Irdeto was
recognized as the go-to provider of secure
television technology. This growing business led
Irdeto to set up their first Chinese research and
development center in Beijing in 2004, with a focus
on digital conditional access.
In 2003, the Chinese government ambarked upon
on an ambitious plan to convert the most of the
country to digital TV by 2010 and to switch off all
analog TV by 2015. The plan relied on getting
a new set-top box into the hands of every cable
television viewer. To ensure rapid adoption of the
new service, the government created a unique
business model. Operators received interest-free
loans so they could provide the boxes to users,
free of charge. Each household then paid a small
monthly fee for the digital TV service. To manage
the overwhelming demand for set-top boxes and
smart cards, Irdeto ramped up production – with
great success.
The drive for digital secured Irdeto’s position in the
Chinese marketplace and marked the first major
deployment of Irdeto technology for basic cable
service – an important milestone in and of itself.
COVERING THE WORLD MORE EFFECTIVELY
The Chinese market grew at a remarkable pace.
And Irdeto’s clients and sales skyrocketed.
Inspired by this success – and looking towards
the future – Irdeto CEO Graham Kill and his team
devised a plan. To ensure that Irdeto had the right
people and capabilities in place, Graham wanted
to divide the company’s key responsibilities and
top executives between the two countries. If Irdeto
was going to continue to flourish, it needed to
be closer to the rapidly growing markets in the
Eastern hemisphere and ensure that its team there
developed quickly enough to rise to the challenge
of future opportunities.
The bold plan was to expand the office in Beijing
to serve as a second corporate headquarters. And
Graham would be there – in person – to ensure its
77
success. So in August 2007, the Kill family packed
their bags and relocated. The dual-headquarters
plan had become a reality.
MAKING IT WORK
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
phase, the company was in a hurry and more time
was needed to develop people and prepare them
for such roles. As a consequence, many senior
executives moved from the Netherlands to China.
This helped to prove Irdeto’s long-term commitment
to China, as Graham was quickly joined by Doug
Lowther, Senior Vice President of Digital TV and
Barry Coleman, Senior Vice President, Global
Talent Community.
To help Chinese executives learn more about to
operations in the Netherlands, Irdeto set up a
program of temporary and long-term exchanges
between the two headquarters, to improve
integration and unity.
Both locations worked to support employee
motivation and development. Graham reduced
his operational duties and transferred more
responsibility to top managers – a necessity as
Irdeto grew rapidly. In China, a new training program
helped local managers build their independence
and decision-making skills. A building for a brand
new Western headquarters in Hoofddorp was
Irdeto’s New Western Hemisphere HQ
78The Wall Street Journal article about Irdeto’s Dual Headquarters strategy.
79
designed, built and opened in early 2010. Both
offices introduced an open floor plan with flex
desks in order to open lines of communication and
increase collaboration across all departments.
Finally, logistic and administrative adjustments kept
both Irdeto offices working together, seamlessly.
Meeting schedules were modified to accommodate
the seven-hour time difference between offices.
New video conferencing rooms, web cams and
software helped employees deal with reduced
face-to-face communication.
A CASE STUDY FOR SUCCESS
Irdeto’s dual headquarters (HQ) strategy was
recognized as revolutionary, far outside their office
walls. Professor Julian Birkinshaw of London
Business School’s Management Innovation
Lab used Irdeto as a case study in his book,
“Reinventing Management: Smarter Choices for
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
directions and technologies, and a corresponding
tendency on the part of its overseas operations
to defer back to HQ in a more subservient
fashion. According to Graham Kill’s analysis,
this problem would constrain growth in the very
geographical areas that had the greatest long-
The seven-hour time difference was one of the challenges.
80
term growth potential – those largely away from
the Netherlands HQ. It was causing dynamics
ranging from investment to be less aligned with
the future growth areas to causing promising
employees in those other geographies to leave
the company because of their perceived lack of
career development outside the mothership…
The change Graham Kill came up with was to
replace the Amsterdam HQ with a dual-core HQ
split between Amsterdam (Western Hemisphere)
and Beijing (Eastern Hemisphere)...
