These kinds of costly cease-and-desist campaings against file sharers aren’t uncommon in Germany; hundreds of thousands of Internet users have been targeted by music labels, porn studios and others with similar demands in recent years, netting rights holders millions. Unusual about this case is that Iron Sky is a crowdsourced and crowd-financed movie, produced by people who made names for themselves with Creative Commons-licensed content that could be freely downloaded and reshared.

Iron Sky is a science fiction comedy, depicting a world in which the Nazis fled to the moon at the end of World War 2. It’s director Timo Vuorensola and its visual effects producer Samuli Torssonen previously rose to fame when they released the Star Trek parody Star Wreck: In the Pirkinning in 2005. That movie was offered for free online and clocked three million downloads within three months. The filmmakers have also in the past  lambasted old media for their take on piracy. In a blog post from 2009, Vuorensola wrote: “Piracy in its current, most common form – the digital download – is not a crime.”

His current German distributor, Polyband, seems to disagree. The company has hired local law office Sasse & Partners, which has in the past sent out similar letters on behalf of German record companies, according to a local law blogger.

Iron Sky has been heavily relying on crowdsourcing for animation, modeling and other parts of the movie making process, and €1 million of the movie’s €7.5 million budget have been contributed by fans. However, the film makers are relying on traditional distributors to actually get the movie in the theaters, and that apparently has resulted in a number of problems.

Iron Sky’s British distributor initially intended to only show the movie in theaters for a single day and then immediately take it to DVD. This strategy was opposed by the film makers themselves, who wrote on their blog: “What they are doing is basically stabbing us in the back.” The duo didn’t immediately respond to a request for comment on the lawsuit threats in Germany, but one can imagine that they’re not too happy about threatening their fans with lawsuits either.

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Cohen has worked on P2P live streaming for a number of years, and told us a while back that he completely had to start from scratch because traditional P2P algorithms introduce too much latency for live applications. BitTorrent Inc. hasn’t said how exactly it intends to productize the protocol, but Cohen said on Monday that he is talking to a number of potential partners. BitTorrent has also started to run a number of  field tests on its website in recent months, streaming weekly live music events with the P2P protocol.

The ultimate winners of a P2P-based solution could be consumers, he argued, because it would enable publishers to put much more content online at a fraction of the cost of traditional CDNs. “Most of the video that people consume today is still not on the Internet,” said Cohen, adding that existing protocols aren’t set up to support big live events.

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The company did a first test featuring local DJ Janaka Selekta last week and is now officially promoting the event series on Facebook and Twitter. From the newly launched BitTorrent Live Studio Facebook page:

“BitTorrent Live is rolling out exciting live events every Friday in order to kick the tires on our new peer-to-peer live streaming technology. Help us define the future of live streaming by testing our software and promoting the live studio sessions.”

BitTorrent inventor Bram Cohen and his team have been working for close to three years on a new P2P platform that makes it possible to stream live content with minimal latency. We were first to report earlier this month that the company is now moving to the next stage in the development of its live streaming platform, which involves larger stress tests of live content.

The next of these tests will star Six Degrees Recording Artist Jef Stott on October 21 at 5 p.m. PDT

Check out an interview with Bram Cohen about his live streaming platform below:

Image of the studio setup in BitTorrent’s offices courtesy of BitTorrent Inc.

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BitTorrent Director of Product Management for µTorrent Jordy Berson told me the following in an email about the release:

“µTorrent Plus offers a few key things our users have been asking for, most importantly play any file on any device and added security. While we are fully committed to the free µTorrent, we’re really excited to offer people something new.”

µTorrent has long been the most popular Windows BitTorrent client out there. Advanced users value its minimalistic simplicity, which can be challenging for newcomers. BitTorrent Inc. is trying to address this by making playback and portability of content easier in the Plus version, while at the same time, keeping the pure µTorrent experience in the free version of the app.

