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Enhancing security of digital property rights and citizens’ awareness through an innovative anti-piracy framework of digital content based on Machine Learning and Artificial Intelligence

Periodic Reporting for period 1 - 3ants (Enhancing security of digital property rights and citizens’ awareness through an innovative anti-piracyframework of digital content based on Machine Learning and Artificial Intelligence)

Reporting period: 2017-07-01 to 2017-12-31

The for-profit theft of creative works jeopardizes the rights of all creative individuals, puts jobs at risks, and undermines new legal business models and distribution platforms.
For such reason, 3antS has the mission to revolutionize the protection of digital content developing tools by combining the intelligent analysis of internet data, while creating a connection between the consumers and the content industry (authors) to rise social awareness and empathy links to fight against piracy.
• Problem 1: The effects of Piracy in numbers
In the last ten years with the massive development of the Internet, piracy related business has grown to be a huge economic and cyber security problem, accounting for 24% of the global network traffic. Initially this was a problem related only to the media creative sectors: books, music, films, television, newspapers, software and videogames, but in the latest years - thanks to the revolution of e-commerce platforms - piracy effects touch also, other forms of content such as brands and designers (fashion, perfumes, watches, pharma, etc.)
Cultural & Creative industries generates $2,250 billions of revenues annually and supports more than 29,5 million of jobs to the worldwide economy , while retail B2C sales in 2018 sales worldwide account with $3,051,15 billions. Only media content piracy is believed to have cost the five largest EU economies around $25billions and more than189,600 jobs between 2008 and 2011. If including other types of piracy and counterfeiting the statistic rise till $125 billions of loses and more than 2.5 million of jobs .
Since 2006, the number of films released each year by the major film companies have dropped by 37%, from 204 movies released in 2006 to just 128 released in 2012. As said before, this fraud is not only affecting the media sector but also involving the pharma, cosmetic, fashion industries, among others. One of four e-commerce transactions involve fraud products, as 10% of the global commerce is based on illegal pirate goods. Product counterfeiting value accounts for 600.000 million euros globally.
• Problem 2: The consumer insensitivity towards Piracy
In recent years’ bandwidth consumed by media pirates has grown 160%, which means that the 22% of all global internet bandwidth is used for online piracy purposes. More than 432 million of internet users regularly pirate content within three key regions: North America, Europe, and Asia-Pacific make up a majority of the internet world, comprising 82.6% of all internet users. But, what it is more worrying, is that the 70% of online users do not find nothing wrong in online piracy and so the pirated content receives more than 53 billion of visits per year. For instance, over 10 million people worldwide have pirated “Expendables 3”, which was leaked online weeks before its release, causing a revenue loss of up to $250 million. Also, facts show that, more than 42% of software running worldwide is illegal, and that at least the 95% of music downloaded online is pirated.
• Problem 3: Where the money goes
Piracy is extremely harmful to the cultural, creative, retail industries & brands: it wrecks distribution channels and leaves creators, creative industries and designers unrewarded or ill-rewarded. Besides, piracy-focused sites are owned and run for profit and so losses from the industry are transformed to revenues for those individuals that are not the original, authors or authorised distributors. The ecosystems of the internet commonly used to obtain infringing media material are bittorrent, video streaming, cyberlockers, and other file sharing networks, while for brands and consumers’ goods are, massive e-commerce platforms as ali-express, Alibaba etc.,
The economic harm from piracy is large and demonstrable, but also the power of these hackers and product pirates are growing with the increasing revenues and revolution of the digital sector, becoming now a major cyber security challenge worldwide. For instance, the famous case of the film “The Interview” and the SONY hacking, in which hackers did not only steal the referred film and company data, but also the titles that where disseminated causing losses of $1,4 billions and jobs cuts.