Irdeto provides a nice example of how to monitor
progress… On moving to Beijing, he [Graham]
located his desk in the middle of an open-plan
suite, rather than taking any kind of office, let
alone the large corner office people had expected
him to choose… For the managers in Beijing,
Graham’s open-plan office layout was not what
they were expecting, but it allowed them to build
stronger personal relationships with him than they
had before. It was a tangible way of decreasing
the hierarchical distance between executives and
employees, in an office that had been used to
being largely subservient to the Amsterdam HQ…
…In order to get a real fix on what had happened,
Graham was careful to measure the changes in
attitudes and behavior over time. Before moving
to Beijing, he developed some clear hypotheses
about what he expected to happen… He surveyed
the 30 senior and middle managers before he left
for Beijing, and then surveyed them again nine
months and 18 months afterward... Irdeto is not
the first company to try to cure the “dominant
mothership” syndrome, but it may well be the first
to know whether it has succeeded.
London Business School and IMD in Switzerland
also collaborated to produce two case studies on
Irdeto’s Dual HQ strategy. These cases are now
taught in MBA and Executive Education case
classes at those two top institutions.
81
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 long-
term 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
82
MARKETING THE IRDETO BRAND
83
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 EVOLUTION OF THE LOGO
Irdeto, by contrast, went for a more sober image
and logo. As the M-Net and Irdeto businesses
took off, the company felt that a more discreet look
would perhaps serve Irdeto better in its dealings
with a wider global market. The most conservative
color they could think of was maroon, so that’s the
color that came to be used for the Irdeto Globe.
The Irdeto Globe was a solid design – and was
used throughout the early 1990’s. But it gradually
became clear that this logo confused clients. Some
people could not figure out the correct company
name, which is exactly the opposite effect a logo
should have. Was it Rdeto? Or Airdeto? Was
this an airline company perhaps? Of course, as
Madelon Kaspers, then communications manager
at Irdeto said, “We traveled a lot, but we were still
a technology company!”
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.
The first Irdeto globe logo, introduced around 1983.
84
85
86Ad Campaign for the NAB Las Vegas 1999
87
The 25 Years Irdeto ad, Introducing the first MPEG2 System to be fully DVB compliant.
“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.
88
89
90
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
91
92
This confusion inspired Irdeto to change the logo,
with stylized satellite dishes placed atop the “I” as
a sign of the new focus on digital technology. The
font was stronger and the color was new. People
easily recognized the company name – and they
understood the type of company Irdeto was.
When the company name changed its name to
Irdeto Access, the word “access” was added to the
logo. However, Irdeto’s communications specialists
soon realized that the logo reproduced poorly in
small print. And, as Irdeto kept on growing, the
stylized satellite dishes soon became outdated.
After all, by now Irdeto offered a broad package
of products and services for cable, satellite and
terrestrial broadcasts.
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
Hoofddorp in 1997, the decision was made to call
the entire entity Mindport, with all subsidiaries
registered using the Mindport name. The business
units of Mindport included Irdeto Access -
conditional access, CLASS – a contract library
and scheduling system to keep track of contractual
obligations for movies, IBS- billing systems for
subscription applications, Interactive applications
and Mindport Solutions, a Systems Integrator.
There was even talk of dropping the Irdeto name
altogether, because people found it difficult to
pronounce. But this was the company’s unique
heritage, a name constructed by the founder
himself, combining his engineer’s title (“ir.” in
Dutch) and his last name (den Toonder) and this
talk was strongly opposed by CEO Graham Kill
and the Irdeto team. Research also revealed that
The satellite dish logo, introduced around 1993.
93
the Irdeto name carried significant brand value.
So the name, Irdeto Access, remained – with the
logo adapted to comply with the new Mindport
graphic identity.
The new logo now included the dancing man
symbol, which was used for all Mindport
subsidiaries. The change in logo also brought with
it new and more vibrant colors: blue and lime
green. The new Irdeto “look and feel” was presented
at IBC 1998 in Amsterdam.
In 1999, with the rapid changes in the technology
and pay TV markets, the business units evolved
into two separate technology companies: Irdeto
and Mindport IBS and the other units were
dissolved. In that same year, Irdeto commenced
work on a project to consider the development
of security technology for Internet video content.
The initial findings revealed that the solutions for
this new medium would be fundamentally different
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
spun out of Irdeto and became known as Entriq.
As the marketplace continued to evolve, in
2002, Mindport IBS became part of Entriq and
became Entriq IBS. The Mindport brand was
then completely dissolved. In 2006, Entriq IBS
split into two companies - IBS Interprit, offering
customer care and billing solutions and Entriq
was once again a stand-alone brand, offering pay-
media security to Internet and mobile providers.
In 2008, Entriq enhanced its product offering by
acquiring Dayport, a solution provider for content
management and distribution of digital media
over the Internet.
The dancing man logo, introduced at the 1998 IBC.
