Blockchain-Based Digital Watermark Solution

How buried Bitcoin treasure is proving the downfall of online pirates

When the French father of anarchism Pierre-Joseph Proudhon declared ‘Property is theft!’ in his 1840 treatise What Is Property?, the notion was quickly hijacked by ardent anticapitalists as a battle cry against ownership of any kind.

A printer by trade, Proudhon subsequently back-pedalled, insisting his previous statement had referred to unearned income—loan interest and suchlike—and not the exclusive possession of wealth or property derived of labour. 

In other words, Pierre-Joseph the pragmatist believed in the individual right to possess and benefit from our own creativity. It follows that the unauthorized exploitation of that creativity by third parties is downright theft, nothing more.

By pilfering original digital books, films, TV series, video games, and music, pirates are mugging hardworking creatives of their property and income. And despite decades of government campaigns and legal countermeasures, pirates are still getting away with it on an industrial scale.

How common is digital piracy?

In 2022, tech security company Akamai released research into the prevalence of online piracy, which the US Chamber of Commerce’s Global Innovation Policy Center says costs the U.S. economy alone US$ 29.2 bn in lost revenue per year:

'Considering the television and film industries alone—including both public and private torrent files, as well as web downloads, stream ripping, and direct streaming—there were 82 billion visits to piracy websites between January and September 2021. If you add in music, software, and publishing to these figures, the total jumps to over 132 billion.'

Of course, there’s nothing new about stealing, and digital piracy has been around as long as the internet has. But today it's so prolific and brazen in some quarters that it's been normalized.

How to prevent digital piracy?

Logo of Custos Media Technologies

So, what to do? Rights owners routinely compare anti-piracy efforts such as DMCA takedowns to ‘whac-a-mole’, the game where players cosh moles popping up randomly through holes in a board. With every strike, another mole instantly occupies an adjacent hole. While concussing the myopic insectivores might bring satisfaction, it’s basically futile.

More than ever, creators need truly effective protections, and South African information security innovator Custos Media Technologies say enlisting bounty hunters to unmask and deter pirates is part of the answer.

Forensic Watermarking and bounties

Custos was born in a Stellenbosch University business incubator, where researchers and academics can attract investment to turn ideas into businesses. The company works with major media producers and film studios, largely in the ‘screener’ (pre-release copies of films selectively shared with insiders) market. It also helps businesses and universities to protect sensitive and valuable documents and learning materials, such as texts, videos, and images.

Fred Lutz, co-founder of Custos Media Technologies
Image: Custos Media Technologies

Custos cofounder Fred Lutz said leaked screeners cost filmmakers millions in lost revenues over a film’s lifetime, and that Custos’s blockchain-based solution can recoup some of the losses by using forensic watermarking and bounties to turn media poachers into gamekeepers.

‘We had this idea of using Bitcoin as a promise of integrity for media, by making people understand they risk being identified when taking a piece of content,’ he said. ‘We put a piece of Bitcoin inside the media, which anyone in the world can claim, and when they do, we’re alerted to the leak. So rather than building a network of piracy hunters, anyone in the world can be a potential informer.’

Cryptocurrency at the Core of the Custos Watermarking Solution

Custos locks a currency equivalent of Bitcoin in a crypto wallet with a private key, which is embedded as a forensic watermark in a copy of a new movie that, for example, needs to be reviewed by trusted person X. If person X lends the movie to someone who passes it to a piracy-minded cousin, who leaks it to a file sharing network, Custos enables anyone, be it a student, pirate, or upstanding citizen, to anonymously read the forensic watermark, access the private key, unlock the wallet, and claim the Bitcoin bounty.

This means anyone tempted to dabble with stolen media—even on the dark web, behind paywalled content, or inside private file sharing networks—will instead be incentivized to track down pirated content and identify whoever released it into the wild. Custos then reports back to its client, who can contact person X and decide whether to prosecute. 

How quickly can pirated content be detected with Custos?

In testing its technology on university students and by deliberately leaking content online, Custos reports that the fastest takedown request was just 30 seconds, although there are typically seven minutes between upload and detection.

Custos has protected 4,000,000 film copies and pieces of educational content, and has set its sights on bigger goals, from a live sports video distribution service starting this year, to proof of ownership of non-fungible tokens (NFTs), to authentication of news content to counter deep fakes.

Lutz said deep fake protection was crucial for large news organisations whose output is being usurped for fake news production using AI tools like GPT-3.

He said: ‘Anyone can add a BBC or CNN logo to content of Trump saying something fake and claim it’s true, so they need a way to prove it’s theirs to build trust that they’re telling the truth. Custos embeds private keys in a clip, an interview with a politician say, and anyone can check on the blockchain if the BBC or CNN was the source of the content and that it hasn’t been tampered with.’

IP protectors need to protect their IP too

With so much at stake, Custos’ lawyers drafted the company’s core patent to cover the embedding of cryptocurrency rewards inside media as an incentive for people to detect its misuse. 

The patent was granted in South Africa and the USA, with the firm now looking at the EU, China, and other territories with developed movie markets. Additionally, Custos was recently awarded a second patent specifically for the watermarking tech that it developed to embed the blockchain bounties without degrading the media’s quality. As a security company, it also has lots of trade secrets.

Gert-Jan Van Rooyen, co-founder of Custos Media Technologies
Image: Custos Media Technologies

Custos cofounder Gert-Jan van Rooyen explained: ‘The patent is broad, covering anything that can carry hidden information. If you give us a way to hide information inside a plant’s DNA structure, we could do anti-piracy for Monsanto. It’s the basic idea of embedding a secret key inside something that can carry information that’s been patented.’

He added ‘Getting the patent granted in the US was an interesting process because it was an early blockchain-related patent during the fuss over when something is a software patent or not, like the Alice case. The US patent office struggled with what we presented to them as using blockchain and cryptocurrency embedded in media to detect and disincentivize piracy. But the patent examiner eventually agreed this was something distinct from just a software implementation of a real-world idea.’

Making movie piracy protection accessible to all film distributors

In the 21st century, where IP and digital creations have become consumer goods, there’s an increasing imperative to produce and market them while retaining some control of their consumption and the way the creators are rewarded.

Based in a developing economy, Custos takes its corporate social responsibilities linked to sustainable development seriously, especially around reduction of poverty, enabling all movie distributors to make a living from movie copyright.

Lutz said: There are large form markets in the world: Hollywood, Bollywood, Nollywood, but there are also smaller industries worldwide that want to create content. They support a large economy very sustainably, but they see piracy as a way of life, especially if they do not have access to the tools available to the big players. Ours is a democratized way of getting piracy protection for any type of film distributor, especially in the early stages of their commercial development, and helping to support that part of the economy. In small markets, like South Africa, it's not something people have access to.’

Last update:

February 13, 2024

South Africa

Company name:
Custos Media Technologies

Share this content: