Why Pirates of Caribbean's Captain Jack Sparrow, would hate this technology!

Cap'n Jack Sparrow of Pirates of Caribbean Disney

One of the entertainment industry's biggest headaches is the billions of dollars it loses every year through video piracy.

Many have been trying to find a solution to piracy, which is widely tipped to hot US$52 billion by 2020.

But Linius technologies, an Australian company of which I am a shareholder, has announced: "Linius Technologies Limited (ASX: LNU) – the only cloud-based solution that transforms static video into hyper-personalized video experiences with its world-first Video Virtualization Engine™ (VVE) – has validated its previously announced blockchain strategy by successfully testing its blockchain technology."

[ If you are not familiar with Blockchain, here's a link to an explainer video by World Economic Forum HERE. ]

Essentially what the announcement means, is that when you combine the Linius capability, with what is called a Smart Contract on blockchain, the viewer has to complete whatever the Smart Contract stipulates, before they can access the program.

According to Linius, there is no way around it.

A Smart Contract is a contract that has been turned into computer code and rides on top of a blockchain, and once fulfilled, automatically executes itself.

The code contains a set of rules created, for example in this case, by a program producer or rights holder.

Once the potential viewer, directly, or indirectly, confirms they are abiding by the pre-defined rules, the smart contract executes itself, and the program begins.

Abiding by the contract could mean confirming that the viewer is playing it on a legitimate platform that pays the rights holder fees, or that a payment has been made, directly by the viewer, to the rights holder.

Essentially, if a content creator passes their program through Linius' Virtual Video technology, every transaction is recorded on a blockchain and therefore every play of the program is tracked, and can only be watched, if the Smart Contract rules are followed.

In other words, pay up and we'll play it for you.

Smart contracts are a decentralized automation that facilitates, verifies, and enforces the conditions of an underlying agreement.

If this technology was applied throughout the entertainment industry, my understanding is that it would effectively mean, every illegal stream would be unable to play without payment. No matter where you try and view it.

According to Linius "We successfully uploaded the virtual video into the blockchain, executed the smart contract transaction (with associated mining*), and successfully retrieved a copy of the virtual video based on the criteria of the contract."

If I was the head of a content creation company, in an industry tipped to lose US$52 billion through piracy, I know what I would be doing.

Full ASX statement HERE.

I hope to be chatting with CEO of Linius, Chris Richardson, in the very near future, to get more on this latest development.

In the meantime, here's a previous interview with Chris Richardson.