94The Mindport stand at the 1998 IBC.
95
IBC 2001
CCBN 2004IBC 2010
96
REFINING THE COMPANY NAME
As time passed, Irdeto Access grew to become a
prominent business entity and the word “access”
was limiting and somewhat misleading (as new
customers believing that Irdeto offered services
such as physical cabling). Irdeto was clearly
heading towards multiple products and services,
and because the mother company Mindport
had dissolved back in 2002, a new logo was
developed in 2005.
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,
to show the dynamism and movement associated
with Irdeto’s market. “The first green block is
more than just a graphic device,” said Christopher
Schouten, part of the logo team. “It is an allusion
to the founder’s Dutch honorific, “engineer” (or “ir.”
in Dutch), much like Dr. in English”.
The colors are strong and authoritative, yet wise
and approachable – a reflection of the original
“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
2005 to an enthusiastic public at the Irdeto User
Group meeting in San Sebastian, Spain, and at
the IBC trade show in Amsterdam.
The current logo, introduced at the 2005 user group.
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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.
“WHEN OUR CLIENTS GROW, WE GROW.”
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THAT WAS ABOUT TO CHANGE.
In late 1994, Graham was asked to join Irdeto.
A massive investment had just been approved
to help Irdeto make the transition from analog to
digital technology. The shareholders wanted that
investment “looked after”, and to improve the
business discipline within the company. It’s no
wonder that Graham’s first impressions of Irdeto
was of a bunch of crazy technology people who
needed focus to deliver to the numerous high
expectations set as part of this transition!
A SUBSTANTIVE MANAGEMENT ROLE
But that didn’t discourage Graham from wanting
to be part of Irdeto. In the time with FilmNet,
he’d been involved in business development
projects linked with technology. And what with
his engineering background, Graham had always
been interested in technology. Then there was
that massive investment, made at what was
clearly a pivotal moment in Irdeto’s history. On
top of this, the position offered was a substantive
management role, which was important to
Graham, as he didn’t want to remain in a corporate
staff role much longer.
So, as all those pieces came together, Graham
made a decision that would shape his life for
many years to come. He became the CFO and
Operations Director of Irdeto.
WRESTLING FOR CONTROL
These were exciting – yet challenging – years for
the company. Irdeto was about to grow rapidly
due to digital technology and acquiring new
customers all over the world. Things looked good
at Irdeto and the first couple of years were truly
exciting, dealing with the challenges of fulfilling
demand from all the new customers with early-
stage technology and products.
However, more corporate (as opposed to
operational) challenges were on the horizon. In
1997 MIH did a deal with Canal Plus that resulted in
50% ownership of Irdeto, with management control.
This changed everything and put the current
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strategy, vision and growth of the company at risk.
The Irdeto Board was a challenging forum, as two
shareholders with very different views frequently
clashed, putting Martijn Höfelt and Graham in a
very difficult position. As the leaders of Irdeto, they
faced a simple choice. Take instructions from the
board or – if they couldn’t change the negative
direction the board was taking – resign.
At times Graham felt as though Irdeto was being
pushed up against the wall and that the company
would be irreparably damaged – risking everything
that everyone had achieved over so many years.
Graham and Martijn held many sessions together,
wrestling with how to navigate the politics to
keep as much of the growth momentum going
as possible and get the best outcome for Irdeto
in these trying circumstances. To summarize a
story probably best told with a beer in hand, with
great support from the South African Naspers
group company, MIH, a situation presented itself
in which MIH could exercise its call option. And
thus regain 100% control of Irdeto.
Following this success, Graham became Irdeto’s
new CEO in 1998 and Martijn moved to China to
establish Mindport in China, based in Beijing.
IN CONTROL OF ITS DESTINY
In Graham’s experience, pioneers like those who
founded Irdeto often face a moment when they
get bogged down – and fast followers overtake
them. So after becoming CEO, his vision turned
to growth and getting a few important things on
a stronger footing after the distractions of the
Canal Plus shareholding, so Irdeto could be
more in control of its destiny. Independence (and
intellectual property rights ownership) from difficult
joint ventures (Digco and Joco) was important,
as both relationships were hindering Irdeto’s
ability to operate. And Irdeto needed to catch up,
technologically, and particularly, security-wise.
Another goal was to deal with the company’s
position in some of the established European
markets. Irdeto was under threat due to changes
in ownership of major pay TV operations with
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different CA preferences. Graham also felt that
Irdeto needed to expand.