3ANTS aims to become the main reference cyber-security service framework to fight against contents piracy & digital distribution of counterfeited goods. With that purpose, 3ANTS mission is to deliver a set of breakthrough cybersecurity SaaS services built over a disruptive self-developed algorithm based on machine learning techniques, that follows as a crawler pirated content & goods through the internet (web, torrents, mobile applications, social networks, e-commerce etc.) automatically geo-locating (100% of accuracy) the items and forcing their withdrawal (98%)
• Market feasibility analysis: We have analyzed and assessed the most promising markets for 3antS adoption. It has been confirmed that the audio-visual market is the first target as customer organizations are really concerned about the need and have a significant budget dedicated to providers in this field. Also, it has been confirmed the interest of the brand markets, as fashion industry and other creative industries like the book publishing sector. Regarding to countries the main market is the US, a business trip was developed in August and September in order to confirm the interest of major customers like Universal, Sony, Paramount, HBO and Disney. Countries visited also as part of business research and events are Argentina, Mexico, UK, Germany and France
We also identified and engaged significant stakeholders like Creative Future, Motion Picture Association of America, French Association for Digital Content Protection and the UE Media Program for 2020, participating in the group of experts.
• Stakeholders and strategic opportunities: We have carried on specific strategies to identify and establish potential alliances and partnerships in different countries. The objective was to carry out at least 10 demonstration meetings among those stakeholders that may show interest. The following stake holders showed interest and channel is being developed: MPAA (Motion Picture Association of America, Federation Audio-visual Property (FAP), UE Media Program, ANDEMA (Asociación para la defensa de la marca) Asociación Española de videojuegos, Academia española de cine y television, ADigital (Asociación Española de Economía Digital), AAPA (Audio-visual Anti-piracy Alliance). On the other hand, stakeholders as consultants although showed a great interest in to packaging their services with our product, although did not end up to date in any sale (IBM Global Services, Auren, Accenture, Garrigues).
• Customer assessment: 3antS has made a simple test to validate the new business model proposed with the end users. This has been done with more than 10 customers from the media industry WarnerBros, Atresmedia, Universal, SONY, El Deseo, Telefónica, Filmax, Amarok Films, Disney, Beta Films among others), more than 5 customers from the consumer goods (Nike, ANDEMA, the association includes more than 70 brands). The value proposition has been confirmed and many of them have started to be our customers.
• 3antS technological roadmap: technological innovation is the main business driving strategy to achieve the expected growth and market. A Sustainable lively roadmap that encompasses customers’ needs in the short & long term has being developed involving artificial intelligence, matching learning and semantical analysis.
• Intellectual property rights (IPR) and Legal issues: An IPR plan to protect the tangible and non-tangible assets we are generating has been developed. Also, we ensure we meet all regulatory and legal requirements of the target countries. It has been confirmed that we have freedom to operate taking into account actions for Phase-2, and we have defined an IPR execution plan
• Business models tests & plan: Based on the deep market research and the opportunity already detected, a set of different business models using Canvas methodology with a deep analysis of value proposal, customers’ relationships channels, and customers (interviews) has been developed. The Pricing model based on cost structure analysis, and targeted gross margin, validated with current customers or potential identified in the data base. We have identified that the drivers of the business model are related to revenue losses and how our algorithm shows it and the key aspect is the demo trial. After that 80% of the customers hire our services, and high potential ones like Universal and Telefónica end up with a yearly contract, with a monthly subscription
• Company business definition & financial plan: The company has developed a growth and scale-up plan with a detailed estimation of the costs necessary to face Phase-2 and market launch, Identification of technological, clinical, market risks and potential barriers to penetrate the market, and a detailed business and commercialization plan. The main criteria of success is the financial round closed by the company, where funds amount 780k were obtain from two venture capitalist JME Venture Capital, BigSur Venture Capital, a one of the main Spanish Banks (Bankinter)
The main innovation proposal of 3antS lies on:
• The capability to trace content from multiple channels: including new parameters of social networks and mobile apps to increase the technology effectiveness in this channel, as well as adapting the overall concept to consumer goods market, specially Sports, Pharma, Fashion & Cosmetics
• The matching learning algorithms technologies: it allows high level of the scalability, effectiveness of search, analysis and learning phases by:
- Correlating all the gathered information tracing the users that pirate contents on the internet, getting a more proactive and effective search.
- Classifying big data amounts shutting down the content without any manual intervention.
- Applying automated self-learning techniques to improve the overall process for its own lessons learned

3antS product has validated and confirmed the feasibility of the product to scale up, due the impact of it progress in the following aspects:
• It has consolidated first target segment (audio-visual), acquisition of global customers and start the market development in new segments as brands
• The introduction of Artificial Intelligence & Matching Learning algorithms has demonstrated to make the operations a 20% more efficient.
• Regarding turnover, we can see the evolution of the company compared to previous year. End of the 2017 year results, confirms 221% increase in monthly turnover (December).
We have also played an important role on the piracy and fraud awareness in the European scenario through the EU Media Program and the numerous stake holders we have mentioned.
Regarding channel, we expect to confirm consultancy companies as a sales channel, as we have done with several associations like FAP,