Technical Specifications:

The technical specifications of all videos and movies processed using Canvid compression are as follows:

Piracy Protection Security Process:

In order to ensure that the video contents delivered from any of our channels are protected against piracy, the company deploys its proprietary digital rights management software. In this process a hash of uniquely identifying information is taken from the machine of the user purchasing digital media and is used to generate the security keys with which the media is encrypted. The security keys for the encryption algorithms are generated uniquely to each end user's computer system. Since no two machines will produce the same hash of information, no two machines will produce the same security keys and thus there is no way to play a file encrypted for a particular machine on another machine. To further the uniqueness of security keys random information is added to the process of key generation. This way each download the user makes of protected media will use different keys. Even if the user downloads the same file twice it will be different. This eliminates a potential vulnerability of encryption by not re-using keys.

The audio format preserves the original quality of the DVD audio. The quality of the encrypted audio is not affected by the encryption process, no further lossy compression is employed than what the original DVD creator employed, thus preserving the clarity of the DVD recording while protecting the digital content from piracy.

The audio and video formats are unrelated to each other and not dependent on one another. The audio and video streams are encrypted separately and independently. Same algorithms and uniquely generated keys are used to encrypt both streams independently.

The decryption of the audio and video occurs only in memory during the playback of the media and no decrypted data is written to disk at any time nor is more decrypted than is necessary for the immediate playback of the current position.

Certain key information about the rightful purchaser of a file is encrypted into the file using an arbitrary key to identify it so that if files are passed around the net, system will be able to tell who is the rightful purchaser.

Overall, the piracy protection software is far superior in providing the security for the following reasons:

• Each key is unique and for each session this unique key is generated regardless if it is the same user or not.
• The entire video file is encrypted rather than wrapping the file in security blanket. This provides the highest level of protection.
• No external authentication required when video is played on a computer. This eliminates the possibility of external interference and break-in into the encryption process. It also allows the viewers the comfort of portability as their computers need no Internet connection to initiate play.

Our Technology:

Introduction

The idea of transmitting video as easily as text, images, photographs or voice over fully integrated networks, like the Internet, had been the dream of most visionaries for much of the past century. For the last five decades, television has provided one-way broadcast of video. The 1980s and 1990s introduced early, often unsatisfactory, rudimentary, commercially premature forays into streaming video and video on demand. But up until now the dominant mode of transmitting video has been via traditional broadcast over the air, cable or satellite.

What is Video-On-Demand (Movies)

Video-on-Demand makes large number of movies available on the Internet for the user to download and play or stream from streaming servers. With Video-on-Demand the user can watch any movie, any time, start the movie when he wants, make pauses, go forward and back in the movie. It is, of course, the best in movie rental.

Internet Video-on-Demand is different than the Video-on-Demand services offered by the telecommunications and cable companies.

The telecommunications companies use ADSL system (Asymmetric Digital Subscriber Line) for bi-directional transmission of video on a local subscriber loop between the local telephone switch and the subscriber's home. Due to physical constraints, such as cable attenuation and frequency distortions, the ADSLs are limited in the distance which can be covered. Therefore, the service is localized. The spanning distances related to the transmission bandwidth through a cable with diameter of 0.4 mm are: 2 Mbit/s > 3.2 km, 4.2 Mbit/s > 2.0 km, 6.2 Mbit/s > 1.6 km

The cable TV (CATV) provides -on-Demand service through their cable network. The cable network is generally made of fiber optic and targeted for high penetration in the cities and large communities. The cable networks are localized and capable of delivering video contents to a distance of 12,000 feet from the delivery servers.

The Internet Video-on-Demand is different than the ADSL and cable services; it removes the geographical barriers and constraints of localized distribution system. The world-wide-web, being collaboration of distribution systems throughout the world, allows an independent service provider to offer video on demand to world wide viewers from a single location.

Markets

The current Video-on-Demand market is relatively small. Some sources estimate it to be around $350 million. The market potential for Video-on -Demand has the highest potential of all technology based video delivery systems. According to Gartner G2 Internet Video-on-Demand is being hyped as "the next big thing". Frost & Sullivan predicts that the European broadband Video-on-Demand market will be worth $2.5 billion by 2006. The Yankee Group believes that Video-on-Demand will generate revenues of $1.98 billion by year-end 2005. Jupiter Research, a division of Jupitermedia Corporation reveals that collectively, Video-on-Demand market will grow 58% annually, from $349 million in 2003 to $2.2 billion in 2007.