That approach seems clever, and it could also help BitTorrent to add another source of revenue to its business. The company has been almost exclusively dependent on bundled software that’s offered to users during the installation process and through dedicated content channels.

These kinds of affiliate partnerships are common in the P2P space, but they can also be risky. Video software and codec maker DivX at one time generated 21 percent of its revenue by bundling the Yahoo toolbar with its free products. Then Yahoo pulled out — and DivX had to lay off 10 percent of its workforce.

BitTorrent didn’t really want to acknowledge these issues played a role in its decision to launch µTorrent Plus, with the company’s chief strategist Shahi Ghanem telling me via email, “µTorrent Plus is not designed as a business-oriented release but was specifically created to give our users the transcoding and security features they’ve been asking for.” Still, I’d bet BitTorrent’s investors and employees are feeling good knowing the company is diversifying its revenue streams.

Want to try out µTorrent Plus Alpha yourself? Follow this link for one of 500 invites.

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A new BitTorrent Live website built with these kinds of tests in mind launched a few days ago, but a company spokesperson cautioned that “a broad beta is still a couple of months away.”

BitTorrent has been testing its live streaming platform with a limited number of users at a no-frills website that hasn’t been publicized but has nonetheless been publicly accessible for some time at live.bittorrent.com. At the end of last week, the site suddenly received a significant face-lift, complete with installation instructions for the BitTorrent Live software and a brief explanation that reads:

BitTorrent Live is a whole new P2P protocol to distribute live streamed data across the internet without the need for infrastructure, and with a minimum of latency.

Users can download BitTorrent live clients for Windows, Mac OS and Linux. The client simply works in the background to facilitate data transfer and doesn’t allow any configuration. Video streams display in the browser via Flash, and a Facebook plug-in allows users to chat with one another while watching a stream. An additional tab offers access to the audio and video bitrate and other debug data.

BitTorrent has been using prerecorded video to test its live streaming, but it plans to expand to live events for further tests.

Speaking of video: BitTorrent’s spokesperson told me that the tests have so far been restricted to “simple pre-recorded content loops to test latency and audio/visual sync.” I was able at one time to tap into a prerecorded stream of a winter sports event but at other times simply didn’t get to see anything.

However, those P2P live streaming tests could get a lot more exciting soon: “One of the ideas is to invite a few of our favorite indie artists into our office to broadcast content and help us kick the tires with their fans,” said BitTorrent’s spokesperson. Still, don’t expect BitTorrent to stream Coachella anytime soon. I was told that “the redesign isn’t intended to suggest we’re out of the R&D stage of designing, building and testing the product.”

BitTorrent inventor Bram Cohen has worked on the live streaming platform for close to three years, and he told me at NewTeeVee Live last year that his efforts included writing a complete new P2P protocol from scratch. The BitTorrent protocol itself, he said, simply introduced too much latency to be a viable live streaming solution. Check out the entire interview below:

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The disappointing thing about Janko Roettgers’s post for GigaOm’s NewTeeVee section yesterday is its casual promotion of the idea that stealing movies, TV shows and music is a perfectly acceptable way to save money.

Roettgers writes at length about recent changes in online video offerings, but his real point is this:

“The U.S. credit ratings downgrade, tumbling stocks and international instability have made not just financial analysts nervous this week. Consumers are also starting to wonder whether we’re about to enter another recession. Whenever that happens, people start to tighten their belts and cut unnecessary expenses — like paying for movies and TV shows… With memories of the housing slump still fresh, many people could simply return to BitTorrent and download movies for free instead of going to the movies or paying for VOD.” (emphasis ours)

There’s no question that when people aren’t certain about their finances — because they’re worried they or someone in their family will lose their job, or the prices of gas or other essentials will rise significantly — they change how they think about expenses and spend money. But if Roettgers had written that financially insecure families will shoplift clothes from a department store this fall to save on back-to-school costs for their children, he would be laughed out of the proverbial building, right?

