Following Linius’ 2018 AGM [Annual General Meeting], CEO Chris Richardson spoke with InsideMarket's Phil Carey about the company’s consolidated focus on video hyper-personalization, strong sales pipeline, scaling through channel partners, and 2019 financial outlook.
Chris Richardson: The most exciting thing we covered there [at the AGM], was actually taking the shareholders through a demonstration of the technology, to show how we’re delivering hyper-personalized streams to the individual level. In this particular demonstration it was in the context of sports, [using boxing footage].
So, we showed the ability to go in and say ‘alright, I want to create my own hyper-personalized channel just for me on Evander Holyfield. And I want to watch every full length fight that he’s in, and I want to watch any clips of news coverage that he’s in – the ability to pick and choose exactly what I want to see as a viewer, to give me that hyper-personalized experience.
The ability to deliver that to millions of users, to really personalize individual streams, has been impossible [up until now]. And, that’s one of the many things that Linius brings to the table with its video virtualization technology. Once that video is virtualized, it becomes trivial to programmatically create unique experiences for every single viewer. And, I think that was really well received by the shareholders.
Naturally we talked through the standard stuff around finances and the state of the business. I do think, that from a client perspective, we’re probably realistically around two months behind where we wanted to be in terms of new deals and news flow. And, we are just as uncomfortable with that as the shareholders – but the reality is that, while we’re unhappy that we’re two months behind, we’re very happy with the sales pipeline. When we look at what is actually going on, none of the prospects that we put in our Near Term Goals have fallen out. All those deals are still progressing. There are a couple of factors that we’ve identified, which are leading to things taking a bit longer than we desired. Probably the biggest one is just the nature of the technology.
So, we walk into somebody’s office and we explain virtual video to them, and we show them a demonstration, and they’re like ‘wow’. They’re blown away and want to do it – but it’s a brand new thing. Nobody’s sitting out there with a budget for video virtualization, because nobody’s heard of it. It doesn’t exist before we walk in the door. And so then there’s their whole internal process, where they say, ‘OK, we want to do this amazing new thing, how do we budget for it’ – it’s about marching through that. And that’s getting easier and easier for us to do, particularly in the context where we’re creating value.
Because now, we’re going in and showcasing these demonstrations like what we did at the AGM, where we’re saying: ‘Mr Sportscaster, whoever you may be – let’s say Manchester United out of England. You have 100 million dedicated fans around the world, who are spending thousands of dollars per year. And you know that if there’s a new thing, they have to have it. So for you to enable them to create their own customized, hyper-personalized Man-U channel, they’re going to spend £10 a month on that – no questions asked. And, if you only get 10 percent of that [100 million fan base], that’s an extra 100 million pounds per month to your bottom line. And that sort of message is becoming really, really clear, and tying deals to those types of value creation models is accelerating a bunch of stuff [in our sales pipeline].
So we’re very happy now with where the pipeline is and where the clients are, we just need to knock a few deals down and get the first ones in some of these verticals. Hopefully that’s happening very soon.
Phil Carey: So to pull that apart a little bit more, when we last spoke, you talked about being able to put forward some sort of metrics around revenue by the end of the year. Are you now saying bump back as well?
Chris Richardson: Probably not metrics around revenue, I think revenue will just speak for itself in our financial and quarterly reports. But we will start reporting for the very first time, in either the December quarterly or the March quarterly, some numbers around video virtualization. Whether that’s the number of videos virtualized, or something along those lines. That’s our intent.
Now, the numbers aren’t going to be that meaningful in the first instance, but that’s ok, because the whole idea is to prove the commercialization of the model. And our strategy has always been, and we’re sticking with the same strategy, to knock-down one or two deals in each vertical that are commercially viable solutions, and then take those solutions and push them through channel partners. And actually since last time we spoke, we’ve made a fair bit of progress on the channel front. We’re now available on the Microsoft Azure Marketplace – we’re closely partnered with them, we’re on the Amazon Partner Network, obviously we have the IBM relationship, we’ve announced MediaAMP as a channel partner in the education sector in the US, and we’ve brought on Stephen Pech who’s the ex-Head of ICT Channel Distribution for Telstra to really firm-up those relationships. He’s making sure that all those channels are in a position where, the minute these solutions drop with the client, we can take them and replicate them [through the channel] to really grow the business quickly. And he’s doing a great job of that. So it really is just a matter of getting the first couple done [in these additional verticals], and then letting the channels run with it from there.
