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Dealing with the devil?

May 11th, 2006

Years ago, when Japanese electronics manufactures introduced the VCR, US movie studios went ballistic and tried to shut the new technology down with lawsuits.

Hollywood was afraid the VCR was going to kill its business.

As things turned out, the VCR and the DVD have proven to be a boon to  Hollywood because it opened a brand new income stream and got its product into more people’s hands. 

Then along came the Internet… and a truly scary technology called BitTorrent.

BitTorrent technology was created in 2001, by programming savant Bram Cohen.  It immediately
became a favorite of folks who like to share movies online – illegally.

BitTorrent solves one of the biggest problems multimedia content faces on the Internet: bandwidth.

Here’s the problem in a two-part nutshell:

1. Multimedia files (audio, video, software, games. etc.) tend to be BIG.

2.  If you succeed in attracting a big audience for your creation you want to share, you can find yourself knocked out by punishing bandwidth costs.

The BitTorrent solution is elegant and simple.

Users join the BitTorrent network by adding the BitTorrent software to their computers.

When a new file is placed on the network everyone who reaches out to download it automatically becomes a source of the file to others on the network who want it.

So instead of one server groaning as the sole source of a file, the more popular a given file is, the more resources there are to distribute it within the network.

Smart, but scary… if your business is selling digital content.

Obviously, there are legitimate uses for a technology like this, but there’s a whole lot of "black market" dealing going on on the network too.

In 2004, Cohen turned BitTorrent into a business and set out to make peace with Hollywood.

Earlier this week,  he announced his first big deal – with Warner Brothers,  the movie arm of the Time Warner media empire.

Why is this mega-corporation cooperating with BitTorrent, the movie pirate’s tool of choice?

Because the horse is already out of the barn.

To quote Kevin Tsujiharta, president of Warner Brothers Home Entertainment:

"If we can convert 5, 10, or even 15 percent of the illegal downloads into (legitimate) consumers of our product, that is significant."

Even more significant are the hundreds of millions of Internet users who have not yet joined the BitTorrent world.

By setting up shop on BitTorrent now, Warner Brothers is hoping to train these future consumers pay for the movies they get from BitTorrent.

I know that nobody who reads this letter needs to be told, but video on the Internet is here to stay and it’s only going to become more and more prominent.

Companies like Warner Brothers and many others – movie studios, television networks, news channels, you name it – are investing billions of dollars into teaching Internet users how to consume video on the

The flood of Internet video rolls on…

* The BitTorrent site here:


* The story just two years ago:

Wired: "Hollywood Wants BitTorrent dead."


* BitTorrent developer Bram Cohen’s personal web site:



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  1. Art Crowley
    May 12th, 2006 at 18:35 | #1

    I thought you’d find this thought provoking…
    Goto http://www.Google.com/trends and type in: online video
    Kind of proves the point. People are hungry for online video. Now it’s time to start feeding them 😉
    See you in Chicago!

  2. Donald Dunham
    May 12th, 2006 at 19:16 | #2

    will the deal with warner brothers and BitTorrent change Wired’s story?

  3. May 15th, 2006 at 18:54 | #3

    Hi – excellent post, Ken. I frequently see pirated IM stuff on bittorrent.. one tip that fellow content producers can use, is to offer monthly webinars and teleseminars that only registered users can attend … so the initial audio/video/pdfs are just Half the piece of what the customer is buying… a “dongle” type solution in a world where piracy is rampant.
    ken calhoun

  4. May 23rd, 2006 at 15:06 | #4

    I was very tempted to join BitTorrent recently when I read a post on the Life Hacker site (http://www.lifehacker.com/software/bittorrent/hack-attack-automatically-download-your-favorite-tv-shows-171992.php) about a free download that would automatically download new episodes of programmes like ‘Lost’ or ’24’. This is particularly interesting to me as I live in England so have to wait several months longer before US shows arrive on my television.
    The thought of TV on demand is incredibly appealing to me as it would save me using the video recorder to time shift, and I presume the downloads probably cut out the adverts as well.
    However, I’ve resisted because I’d prefer not to get involved in anything illegal – especially when the law is there for a good reason. On the other hand, I am kind of glad enough people are breaking the law that the production companies wake up and start to explore new media.
    I heard a news report a month or so ago that the main British television companies are planning to offer shows for download with adverts you cannot skip or, I think, the option to pay for the show without adverts. iTunes I believe now offers a few shows for download immediately after they have aired on TV; but again this is unfortunately not available for us overseas. Again BitTorrent offers a better service. Also, we all want a method of watching it on our big screen televisions, and I have a feeling this not possible.
    It’s incredibly tempting to infringe their copyright, and with the download I mentioned above it sounds like it is getting easier to do so. The production companies have to respond with an equally good service – they don’t have any choice. You can’t fight it.

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