BitTorrent Snags Warner Brothers

BitTorrent continues its efforts to go legit. The company has just snagged a deal with Warner Brothers. The Hollywood giant, part of Time Warner (my employer) will use BitTorrent to distribute and sell Warner Brothers content online. It is first major studio to sign a deal with BitTorrent that has been working with the MPAA to go legit, and become a distribution channel for Hollywood content. Earlier this year, BitTorrent, signed a deal with UK-based cable provider, NTL for legal P2P distribution.

The service will launch later this summer and will include newer releases such as Harry Potter and the Goblet of Fire. Now, this is not an exclusive deal, and the burden of distribution and sales falls on BitTorrent. Warner makes its content available for distribution. Time Warner has been toying with many different online video distribution technologies. AOL, for instance has a deal with Kontiki, and has been working with BrightCove. In Germany it has another kind of digital distribution deal. Only yesterday the Time Warner announced that it was working with its affiliate television station owners and will streaming content off the affiliate websites.

An optimists view would be that Warner Brothers like other content owners is charging boldly into the exciting new future. A more pessimistic view would be, wouldn’t it cut into DVD sales, leading to the more basic problems of divisional P&L statements? I posed this question to Warner folks who pre-briefed me about the upcoming launch. “DVD is a great business and we see BitTorrent as an opportunity to only increase the pie,” says Jim Wuthrich, Senior Vice President, Warner Bros. Home Entertainment. He sees the initial impact as incremental. WB, is hoping that 15% of BitTorrent users become buyers of their content. That is a modest goal, and quite achievable.

While BitTorrent might be good and all, it still cannot meet the ease-of-download of iTunes, which like music, is making downloading legal video a mainstream activity. Wuthrich pointed out that the company, like most in Hollywood is in talks with Apple as well. BitTorrent is a great way to distribute content, but the slow uplink speeds, and individual file sharers-throttling the bandwidth ruins the experience. The ISPs are beginning to crack down on bandwidth hogging services such as BitTorrent.

In addition, other erstwhile not so legit services are going legit these days, clouding the competitive landscape. For example, Azureus recently launched its own distribution platform, based on BitTorrent technology.