Phil Carey: But when you say getting the first couple done, obviously Newstag [in the news sector] and MediaAMP for universities, those are done deals that are set-up?
Chris Richardson: Yeah, that’s right. So now I’m talking about [getting the first deals over the line in our other identified verticals], like sports, gambling… And that’s something we brought to the AGM, that we’ve expanded into the gambling vertical – we’re getting a ton of interest there.
This whole notion – never mind the other capabilities of Linus and virtual video, never mind anti-piracy and those other sorts of things – just the search and hyper-personalized stream capability is opening-up so many verticals. We’re talking to gambling, we’re talking to sports, we’re talking to education and news as you well know. [We’re talking to] security and defense – the primary application there is effectively the same use case. And, all of these people are tremendously excited about the capability.
Phil Carey: So, to wrap-up then: Things are going well, but it’s just taking a bit longer?
Chris Richardson: Yeah, I think that’s the short way to say it. It’s actually going extremely well, it’s just taking a bit longer.
Phil Carey: Ok, and there’s not going to be a need for more capital raising at this stage, given that?
Chris Richardson: Yeah, that’s another thing that we did address at the AGM. So, right now, with no new income or new revenue, we’re good through May – June next year, just on a running cashflow basis.
But we have about $AU 7.2 million worth of options that are out there, which are going to expire in the first half of next year. So, if we get a couple of these deals knocked-down, or two or three small ones in Australia, and one good sized one in the US, and get the share price back where it reasonably should be, then we have every expectation that those [options] will get exercised. And that puts us at 18-months worth of cash comfortably. So if we can execute on these things in the next four, six, eight weeks, we should be very, very comfortable.
Phil Carey: Ok, you mentioned getting the share price back to where you think it should be. So where do you think it should be at this point in the process?
Chris Richardson: I think at $AU 0.21c we were still undervalued. So, right now, it’s about getting us back over the 12 to 13 cent barrier in the first instance, and then running from there. And we did have an issue back in the June timeframe, where we had that pressure on the stock from the selling that came out of the Phoenix Myrrh entity, and that’s largely cleared-out now. So we’re now in a good position for the price to run as we provide news flow.
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Linius Technologies Limited (ASX: LNU) has invented and patented the Video Virtualization Engine™ (VVE), which is available on Amazon Web Services, Microsoft Azure and IBM Cloud.
Amazon, Microsoft and IBM are investing billions in virtualizing ‘video services’ (technologies) and Artificial Intelligence in the cloud. It is arguably the biggest battle on the internet, given that video accounts for nearly 80 percent of internet traffic.
Only Linius can expose the data that makes up the video file, making cumbersome video as flexible as all other forms of data. Accessing the data within the video file is the missing link for video cloud service providers, creating unparalleled value across the internet video industry.
Linius’ VVE-powered Video Hyper-Personalization and Search Solution enables anyone to instantly search the data within video, from across an infinite number of sources, and automatically assemble the results in a single stream on-the-fly. No human hands required.
Linius is revolutionizing the way organizations and individuals across the globe produce, deliver and consume video, enabling previously impossible hyper-personalized video experiences.
It’s a breakthrough set to disrupt entire multi-billion-dollar industries. Linius is initially focused on delivering its Video Hyper-Personalization and Search Solution to six core markets: News and Media, Sports Broadcasters and Rights Holders, Education, Corporate Communications, Security and Defense and Sports Betting.
For more on Linius Technologies, visit www.linius.com
Linius Technologies Communications Director, Lachlan James: email@example.com or +61 (0)431 835 658
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