BitTorrent’s two big projects: Getting media giants to pay them to deliver video over its peer-to-peer network. And getting BitTorrent’s downloading software pre-installed on consumer electronics devices like DVR set-top boxes, home network routers, and TV sets.
So how’s it going? New CEO Doug Walker says his company can undercut content distribution firms like Akamai Technologies (AKAM) and Limelight Networks (LLNW) by 50%, and will have a some big deals to announce within a month. And he expects more than 5 million BitTorrent-enabled consumer electronics devices to ship in the next year; he says he’ll be able to get 50 cents to $2 in licensing fees per device.
Both business-to-business pitches are a big shift from the company’s first project after making nice with Hollywood more than two years ago: That’s when BitTorrent started building a consumer-focused digital media store, including movies, TV episodes, games, and music. Via deals with News Corp. (NWS), Viacom (VIAB), and Time Warner (TWX), that’s helped big media companies get comfortable with the idea of working with BitTorrent. But the store hasn’t taken the market by storm: Its most popular movie available for purchase right now is 2007’s “The Reaping.”
Walker talked to us about his new projects and whether cable giant Comcast’s (CMCSA) policy of disrupting some BitTorrent file transfers has affected his business.
Silicon Alley Insider: Apple (AAPL) recently added movie rentals to its iTunes store. What’s your plan for the BitTorrent store?
Walker: We’re actually going to reposition our store. The two areas that we’re going to focus the business are the ‘DNA’ service, which is a service for the distribution of large rich media files in a secure, private network environment. The second is a new area for us which we call ‘BitTorrent Certified’ — an ability to use BitTorrent technology on new IP-enabled consumer devices. So routers, network attached storage devices, DVRs, television sets.
So what you’ll see happening with the store: We’ll look at that underlying technology that we’ve developed over the past several years and invested heavily in, and we’ll look at ways to use that underlying technology to actually connect those two groups and create value for both of them. I think that’s the way you’ll see more value accrue to a company like ours other than strictly being a download or streaming video store.
SAI: So is the store going away?
Walker: It’s possible we’ll evolve that storefront. We don’t have the answer yet.
We’re going through the process of evaluating. It could very well be [still around], but look a little bit different. Or we could have refactored it somehow to make a better fit. We’re talking to Hollywood. We’re talking to the device manufacturers and we’re trying to understand what models are going to work between them. Then we’ll make a decision from there.
SAI: Shifting gears a bit: Comcast is in hot water with the FCC for disrupting some of its subscribers’ BitTorrent downloads — and not telling them about it. Is this affecting your ability to sell ‘BitTorrent DNA’ as a grown-up content delivery network to big media companies?
Walker: No, not at all. The ‘DNA’ service is a commercial service that’s undetectable by Comcast. We’re able to encrypt it such that we can to protect our customers’ interests. Having said that, Tony Werner, who’s the CTO of Comcast, is on our advisory board. So we’re working with Comcast not only to help them understand how we’re going to present ourselves to the marketplace but also to offer them technological solutions to some of their problems.
SAI: So who’s getting affected by their so-called “network management?”
Walker: Who it’s really affecting are the BitTorrent open source clients. (Not part of BitTorrent’s commercial service.) [Comcast is] actually stopping traffic by forging packets. And that’s clearly unacceptable. They didn’t deliver what they said they were going to deliver in the first place. And it’s also unacceptable that by category, they’re impacting traffic on the Internet. That category can include very large files, like the ones they’re trying to “manage,” or it could include very small files. BitTorrent could be a 500 K file or it could be a 5 megabyte file.
SAI: Do you have any stats on how aggressive their traffic filter is?
Walker: We haven’t actually done our own tests. We’ve of course looked at what’s been presented in the FCC filings. And it really does look like it’s a very small amount of traffic that Comcast is blocking. And they do it when a certain neighbourhood reaches a certain point of saturation.
The problem is they’re not defining what that saturation point is and they’re asking the world to rely on their expertise. If they’re thinking about ways to manage networks they should do it openly and publicly, especially when they haven’t been able to keep up to world standards in terms of the speeds of the networks in the first place.
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