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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

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TABLE OF CONTENTS

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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

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WELCOME

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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

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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

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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.

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DETERMINATION, FORESIGHT AND RISK

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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.

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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.

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A picture from the past: Pieter teaching at the radio school

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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.

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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

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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

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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.

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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.

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NEW ERA, ENDURING VALUES

In the span of a few short decades, Irdeto grew

from a one-man business to a leading player in

the content security market. Navigating new

geographies and technologies, the Irdeto team

repeatedly demonstrated the innovation and

motivation required to succeed. Now, more than

40 years later, the characters that helped shape

Irdeto in its formative years live on in the company’s

enduring values. The determination, foresight and

risk that contributed to past achievements continue

to guide Irdeto in its latest endeavors.

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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

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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

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SOUTH AFRICA AND THE BIRTH OF M-NET

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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.

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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.

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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.

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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

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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

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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

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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

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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

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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

118

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.