The technology that enabled legions of digital pirates to illegally swap tens of billions of songs, television shows and movies is ready to go legit.
Peer-to-peer technology, which connects users’ computers and lets them share files without a central server, is beginning to be embraced by media companies including Starz as an efficient way of delivering programs over the Web. Media executives estimate that peer-to-peer technology could save distributors 25 percent to 35 percent on bandwith costs.
Starz this week plans to unveil a deal to offer movies, TV shows and short videos online in partnership with peer-to-peer company Azureus, which offers the media company a way to distribute content without expensive computer servers. The agreement, Azureus’ third with a media company, portends a movement by entertainment executives to embrace a technology they once battled and which still has potential to be misused.
“We want to be anywhere and everywhere a consumer is and there are hundreds of millions of people [using peer-to-peer],” said Marc DeBevoise, senior VP of business development and strategy at Starz Media, a division of Starz.
Azureus will offer programming from the Starz Media library, which primarily includes direct-to-video titles in the horror, comedy, anime and sci-fi genres. The Starz parent company is not yet offering its top-tier studio flicks to Azureus, but the deal signals a willingness to experiment.
Azureus is currently talking to nearly all the broadcast and cable networks, as well as smaller providers, to secure deals, said company CEO Gilles BianRosa.
More than 80 million Americans have used peer-to-peer technology to download a pirated video file or song and more than 50 million use it monthly, according to Solutions Research Group. In 2006 alone, consumers used peer-to-peer systems to swap at least 12 billion files in the United States, about 85 percent of which were songs.
The technology itself is not illegal-the issue is how it’s used. Peer-to-peer systems are more efficient and cost less for the content provider because they distribute large files by harnessing unused bandwidth from various users.
Media executives first became aware of peer-to-peer technology earlier this decade, after online pirates began using it to trade unauthorized copies of movies and TV shows on the Web. Many of those digital scofflaws relied on BitTorrent’s software, created by the company of the same name.
Now BitTorrent is also inking above-board deals with content providers. Later this month, BitTorrent plans to launch an online store featuring film and TV content from 20th Century Fox, G4, Lion’s Gate, MTV Networks, Paramount Pictures as well as Starz Media. BitTorrent will offer those videos to own or rent or on an on-demand basis.
The television industry’s tentative embrace of the technology comes after peer-to-peer almost single-handedly brought the music business to its knees. Peer-to-peer file-sharing on services such as Kazaa and Napster became the modus operandi of kids who wanted to get songs for free. The relatively small file size of songs made them the easiest to trade, but faster computers and better Internet pipelines have made large video files susceptible.
TV networks are banking on copyright protections built into the new generation of legitimate peer-to-peer networks to keep their content from being traded for free.
“They all learned from the music industry that you can’t sue yourself into success,” said Ashwin Navin, co-founder and president of BitTorrent.
About 135 million people worldwide have installed BitTorrent’s software and have used it to create Web sites that distribute both legal and illegal content. Because BitTorrent technically didn’t serve up the pirated goods, the company has avoided legal liability, Mr. Navin said.
Azureus will use BitTorrent software for its online store that launches next quarter.
“At Fox, we support and encourage legitimate use of peer-to-peer. However, if programming is pirated, we’ll aggressively protect our copyrighted material,” said Scott Grogin, a Fox spokesperson.
NBC Universal inked a deal in 2005 to include NBC Universal film and TV properties on Wurld Media’s peer-to-peer site.
“The most efficient way to get content to a mass audience is through a peer-to-peer technology,” said Ron Lamprecht, senior VP of digital distribution at NBC.
NBC is talking to other peer-to-peer services and will strike more deals, but only if it can ensure that content is protected and that those services don’t still allow consumers to grab illegal files, he said.
Some TV executives question whether BitTorrent has erected enough gates to keep out thieves. Others wonder why consumers need yet another means to procure content online when the marketplace is already crowded with online stores including iTunes, UnBox, AOL Video and Wal-Mart’s digital download service, introduced last week. AOL even uses peer-to-peer to distribute high-resolutions files in its AOL Video store.
“It’s cheaper and more efficient to have users distribute across the Internet so they spread the costs around,” said Fred McIntyre, senior VP of AOL Video.