Verizon’s Blessing Won’t Help Peer-To-Peer Sales

Nerd blogs are buzzing about an AP article published this morning about Verizon’s (VZ) participation in “P4P,” a group of Internet providers and software companies working to make peer-to-peer file transfers faster and more efficient. Initial test results: If ISPs and peer-to-peer content delivery networks (CDNs) work together, they can speed up P2P downloads by about 60%.

Nice to know, but it probably won’t help P2P CDNs take much business away from content distribution giants Akamai Technologies (AKAM) and Limelight Networks (LLNW) — not soon at least. Why not? Because there’s still a lot of limitations to P2P. Such as:

Ease of use: P2P transfers require a separate software download/installation. They don’t just play video directly in the browser. And good luck getting your IT department to let you install P2P software at work.

Reliability: P2P relies on individuals’ computers to power others’ downloads. That’s a lot less reliable than a professional server hooked up to a dedicated pipe. And U.S. broadband connections are a lot slower sending files than receiving them. So the distribution model doesn’t scale.

Annoyance: Not everyone wants to use their upstream bandwidth/computer resources to power someone else’s download — especially if there’s no benefit to them.

Selection: P2P doesn’t support as many video types as CDNs do.

We see a commercial future for P2P — someday — especially so-called “blended” P2P networks that also hook into traditiional CDNs. But today’s announcement won’t shake up the industry.

See Also: BitTorrent CEO: Rethinking Media Store, No Business Impact From Comcast