BitTorrent Gets $8.75M From Venture-Capital Firm

funny-jack writes "BitTorrent's drive to legitimize itself as a tool for distributing legal content appears to be gaining steam, as evidenced by the $8.75 million venture capital they recently secured. 'The piracy business is not something anyone can make money on,' says Ashwin Navin, who co-founded BitTorrent with Bram Cohen. 'We want to distribute paid and ad-supported content, using this technology.'"

Comments

If you use BitTorrent and would like to help...

[skydude_20]

...support it, please consider making a donation to BitTorrent, Inc.
Donate (via PayPal): $20 $10 other

I think they hit 'other'.

Re:If you use BitTorrent and would like to help...

[AKAImBatman]

Possible BitTorrent models:

1. Create a torrent search engine with Google Ads (already done)
2. Charge large companies for customized/secure trackers
3. Charge gaming companies for customized BT Clients (e.g. Blizzard)

Help me out here...

[Karma_fucker_sucker]

He says the company is meeting with movie studios and other copyright holders to negotiate use of BitTorrent to distribute content.

Why would a movie studio use BitTorrent instead of just allowing someone to download from their site or from, let's say, iMovies by someone like Apple?

Re:Help me out here...

[Phil246]

Bandwith costs money
BT allows these movie studios to cut costs, and yet still host large files.
Letting people just download directly from them, especially when large files are involved will cost them a packet.

Run! The VC are coming!

[fragmentate]

Every time I hear another rush of VC's I have horrible nightmares of the DOT BOMB...

They're like a bad form of birth-control -- where pulling out doesn't always work.

But there's a catch!

[Chairboy]

To raise the funding, they ask that everyone send in a couple bucks each to help seed the system. As they receive cash, the money will be invested, and a map of generous investors will be created. The more money you contribute, the higher rate of return you'll see, and so on.

The investment will continue until they hit the $8.75 million mark, then they'll keep the fund the same size and just feed the profits back into the investment group as other people join and leave.

A constant threat will be a type of invester known as a 'leech' who makes minimal contributions but attempts to collect large returns and- ...

Gosh... I'm really trying hard to make this a funny bittorrent joke, but I find that I've just described actual commerce. How depressing.

Re:But there's a catch!

[Mr Guy]

No, it's actually the opposite (which does help demonstrate that copying isn't theft, even if it's infringement).

See, in a pyramid scheme, the Guy A starts with nothing.
A^2 gives him X.
A^3 gives him X and and A gives A^2 f(X).
A^4 gives him X and and A gives A^2 f(f(X)) and A gives A^3 f(X).
A^5 gives him X and and A gives A^2 f(f(f(X))) and A gives A^3 f(f(X)) and A gives A^4 f(X).

Where f(X) is > X.
As long as it keeps growing, Guy A will be able to meet his obligations. Once growth slows down (Social Security), the system fails.

BitTorrent is the exact opposite.

Guy A starts with X.
Guy A gives A^2 X.
Guy A gives A^3 f1(X) and A^2 gives A^3 f2(X).
Guy A gives A^4 f1(X) and A^2 gives A^4 f2(X) and A^3 gives A^4 f3(x).

Where fn(X) X and sum f1..n(x) = X.

Pyramid schemes just shift content around, BitTorrent rapidly progates new copies of content.

I think I spent way too much time writing this out.

Piracy is BIG business

[popo]

No matter how you slice it, piracy is enormous business. Never mind the millions that KaZaa made, of the millions that are made on .ru music sites -- there are dozens of downstream businesses which benefit directly from piracy.

For example: Just because Apple makes money on iTunes (ie: legitimate music sales) they make far, far more on sales of the iPod -- which are prediated on the availability of free pirated music. iTunes keeps Apple's music initiatives legitimate, but to say that Apple hasn't benefited from piracy would be wrong.

And let's talk about storage media: How much will Seagate, iOmega, yada yada yada, benefit from storing pirated digital movies? Tons!

Piracy is huge business.

Hell, I pull out my wallet for storage and playback media far, far more than I do for music. And I don't think I'm unusual at all -- most people are the same.

Re:Piracy is BIG business

[e40]

I have a 40GB iPod almost full of 100% legit music. It doesn't take a genius to figure out that 15 years of buying CDs could do that.

Bandwidth and word of mouth are both money

[Nomihn0]

I'm thinking that share ratios could become a kind of online currency once BitTorrent becomes commercially accepted. Seeding a file could earn you points to download other media. For example, sharing an artist's latest music video using the .torrent from her/his site could be rewarded with downloads of free singles or swag.

How are they going to do this, exactly?

[Cyberllama]

Bittorent was released under the MIT license, so pretty much anyone can take it, modify, make their own version (like the one Blizzard patches World of Warcraft with) and basically do as they please so long as they include credit to the original author. So really, anything particularly special that Bittorrent manages to do, can't anyone else just copy it?

Re:World of Warcraft's Bitttorrent updater

[theGreater]

Did you forward all three sets, or just a single port? I know a lot people have made the mistake of allowing 6881 and 6999 only, 6112 only, 3724 only, or some combination thereof. I have had nothing but good speeds when updating -- obviously YM(H)V'ed. It's 3724, 6112, and 6881 THROUGH 6999. And yes, I think that's a ridiculous number of ports to have to leave open.

-theGreater.

Bring on the commercial content!

[Gulthek]

I, for one, would be happy to download torrents of my favorite tv shows with commercials included. Sell the torrent ad space! At least the ads would be semi-targetted (as on slashdot) to thinks that I might actually care about. Hell, I'd even pay to subscribe to torrents of specific shows with ads. My purchasing power as an emerging late-20s demographic should be worth a pretty penny to corporations. So let them vie for my attention by supporting awesome shows.

