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Cloud in a Box Innovation Set to Disrupt Digital Content in Africa and Challenge Entertainment Models in the West

By Rowan Philp

The “Cloud in a Box” content solution – innovated by a South African start-up – was the first-ever VC investment made by TED Talks, and is now set to disrupt the way digital content is consumed in the developing world – and beyond.

Offering free, off-line, audience-relevant digital content to users, the “CLOX” – developed by content media company Eduze – has graduated from a successful pilot phase, and is now seeking to expand, with its stunning solution to both commercial brands and education and training institutions.

In the western commercial context: CLOX is simply a more affordable and versatile solution than almost any in-flight or in-vehicle entertainment solution for public transport operators, or any in-room hotel or B&B entertainment system, or indeed for any training institution with unreliable connectivity.

But its application in the African context is revolutionary: Eduze neatly bypasses the persistent problems of high data costs, slow connectivity and network unreliability by allowing any user, anywhere within the radius of a CLOX, to rapidly download movies, steam lectures or browse content at no cost to the user – and without the need for 3-G, ADSL – or even electricity. Feature-length movies can be downloaded by multiple, concurrent users in less than 5 minutes – and music albums or e-books in less than one – with 140 hours of DVD-quality video on its smallest box, and content streamed with no buffering.

It is a free digital library – in which the library itself can be remotely renewed at any time.

CLOX also addresses a major but little-understood phenomenon in Africa: that, while smartphone penetration is exponentially increasing across the continent, data usage is actually increasing only slowly – leaving a massive gap, and a reality in which many Africans use their smartphones merely as cell phones, or status commodities. The other African phenomenon it addresses is better known: public waiting. From clinics to government offices to transport queues, Africa is filled with captive audiences rendered idle by connectivity problems – but all of whom could  be connected to compelling, empowering and relevant digital content, at absolutely no cost, with a unit nearby.

Its simplicity is potentially disruptive. Once couriered to a school, a teacher can simply plug in the box and it works within 5 minutes, sending its ready-to-play content menu automatically to every device in range.

But experts say the model’s fundamental game changer is not the proprietary technology or its unique affordability, but rather the relevance of its curated, fully-licensed content for each CLOX audience – so that rural school pupils in East Africa will have local music and inspirational learning included on their content menu, while a commuter train might have the Red Bull extreme sports channel and comedy shorts included; and a four-star guesthouse owner would have top ten movies and National Geographic specials.

It was also recently selected as one of 20 start-ups in the world with the potential to impact global illiteracy, and spent an acceleration week with the Unreasonable Group and Pearson International in Silicon Valley in July.

With commercial deals agreed with companies like Toyota, Red Bull and Unilever, and some big trials with major brands, Eduze is about to sign its first major commercial deal with a transport operator in South Africa.

Its range of applications and value are striking. For instance: airlines – which currently use in-flight entertainment systems that weigh one ton, and cost over $1 million per plane – would derive massive benefit from an affordable, 4kg box that offers potentially thousands of hours of DVD-quality video, irrespective of the number of concurrent users. And small guesthouses – whether in Cape Town or California – could use CLOX to send curated, in-room entertainment to their guests, just as corporate trainers or conferences could use it to share reliable content with their members. In the U.S., experts have quickly recognized its potential for organization like Amtrak, with its evergreen connectivity problems.

But its spectacular global potential was best described by TED’s Head of Media Distribution, Deron Triff, who stated: “Eduze has pioneered something extraordinary. Thanks to its technology, for the first time, entire swaths of the global population will have the ability to connect and explore, to discover and learn. It’s exactly this kind of breakthrough in connectivity we seek in our work to spread ideas to the far corners of the world.”

Charlie Beuthin, CEO of Eduze, gave a quantitative example of its social impact potential in just one region: “If we put 5000 boxes out into Southern Africa, we could have 2 million people connecting to relevant content for over half an hour, every day and month, for two years. That’s a huge amount of impact.”

Armed with a mission to solve not only the problem of high data costs and slow data speeds, but also broad internet illiteracy in the developing world, Eduze has developed an easy-to-use content platform, in which its low-cost box distributes licensed, curated content to anyone with a connectable device within its wifi radius.

