Insiders say deal with Warner Bros. is good for industry, but some aren't sure its technology can work for consumers.
Long considered in Hollywood as part of an extensive and despised piracy tool kit, BitTorrent's file-sharing system will be used by Warner Bros. to distribute films and TV shows starting sometime this summer, the companies announced Tuesday.
The entertainment industry has for some time feared that file-swapping services would allow users to violate the studios' copyrights and engage in piracy of music and movies. Studios have aggressively filed lawsuits against peer-to-peer companies.
Entertainment executives now appear willing to partner with file-sharing companies. One reason, said Nitin Gupta, a research analyst at The Yankee Group, is that Hollywood needs a cheap and speedy way to transfer huge video files via the Web. Peer-to-peer technologies can do that. Another reason is that by offering the public a legal and inexpensive way to download video, the studios may feel they can remove the need to pirate content while the industry is still in its infancy, Gupta says.
"If you look at the music industry, they waited too long before doing anything about piracy," Gupta said. "Anything (the studios) can do now to raise awareness of a legitimate online distribution system means they are getting ahead of the trouble."
Even BitTorrent's competitors say the Warner Bros. agreement is a good deal for everyone.
"I think it's good for the industry that peer-to-peer technologies are finding markets," said Mike Homer, who founded Kontiki, one of the top peer-to-peer distribution systems. "It's good public relations. This shows that media producers have more confidence in that technology."
At the same time, Homer and others in the sector say Hollywood should move slowly with regard to untested file-sharing systems. BitTorrent has yet to prove that it can safeguard video distributed over the Net, offer studio executives the kind of distribution control they want and appeal to mainstream Internet users.
"BitTorrent's audiences are people who want free content and are willing to rip it off," Homer said. "The file-sharing crowd is looking for illegal content. They haven't been very attractive to media producers."
BitTorrent's president, Ashwin Navin, dismisses talk that the technology can only be used for illegal ends. BitTorrent, the company, has always been a model corporate citizen, Navin said. The company signed with Warner, the first of many deals the company expects, because it simply works.
"Much of the negative perception of BitTorrent came from the press," Navin said. "BitTorrent has become synonymous for one thing with our users: fast on-demand entertainment. The content providers are going to see BitTorrent in the same way."
BitTorrent allows a single file to be broken into small fragments that are distributed among computers. People then share pieces of the content with one another. This reduces bandwidth costs for content providers.
While it might be useful in moving large files, BitTorrent has yet to prove that its technology is a successful consumer service. To send movies across the Internet on a wide scale, entertainment chiefs are going to want absolute control over where the video goes, who sees it and who pays, said Todd Johnson, Kontiki's former chief executive.
"It's an incredibly complex problem," said Johnson, who has helped his company sign deals with such entertainment companies as AOL Time Warner and the BBC. "I'm going to be interested in finding out whether BitTorrent can provide all the central control and meet the requirements content owners are going to have."
What everybody in the sector agrees on is that peer-to-peer technologies are only going to appear more attractive, as more people start demanding high-quality Internet video.
The higher the quality, the more information that has to be pumped through broadband systems. A typical episode of "Lost" bought through iTunes requires Apple Computer to transfer 200 megabytes of data to a customer. A feature film could take up to 500 megabytes. Gupta said that the expense of distributing movies in high-definition quality could send costs skyrocketing tenfold.
"The key here is keeping costs down," Gupta said. "The low margins for a lot of the video content distributors make it critical for them to use peer-to-peer to deliver high-quality video."