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WB sails with tech pirate

BitTorrent signs 1st major deal for content

Warner Bros. has become the first studio to play nice with BitTorrent, the company behind the most popular technology used for online piracy.

Warners has signed a deal to sell and rent its movies and TV shows through a content store that BitTorrent will launch in summer. It likely won’t be the only major player on board, as BitTorrent has already approached or is in discussions with nearly every major studio and network.

In a bid to use its technology for a legit business, BitTorrent last year partnered with the MPAA to eliminate copyrighted content from its search engine, which many Netizens use to find illegal copies of movies and music (Daily Variety, Nov. 23).

Since only a portion of the 65 million-plus BitTorrent users utilize the company’s search engine, however, technology is still widely used for piracy. Nonetheless, studios required a purge of copyrighted content from the search engine as a good faith move by the company to prevent piracy under its control before they would consider partnering.

“BitTorrent has shown they are very good at filtering out illegal content,” said Warner Bros. Home Entertainment Group prexy Kevin Tsujihara. “Now they face a challenge of converting their users who are used to getting product for free to purchase it legitimately. We know that’s a battle we are both facing.”

BitTorrent already sells some videogames through its search engine and has converted searches into sales at rates as high as 10%. Similar success with movies and TV shows could create a significant new market.

“There is a group of BitTorrent users who will not be interested in paying, but we think many of our users just have a voracious appetite for content,” said BitTorrent prexy Ashin Navin. “The potential to convert 5% or 10% of our audience to a legitimate service outweighs any risks for us or our partners.”

Partnership indicates a willingness by big media congloms to get along with technology companies that are closely aligned with mass piracy. That’s very different from a few years ago, when music labels refused Napster’s entreaties to work together and sued it into bankruptcy.

At launch, BitTorrent will have a similar offering of WB films for sale and online rental as are already available through Movielink, and on the same financial terms. However, BitTorrent also plans to offer catalog TV shows the studio has the right to distribute, such as “Dukes of Hazzard” and “Babylon 5,” which Movielink doesn’t provide.

Some studio execs who have been approached by BitTorrent said they have mixed feelings about providing their content. They noted that while it has high traffic and name recognition, BitTorrent is building a legitimate business from scratch, while Movielink and Amazon.com (which is expected to start selling digital movies and TV shows soon) are experienced retailers.

Because it utilizes its own peer-to-peer technology, BitTorrent is also able to distribute content more efficiently, which could lower its costs compared to competitors.

Signing more studios and major videogame publishers will be key to BitTorrent succeeding in the online distribution business, since consumers likely won’t be too interested in a store that has only Warner Bros. content. (It is staying out of the already saturated, low-margin online music business.)

Netco and its co-founder Bram Cohen, inventor of its technology, became notorious in the past couple of years for fueling the boom in video piracy thanks to the ability of its technology to move huge files, like movies, very quickly.

However, BitTorrent raised $8.75 million last year in a bid to transform itself from the leading developer of piracy software into a legitimate company that distributes content on the Internet.

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