T-shirts and jeans aren’t made out of zeroes and ones, at least not yet. But just because movies and TV shows and songs can now be packaged and distributed as data, not just as film reels or vinyl records or DVDs, and can be acquired or distributed with a few clicks of a mouse, doesn’t mean that the labor and time and money that went into making them is any less meaningful.

We doubt many people will subscribe to the kind of intellectual dishonesty that suggests that it’s fine — or really, that it’s inevitable — to steal as a way of saving. But it’s troubling that by suggesting that stolen content available on rogue sites and elsewhere is just another substitute good, Roettgers is tacitly arguing that content theft is legitimate and socially acceptable. Truth is, it’s neither.

Photo courtesy of (CC BY-SA 2.0) Flickr user Seth Anderson.

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We’ll have to wait for the actual switch-over to the authentication system for any hard data, but here’s a clue to how much is at stake for Fox: The official launch of Hulu in early 2008 reduced the number of U.S.-based viewers who got their Fox shows from BitTorrent by up to a third for some of the more popular shows on the network, according to data from TorrentFreak.

TorrentFreak has been tracking weekly BitTorrent file-sharing trends for years, and its editor, Ernesto, told me on Wednesday via IM that the number of U.S.-based downloaders of the Fox show Prison Break decreased by 36 percent from October 2007 to October 2008. The Simpsons saw a slightly less dramatic decrease of 23 percent, and the number of people downloading Family Guy from the U.S. was only down 10 percent in the same time period.

Why is there such a discrepancy between shows? Ernesto explained that the amount of piracy between shows can be influenced by a number of different factors, including the genre, viewership demographics and the time slot they air during.

However, few doubt that there will be a direct impact on piracy. “It’s like flipping a switch,” said Eric Garland from the Los Angeles–based media measurement company BigChampagne during a phone call on Wednesday, adding that he has seen “immediate and direct correlations” between the availability of online content on sites like Hulu and piracy.

Of course,  the world of television has changed a lot since 2008. Content is now available through a wider variety of sources, with people using more DVRs and cable VOD systems that offer more content than in the past. TV Everywhere could just be seen as another alternative, and its proponents might argue that Fox viewers will still be able to access the content as long as they’re authenticating themselves as subscribers of a participating pay-TV provider.

However, Garland thinks that piracy is still a viable alternative for many, just because it’s easier than jumping through authentication hoops. “We have still not made the process effortless enough,” he told me, comparing authentication to issues the music industry faced with DRM a few years ago and arguing that DRM eventually ended up punishing honest customers the most while not really preventing piracy. “People don’t like to be inconvenienced when they are playing by the rules.” In other words: People might just go for BitTorrent or unlicensed streaming sites and watch content ad-free if they feel like they’re being forced to jump through unnecessary hoops to watch an ad-supported episode of a TV show online.

Pirate picture courtesy of Flickr user Juliana Coutinho

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Crowd-financed film making has sometimes been decried as a way for amateurs to produce scripts written fresh out of film school for budgets that Hollywood usually spends on catering, but A Lonely Place for Dying is in a bit of a different league. The movie has been shown at numerous film festivals and was nominated for 45 awards of which it has received 19, including 14 for best motion picture. Its cast includes Six Feet Under actor James Cromwell, who is also credited as the film’s executive producer. Evans told me during a phone conversation on Wednesday that his team initially wanted to go down the traditional indie release route.

But then about a dozen offers from Hollywood came in, including $50,000 commission fees and rights that had to be signed away forever — and everyone started to look for other options. Evans said that VODO had been on his radar for about a year and the success of the VODO-exclusive TV show Pioneer One had been especially encouraging. Still, convincing everyone that it would be a good idea to give the movie away through technology better known for piracy wasn’t exactly easy. “There was a lot of fear,” Evans told me.

