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Summary:

Next week’s CES will see a flurry of announcements from companies looking to tap into the online video boom. Among them will be new cooperations between BitTorrent Inc. and makers of both routers and network attached storage (NAS) devices, all aimed at making BitTorrent easier to […]

Next week’s CES will see a flurry of announcements from companies looking to tap into the online video boom. Among them will be new cooperations between BitTorrent Inc. and makers of both routers and network attached storage (NAS) devices, all aimed at making BitTorrent easier to use and to giving the company a stronger foothold in the home networking and home entertainment space.

Granted, embedded BitTorrent solutions aren’t exactly big news in the marketplace. Some NAS makers have been using their own implementations of the P2P protocol for years, and the company started to work with hardware makers back in early 2007. This time, however, the partnerships are part of a revised strategy to reinvent BitTorrent as a P2P infrastructure provider that offers solutions to CDN bottlenecks. But can the company really compete with heavyweights like Akamai?

Talk about two sides of a medal: BitTorrent continues to be one of the most successful P2P protocols, responsible for, by some measures, almost 50 percent of all Internet traffic. But BitTorrent the company hasn’t been quite as successful, and has been forced to change directions more than once since its incorporation in 2004.

The company started off with a web search engine that didn’t make anyone happy. Users disliked the fact that BitTorrent cooperated with the entertainment industry to automatically filter out infringing content, while content owners were irritated by the fact that BitTorrent.com kept indexing sites like The Pirate Bay.

At the start of last year, BitTorrent shifted gears, opening a download store with major studio releases, complete with Windows Media DRM and all the trouble that comes with it. The reception to the platform has been, well, less than enthusiastic — and if even Apple can’t sell TV shows online, why should BitTorrent have any more luck?

The company made its latest bet back in October, when it rolled out its Distributed Network Accelerator (DNA) platform, which offers content providers a P2P layer to save on their existing CDN costs. BitTorrent president Ashwin Navin insisted back then that DNA was only one pillar of its business and that the company continues to believe in selling content to consumers through the Bittorrent.com store.

Navin changed his tone on this when he caught up with him in late December, stating that the BitTorrent store is first of all a showcase for the company’s DNA product and that the company isn’t really competing with P2P download platforms like Vuze.com anymore.

Clearly, DNA is where it’s at for BitTorrent at this point. The company has started to distribute a browser plug-in to consumers that makes it possible to access Flash streams through the DNA P2P infrastructure and it plans to soon update its traditional BitTorrent clients to enable DNA streaming with them as well. When we spoke with him, Navin was more than bullish about DNA’s prospects: “I expect the number of files that will be published with BitTorrent DNA (in 2008) to exceed the number of files published with BitTorrent since 2001.”

That’s a daring prediction, especially in light of the fact that BitTorrent is just one of many companies making a P2P CDN play. Among them, Pando has secured NBC as a customer for a very similar offering, and Akamai is getting ready to put the P2P assets it gained from the acquisition of RedSwoosh to good use. So how can BitTorrent compete? Navin responded to this by pointing to their huge install base, and he does have a point. A recent study found BitTorrent’s software installed on almost eight percent of all Windows PCs worldwide. Other P2P vendors will have a hard time catching up in getting their CDN products off the ground.

And although eight percent is a good start, Navin said that, with the help of the DNA plug-in, BitTorrent wants to quadruple its current install base. That kind of growth would obviously come with a whole new set of challenges; there are ISPs like Comcast, for example, that throttle BitTorrent transfers. Navin told us that he believes market forces will solve such problems. Other P2P vendors don’t seem to be so sure about that.

Then there is the threat of a renegade protocol developed by the Pirate Bay that might divide the BitTorrent world. And finally, while BitTorrent’s current user base is fairly educated when it comes to the inner workings of P2P technology, web video fans don’t want to be bothered with tweaking their router’s firewall settings to achieve optimal transfer speeds — a problem the company aims to solve with its upcoming CES announcements.

BitTorrent may have finally found its calling, but the road ahead remains bumpy.

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  1. Janko – pragmatic commentary – good post.

    So now they are on the third iteration of Business Models. Give them 2 years to obscurity… this is a technology looking for a business model – instead of being a good business model, incorporating state-of-the-art technologies.

    Remember the music industry and Napster? P2P renegade – to befriending media companies – good PR for plaintiffs in the KaZaa lawsuit – press releases/funding -SnoCap – MashBoxx (where is Wayne Rosso these days?) – layoffs – dirt nap coming soon!

    Installed base does not give them any long lasting advantage – (Napster & KazAA had one too).

    CES announcements last for the 3 days – Google Video launching at CES 2006, MTV Urge with MSFT & Bill Gates, TiVO and MSFT, HP/Carly Fiorina and Apple… the list is long as distinguished – unfortanately – most times – that dog don’t hunt!

    P2P is a feature for efficient distribution – but the last mile will always get in the way of QOS/QOE. As you suggest, the advantage still lies with players like Akamai (and even they have their work cut out). And consumer experience – that domain belongs to the Apple’s of the world.

    As a pure simple P2P feature, Pando perhaps got it right from the starting line – and should be watched closely.

    Bit Torrent DNA in routers is experimental at best, press gimmick at worst – why – ISPs and their vendors will be playing around with technologies around P2P, as the debate around flat rate royalties to media companies by ISPs becomes one of the options explored by a few parties (of course people have suggested this for a few years now).

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  3. pando employee Sunday, January 6, 2008

    correction to the last post, pando didnt get it “right” from the beginning… it started as an email attachment company. now its trying to make content delivery happen from email attachment software? tough sell.

  4. Janko Roettgers Sunday, January 6, 2008

    Transitioning from a personal P2P solution to a CDN layer applocation is always going to be a tough sell, but having a certain install base definitely helps. We’ll see how successful Pando will be.

    Characterizing them solely as an email attachment software is a bit unfair though. Sure, that was the initial idea, but their users had other things in mind. Just take a ook at delicious bookmarks tagged “Pando”, and you#ll see that lots and lots of poeple are already using them for all their video needs:

    http://del.icio.us/tag/pando

  5. @pando employee – let me clarify – the point I was making – Pando brings together community (sharing) and efficient (distribution) in a simple way – two basic utilities of P2P.

    As Janko has already pointed out – both users and founders had multiple use cases in mind when they built Pando.

    But they did not start off with a protocol facilitating illegal sharing on the net, publicly antagonizing content owners – that’s one of the things they did “right” from the start – perhaps the experience of the founders – former media executives themselves.

    How they handle implementing as a CDN application – that’s the part to watch.

  6. @ G Wayne Russo is still around I chatted with him a couple of Weeks ago ;) .

    Joost is p2p , Akamai owns Red Swoosh , Pando is working with Verizon with P4P http://www.cs.yale.edu/homes/yong/p4p.html

    As you say the future of p2p is Hybrid Content distribution networks and this seems to be the space Bittorent is moving into just like everyone else ;)

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