Beuthin told SABLE that the company was a content innovator, above all, with its model of acquiring audience-relevant licenses from some of the world’s biggest content providers, from the BBC to National Geographic, as well as small local producers.

“We are not a technology business; we are a content media business,” says Beuthin. “We have developed this technology simply because it’s the best, most effective way of distributing our content to the user. We can send video quicker and cheaper than anyone else.”

This month, Eduze attracted immediate interest from fellow breakthrough startups at the Unreasonable Group acceleration workshop in San Francisco – with a few declaring their intention to use CLOX in their territories, due to unreliable connectivity and high data costs.

But Beuthin says that – while commercial customers in the west are envisaged – the immediate expansion plan is to consolidate commercial and educational rollout in South Africa, followed by expansion into east Africa and states bordering on South Africa.

“We’ve just piloted with major brands, and are now moving from pilots to commercial production,” he says. “The usage rates are awesome in the pilots. For instance: We have 20 to 25 boxes in schools; across the board in South Africa – both high-fee paying and low-fee schools; we’re in trials with the Department of Education. With just that limited rollout we’re getting more than 15k students a month connecting for thousands of hours, for free. And the teachers’ feedback has been incredible positive.”

Eduze currently has 60 CLOX units in the field, including two dozen in schools, but Beuthin expects a rapid scale-up with commercial and CSI customers in the year ahead. He said the company was currently singing a major contract with a major transport operator, among other new clients.

“Our technology and the need is multi-faceted – we could go anywhere from public transport to schools to hospitals to government buildings,’’ he says. “Just think of what we could do for Amtrak’s passengers, as someone suggested to us just this week. There are a lot of different channels and categories we can target; we’re in the process of getting the value proposition right. What we are looking for with partners is a strategic investor – that could be a hotel chain, where we could offer in-room entertainment cheaper and more efficiently than any other company. It could be a bus company or an airline. Of course: as a media/ content business, we need capital for infrastructure, and for that you need revenue, for that you need an audience; and for an audience you need infrastructure, etcetera."

We are organically chipping away at both ends – gaining audience and generating revenue, which gives us a little more infrastructure. But there are great equity and technology-sharing opportunities for a strategic investor, and truly fantastic impact opportunities for foundation funders.”

The inspiration for Eduze was strikingly simple: Beuthin realized that print-based libraries whose resources many generations have enjoyed at no cost are simply not available in the digital world.

“The spark was this: I used go book libraries as a kid, and my mum loved me going there because it was safe, there was no risky content, and it didn’t cost anything," he says. “We wanted to create a similar environment for digital content. So if you have free content for printed media, what do you have for digital media? You don’t have anything; there is almost nothing truly free to access. Certainly: there’s whole lot of obstacles between the average African person to connect to digital content – speed of data; his own internet literacy; cost of data; network reliability – all of these things get in the way of access. On top of that, it’s the big unknown of what a megabyte means – how much data am I using? If you have no idea what a megabyte means in terms of your pay-as-you-go spend, it’s a very risky proposition. It's sending a person who has never been on a boat out to sea where they cannot even see land."

While there are a few players in the offline digital content delivery field, Beuthin says the differentiator lies in content licensing and bespoke curation.

“Competitors are really just creating boxes,“ he says. “Intel has a local server box they have tried selling into schools which have a degree of content, and that’s great. But its much more expensive than our box; its harder to set up, and it doesn’t have the versatility ours has for the teacher."

“The content is the key. My experience is in media, music and television, and about 80% of our team is focuses on content. That’s a very important differentiator, because there’s a few players in the space, and pretty much all of them are technology providers, and content is an afterthought. It's not how people are connecting; its what they are connecting to that’s most important.

“We are dealing with some of the biggest content producers in the world: BBC, Khan Academy, National Geographic, as well, crucially, as every local provider. We are trying to be as brand agnostic as possible – the idea for us is to be a media channel into all these areas. And in each of those boxes the content is contextualized for the individual audience, and each box has multiple portals, so it's almost a bouquet of channels.”