First we get the coporate tv torrents; then we get torrent Neilson ratings; then they see the massive popularity of shows like Firefly and Battlestar Galactica and just how many people are watching; then we have more awesome shows to watch.

The downside? Oh no, I'll have to watch commercials again. What ever will I do?

Errr -- I don't think so

[Reality Master 101]

I like BitTorrent... it does a great job of doing reliable downloads for movies, er, I mean, large files. But why, exactly, would I use it from an "official" source? I mean, I'm not particularly interested in saving them money.

Second point, BT is not that user friendly, since it often takes a long time to start up, and isn't always very fast. It's reliable, in the sense that things usually get to you *eventually*, but it's not an appropriate technology for mainstream downloads.

Another case of VCs dumping money at popularity rather than something that can actually make money.

Business Model

[rblum]

Can't believe I'm the first one to say this, but

Step 1: Bit Torrent
Step 2: ???
Step 3: Profit!

You must ALL be new around here!

Re:speaking of torrents

[shudde]

you guys check out http://www.litebay.org/ yet? pretty good selection, and all are super fast, i got batman begins in 2 hours. -acidjazz

--from litebay.org forum: acidjazz Administrator Registered: 2005-08-22 Posts: 3

Idiot.

No money in piracy, eh?

[xiando]

'The piracy business is not something anyone can make money on,' is the most stupid thing I ever read. Are not The Pirate Bay making money? If you think they are not then look at their traffic http://www.alexa.com/data/details/traffic_details? q=&url=thepiratebay.org and ask yourself "Is there a website with that much traffic that is NOT making money?". Yeah, I realize that their sponsors, the advertisement companies they use, are among the worst in the industry. Why? Because more serious corporations like Google Adsense does not allow their advertisements to be placed on websites like that. But even though they are using the worst paying solutions in the industry, they ARE making money. Lots of money.

BitTorrent sites are generally not about "being kind" or "we are against copyright or have some other justification". Websites (including BitTorrent trackers) ARE ABOUT PROFIT. And there IS profit in it. I know. I once had sites who, then, had the same traffic as the pirate bay had. It was not a tracker, the sites merely indexed trackers and mirrored their torrents. So it was even "more innocent" than the pirate bay. And I could claim that "we are not hosting this content" and "we are not even tracking it" and therefore me, in fact, in reality, making money off piracy was therefore alright and justified. Then the RIAA started getting angry about music and even though the sites technically were not doing anything wrong it was obvious the money made was made because of piracy. So I choose to remove the music section and configure the spider to ignore .mp3. Then the MPAA started their propaganda in the media against movie piracy and I rewrote the spider and the scripts and so they automatically removed all movies. Then were was only television shows left, and the MPAA did not indicate they minded that. But later they decided that too was bad and again pushed propaganda on the media, and then there was nothing left to filter away and I closed those sites, contacted the mainstream entertainment industry, tried to get legal deals and found that only the adult industry were willing to allow some content to be distributed by BitTorrent. Today I have several (legal) adult torrent sites.

I honestly consider I did consider the alternative: Rent servers in a country like Sweden and engage i major copyright theft. I even made spreadsheets and so on. Even though I got quite pissed off when the MPAA stupidly claimed that sharing television shows is somehow piracy and bad and that alone, apart from the huge profit, made me want to do it, I at length decided that it would be morally wrong.

Why am I telling you all of this? To make a point. There IS a lot of money to be made off piracy. And that is why a lot of people are doing it. I never had a thousand-part of the traffic the pirate bay has today, and I still made a lot of advertisement money off mirroring torrents. Technically that money was not made from piracy, only by distributing hash codes and links as one may innocently claim, but in reality it was made off illegal distribution of copyrighted media files. No matter how much you claim "we are only tracking" or "only mirroring torrents" or whatever, torrent sties and torrent search engines and even normal search engines who pick up .torrents make a lot of profit off piracy. That is the truth and we all know it, we just choose to support this and turn the blind eye because it suits us (and also because there IS NO LEGAL ALTERNATIVE that is equally good).

The people who run BitTorrent sites and trackers, legal or not, sites do it because IT IS PROFITABLE.

Missing something...

[RyoShin]

One thing that I've thought is missing from BitTorrent for a long time that would give it a huge boost over regular download methods is "Updating Trackers".

With Updating Trackers, the host tracker would be updated to include more files. When this is done, the BT client would get a signal saying "Hey, there's more to download!" When this is done, certain things could happen depending on the tracker and the user settings. You could do one of three settings:

1) Ignore it

2) Prompt the user that there are updates; the user then chooses what, if any, of the new files to download

3) Automatically download all new material.

This feature may not be helpful for downloading, say, software, where you really don't want every version of a piece of software released, but it has many other uses.

First, fansubbing. Often times you'll have to visit a site/newsgroup/chatroom often to see if the latest episode is out (many fansub sites use torrents now,) but with Updating Trackers, you could just set it to download all new files, and receive the files as they are created, with no waiting. The legality of fansubs is always a hot debate, but most people agree that many companies wink at it, as fansubs help to create a large mass of fans in America (and other countries) before an Anime is even liscensed there. (For recent examples, see: Naruto.)

Second, "indie" authors. Authors that create large books, and release them a chapter at a time (regardless of the quality of their work,) generally use sites like FanFiction.net to upload to. While not a bad way, if they gather a growing number of fans, the fans can instantly receive new chapters as they are released, to read at their leisure.

I'm sure there are other uses for such a feature that others will come up with. The only downside to Updating Trackers would be that the hits to the parent site would likely decrease somewhat, because people no longer have to go there to download the latest file. This could be useful to some and detremental to others, depending on how they use advertising.

(I hope I'm not talking out my ass; I don't use BT that often, but I don't think that this feature exists.)