March 11, 2004 1:44 PM PST

Legal P2P networks gaining ground

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While peer-to-peer piracy continues to grab the entertainment industry's attention, a few technology companies are gaining headwind, using almost identical means to distribute legal downloads.

After several years in the shadows, Red Swoosh--a company founded by veterans of Scour, one of the first file-swapping services Hollywood shut down?-emerged Tuesday with the seeds of a healthy content distribution business. While prominent peer-to-peer companies such as Kontiki and Groove Networks have focused on business applications, Red Swoosh has kept its eyes on entertainment and consumers.

In part, that's why the company's CEO is now reaching out to the broad community of people using BitTorrent, an underground file-trading application using similar technology that has exploded in popularity among people distributing or downloading video and software programs.

Red Swoosh CEO Travis Kalanick said he wants to tap that energy. He's offering free use of Red Swoosh's content distribution services to noncommercial filmmakers, game developers or other publishers.

"I don't want to fight BitTorrent," Kalanick said. "I want to have a relationship with that community. That's not just about cutting a deal; you have give to that community."

The peer-to-peer technology world has been proceeding on two tracks almost since the emergence of Napster, despite similarities on the technological front. Underground networks like BitTorrent and Kazaa have flourished, while companies like Red Swoosh that have taken the copyright-friendly track are now just beginning to see their efforts bear fruit.

Red Swoosh and rival Kontiki, along with a handful of other companies, say peer-to-peer technology allows content distributors to pass off much of their distribution costs--largely in the form of Net bandwidth charges--to their customers. For companies distributing large files to many people, such as gaming or video publishers, that can be a huge benefit, they say.

As with more familiar networks, like the defunct Napster or Kazaa, people interested in specific files download them and store them on their hard drives. With Kontiki or Red Swoosh, they also download the peer-to-peer company's sharing application, which then lets other people interested in the same files download from them instead of from the original publisher.

Kontiki counts GameSpot, a game site News.com publisher CNET Networks owns, among its clients--though it now focuses more on internal corporate communications. Red Swoosh has signed GameSpot rival IGN Entertainment, as well as Net video site IFilm. Largely as a result of those two customers, the company's network has peaked at transmitting 7 terabytes of data in a single day, Kalanick said.

IGN Chief Technology Officer Ken Keller said Red Swoosh's services have saved the company considerable amounts of money, including about $36,000 on the distribution of more than 18 terabytes of data last month.

Some analysts remain skeptical of peer-to-peer companies' ability to play a large role in entertainment distribution, however.

"Large companies I've talked to didn't seem to want to adopt it because (of) a lot of the uncertainties around it," said Lawrence Orans, a Gartner analyst. He noted that people uploading content could be violating some Internet service providers' terms of service or even exceeding monthly bandwidth limitations, in some cases.

 

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