500 000 Movies Protected with Blockchain — How We Got Here

Fred Lutz
Fred Lutz
Aug 2 · 5 min read
We love the customers that got us here! Photo by Anthony DELANOIX on Unsplash

In April 2018, we celebrated the 100 000th movie protected from piracy using our patented blockchain technology after four years in the market. By November of that year, we celebrated the 200 000 mark. Now — blasting past 500 000 — it’s probably the last time we’ll be celebrating increases in the hundreds of thousands.

We have some new customers coming on board who will be processing millions of copies of movies, documents, and ebooks a year. At this inflection point, I thought it proper to take a look back at where we started and how we got here, to celebrate our customers, and to share our excitement about what is next for Custos.

Starting a Blockchain Startup in 2014

The first time we presented the Custos concept of using blockchain technology to protect media to the local blockchain community, comments included “This is evil,” “this is not what Bitcoin is about” and “you are evil.” The community saw the blockchain as theirs and as a tool that was inherently anti-business. They were not happy with the idea of building something on top of it that is meant to help businesses. Conversely, when we pitched the idea to investors, we got “Bitcoin, oh, that’s that drug money, right?”

Over the years, through the crypto crashes and controversies, the ecosystem has evolved. In 2016 people in suits started attending blockchain events. By 2017 the people in the suits began wearing jeans and t-shirts to fit in. In 2018 the big dip washed away the buzz-word pedlars, and in 2019 people finally started seeing blockchain as a technology rather than a selling point.

To ICO or not to ICO

Throughout the changing attitudes and market, we were building cutting-edge watermarking technology, media distribution platforms, and various blockchain components (now with multiple patents in the US, China, Russia, etc.) — and we needed to fund this. We have managed to build the company with just under $1.4 million raised to date from various local and US-based investors — a fraction of what we might have raised in an ICO if we decided to go that way.

2017 was a good time to raise easy money (source)

Although it was tempting, we opted against it because:

  1. Custos is something that we are building for the long-run, and we don’t want to do business in regulatory loopholes, and more importantly,
  2. We could not see an advantage to our customers in a custom token over Bitcoin or another existing cryptocurrency.

Sure, integrity can be a bitch when you see other companies with hoards of cash while you are struggling to secure funding, but we have started seeing it pay off with investors and customers trusting us precisely because we did not ICO. It also meant that we could focus on building cool tech for our customers rather than taking a year to market a coin.

Getting Customers and Catching Pirates

And cool tech it is! Our first customers were in the film industry, where we helped indie film producers to protect their screeners that they send to buyers or reviewers.

Before we launched Screener Copy, our SaaS platform for this market, most people were either couriering DVDs or sharing cloud storage links, and more than 6 out of every ten movies were pirated before release — where a leak leads to a 19.1% reduction in lifetime revenue for a film.

We stopped piracy completely for these customers.

This was great — our technology is about prevention of piracy — but we needed to validate the core concept of actually catching some pirates. When a large international reseller approached us to help them identify pirates in their network, we were thrilled. This allowed us to test the technology without the deterrent effect in a controlled manner. And it worked! We caught over 90 cases of piracy within weeks! Since the successful sting operation, we have not had a single leak on the platform.

We have since branched out to other actors in the film industry, to ebook protection and most recently to data leak prevention. We are particularly excited about our recent entry into the EdTech market — with a top 300 research university protecting all the content on their learning management platform with Custos technology. We have also partnered with one of the big four global consulting companies to launch a data breach prevention and detection solution for their customers.

Here’s a non-exhaustive list of case-studies and use-cases:

Building a Dream Team

The most significant success by far to date is the Custos team. We spend a lot of time and energy on scouting, interviewing, and recruiting Custodians. Taking inspiration from the MIH Media Lab, where Custos was developed (and which G-J, our CEO, founded, and I was a student in), we look for individuals with deep specialties, but broad interest. People who want to build cool tech with cool people, and buy into the dream that we have at Custos — to develop technology to help anyone protect their content, wherever it moves.

The Dream Team

Custos Media Technologies

A blockchain startup on a mission to protect content owners and distributors of digital media from piracy. We use cryptocurrency and forensic watermarking to incentivise a global network of bounty hunters to notify us when your content gets leaked online.

Fred Lutz

Written by

Fred Lutz

COO and Co-Founder of Custos

Custos Media Technologies

A blockchain startup on a mission to protect content owners and distributors of digital media from piracy. We use cryptocurrency and forensic watermarking to incentivise a global network of bounty hunters to notify us when your content gets leaked online.

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