An already carved up North American market,
and pressure in EMEA as a consequence of
technology changes due to shareholders meant
that Asia was the natural choice, building on
some solid customer relationships in certain
territories. This was the start of the company’s
Asian expansion and the significant market
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,
when Irdeto’s clients grow, Irdeto grows.
So many company milestones and successes
have shaped Graham’s career with Irdeto. “To
mention them all,” says Graham, “would take far
too much time, and would belittle the seemingly
small, but critically important, things done day-
in and day-out by dedicated people. All these
efforts add up to milestones, and to a company
that is growing stronger by the day.”
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IRDETO KEEPS ON GROWING
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LOCKSTREAM
LockStream was founded in Seattle, Washington
in 1999 by Scott Searle and Floyd Rose. The
company sprang up as a response to the rise of
Napster – the first major online platform for peer-
to-peer file sharing. Online content had suddenly
became a mainstream issue. LockStream set
out to create a digital content superstore, and
approached major labels and studios to negotiate
distribution rights. But despite declining revenues,
the entertainment industry was not yet ready to
adopt this new business model.
LockStream swiftly adjusted their focus. To
make it possible for the entertainment industry to
embrace digital distribution while preserving its
revenues, they developed a range of digital rights
management (DRM) software. LockStream’s DRM
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.
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2005 LockStream, Seattle, USA
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solutions were available for a range of platforms,
including computers, mobile phones, set-top
boxes, and gaming devices.
As time passed, the market for secure delivery of
online content became more and more crowded.
The growing popularity of services like iTunes
meant smaller vendors needed to re-think their
niche. So LockStream revised their focus and
moved into mobile – quickly becoming the leader
in mobile DRM technology.
As they were reaching the top of their game,
LockStream realized they were not big enough
to keep up with the demands of the major mobile
operators and device manufacturers worldwide.
Thriving in the midst of such growth called for the
backing of a large and established company.
Irdeto first worked with LockStream during
their early explorations in IPTV. Together they
completed the first ever IPTV deployment in
North America. A few years later, LockStream’s
need for an investor neatly coincided with
Irdeto’s search for a mobile DRM provider. The
executives at LockStream were impressed with
the knowledge Irdeto brought to the industry
and were confident that they had found the right
partner to help them achieve their goals.
In 2005, Irdeto acquired LockStream. The
LockStream staff was thrilled by the news of
the acquisition. While many other technology
companies were collapsing, Irdeto’s support
allowed LockStream to grow and flourish. Irdeto
took a gradual and careful approach to integrating
the two companies, allowing LockStream to
continue executing on their existing deals,
supplemented by Irdeto’s resources. Members of
Irdeto’s senior management travelled to Seattle
to ensure the LockStream team felt comfortable
about their future. By taking this approach, Irdeto
was able to keep the key staff in place and slowly
merge the two cultures.
This acquisition supported LockStream’s goals,
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while allowing the technology and the team
to thrive. Irdeto gained strong new customer
relationships, innovative personnel, and a proven
portfolio of mobile DRM solutions.
PHILIPS CRYPTOTEC
At the start of 1994, three entrepreneurial men
from Philips Research (Rob van Oostenbrugge,
Pieter Noordam and Marcel Fuhren) got the go-
ahead to build a digital video system. Forming
the new CryptoTec division, they set out to create
a complete offering of digital TV services – from
camera lens to TV screen. Their efforts attracted
the attention of companies like Viacom and
Turner, who put in orders without even laying
eyes on the product. The team had their work cut
out for them!
Mathieu Goudsmits was named product manager
for the conditional access system, one of the
key components of the digital video system. His
task was to build the first fully digital CA system,
christened CryptoWorks.
Philips CryptoWorks was poised to start producing
new DVB standard scrambling chips, but a major
barrier stood in their way. The government
agencies in the UK, France and Germany
responsible for overseeing encryption technology
were fighting against the DVB standard, and
wanted to prohibit the new scramblers because
the encryption keys were stronger than legally
permitted. Recognizing that their new product
was at stake, Philips director and DVB board
member, Theo Peek, sprung into action.
Pushing for a compromise, Theo attended
meetings between the government agencies and
technology vendors, as did Irdeto executives. It
called for a lot of tough decisions, but finally they
did it. The government approved designs with
weaker encryption keys - and chip design required
no modification. The tenacity of this new start-up
was a big win for CryptoWorks, as well as industry
leaders like Irdeto, Canal Plus and NDS, who had
originally developed the DVB standard.
