MatthewVB

This week’s eComm study looks at the write up by Bagley and Martin regarding BitTorrent and Warner Bros‘ partnership in P2P video distribution (circa 2005). I have to be honest here, Bagley and Martin leave something to be desired in their write-up. So, in efforts to make this somewhat enjoyable, let’s take a different angle and actually ask a question to respond to the BitTorrent v. and Warner Bros. partnership.

First, the RIAA and MPAA are all over this area. Kudos to Cohen and Navin for wanting to make a business out of P2P file sharing. I given them credit – in 2005 the lawsuits were really just starting. Our BFFs were handing out take-down notices left and right by time BT & WB started getting cozy. For notable suits, check out my friends at TWIL for some podcasts; and for some reading: Grokster or Jammie Thomas. (The Thomas case is very interesting and is still ongoing – interesting stuff.) Cohen and company did the right thing by saying they’d do what they can and be pro-active, helping remove illegal files on the BT trackers they manage. This was the selling point to WB in my view. But what money is to be made?

Huge players have entered the market around this time: Netflix, Hulu, and others. WB has been getting around, meeting up with a few players in the field, including Arvato Mobile. I think WB is spreading the wealth of movie disto in hopes one of the networks takes off, is successful, and avoids their day in court. (Grokster did lend a bit of protection in this case, and we know YouTube takes-down all kinds of stuff (seriously check out that link – YouTomb is cool stats). What does BT have to gain from all this? A partnership with one of the big six. If they can get in with one, they can slowly get in with the rest.

Fast forward a few years, and just a few weeks ago Netflix announced they have a deal to allow downloaded content 28 days before DVD availability from…yup, WB. Sorry BT, you’re about to leave us. With major ISPs throttling bandwidth…opps, allegedly throttling bandwidth, the open source tech is going to continue to struggle. Major trackers have already been hit hard by lawsuits and BT as a company is about to face their own.

So, at the end of the day, how does BT make money? Fair question. I suggest they don’t, but for the sake of argument, here’s what I’d do:

1. Join forces with the BT community to leverage the BT platform as a way to do more than illegal downloading.
2. Brand, brand, and brand. Need to brand BT as what it can be – not what the media makes it out to be. Put some money behind a campaign to show how BT can be used for good and not evil.
3. Continue to be pro-active in the legal community in your take-downs of illegal content. If you don’t, our BFF’s will be after you.
4. Once you’ve done the above, use the community to tap into the growing markets as you were trying to do. Build partnerships with movie AND music distributors. Tap into people like Netflix (or even better, the dying Blockbuster) and get them to use you as a “faster way to stream.” I’d go one-step further and tap into something like RedBox which is all disc right now, and see if you can be a premium provider to them as a way to get content to people in their homes. Stick with the $1/day, but save me the 2 trips to the store.
5. Rise and repeat.

Or, you could license the technology to one of those listed in #4 and see what they can do with it. You won’t be the next CDN, but you could be a CDN alternative.

Oh, one last thing – don’t be evil and turn in people who break the law. While ignorance isn’t an excuse (not knowing the law or what’s happening on one’s computer), privacy violations just aren’t cool. If you go down this road, do it the right way and just tell people they’re doing wrong and pull the plug on that file. BT can be used for good, promote that. If you become the snitch (or aid the snitch), you’ll lose the people instantly.