Verance Copy Management System Presentation to CPTWG ARDG April 10, 2003

1. Verance Copy Management System Presentation to CPTWG ARDG April 10, 2003

2. Presentation Overview • Verance Copy Management System for Audio Content (VCMS/A) • Performance Specifications • Format Support • System Architectures • Deployment Status • Applying VCMS to Protecting A/V Content (VCMS/AV) • Technical Considerations • Conclusions

3. VCMS/A: Overview • Multi-industry “consensus audio watermark” for audio only content • Core technology from Verance, tailored to music industry requirements, independently evaluated, and adopted by consensus • Provides persistent copy status signaling in audio and playback control, record control, and generational copy management functions in consumer devices • Perceptually transparent, robust to a wide range of distortions, large data payload, low processing requirements • Mature, proven technology with significant deployments • Adaptable to evolving market needs, technical requirements

4. VCMS/A: Performance Specifications • Perceptual Quality • Absolute transparency to “golden ears” on 96/24 content • Data Payload • 4 CCI bits per 15 seconds (3 assigned [1 “remark”-able]; 1 rsvd.) • 8 Usage ID bits per 15 seconds (reserved) • 60 Content ID bits per 30 seconds (reserved) • Robustness • 36 dB SNR noise • 6 kHz bandlimiting • 32 kbps/channel codec • +/-10% linear speed • +/-4% PITS • Computational Requirements • Detect from 48/16/2 PCM: 10 MIPS, 16 kB data, 8 kB code • Remark on 48/16/2 PCM: 20 MIPS, 32 kB data, 20 kB code (proj.) • Wow & flutter • Echo/reverb • EQ +/-6dB/oct • Channel mixing 621 • Dynamic range compression

5. VCMS/A: Performance Validation • Performance validated through independent evaluations • 1997 • MUSE Program for Digital Media Management in the European Music Sector • 1998 • 4C Entity Evaluation of Audio Watermarks for use in Copy Protection System Architecture (CPSA) • 1999 • Secure Digital Music Initiative Evaluation of Screening Technologies for SDMI Portable Device Specification, Phase I • 2000 • Secure Digital Music Initiative Evaluation of Screening Technologies for SDMI Portable Device Specification, Phase II • 2001 • JASRAC STEP 2001 Project for Certification of Digital Audio Watermark Technology

6. VCMS/A: Format Support • Watermarked audio can be distributed in any format • Packaged media • CD, DVD-V, DVD-A, SACD, etc. • Electronically distributed media • Webcasting, subscription services, downloaded content, etc. • Broadcast media • Free-to-air, digital music services, satellite radio, etc. • Watermark enforcement required in “compliant” secure formats • 4C Entity Copy Protection System Architecture (CPPM/CPRM) • DVD Audio playback and record control • SD Card Audio record control • SDMI Portable Device Specification • Media player application record control • Portable music device record control

7. VCMS/A: System Architecture • Defined Watermark States: • “copy freely”, “one copy allowed”, “no more copies” • “sdmi upgrade trigger set/not set” (obsolete) • Compliance Rules: • Screen all unencrypted content for watermark at inputs • Accept “copy freely” and unmarked content • Reject content marked “no more copies” • Handling of “one copy allowed” is format dependent • DVD playback: Reject if unencrypted • DVD recording: Allow but encrypt and mark “no more copies” • SDMI recording: Accept • Device must be tamper-resistant • Compliance is “self-certified”

8. VCMS/A: Deployment Status • Content Owners • All major labels distributing watermarked EMD content • Hundreds of thousands of tracks embedded • One major label distributing watermarked packaged media • Hundreds of DVD Audio titles • Consumer Products • All DVD Audio players and recorders include watermark detectors • Over one million consumer devices (including hybrid DVD-V/DVD-A) • Detectors included in many OEM chipsets (e.g. Cirrus Logic, Hitachi, MEI, Sharp, ST Micro, Toshiba, Zoran) • All SD Card Audio devices include detectors • Hundreds of thousands of consumer devices • Primarily cellular phones for the Japanese market • Some portable music devices • Devices from Philips, SonicBlue/Rio, Samsung, and Sony • No adoption in software media player market

9. VCMS/A: Representative Customers

10. VCMS/AV: Adapting VCMS/A to A/V Content • Use audio watermark to protect A/V content by adapting VCMS/A technology • Benefits: • Existing implementations accelerate deployment • Common core technology reduces resource requirements • Larger adopter base amortizes economic costs • Existing standard status facilitates acceptance VCMS/A COMMON CORE TECHNOLOGY VCMS/AV

11. VCMS/AV: Technical Considerations • Performance Specifications • Transparency, Robustness, Data Payload, Computational Requirements, Effectiveness • System Architecture • Watermark states, Compliance Rules, Harmonization of Audio and A/V Compliance Rules • Format Support • Formats, Devices, System Architectures

12. Conclusions • VCMS is proven and accepted solution for music • VCMS is a potential near-term solution for A/V content • VCMS provides substantial flexibility and expandability as market needs and tech environment evolve

13. Verance Copy Management System Presentation to CPTWG ARDG April 10, 2003