Parks Associates Blog

Monday, February 26, 2007

Let Them Have Content, Says Studios to BitTorrent

After much anticipation and some expected delays (convincing content providers to use a new platform is very time consuming, if you have not heard), BitTorrent is finally launching it's entertainment network. We are believers in P2P content delivery, be it P2P download or P2P streaming, and it's great to see major content providers finally embracing it. In a recently published report on Internet Video, we wrote:

"The peer-to-peer space is extremely intriguing. Although a pure peer-to-peer network has inherent technology and business limitations (such as the lack of guaranteed service quality and need for high upstream bandwidth), modified or managed peer-to-peer technologies, due to their high scalability and efficient delivery, are receiving a lot of interest in the media and service industry. Parks Associates believes that managed peer-to-peer technologies have tremendous growth opportunities."

BitTorrent has great algorithm, efficient network economics, a huge audience, growing penetration in embedded consumer electronics (the TV connection is still key for digital movies, as evidenced by the success of Xbox movie downloads and the launch of AppltTV), and now great content as well. Now the only thing it needs is for its audience to embrace this new offer (with their wallet) from a company they have come to love because of the amount of free content they could find. It's still a debate regarding whether P2P users are forced to steal or they simply steal because they cannot find the digital content they want through a legitimate way. Our consumer data shows that P2P users are much more likely to purchase movies than those who are not using a P2P network, leading us to believe that many P2P users are forced to steal.

The launching line-up is very impressive, with over 5,000 movies, TV shows, PC games, and music content. New release titles include hits such as “Superman Returns,” “Mission: Impossible III,” “World Trade Center,” “Jackass: Number Two,” “An Inconvenient Truth,” and TV programming include hits such as “24” and “Prison Break” from 20th Century Fox; “Punk’d” from MTV: Music Television; and “Chappelle’s Show” from Comedy Central. Content providers include

Compared to iTunes and Xbox Live Marketplace, the other two popular electronic sell through destinations, BT has the strongest studio support, with 20th Century Fox, Lions Gate, MTV Networks, Paramount, Warner Bros. Home Entertainment and Metro-Goldwyn-Mayer Studios, Inc. (MGM). The only major studio missing from the list is Disney but BT executives have strong faith in their ability of convincing Disney to be a part of this revolution. Based on its announced business models (movies for rent and TV programs for purchase), apparently BitTorrent is using Microsoft's DRM solutions, like most of the other online video sits such as Movielink and Cinemanow.

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