Linius teams up with Warner Bros. to pilot lucrative video virtualisation engine

One of Hollywood’s largest entertainment industry studios, Warner Bros., will collaborate with Linius Technologies (ASX: LNU) to conduct a technical pilot test of Linius’ proprietary Video Virtualization Engine (VVE), already being used by Amazon Web Services, Microsoft Azure and IBM Cloud.

Warner Bros. and Linius have agreed to sign a collaboration agreement to pilot test the streaming of Warner Bros. films, with news of the agreement sending Linius shares 33% higher to trade at $0.16 per share in early trade this morning. At the time of writing, Linius shares were trading at $0.14 per share, 20% higher compared to yesterday’s market close.

VVE is a transactional video on demand (TVOD) streaming and content platform similar to the likes of Amazon Prime and iTunes, but with additional security and distribution features that could make it more receptive for Hollywood studios, given the current struggle against digital content piracy.

Popular TV shows such as Breaking Bad, Mr Robot and Game of Thrones in particular, have been the subject of intense piracy activity in recent years with Hollywood studios finding it increasingly difficult to cap the growth of illegally downloaded premium-priced content.

Linius intends to carve out a market niche by streaming content from provider to consumer whilst solving the inherent piracy problem plaguing the most lucrative video on demand platforms and content publishers.

Warner Bros. intends to validate Linius’ claims and has therefore signed a collaboration agreement that will see popular Warner Bros. productions such as The Dark Knight and Harry Potter broadcast to Australian viewers as part of a “commercial use case” pilot test.

The VVE platform “will enable consumers to rent films for a limited period of time,” according to Linius, with the project expected to commence sometime in Q1 2018.

Working in practice

Linius’ patented VVE converts static video files into an interactive virtual asset that can be sorted more easily, and therefore, can be distributed to viewers more efficiently.

According to Linius, creating a virtual video file “is like splitting the atom of traditional video”, which “unleashes the tremendous potential locked within.”

Taking the analogy further, Linius says that “with the virtual file in hand, you can access its digital DNA on a molecular level to tag, index, parse, splice, manage and manipulate video content on the fly, in transit between source and screen,” and thereby transforming static video into “intelligent content” that can be managed more efficiently and bear higher commercial potential.

The range of benefits made possible by Linius’ VVE platform all gravitate towards security. VVE allows content to be adequately encrypted and protect to prevent piracy and greatly improves data distribution given its superior search and indexing capabilities as a TVOD platform.

TVOD differs from other methods of content commercialisation such as AVOD and SVOD by how video content is distributed and paid for. TVOD charges users based on individual transactions, SVOD is based on flat-fee subscriptions over time and AVOD is based purely on advertising revenue with the user not charged.

Having full control of the underlying data within a particular video file potentially gives any data distributor, cloud service provider or content owner “the ability to generate unparalleled value across its content catalogue,” according to Linius.

Targeted advertising, as well as bespoke user features that interact with the viewer, are also made possible by VVE.

Linius says its technology allows content distributors to splice videos and intermix content aimed directly at the user which is also something Hollywood studios are attracted to when considering appropriate on-demand platforms to broadcast their content.