Those feelings only echo the reservations that studios have about anything that questions their established ways of doing business. “Hollywood is absolutely paranoid about flipping the window model,” said Evans. However, after contemplating the different options, Evans and his team decided that BitTorrent would be their first window. Asked if this could hurt the chances of people going to see his movie in the theater, he argued that even the most popular VODO release hasn’t seen much more than three million downloads, many of which came from outside the U.S. That still leaves plenty of people to watch the movie on the big screen, he explained.

But will file sharers pay for the movie? Evan hopes so, admitting that the stakes are much higher than for some other films that have relied on VODO and similar crowd-sourced financing. That’s why A Lonely Place for Dying isn’t relying on donations alone; the VODO release is sponsored by Verisign and .TV. The movie is also released in five parts for maximum impact.

But in the end, Evans sees BitTorrent and crowdsourced donations just as a way to get into theaters. He has already booked a few theaters and eventually wants to take the film to as many as 200 screens, all without any outside help. “The system wants to believe that we have to do it their way,” Evans told me. He’s out to prove them wrong, and now counts on file sharers to make that happen.

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Check out a trailer for the show below:

NRK is also streaming the entire trip live online, and the live stream has gotten some significant attention from outside of the country. Forty-six percent of the stream’s audience is from outside of Norway, according to NRK. The live stream is accompanied by a map widget that shows the position of the ship at any given time, complete with a number of overlays, as well as a live chat widget and Google Earth integration.

But NRK doesn’t stop there. The broadcaster is also making a lot of the recorded material available as 1080p HD BitTorrent downloads, which are licensed under a liberal Creative Commons license. Downloaders will be able to remix the material and even use it for commercial purposes, as long as the resulting works are published under the same license and give credit to NRK.

This isn’t the first time NRK has experimented with long-form live broadcasts, online streaming and torrent downloads. The broadcaster aired a seven-hour train trip in 2009 and subsequently made much of the material available via BitTorrent. The show was a surprise hit, with a third of Norway’s TV population tuning in, and the torrent downloads led to a number of interesting remixes. But it’s not just about ratings, according to NRK’s Hurtigruten website:

“Programmes like this aren’t economically feasible for a commercial channel; to a large amount of the public it probably seems completely useless, but to some of our viewers it can have a very high value, be something they wouldn’t get in any other way, and in twenty or two hundred years, it will be a strange document of life at the edge of civilisation from a different time.”

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Hollywood has abstained from taking P2P users to court, but mass lawsuits like these are getting more common with smaller studios. FUNimation sued 1,337 downloaders of its Anime show One Piece in January, and the producers of The Hurt Locker sued close to 25,000 downloaders last week. These lawsuits typically target a large number of unnamed John Does in a single filing, with the intent of unmasking the downloaders’ identities during discovery.

Once rights holders knows the name behind an IP address, it pursues the alleged infringers individually and offers to settle in exchange for a cash payment. Rights holders have been hugely successful with these kinds of lawsuits overseas. Just this week, German ISPs said that they have to reveal the identity of some 300,000 subscribers per month. However, U.S. courts have been much more skeptical of this approach, and Funimation’s One Piece lawsuit was thrown out against all but one defendant.

The Legend Is Born: IP Man is a bit of a special case for FUNimation. The movie is a prequel to the highly successful martial arts flick IP Man, which was distributed in the U.S. by Warner Brothers. Funimation acquired the rights to The Legend Is Born earlier this month and plans to distribute it by December through various channels, including VOD and DVD. However, the movie was released in Hong Kong last summer, and imported DVDs have been selling in the U.S. for months. It has also been popular on torrent sites, where first copies appeared as early as last July.

Update: FUNimation sent us the following statement via email:

“As the local distributor of many titles entrusted to us by our partners around the world, part of our responsibility is to prevent infringement of those titles – such as The Legend is Born – Ip Man. The practice of illegal downloads is very harmful to our partners and as their rights are applicable, and enforceable, worldwide, we will continue to monitor and take action as needed.”

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