The BitTorrent Model

Is 2015 a turning point for a new online distribution model the likes of what BitTorrent proposes?

Ten years of expansion

2014 will be remembered for the consolidation of the major online video subscription platforms that have become credible alternatives to cable television and traditional film distribution venues. Indeed, these platforms are now officially recognized following the crowning last January of Amazon’s Transparent series as well as Kevin Spacey (Golden Globes’ “Best Actor” award) for his role in the Netflix series House of Cards.

Launched in 2004, BitTorrent popularized torrent technology. This protocol enables users to exchange digital content over the Internet. More recently, the company made the news after the unprecedented piracy record of HBO’s Game Of Thrones series via its sharing platform.

Today, BitTorrent is a giant that counts over 170 million users. This imposing figure explains why more than half of the bandwidth used in the United States in 2014 served to transfer BitTorrent files.

The road toward legalization

At the end of 2014, the famous file sharing site took the industry by surprise by announcing an expansion of its bundle distribution service to enable musicians, producers and other creators to offer content packages to their fans. These packages are available to the public through a pay portal.

It’s the beginning of the road toward legalization, by which BitTorrent is attempting to rid itself of its reputation of a piracy accomplice. For the past two years, the California-based company has spared no efforts to demonstrate its willingness to work with artists, labels and production companies. It’s a sign that it wants to reinvent itself and measure itself against existing distribution services while continuing to defend free access to the Internet.

Through this strategy, BitTorrent joins forces with other new players in the online content creation and distribution arena the likes of Netflix, Amazon, YouTube and Hulu. The domino effect in no way spared the other online video sharing and distribution platforms—like Vimeo, which made waves in 2014 when it launched its Vimeo On Demand film distribution service. As a logical sequel, Vimeo also began creating content and funded the production of six episodes of the High Maintenance webseries.

New “package” services

BitTorrent remains first and foremost a technological platform designed to facilitate the sharing of content. In line with the company’s initial philosophy, BitTorrent’s new business model is open to all types of content and its strength resides in the great deal of flexibility that it offers. It allows creators and editors to select payment options. Furthermore, the service returns 90% of all revenue it generates to the creators. This makes for a convincing business argument.

Thus, by providing a customized distribution service along with the creation of original high-end content and by engaging its unique peer-to-peer file sharing network (P2P), BitTorrent proposes a third track that is different from those offered by traditional players and new over-the-top (OTT) platforms. This system seems to benefit all parties involved and creates the hope of sustainable relationships with artists and their assigns seeing as the packages are directly aimed at faithful fans who are naturally active and engaged.

This offer is the outcome of the recent success reaped by engaging fans on the Internet and crowdfunding. It capitalizes on the absence of connections between funding campaigns and the distribution of cultural products, which absence sometimes leaves projects in limbo without access to the appropriate distribution services. By proposing both free and pay-per-view content access packages, BitTorrent has instituted a sort of donation system.

Radiohead singer Thom Yorke demonstrated the effectiveness of the new system by launching his solo album on BitTorrent in 2014. Sold for a price of $6, the album was downloaded over 4.4 million times and the initiative proved that it was possible to bypass traditional intermediaries. A few months later, the peer-to-peer network announced the distribution of the Children of the Machine online series starting in the fall of 2015. This eight-episode sci-fi series will be available as an ad-supported free download, and an ad-free version will be purchasable for $4.95. But there’s no stopping BitTorrent… It’s now offering to its users the feature film HITS presented at the 2014 Sundance Festival. Fans can buy it online at the price of their choice.

Finally, in January 2015, BitTorrent announced a partnership with FilmBuff, an independent distributor based in New York, and the launch of documentary series, i.e., a collection of 16 pay films divided into four packages. This is not the first time BitTorrent enters into a partnership with an independent distributor. In December 2013, Drafthouse Films distributed the documentary The Act of Killing through the platform. This collaboration could prove to be mutually beneficial as film distributors are searching for new distribution windows.

BitTorrent has constantly expanded its catalogue and today offers a fully legal access to two million titles. From this point forward, there is every reason to believe that the company will multiply its partnerships within the industry to expand its film distribution business. This is no doubt a unique opportunity for Hollywood studios that are still not capable of effectively putting an end to piracy or reaching niche markets. By combining mainstream programming and remaining open to a variety of creative works, will BitTorrent win its battle and successfully monetize content that is sometimes abandoned by platforms such as Netflix, Amazon or Hulu?

Posted in: Business Practices



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