Linius Tech – video Spotify on steroids


CM added Linius Tech (LNU.AX) to the SMSF today. Another diamond in the rough listed on the ASX. LNU basically does the following with its Video Virtualisation Engine (VVE),

[Linius empowers you] to instantly search the data within your video, and programmatically assemble the ultra-granular results, for the first time. Imagine the possibilities. Effortlessly give every viewer the exact video content they want in milliseconds – delivered as a single video ready for immediate playback on any web-enabled device or platform. No human hands required.”

Essentially users get to have their own custom TV channel. A good video example can be found here. The added bonus is that advertisers would be able to even better target audiences by knowing individual preferences.

So a football fan can say: ‘I want to watch all the highlights from these six teams that are my favourites and in particular every time one of ten players scores a goal or gets a red card or a yellow card.”

Sports betting – Betting on horse racing generates over $116B in annual revenues globally. One could easily search which horse in a race is best suited to particular conditions. The more punters can use technology to finesse betting, the more likely they are to place bets. LNU announced in September 2019 that it has partnered with Racing.com to deliver a range of virtual video experiences to Racing.com viewers. Linius has entered into a Master Services Agreement with SportsHero (ASX:SHO)

LNU even works in education. Students often spend hours combing through recorded lectures, just to find small nuggets of information. Linius flips that experience on its head. It allows students to search and find any object – from text to audio and even facial recognition – across any video source.

Law enforcement – LNU connects the dots by automatically detecting related activities, objects or incidents from an infinite number of video streams and archives. Flagging a person for suspicious activity, then submitting a search for archived footage of the same individual. Immediately identify any other instance in which the person of interest has appeared across any video archives – even footage from different systems in separate locations and agencies. Now that’s high-impact, real-time intelligence sharing. And, because Linius is AI and analyst toolbox agnostic, it easily integrates with government-approved solutions like Darknet/YOLO, Caffe and Tenserflow.

Media & News – For the first time, media outlets can provide every viewer with a hyper-personalized video newsfeed. It’s the single biggest change in news video delivery – ever. Linius is the only one doing it. Think of all those chronic Trump Derangement Syndrome sufferers who could search their inner rage using Linius enabled devices.

The company is partnered with Amazon Web Services, IBM and Microsoft. The company holds patents in the US, EU, Canada, S. Korea, PRC, Hong Kong, Singapore, Australia and India.

This stock has been clubbed toward all-time lows. It most recently capped off a $4.5mn cap raise.

Given that we all observe many people nose deep in video feeds, this technology will allow them to tailor feeds to their liking. Broadcasters can charge circa $5pcm per subscriber and or use an ad-funded model; There are 1.8 billion sports subscribers. The European Premier League alone generated £2.8B in broadcast revenue in 2016-2017.  The global value of sports media rights reached $49.53B in 2018 of which soccer accounts for 40%.

At 3.5c, and contracts already signed with an Asian and soon to be EU broadcaster, this thing looks a ridiculously overlooked stock. On a DCF basis with a 20% discount rate, it looks fair value at around c.30c.