South African start-up uses innovative approach with bitcoin and blockchain to catch the pirates online

4 November 2016

Top Story

Piracy plagues Africa and TV and film markets but particularly piracy within the industry. People take screeners and before you know where you are they have been uploaded . to the Internet.Russell Southwood spoke to G-J Rooyen, Custostech who has developed a new approach to cracking this age-old problem.

Custostech’s approach deploys some unique technology but could not be simpler. When a broadcast or film company wants to send content to a client, they upload that content to Custostech.

It puts a forensic digital watermark (unseen by the user) on the content and a bitcoin private key, which is the equivalent of your bank PINcode and a bitcoin wallet. Custostech puts a small sum of money in the wallet of the content that is being sent out and tells the recipient that is what it has done. It explains that they have to keep the content and the money in the wallet safe by not circulating the content publicly.

For those who have been using media for last three years, some explanations of what bitcode and blockchain are. Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Blockchain is a public ledger of all bitcoin transactions that have ever been executed. It is constantly growing as 'completed' blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order.

If the content is uploaded publicly in some way on the Internet, a pirate from the pirate user community will spot the bitcoin key and download the money. This triggers a payment notification to blockchain which in turn Custostech gets told about. At this point Custostech can tell the client and it can take action:”The transaction will be visible on blockchain and it will tell you who the money has been taken by This tells the content owner the content sent has been compromised and it can then take action quickly”. The loss of the bitcoin on the content clearly indicates that the content was pirated online.

The elegance of the solution is that it uses pirate content users to police for piracy:”We’re turning the pirates into a detection network”. It is currently experimenting with a US$2 sum in the bitcoin wallet. When piracy occurs, in tests it has taken only a few minutes for the money to be taken. It has experiment with larger sums. With US$10, it takes 45 seconds for the money to go and with US$100, it’s gone in 30 seconds.

It has discussed models whereby a production company can embed the anti-piracy protection in production and post-production. So for example, at post-production stage all the external companies will agree to a much higher bitcoin wallet to protect the footage in the production and post-production process:”Stuff often goes missing at this point. A substantial deposit – say tens of thousands of dollars -can be paid by the recipient and after the post-production window is over can be returned to those who have paid it.

So who’s expressing interest in using it? It was piloted about one and a half years ago in South Africa with a regional TV company one of South Africa’s largest producers of films:”We wanted to ensure the product was strong and stable and there was no occurrence of piracy.” The company has spent time in Los Angeles and talked with studios to understand their piracy pain points.

Founder G-J Rooyen knows that getting the US studios on board is the key to wider dissemination and use:”We’re speaking to small and large studios in the USA and we need to have buy-in from the studios.”

It has had take-up in the UK where an e-publishing platform has made them the security provider on their platform. G-J Rooyen was attending the African industry trade show DICOP this week and had much interest from African distributors:”it would work well with Nollywood and Bollywood. African distributors are struggling with piracy but because they don’t have legacy systems, they are also often early adopters. We’d love to run a pilot.”

G-J Rooyen used to be an Associate Professor of Electronics, Telecoms and Signal at Stellenbosch University. He was part of the MIH Lab funded by Naspers:”It’s not actually involved in funding us.” The company was a start-up spin-off from the university.

The investors in the order they got involved were as follows: Stellenbosch University (as co-founder); the Government start-up agency, TIA Seed Fund (a grant); Stellenbosch University (equity partner);an angel investor in South Africa (the lead investor), the Digital Currency Group (New York-based VC investor in bitcoin and blockchain); and finally, the TIA (debtinstrument).

Stellenbosch University helped patent the technology through its tech transfer office, Innovus:”If you invent something, it goes through the TTO process and the University keeps the technology until the start-up company is formed.”

__________________________________________

Digital Content Africa: Balancing Act’s web TV channel Smart Monkey TV has an e-letter called Digital Content Africa. On a fortnightly basis, it covers online film, music, media, social media, publishing and services and applications. We have already produced 74 issues and these can be viewed on this link:
Digital Content Africa - past issues here:

Essential reading for those in mobile VAS to anyone just interested in what African and relevant international content they can now get online. If you would like to subscribe, just send an email to info@balancingact-africa.com with Digital Content Africa in the title line. Look at the full list of past issues on this link:

Videos interviews to watch:

Marek Fuchs on working with Sauti Sol and launching an entertainment branding agency

Jessica Hope on why African start-ups need media coverage and how to get it

Jason Njoku on how iROKO has pivoted its business from the diaspora to Nigerian mobile users

Christian Osei-Bonsu on MEST start-up e-commerce inventory platform SynCommerce

Bunmi Okunowo on the start-ups selected at Start-Up Friday to get seed and accelerator funding

Devin de Vries on how start-up WhereIsMyTransport wants to change Africa's city transport

Juliet Ehimuan, Google Nigeria on why the Internet of Things matters for Africa and how to use it

Kofi Dadzie, Rancard Solutions on how its Social Graph Rendezvous provides engagement marketing

Goodnews Chibuike on how his start-up Dochase helps advertisers reach their online customers

Binta Coudy De, JJiguene on how it helps women street sellers go online to sell food products

Karl Kathuria, Psiphon on how Africans can beat social media and What's App banning

Catherine Luckhoff, NicheStreem on bringing Afrikaans music and Nigerian gospel online

Chika Nwobi, L5 Labs on the lessons of seed investing in Nigerian start-ups

Jennifer Chizua on launching Startpreneurs, Abuja's first start-up accelerator

Kemo Toure on his start-up jobs platform Wutiko.com aimed at Francophone Africa and the diaspora

Benedict Olumhense on the barriers to success in the Nigerian games sector

CcHub's Bosun Tijani on its new edtech incubator and research centre re:learn