2006 CryptoTec, Eindhoven, Netherlands
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2006 CryptoTec, Eindhoven, Netherlands
108
With a small but dedicated team working on the
digital video offering, CryptoWorks signed up their
first big customers in 1996, and in two short years
began turning a profit. By 2005, it was one of the
top-rated conditional access systems in Europe.
CryptoWorks grew and became more profitable, but
other elements of Philips digital video system were
far less successful. Philips was also changing their
strategy as a whole, and CryptoWorks no longer
seemed to fit in the mix. So the senior management
of Philips started looking for a buyer.
In April 2006, Irdeto acquired Philips CryptoTec,
and with it the CryptoWorks conditional access
system. Other industry leaders like NDS and Nagra
had also been considered for acquisition, but the
goals, drive and atmosphere of CryptoWorks best
aligned with Irdeto. The two companies were
already acquainted through shared involvement in
industry-wide organizations concerning DVB and
anti-piracy standards. And Philips was confident
that their CryptoWorks customers would be well
served by Irdeto’s expertise and its systems.
With more than 100 CryptoWorks customers
worldwide, the acquisition strengthened Irdeto’s
market position and helped them reach more than
300 customers on six continents. The acquisition
also brought Irdeto a highly skilled staff with an
innovative entrepreneurial spirit and one clear
goal: “We want to be the best.”
CryptoWorks is now fully integrated into Irdeto.
As technology changed, their system was largely
phased out, and replaced by current generations
of Irdeto security systems to meet changing needs
of customers.
CLOAKWARE
In September 1997, five co-founders (Harold
Johnson, Yuan Xiang Gu, Paul Litva, Stanley
Chow and a part-time CEO) formed Fallingbrook
Technologies in Ottawa, Canada. They began
to work on a new technology called Cloakware,
which lent its name to the entire company a
couple years later.
2007Cloakware, Ottawa, Canada
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2007Cloakware, Ottawa, Canada
110
Cloakware was developed to address new
Internet-based security concerns that went
beyond the capabilities of traditional cryptography
and network security. They worked hard to
understand the needs of this growing market, but
their early attempts proved too advanced for the
average operator. By 2002, they had found their
niche, developing an enterprise-based software
tool that could be adapted to each client’s own
security requirements.
Until 2004, Cloakware remained small and
operated like a family. The employees all knew
each other, and the company executives went out
of their way to support their staff professionally
and personally. Cloakware was known as a good
local employer.
After Jeff Waxman took over as CEO, the company
put a greater focus on sales and international
business. It began to resemble a more traditional
North American high-tech company. As the
company prepared for an IPO (initial public
offering) on the stock market, the patent budget
was reduced to focus on other short-term goals
and quick revenue gains. These changes got the
founders thinking about the benefits of finding a
stakeholder with a more long-term strategy, to
ensure that their technology had the opportunity to
make a difference in the world.
In 2003, Irdeto became one of Cloakware’s
customers. From the outset Graham Kill had
wanted its license of the Cloakware technology
to be accompanied by a strategic stake and a
seat on the Cloakware board. The then owners
of Cloakware did not feel that such a relationship
was beneficial at that time. So Irdeto licensed the
Cloakware technology.
The relationship grew, and Cloakware’s founders
began believing that they may have found an ideal
candidate to acquire their business – and that
partnering with Irdeto could help them achieve
their long-term goals, including a new generation
of Cloakware technology. So in 2007, Cloakware
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was adopted into the Irdeto family, and the founders
gained renewed faith in their future. This was the
best imaginable option for their company.
Irdeto also recognized Cloakware as an ideal
partner. Historically, Irdeto’s content security
relied on hardware platforms like smart card
chips. As the market evolved, Irdeto began to
develop software-only solutions for IPTV, mobile
TV and mobile DRM. Cloakware was essential for
these new technologies. Together, they created a
revolutionary way to secure digital content. Their
solutions completely eliminated the need for set-
top boxes and smart cards.
In the beginning, Irdeto took a reserved approach
to day-to-day management but provided excellent
new opportunities for Cloakware’s executives.
One of those opportunities allowed Yuan Gu to
travel back to his native China. He was invited to
give seminars on software security by Northwest
University, and also took the time to re-connect
with many past contacts across China. As word
spread, more and more people approached him to
give presentations on Cloakware’s products and
technology. In total, he gave nine presentations
and had 15 meetings in China, despite the fact that
Cloakware’s management doubted the business
opportunities there.
