Hollywood to join up with one of its biggest tormentors

By Brad Stone

Feb 25, 2007

SAN FRANCISCO: Hollywood studios are going into business with one of their biggest tormentors: the peer-to- peer pioneer BitTorrent.

On Monday, the company, whose technology unleashed a wave of illegal file-sharing on the Internet, plans to unveil the BitTorrent Entertainment Network on its Web site, BitTorrent.com. The digital media store will offer about 3,000 new and classic movies and thousands more television shows, as well as 1,000 PC games and music videos each, all legally available for purchase.

The programming comes from studios, including Twentieth Century Fox, Paramount and Warner Brothers, that previously announced their intention to work with BitTorrent.

There is also a new partner: the 83- year-old Metro-Goldwyn-Mayer, which will take part by making 100 films available on the site from its 4,000- movie library. "Somebody once said you have to embrace your enemy," said Doug Lee, executive vice president of MGM's new-media division. "We like the idea that they have millions of users worldwide. That is potentially fertile, legitimate ground for us."

The BitTorrent store will work slightly differently than rival digital media offerings like the iTunes Store of Apple and the Xbox Live service of Microsoft. BitTorrent will commingle free downloads of users' own video uploads with sales of professional fare. And while it will sell digital copies of shows like "24" and "Bones" for $1.99 an episode, it will only rent movies. Once the films are on the PC, they expire within 30 days of their purchase or 24 hours after the buyer begins to watch them.

Ashwin Navin, BitTorrent's co- founder and chief operating officer, said the company had secured the right to permit users to buy outright digital copies of films, but the studios wanted to charge prices that would be too high for most consumers. "We don't think the current prices are a smart thing to show any user," he said. "We want to allocate services with very digestible price points."

BitTorrent, which is based in San Francisco and has 45 employees, will face significant challenges as it tries to carve out some space in the emerging digital downloading landscape. Apple is the largest presence among the legitimate Internet media stores. ITunes, which has sold more than $1 billion worth of digital music, sells movies from Walt Disney and Paramount and programs from all the major TV networks.

There is also the illegal economy in pirated video content, whose size dwarfs that of the legal online media stores. The Motion Picture Association of America has said that 1 million movies are illegally acquired every day using BitTorrent technology. The software is open source, so versions of it, as well as Web sites offering pirated movies, are maintained by companies not affiliated with BitTorrent.

Bram Cohen, BitTorrent's co-founder and chief executive and the inventor of the technology, said the new store would offer a compelling alternative to the illegal ecosystem. "I think what consumers want is a good experience," he said, "and the first part of that is making the content they want available legitimately."

But he added that the anti-piracy software that will protect files in the new store, which the studios insist on including, will make the experience more cumbersome for users. "We are not happy with the user interface implications" of digital rights management, or DRM, Cohen said. "It's an unfortunate thing. We would really like to strip it all away."

BitTorrent's store will have some advantages over legal rivals. Its peer-to- peer technology introduced by Cohen in 2001 works by taking pieces of large files from nearby computer users who have that file, permitting speedy downloads.

In a test of the new BitTorrent store, downloading the film "X-Men 3" took two hours with a broadband Internet connection. Downloading the same movie from Walmart.com took three hours. And BitTorrent downloads should theoretically become faster as more people sign up, since digital copies will originate from nearby computers whose owners have bought the movie, instead of from a central server.

The company, which has received close to $30 million in venture capital, ultimately wants to use its media store to demonstrate how the underlying technology is effective at moving large files around the Internet. Then it wants to sell the technology to other media stores and to the studios themselves.

The studios hope the new BitTorrent will put a dent in the illegal trading of their content.

BitTorrent executives say they are not able to prevent illegal downloads in the larger file-sharing world. But they cite internal studies that say 34 percent of BitTorrent users would pay for content if a comprehensive, legal service was available.

That group clearly does not include Aaron, a 36-year-old San Francisco programmer who does not want his full name used because he and his wife regularly use BitTorrent to download songs, movies and TV shows illegally.

After testing a pre-release version of the legal BitTorrent store, he said it would not persuade him to abandon the limitless selection of content and freedom he enjoys on free BitTorrent sites.

"The sad thing is, it's not about the money," he said. "I'm not interested in renting a movie. I want to own it. I want total portability. I want to give a copy to my brother. Digital convergence is supposed to make things like this easier, but DRM is making them harder."