Linius Technologies Limited (ASX:LNU) Executive Director & CEO, Chris Richardson talks about a range of applications it's developing for video from search, improved ad placement and video blockchain.
Rachael Jones: Hello I’m Rachael Jones for the Finance News Network. Joining me today from Linius Technologies Limited (ASX:LNU) is Executive Director and CEO, Chris Richardson. Chris welcome back to the Network.
Chris Richardson: Thanks Rachael, as always a pleasure.
Rachael Jones: Linius Technologies is developing a range of application for video from search, ad placement and also blockchain. Can you tell us more about your recent announcement regarding video blockchain?
Chris Richardson: The announcement was really about the fact that we demonstrated, in a live webinar earlier this week on the 20th, video in blockchain for the first time. I know blockchain is a buzzword that a lot of people hear and that people hope that there are amazing things happening with it, but don’t really understand it. That’s okay; one of the key points from our perspective is that up until now, nobody has been able to put video on the blockchain. There’re actually a lot of companies doing really interesting stuff, related to video and blockchain, stuff around the sides.
But actually enabling blockchain to deliver on its promise of protecting visual assets is something that nobody has been able to do, due to the size of video files. Video files are really, really big and you can’t just put them in a blockchain. But because what Linius does is virtualise video and virtual video files are a tiny tiny fraction, less than one per cent of the size of a real video file. We’re able to put those virtual video files directly in the blockchain and enable it to deliver on its promise. And that’s what we demonstrated earlier this week. Your viewers can actually go to our website and watch a recording of that.
Rachael Jones: What are the benefits of video blockchain to the video industry?
Chris Richardson: So blockchain itself is the underlying technology beneath crypto currencies, like Bitcoin. And what that technology enables is the protection and guarantee of the ownership and transfer of digital assets. Originally those assets were crypto currency, Bitcoin etc. But there are lots of applications that the industry is foreseeing for applying that same technology, to guarantee trust in an untrusted environment, without an intermediary. So people are using it for things like land contract deals and Title transfer.
What we’ve done is we’ve made it possible for the first time; that guaranteed protection of video assets. Now what that means for the industry is that anybody who is a rights holder to video, who is a producer. Whether you’re a major studio or an independent, or even user-generated content and the You Tube stars and the Twitter stars of today. It enables you to publish your content and completely control the access rights to it, and the business models behind it.
Rachael Jones: What are the next steps Linius is taking with video blockchain technology?
Chris Richardson: There are tons of opportunities for the world out there that are clients and owners of this content, to monetise in a number of different ways. And that extends from literally changing the business model of how you price and sell your assets, whether that’s rental or direct sales, or advertising generated revenue, or some combination. And of course, there are follow on benefits around antipiracy, and antipiracy on its own is a giant benefit to the industry. I think the current stats are something like, by 2022 there’ll be over $50 billion in revenue lost to TV and studios, through piracy. Which is more than double what it was as recently as 2016.
So there’s a giant problem out there that needs solving, in addition to all the enhancements you can get through additional monetisation. All of that means there are lots of opportunities for Linius to monetise that technology as well, on top of what we already do with our virtualisation services, for discovery and assembly in video. Right now the plan is to work with our partners and move from the pilot that we released earlier this week, to a commercially viable product. And we’ll do that in conjunction with a number of commercial partners.
Rachael Jones: I understand Linius is also busy with new ad placement technology. Can you tell me how this fits in with other ad tech that’s already out there?
Chris Richardson: The existing placement technology for ads does a really good job of understanding that persona, and targeting ads at individuals. What Linius enables is really taking that to the next level, where both the added self can be dynamically modified to suit the individual. And where that ad is placed in the content, can be chosen based on the context of the content, to really make it as relevant and as powerful an ad as possible. So that no two viewers need ever see the same ad even in the same spot, even if they’re watching the same movie, ever again.
It’s really something that we think will dramatically increase the value of existing ad content, in the marketplace. And really change the world of advertising. If we talk about the world of advertising, today video advertising is a $0.5 trillion industry. And the online video advertising portion of that is the most rapidly growing segment. So there’s tremendous potential.
Rachael Jones: Can you tell us about your work with Hemisphere?
Chris Richardson: Hemisphere is a leading system integrator and software development company, focused on video technology. And they’ve worked with some of the biggest names around the world, like CNN and FOX, developing systems for them. So we’re really excited to have them as a partner and have them actually build this advertising solution, on top of our technology. They’re actually putting the frontend out there that enables this to go out and integrate with the existing advertising platform.
Rachael Jones: How does this align with your go-to market strategy?
Chris Richardson: This really is our go-to market strategy. Linius itself, we provide a B-to-B application that sits behind the existing software. It’s really not something the end user ever directly sees, it’s all done through what I could APIs or Application Programming Interfaces. What Hemisphere is doing is exactly what we want the world of software vendors and system integrators, and managed service providers to do. Which is build an application on top of our technology.
And from our perspective, this particular instance is great because they’re doing it at no cost to Linius. They’re doing it really as an investment on their own, because they believe in the application of the technology and the size of the market. And then we’re doing a revenue share with them on the backend, where they get 10 per cent of anything that comes into our system, based on their advertising solutions.
Rachael Jones: Looking to search now Chris, still on Hemisphere, they’re looking to build a second solution to your SaaS platform. What can you tell me about this?
Chris Richardson: Much like the advertising solution, this is the same idea, where they’re building the end user application. And in this case, the goal of the search and assembly application is to make it trivially easy for anybody who has video content, to start taking advantage of the Linius search and assembly, really our hyper-personalisation capabilities. What they’re building is the capability, for anyone without deep technical expertise in video or software programming, to come sign up for LVS our SaaS platform. And then deploy in a matter of hours, an automatic search and assembly hyper-personalisation application, on their own website.
Rachael Jones: To the last question now Chris. What is the revenue model for this new solution?
Chris Richardson: As with everything from Linius, our revenue model is based on user to the system. So you could think of it for the search and assembly application, for this hyper-personalisation capability, we get paid every time somebody watches one of those personalised videos. And in this case, much like the advertising solution, Hemisphere is building this, because they believe in our deep technology. So Linius is not footing the bill for it, so to speak. And again, it’s a revenue share with Hemisphere that’s very much something that we both believe in. And it’s kind of exactly the model that Linius wants, going forward.
Rachael Jones: Chris Richardson, thanks for the update.
Chris Richardson: As always a pleasure Rachael, glad to be here.