In 2007, Irdeto set up a dual headquarters in
Beijing. It was now clear to all that China and
the Asia Pacific region were a priority. As part of
their new strategy in China, Andrew Wajs, Irdeto’s
CTO, came to Yuan with the idea of developing
relationships with select Chinese universities.
So the two of them traveled extensively across
China, carefully reviewing universities for potential
partnerships.
As a result of their year-long investigation, Irdeto
now has formed collaborate research agreements
with the State Key Laboratory of Information
Security (SKLOIS) of the Institute of Software
of Chinese Academy of Sciences, Northwest
University, and Beijing University of Post and
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Telecommunications. And both Cloakware and
Irdeto gained valuable recognition within the
Chinese universities and research community.
The fusion of these two companies was a win
for both sides. The acquisition of Cloakware
brought with it revolutionary technology, world-
class security experts and a strong reputation.
It also exposed Irdeto to new industries and
prestigious clients like Texas Instruments, Pioneer
Electronics and Vodafone. By joining the ranks of
Irdeto, the Cloakware product quickly gained new
opportunities in Asia and other emerging markets
with expanded marketing and sales support. Now
they could realize their goals, thanks to the backing
of an ambitious executive team.
As a result of this collaboration, both teams
can better serve existing customers, expand
their business and offer an unbeatable range of
innovative solutions to protect digital content.
Cloakware has now been fully integrated into its
parent company and their name continues to be
an important one under the single brand, Irdeto.
IDWAY
IDway was founded in Paris in July 2002 by three
friends – Gerard Pazuelo, Faraj Sair and Patrick
Finkelstein. Their company provided Java-based
open software solutions for digital TV devices.
The IDway-J middleware product was an essential
element for interactive digital TV, allowing operators
to customize the user interface of set-top boxes in
terms of layout, language, and available services.
Although Irdeto was based in the Netherlands
and IDway in France, the two companies first
encountered each other in South Korea. Together
they helped a Korean set-top box manufacturer
prepare their products for a European market
using IDway solutions and Irdeto’s conditional
access system. IDway had worked with some of
Irdeto’s competitors in the past and was surprised
by how easy it was to cooperate with Irdeto.
IDway had a strong product offering and plenty of
technical expertise, but its small size meant it had
difficulty winning business from large operators.
When Irdeto came knocking with an acquisition
2007IDway, Paris, France
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2007IDway, Paris, France
114
offer, the IDway team clearly understood the
benefits of joining this industry leader, including
strong financial credibility and access to bigger
deals through Irdeto’s extensive sales team.
In 2007, Irdeto acquired IDway. After the agreement
was signed, Irdeto CFO Allen Pheiffer shook
hands with IDway’s founders and welcomed them
to the family. And within a few months, the newest
members of Irdeto did indeed feel like family.
Despite being a large company, Irdeto chose a
smooth and slow approach to help slowly merge
IDway’s managers into Irdeto’s processes with
minimal conflict.
Thanks to joining a larger company like Irdeto, the
IDway team got the opportunity to see their goals
executed in a much greater scale than they could
have achieved on their own. They got to handle
large projects in India and South Africa and gained
a new sense of pride as their software gained
exposure to millions of users worldwide. But
there was one thing that remained the same – the
engineers from IDway faced the familiar challenges
of tight deadlines and limited resources.
From Irdeto’s perspective, the acquisition of IDway
and its technical architecture allowed it to provide
a wider range of integrated solutions to operators
and set-top box manufacturers. For the first time,
Irdeto combined middleware and conditional
access under one roof.
IBS INTERPRIT
IBS was born in 1993 as a new department in
Irdeto’s Hoofddorp office. Headed by Loefie
Engelbrecht, the department was created to
centralize the customer care and billing solutions
for FilmNet, a leading pay-television operator
active in the Netherlands, Belgium, Denmark,
Sweden, Norway and Finland.
Each of the countries where FilmNet operated had
developed their own independent systems supported
by local personnel or external consultants. Irdeto’s
newest team set out to create a unified customer
2007IBS Interprit, San Diego, USA
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2007IBS Interprit, San Diego, USA
116
care and billing system to replace all of FilmNet’s
fragmented systems. The project was led by chief
architect Peter Cilliers.
Even though IBS started as an internal division of
Irdeto, they felt like a small company trying to take
on the world. IBS continued to perfect their new
system, and followed a complicated path out of,
and then eventually back into the Irdeto family. First
the team spun out of Irdeto to become a division of
Mindport, a former Naspers group subsidiary. Then,
in 2002, IBS was absorbed by the company Entriq,
which was renamed Entriq IBS. By 2006, Entriq IBS
became two companies: Entriq and IBS Interprit.