Hurdles to Internet Video-on-Demand

Lack of suitable compression technologies and Internet had been the two major factors for non-proliferation of Video-on-Demand over the Internet. Internet, are by nature shared networks and so bandwidth availability and throughput are constantly changing meaning that disruption of the flow is the norm rather than an exception.

Compression Technologies

The compression technologies available in the market place to-date has fundamental flaw that the compression ratios are very small. The compression ratio determines the final size of raw digital video file while maintaining the quality of video images. The smaller is the size of the compressed file, easier it is to deliver it over the Internet. An average 100 minute movie in raw format occupies around 50 gigabyte of space. If file of this size is downloaded on to a computer from the service provider's servers using high speed Internet connection, it will take nearly 20 hours of un-interrupted download. A video picture 360x288 pixel in size with three color separation and 8 bit precision occupies 311 Kbytes. To send a sequence of these pictures, un-compressed, at 24 pictures per second to give the viewer a VHS quality picture would require Internet speed of 60,000 kilo bits per second. The best household Internet connection has 300 - 2500 kbps of speed.

The compression technologies available in the market place provide compression ratios of about 100:1. Movie files compressed using these technologies are still too large to download from servers using average household Internet connections. In order to reduce the size of movie files to the levels that it can be delivered on existing Internet connections, service providers compress the movies way beyond the capabilities of compression technologies. This results in poor quality distorted video images.

Bandwidth

The bandwidth for Internet connection is defined as the speed at which it allows the data to be transmitted (kilobits per second-kbps). The standard bandwidths available include 28 - 56 kbps for dial up Modems, 300-500 kbps for the cable connection, 500-2500 kbps for ADSL connection and 1500+ kbps for T-1 connection. All households have either dial up modem, cable or ADSL connections.

There are two modes of delivering movies over the Internet and both modes are Internet speed dependent. In the first mode the subscriber downloads a compressed movie from service provides centrally located servers on to their computer. The computer decompresses the downloaded movie and allows the subscriber to watch it at its leisure, similar to having a rental tape. In order to deliver movies through this mode, the movie files must be highly compressed so that it can be downloaded in few minutes vs. several hours.

The second mode of delivery is streaming the movie from service provider's centrally located servers. In this application the video images are converted into 'packets' and delivered over the Internet which is a packet network. If the packets are delivered (streamed) to the subscriber at a rate lower than the speed of subscribers Internet connection, the flow of the packets is smooth, resulting in television quality of picture. The compression technologies of today does not have the capability to compress video images at low bit rate while maintaining television quality video. The conventional approach to overcome this deficiency is to create a large buffer. The buffer moderates the effects of variable throughput. When throughput is less than the average, the buffer is slightly drained and when throughput is more than the average, the buffer is replenished. The problem with this buffered model is long startup latency (as in "please wait, buffering..."), widely recognized by Internet streaming users. Using this model to deliver movies is a non-starter.

Canvid Advantage

Canvid Video Compression Solution is different. It takes a radically different approach to video compression. Its monumental technological break through in video compression allows it to overcome the deficiencies experienced by the existing technologies:

Proof of Concept

The Canvid video compression has gone through extensive testing and it is now ready for commercialization. The company has purchased and installed necessary hardware and number of servers to provide proof of concept for delivering movies over the Internet. Additionally, company has developed a comprehensive delivery system that allows the subscriber to select movies, pay for it, download and play or stream movies any time, watch for the designated time of one day to one week, protect the delivered movie for copyright, prevent unauthorized use and distribution and serve subscribers throughout the world with full comfort of payments and content protection.

Opportunity

Canvid video compression creates the biggest opportunity to penetrate multi-billion dollar consumer market in video rental for the following reasons:

• The studios are ready to make movie contents available to service providers. They do not wish to go through the problems experienced by the music industry.
• Major brick-and-mortar retailers and rental stores, such as Blockbuster and Hollywood Video, are concerned that their business may be cannibalized if enough consumers start using Internet Video-on-Demand services and primed for modifications to their business models.
• The technical hurdles in delivering television quality movies to households are removed.
• Most people spend large amount of time going to the video store to select, pay for, return home and prepare to watch rented videos. Cable Television has limited pay per view offerings. Viewers must select from a small number of choices. What people really want is any video, anytime at less time than it would take to go the video rental store which they can view without the worry of returning the tape.