November 29, 2006 12:00 AM PST
Paramount, Fox embrace BitTorrent
In February, BitTorrent will launch a video store where customers can download movies from Hollywood studios such as Paramount Pictures, Lionsgate and Twentieth Century Fox Film, as well as TV shows from MTV Networks. Earlier this year, BitTorrent announced a similar partnership with Warner Bros. Home Entertainment.
Financial terms of the agreement were not released.
The deal comes at a time when Hollywood is looking for a winning Internet movie strategy. Short-form video distributed over the Net has caught fire at places like YouTube. Many in the digital-entertainment realm are preparing for a day when the Web will provide an effective and profitable distribution method for feature-length films.
BitTorrent's announcement comes a day after Wal-Mart Stores, the world's largest retailer, launched its own movie download service. Other companies that have struck Net distribution agreements with studios are Apple Computer, which offers content via its iTunes Store, Amazon.com and video-sharing site Guba.
Even by offering thousands of titles, San Francisco-based BitTorrent faces tough competition from the massive libraries of Wal-Mart and Amazon. Executives at BitTorrent say they plan to stand out from the pack by offering consumers the speediest way to download a movie.
Developed in 2001, BitTorrent's open-source distribution system was designed to help transfer large files over the Internet. BitTorrent allows a single file to be broken into small fragments that are distributed among computers. People then share pieces of the content with one another.
The company also has street credibility with a group that studios want to bring into the fold: pirates.
"We come to the table with a solution to piracy," said Eric Patterson, BitTorrent's general manager of consumer services. "Millions of people are using BitTorrent to download content legally and illegally. We know from our research that 30 percent of that audience will pay for content. We're going to help the studios turn an enormous problem into a viable sales channel."
When it comes to battling bigger companies, Josh Martin, an analyst with the Yankee Group, agrees that nobody should flee the sector just yet.
He recalls that both Amazon and Wal-Mart had big plans to launch online music services, but neither ever went anywhere. Four years ago, Wal-Mart also tested a service to compete with movie mail-order company Netflix and that too has yet to materialize.
"(Movie downloads) is still an emerging market and nobody has all the answers," Martin said. "We're still in the experimental stage where everyone is trying to find the right partnerships, the right technology and make the moves that make the most sense."