P2p: Too Legit To Quit

There was a time when the phrase "peer-to-peer" (P2P) was practically a curse word in the music industry.

But in the last month, two new services have emerged to utilize the technology for the legal, protected distribution of content—specifically video.

One of them is BitTorrent, which developed the technology that at one point was used for one-third of all P2P traffic on the Internet. The other is Joost—formerly known as the Venice Project—which was founded by the same developers that created the notorious Kazaa music-swapping community and later the Skype Internet telephone service.

Despite their history with unauthorized digital content distribution, both services are setting themselves up to provide some of the better digital entertainment services available today. The question is: Will their tech-cred be sufficient to lure into a more legitimate environment the millions of downloaders who have previously used their technology to steal content?

BitTorrent

More than 135 million people have downloaded the BitTorrent technology worldwide. It basically lets people publish content to the Internet in a way that enables multiple users to quickly download large files by sharing the distribution load. While it has several legitimate uses—game publishers use it to distribute software updates—it also is used by such sites as Pirate Bay to allow illegal downloads of Hollywood movies.

The company hopes to convert these users into legitimate customers through the BitTorrent Entertainment Network—launching Feb. 26. The new service has compiled the rights to more than 3,000 movies, 1,000 games and 1,000 music videos from 34 participating content providers.

The move makes BitTorrent a distributor—connecting content owners to the technology's users in an attempt to monetize their interest in digital entertainment. Like any authorized digital music service, the challenge is to entice consumers away from a free, pirated environment into a paid, legal one. The strategy aims to offer a better experience than the chaotic pirate sites.

"You never saw an ad that says, 'Use iTunes because it's legal,' " BitTorrent COO Ashwin Navin says. "What users care about is getting their favorite content in a digital format. Only a very small percentage of our users are pirating content because they are anti-establishment or want to fight the man."

Users can rent movies at $4 each, download-to-own TV shows and music videos for $2 and get user-generated content free. The company also plans to add a digital rights management-free music download service in the near future.

Joost

While BitTorrent works a rental download model, Joost is an ad-supported streaming video service currently in beta testing. Of the many sources providing video at this time, Warner Music Group (WMG), Nettwerk, MusicNation, Voy and now Viacom are all contributing music videos and other music-themed programming.

Joost takes streaming video to a new level, with TiVo-like user controls and a high-quality full-screen display that immediately captured the attention of content partners. Like BitTorrent, it uses P2P technology to optimize the streaming process.

But what really sets Joost apart is its ability to add widgets or plug-ins—small applications that run atop the streaming video screen, enabling a degree of interactivity with both other users and the content provider.

For instance, a chat tool allows users viewing the same video to discuss it with each other in real time. Joost not only allows, but encourages content providers to create their own plug-ins customized for their video.

MusicNation is one such provider. The company conducts an online battle-of-the-bands competition on its Web site and will be providing exclusive content to Joost. It plans to create a live voting plug-in as part of that process.

"It wasn't just about the display," MusicNation founder and chief marketing officer Lucas Mann says, "it was about building a dynamic experience."



Both BitTorrent and Joost rely on P2P technology to enhance the user experience. The more popular a file is on either network, the easier and faster it will be to download. Whereas the iTunes store shut down last Christmas due to overwhelming demand, services like BitTorrent and Joost will only improve as demand increases.

And while that translates to a cheaper and more robust viewing experience—assuming they attract the necessary critical mass of customers—for the content owners, it's all about interacting better with fans.

"We've seen the business end of disruption in the digital age, but this is the kind of disruption around distribution channels that really favors people that own content," says Michael Nash, senior VP of digital strategy and business development for WMG. "The fact that they can directly leverage community and provide interaction between consumers while they're experiencing video will change the dynamic in terms of how content is consumed over time. We are definitely looking to figure out how to [use] that. This will be an interesting creative arena for entertainment companies to explore."