Linius Technologies (ASX:LNU): Making video searchable

Linius Technologies

We spoke to Linius Technologies‘ CEO James Brennan about the momentum the company is currently enjoying with its Linius Video Services platform, now being used to make sports video content more searchable. We spent some time on the recent IMG Replay deal and how the company is nearing breakeven as more deals like IMG are struck.

Full transcription below.

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Transcription

 

Stuart: Hello, and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me today on Monday the 15th of May, 2023 from Melbourne is Mr. James Brennan, who’s the CEO of Linius Technologies, (ASX:LNU). James, Good afternoon.

James: Hi, Stuart. Thank you for having me on.

Stuart: Contrary to popular opinion, Linius is not the guy who invented all those, that scientific terminology for botanists. You have the best technology ever for being able to search video content.

James: Thank you. I appreciate that opinion. And interestingly out of botany is where the name came from. The original founder of the technology had a bit of a background, I believe it’s related to bumblebees, and so yes, it does have that tie back to the original.

Stuart: Okay. Okay. So, do you agree with me that you’ve got the best technology for searching video content, and we’re now on the cusp of commercializing it in a serious way?

James: Absolutely. The way that we search through huge archives of content, and the way that we can allow our customers to reassemble that into an infinite number of personalized video streams, that is absolutely unique. There’s nobody else in the industry who’s doing that. And it’s great to see that our customers are really recognizing that. So, over the past two quarters, we’ve had some amazing customers come on board. Their solutions are gonna be going live, and hopefully, proving to the market that Linius’ technology does offer tremendous value and is completely unique.

Stuart: Right. And when I saw your most recent quarterly, the big jump in billings, I thought, “Brennan’s finally cracked the puzzle. The business is beginning to flow his way after years of this company trying to figure things out.” In particular, seeing IMG Replay, the IMG Replay that you announced last month in April of 2023, that was impressive. In fact, I’ve brought in my copy of what they don’t teach you at Harvard Business School. Mark McCormack, founder of IMG. Obviously, it belongs to Endeavor these days, but we’ve got 50,000 hours of content that is now searchable thanks to Linius as part of that recent deal.

James: Yeah, look, we’re really proud of bringing that deal forward, and putting our technology into IMG Replay. It’s a huge validation of what we do, and it really is a transformational deal for Linius in so many ways. So look, IMG went through a massive validation and review period on our technology, from a technical perspective, from a market perspective. They compared it to alternatives. Looked at what it was actually gonna do to drive their strategic initiatives for IMG Replay. And the fact that, you know, we came out in the end, and we’re the technology that they chose to put in for me is huge validation for the technology, and I can’t wait to see it actually live and delivering value for them and their customers. It’s basically gonna make it possible for their content licensers to find more content, find it more quickly, and gain access to it, and it’s gonna open up new market segments for IMG Replay. So, we’re really excited to be part of that journey.

Stuart: And we’re talking stuff that people actually like to watch, such as “Miss Universe.” Looking forward to watching that myself. “Wimbledon” for example, the Premier League, etc., we’re talking premium content.

James: PGA, LPGA, ATP, tennis, golf, rugby, everything you can think of. Yeah, it’s got amazing content, some of the most premier content in the world from 30-plus different sports. So, we’re really excited to show what our technology can do across such a vast archive.

Stuart: Right. And it wasn’t long before that before there were various other deals. For instance, the ALEKS, both men and women here in Australia, recently became a customer. And there’ve been other people.

James: Yeah. So, over the past two quarters, we’ve really solidified that momentum. And, you know, for the past 12 months, we’ve been talking about creating repeatable, scalable products, and we now have two products in market that really drive that scale, and we’re showing that repeatability. So, we’ve got the Fan Engagement Solutions, which we’ve deployed with A-leagues that that’s direct to the fans. We’re actually seeing huge momentum in our Wizard product, which is more of a kind of a business-to-business tool, and it’s used by the internal staff at our customers, and the internal staff at their customers. So, the ends rights holders, whether it’s broadcasters or advertisers, and those two products are showing absolute scale and repeatability. So, Wizard in particular, we launched with Cricket Australia in November. We then sold that to Inverleigh Media who’s an Australian-based media company. They originally rolled that out for the South Africa, New Zealand, Australia, and Argentinian Rugby Leagues. We then rolled out a second deal with them. They’re embedding that into their platform, and onselling that onto multiple archives and customers, and then rolled IMG on top of that. So, that same products we’re finding scale and need in the market for ’em.

