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Summary:

BitTorrent continues its efforts to go legit. The company has just snagged a deal with Warner Brothers. The Hollywood giant, part of Time Warner (my employer) will use BitTorrent to distribute and sell Warner Brothers content online. It is first major studio to sign a deal […]

BitTorrent continues its efforts to go legit. The company has just snagged a deal with Warner Brothers. The Hollywood giant, part of Time Warner (my employer) will use BitTorrent to distribute and sell Warner Brothers content online. It is first major studio to sign a deal with BitTorrent that has been working with the MPAA to go legit, and become a distribution channel for Hollywood content. Earlier this year, BitTorrent, signed a deal with UK-based cable provider, NTL for legal P2P distribution.

The service will launch later this summer and will include newer releases such as Harry Potter and the Goblet of Fire. Now, this is not an exclusive deal, and the burden of distribution and sales falls on BitTorrent. Warner makes its content available for distribution. Time Warner has been toying with many different online video distribution technologies. AOL, for instance has a deal with Kontiki, and has been working with BrightCove. In Germany it has another kind of digital distribution deal. Only yesterday the Time Warner announced that it was working with its affiliate television station owners and will streaming content off the affiliate websites.

An optimists view would be that Warner Brothers like other content owners is charging boldly into the exciting new future. A more pessimistic view would be, wouldn’t it cut into DVD sales, leading to the more basic problems of divisional P&L statements? I posed this question to Warner folks who pre-briefed me about the upcoming launch. “DVD is a great business and we see BitTorrent as an opportunity to only increase the pie,” says Jim Wuthrich, Senior Vice President, Warner Bros. Home Entertainment. He sees the initial impact as incremental. WB, is hoping that 15% of BitTorrent users become buyers of their content. That is a modest goal, and quite achievable.

While BitTorrent might be good and all, it still cannot meet the ease-of-download of iTunes, which like music, is making downloading legal video a mainstream activity. Wuthrich pointed out that the company, like most in Hollywood is in talks with Apple as well. BitTorrent is a great way to distribute content, but the slow uplink speeds, and individual file sharers-throttling the bandwidth ruins the experience. The ISPs are beginning to crack down on bandwidth hogging services such as BitTorrent.

In addition, other erstwhile not so legit services are going legit these days, clouding the competitive landscape. For example, Azureus recently launched its own distribution platform, based on BitTorrent technology.

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  1. Gerald Buckley Tuesday, May 9, 2006

    Om – The dirt swirling the past couple of weeks is OS X Leopard is going to have bittorrent built in. Makes me wonder if Apple iTunes is the ultimate benefactor of that move.

    Hope you’ll post what you know/find out when you can.

    GB

  2. Frank Barnako Tuesday, May 9, 2006

    Om … in WaPo, a Warner “suit” says using BitTorrent could reduce online piracy.

    Ever tried to decode an “rar” archive file form BitTorrent?

    Easier to use vs. free … I think free wins.

    Studios still lose.

    Frank
    http://barnako.typepad.com/barnakocom/2006/05/warners_wrongwa.html

  3. Om you forgot about Peer Impact who has a great closed p2p platform and the only p2p bussiness model that the early adoptors and techies are going to adopt becuse they give users up to a 5% maximim system credit on the sales price of content for uploading .that is placed in thier account for future purchses on the network .

    http://www.peerimpact.com

    Bob Cringley on Peer Impact and the future of p2p
    http://www.pbs.org/cringely/pulpit/pulpit20060302.html

  4. Jesse Kopelman Tuesday, May 9, 2006

    iTunes and Bittorrent technology would be an excellent match. Maybe then iTunes would start selling higher quality files and I would consider buying them. No way am I buying DRM electronic content if it is not of at least comparable quality to that obtained from physical media.

  5. One caveat to all of this.

    If you look at the execution of bittorrent so far, it has been very disappointing.

    Their client is not considered to be the best nor is their web site and search of much quality either. I am skeptical of their success.

    As an experiment here, why not take a look at the client types on peers when downloading a torrent. What percentage do you see?

  6. The positive view is certainly that WB is going after people who are currently downloading pirated material, trying to find people who would go for a legal alternative if it were available. I think people who buy dvds don’t download via bittorrent so it’s unlikely to cut into dvd sales.

    I think it’s important that WB acknowledge they are offering something with far less utility than a dvd and charge a cheaper price accordingly. I strongly believe if they charge the same price as a dvd for a download, the download experiment is doomed to fail.

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