[THE INVESTOR] We’ve had sharing of cars and apartments, why not extra bandwidth? This is the idea behind Theta, the world’s first blockchain-powered video delivery network that incentivizes anyone to restream video by using the redundant processing power of their smartphones or computers.
Samsung Electronics and Sony are the early investors in the Silicon Valley-based developer Theta Labs, with their total equity funding worth US$17 million last year. Steve Chen, co-founder of YouTube, and Justin Kan, co-founder of Twitch, have also joined the advisory group.
Theta Labs co-founder and CEO Mitch Liu (second from left) and other management members. From left are Ryan Nichols, chief product officer, Riz Virk, head of Corp Development, Mitch, and Jieyi Long, co-founder and chief technology officer.
Video streaming services like YouTube and Netflix have seen thriving businesses running on content delivery networks, or CDNs, a system of strategically placed servers. Cisco predicts digital video will make up 90 percent of the total internet traffic by 2020 compared to the current 70 percent.
The issue is the huge CDN costs and service quality. The Theta network allows users to share their extra computing power and memory storage for helping restream video. Before you sleep or go on vacation, you can leave your computer on as a CDN host and then the network will track the processor’s data delivery and reward you with tokens as incentives.
The firm recently launched the testnet running on its parent firm SLIVER.tv, the second-largest esports streaming platform in the US, before its official debut later this year. The presale of the Theta tokens raised US$20 million in January.
“It’s a win-win for all. Users earn money by using their excess bandwidth, while streaming firms reduce CDN costs and create new values for consumers,” Mitch Liu, CEO and co-founder of Theta Labs, told The Investor in an interview last week in Seoul.
“The beauty of Theta is it’s an add-on to their existing platforms. We don’t compete with YouTube, Naver or Afreeca TV. We want to partner with them.”
During his weeklong visit, the CEO met a slew of Korean tech firms and video streaming services, including the nation’s top three telecom carriers, to discuss potential partnerships. The firm plans to unveil a new 3D video streaming service with Samsung VR in the coming weeks.
Other than the crucial partnership with Samsung, Korea is a key market for Theta. It is one of the most wired countries in the world and is the powerhouse of popular video contents in the region like dramas, TV shows and K-pop.
“We were really surprised to find how open Korean conglomerates are to blockchain and our idea,” the CEO said.
“A lot of other blockchain companies are not necessarily demonstrating anything. We are demonstrating real-world results. It’s so tangible.”
Considering the potential benefits Theta could offer, large companies may want to develop their own blockchain-based platform and many of them already operate research and development teams.
The CEO, however, said that would be less effective compared to adopting the Theta network, citing the “network effect.” A media platform should attract more users, and if they can connect with other platforms, the tokens the users own could have more value and the incentive system would attract a lot more users.
According to the firm’s own study, more than 60 percent of its users spend their tokens within the website to use premium services rather than selling them at crypto exchanges.
Still, the CEO hopes more players will jump in the field and boom up the market together. Asked to offer some tips for large Korean firms eyeing the blockchain market, he stressed, “Do it small.”
“We are a small team with 25 people. My company building philosophy is to build the best technology possible with the fewest people possible because the more number of engineers you have the more problems you will have,” he said. Theta Labs is his seventh startup.
“You need to think like an entrepreneur and they think differently. So pick a person who thinks differently and then leave the team alone. That’s very hard for companies to do.”
By Lee Ji-yoon (email@example.com)