Stuart: Right. And the secret to your success, it’s fair to say has been focus, focus, focus. Since you took charge of this company in November 2021, there’s endless potential uses for the Linius platform. But the one you focused on, obviously, is sports where the potential to break out some serious value is already there, then we can go on to add value in other platforms, in other formats, shall we say?

James: Yeah, absolutely. And that’s what the company needed was to really bring that focus together, and to really drive revenue, and to drive the business towards profitability. There’s tremendous opportunity for our platform to be used in education, security, media distribution, entertainment, you name it, there’s an application for our core technology, but as a small company, we need to drive towards profitability, and the sports industry was where we were seeing the most immediate traction. So, rather than try to do too many things, which we have done in the past, we narrowed our focus, again, brought in two repeatable, scalable products. Once we had those products done, we were able to reduce our cost base. So, last year we did a restructuring that reduced our costs, and now by focusing on the sports product, or sports market with those two products, we have a path towards profitability. And then once we get there, then we can invest for future growth. We can go into all of these additional markets.

Stuart: Right. Now, for investors who don’t know you, James, that accent tells me you’re not from around here. You came to Australia to head up the business development of Polycom, name that many people will know, because if you go back in the day, if you were doing video conferencing, Polycom was it. Now, these days Polycom, isn’t it? We’re having this video conference on Zoom, for example. But back in the day, Polycom was a huge step forward in video conferencing. That’s what brought you down here. Tell us a bit about your career.

James: Yeah. So, that was a great opportunity for me with Polycom. I can’t say enough about them. I had a 15-year career at Polycom, and they gave me the opportunity to come to Australia. I’m a huge Polycom fan. But as you say, the markets changed, and companies like Zoom and BlueJeans came along. So, yeah. Look, my background, I started as an accountant, believe it or not. Started at General Motors in an accounting department.

Stuart: Well, do you actually regret leaving that company?

James: Look, it was a great start to your career. I think accounting is a fantastic baseline for any career in business. So, started as an accountant, got my MBA, and decided to move more into technology and business, and that’s when I joined Polycom. Great career with them for 15 years, and made the decision to move into sales, and Polycom gave me the opportunity to do that by leading their business down here in Australia, and then I moved on to some of the cloud video conferencing providers. So, I moved to BlueJeans to lead their Asia business, and then I’ve really led the Asia and Australia businesses for quite a few U.S.-based software companies. My background, my real passion is in product and go to market, so developing a product strategy, developing a way to bring that to the market that really adds value. And then on the sales execution side, you know, how do we build the right execution plan to take this out to market, and just deliver it over and over again? So, those were the two things that Linius really needed, fit my background perfectly, and it’s what made me believe I could be successful here.

Stuart: Right. Now, if we’re having this conversation in late 2024, what do you hope to have achieved?

James: Late 2024 calendar year? Look, we’ve got a very clear plan to bring on more customers for our Wizard and Fan Engagement Solutions. That is gonna be our focus between now and then. It will be all things sport. We’re focused on larger customers and larger kind of opportunities in that segment. We’re now talking to a number of broadcasters. We’re talking to bigger rights holders. So look, this time in 12 months or more, I’m hoping that we’re approaching that breakeven point for the business, we’re in well entrenched within IMG and expanded out within the opportunity at IMG, touched on broadcasters. Hopefully, we’ll have our first broadcast customers. We’ll be in the U.S. market. So, these are all things that we’ve got directly ahead of us, and, you know, I anticipate the success we’ve had with IMG Cricket and Inverleigh will translate into those further successes.

Stuart: Well, cheers Brennan. Well done on what you’ve achieved at Linius in the last year and a half, and here’s to bigger and better things. Keep up the good work.

James: Yeah. Thank you. Look, we’ve got a great opportunity ahead of us. We’ve had two really good quarters of significant financial performance, and if we can continue that ball moving forward, we’ll be in a very different position in a year from now.

Stuart: Okay. Thanks for joining “Stocks Down Under.”