The newly independent IBS Interprit continued to
focus on customer care and billing solutions.
In the end, in 2007 Irdeto acquired IBS Interprit and
formed a new group called Irdeto BSS (Business
Support Systems), located in Carlsbad, California.
The IBS team welcomed the acquisition and looked
forward to the positive influence of belonging to a
larger organization. And Irdeto gained yet another
valuable asset to their solutions for the pay
television market.
ENTRIQ
Entriq grew out of a project within Irdeto, initiated
by Robert Fransdonk and Graham Kill, to develop
security technology for Internet video content.
Because broadband Internet was taking off in the
US faster than in Europe, Robert moved to San
Diego to start building a small team there. In 2000,
his California-based team created a new Media
Authorization Network (MAN) for on-demand and
live media streams.
Because of the dramatic differences between TV
and Internet broadcasting at the time, the decision
was made to spin the department out of Irdeto. It
became a separate company named Entriq. The
first major application of Entriq’s content protection
and subscriber management technologies was
for a pay-per-view broadcast of a World Wresting
Entertainment (WWE) event.
2008Entriq, San Diego, USA
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2008Entriq, San Diego, USA
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If Entriq was to grow, they needed to look beyond
securing online content. So in 2002, Entriq
absorbed the IBS group out of a former Naspers
group subsidiary called Mindport. The company
was renamed Entriq IBS, and expanded their
expertise to include subscriber billing services.
The company continued to build its reputation in
digital storage and content protection with high-
visibility sporting events like the 2004 Summer
Olympics and 2006 Winter Olympics.
In 2006, Entriq IBS split into two distinct
companies: Entriq and IBS Interprit, both largely
based in Carlsbad, California. In 2008, Entriq
increased its scope of business by acquiring
Dayport, based in Mankato, Minnesota – adding
content management and distribution to target
the packaging and distribution of digital media
over the Internet.
Entriq rejoined Irdeto in 2008. This addition
represented an important new element in Irdeto’s
end-to-end suite of solutions for its customers.
As fast broadband Internet connections become
a reality outside of Europe and North America,
this acquisition let Irdeto provide pay-television
operators worldwide with integrated solutions
for online content and to have a strong basis for
addressing pure broadband video customers.
MOVING FORWARD
Through these acquisitions, Irdeto has become
much more than a content security expert. It
has transformed into an organization offering a
complimentary array of solutions to enable the
evolving digital marketplace and become a vital
part of the consumer’s connected day.
Irdeto’s partners and employees continue to
help the company stay at the forefront of the
industry. New services and capabilities help
Irdeto’s customers benefit from the evolutions in
technology. In the words of Irdeto CEO Graham
Kill, “We owe our success to being able to adapt
to, and anticipate the ever evolving demands
of our industry and, of course, to our valued
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partnerships with customers and core vendors
and partners worldwide and a team of dedicated
professionals on our staff.”
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121
During the Naspers Group’s 93rd annual general
meeting in Cape Town on 24 August 2007, Irdeto
CEO, Graham Kill, was the recipient of the Phil
Weber Award. Named for Dr. Phil Weber, the
award is Nasper’s top honor for leaders who
show exceptional achievement. Weber was the
managing director and chairman of the board of the
former de Nasionale Pers. The high standards he
set for himself are reflected in the award: initiative,
perseverance, leadership, drive, expertise,
integrity, loyalty, and ethical conduct.
TREBLING IRDETO’S VALUE
Naspers chairman Ton Vosloo praised Graham’s
leadership, which helped the company grow from
a single-technology organization into the third
largest 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,
including the Far East, and strengthened the
company’s market share by acquiring interests
in international businesses that specialize in
content protection. Irdeto also continued its global
participation in mobile technology trials.
IRDETO TEAMWORK
In his acceptance speech, Graham said, “I want to
thank you for the recognition that this award gives
Irdeto. It has named me as its winner, but for me,
it represents the work that the team at Irdeto has
done over the years. Any leader is only as good as
his or her team, and I am no exception. I work, and
have worked over the years, with remarkable and
dedicated people who have diligently applied their
skills – and that have made Irdeto what it is today,
and its prospects for the future.”
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ONE IRDETO
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Because of the importance for Irdeto employees
worldwide to work as a single team using these
values as a foundation, the tagline “One Irdeto”
was chosen as the theme for the corporate
values program and a logo was designed to
visually represent the concept. Under the One
Irdeto banner, the values were implemented
into all aspects of the organization including
performance appraisals, the hiring process,
trainings, and most importantly in the way that
employees dealt with one another as well as
Irdeto customers and suppliers.
In 2006, the One Irdeto initiative was launched
worldwide through a series of trainings and
workshops, a poster campaign and through other
employee touch-points including the employee
magazine.
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.
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Trust
Innovation
Effective Communication and Teamwork
Loyalty and Respect
Accountability and Sense of Urgency
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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!
Effective Communication and Teamwork
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IRDETO IN MOTION
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Such belief in one’s co-worker was one of the pillars
of the company’s global growth and success. And
as Irdeto grew, the company was challenged to
find new ways to bring their people together, and
bridge the distances and differences between all
members of the Irdeto team.
So the Irdeto in Motion initiative was launched. This is
an annual “fun day” and is held at each participating
Irdeto location. All employees in that office are
treated to a day of team building, adventure and
excitement, to help ensure that everyone at Irdeto
continues to work as an effective team.
Irdeto believes it is important to break down
hierarchies – and build on their strong sense of
community. So Irdeto in Motion gives everyone the
opportunity to interact with their colleagues, and
actually experience what it means to be on the
same team, working together for the same goals.
The original Irdeto in Motion was launched in 2007
in Hoofddorp, with activities that included graffiti art
and building a giant Meccano vehicle. That same
year in Beijing, CEO Graham Kill participated
in the team’s three-legged race, among other
activities. By 2010, the fun and action moved to
Irdeto Canada in Ottawa, Canada, where the team
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.
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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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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.
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.
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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 FORTHE 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
architectural principles. To cut down on the amount
of fuel needed for transportation, local vendors
were used as often as possible. Concrete use was
minimized, as the means of concrete production
demands so much energy. The façade was
constructed from 100% sustainable wood. Even
the carpets and wall coverings were made from
recycled materials, to reduce the use of trees and
other natural resources.
ATTENTION TO ENERGY-EFFICIENCY
Large skylights bathe the atrium, restaurant and
mezzanine in natural light – and there are lots of
windows throughout the rest of the building, which
was constructed to allow as much light to enter the
building as possible. But Holland can be dark and
rainy, especially in the winter – so when electric
lighting is needed, it comes from energy-efficient
compact fluorescent lighting with high-intensity
reflectors to disperse the light.
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Energy use within the building is kept as low as
possible, thanks to sensors in areas that are only
used from time-to-time, like toilets and meeting
rooms. And by placing the IT department directly
above the servers, Irdeto only needed one cooling
system and saved on kilometers of cabling.
Heating and air conditioning makes use of
geothermal heat sink system, with hot and cold
water stored in two 80-meter deep pits. This cuts
down on the amount of energy needed to maintain
temperatures indoors, while keeping everyone
comfortable regardless of the Dutch weather.
FLEXIBLE WORKSPACE
Because more employees balance working hours
between home, office and elsewhere, the building
would not be fully used at all time. So the architects
anticipated that only 70 percent of the workforce
would be present at any one time – and designed
accordingly. Which saved on materials, lighting
and other costs. And when the workforce arrives,
they don’t go straight to “their” desks, as there are
no set workplaces. The building is an open plan
office with different work areas designed to suit the
needs of the type of work being done. This helps
to foster greater interaction and the flow of ideas
between people.
ENCOURAGING ECOLOGICAL BEHAVIOR
But it’s not just about the building itself. Creating
the office of the future also means finding ways for
employees to decrease their ecological footprint,
too. So the Western headquarters was strategically
located opposite the train station. Employees are
also encouraged to bike to work – so there are
plenty of bike racks to park, and showers inside
for freshening up.
To further reduce the need for travel, audio and
video conferencing technologies are readily
available. Irdeto introduced a means of saving
paper (and trees) that had proven successful in
the Beijing HQ. If employees want to print anything
– or make copies – they need to log in first!
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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 BogaardtJulian BirkinshawRobyn Collins Brian DinneenLoefie EngelbrechtPatrick FinkelsteinRobert FransdonkMathieu GoudsmitsYuan GuMartijn Höfelt Harold JohnsonMichael KarpMadelon KaspersGraham KillMichelle La Vita Norman LievaartRob Mills Wim Mooij Rory O’ConnorChris Raats Thierry RaymaekersAntonie Roux Faraj SairChristopher Schouten Werner Strydom Tania UsherAndrew WajsNeil Watson Brendan WooKlaas Zuidema
and others, all of whom who we wholeheartedly thank for their contributions.