Warner Bros., BitTorrent Sign Distribution Deal

Content moved via Bram Cohen’s brainchild will be offered at BitTorrent.com, to leverage BitTorrent’s “file-swarming” technology, which enables transfer of massive files from a website to a PC with a P2P transfer’s speed and bandwidth efficiency. The new delivery tool is the first peer-assisted network in the U.S. melding guaranteed availability, rapid download rates and high-quality video, BitTorrent said.

The service will begin with more than 200 WB items - new releases, catalog favorites and TV series. Newer big screen fare like Harry Potter & the Goblet of Fire, Dukes of Hazzard, North Country and Rumor Has It will be offered alongside The Matrix, Natural Born Killers and National Lampoon’s Vegas Vacation. Small-screen programs will include Babylon 5 and Dukes of Hazzard. Estimates vary on the population trading files via the BitTorrent protocol, which Cohen created but now does not control. Among P2P buffs, the protocol is widely regarded as a favorite. Cohen’s creation is said to account for at least 35% of data moved on the Web.

BitTorrent’s ties to Hollywood have been knotty. WB and others have pursued BitTorrent users in court. The U.S. Dist. Court, Milwaukee, recently issued a $35,000 judgment against a user in a 2004 copyright infringement case brought by WB and Columbia Pictures. The defendant allegedly ran a server and website that let others download illegal copies of films and TV shows. BitTorrent founder Cohen vowed to remove links directing network users to copies of pirated content through his search engine in a joint 2005 declaration with MPAA Pres. Dan Glickman at the American Film Institute.

Cohen’s company is continuing to work with MPAA to remove copyright infringing content from its search results and is working with studios to replace that content with a secure, legal venue for consumers, the firm said. The site will employ integrated monetization for paid and ad-supported content in conjunction with the coming WB service. BitTorrent “made the leap in creating a legal partnership that respects the value of the intellectual property,” WB Home Entertainment Group Pres. Kevin Tsujihara said.

The service’s launch lets WB “extend our reach to places our content would not ordinarily be found legally and opens up new opportunities,” WB Exec. Vp Darcy Antonellis said: “Entering into agreements such as this to distribute our content is not only a better way to reach existing and new customers but a reflection of the critical role distribution technologies play in the future of the entertainment industry.”

The deal will roll out first in the U.S., with WB eyeing other markets as the initiative matures, a spokeswoman told us. Pricing details will be aired as the launch date nears; TV programs will cost as little as 99 cents, she said. Pricing for movies may vary, depending on whether the title is new or not, she said. Once purchased, the WB content is “yours for life,” the spokeswoman said. Users can make up to 3 backup copies, which only play on the device of download and are protected by Microsoft DRM technology, she said.

The BitTorrent deal isn’t WB’s first time with P2P. In Jan., the studio and Arvato Mobile announced a joint venture, In2Movies, bringing EST of movies and TV content to users in Germany, Austria and German-speaking Switzerland. As in the BitTorrent deal, In2Movies releases content day-and-date with German-language DVD releases. Initial rollout on Arvato’s GNAB download platform let consumers put content on PCs but subsequent versions of the service will let consumers download programs to DVD recorders and other portable devices, WB said. The service launched in March with about 80 new releases, catalog films and local German productions, officials said.

The deal is “very big for the BitTorrent folks” because it “goes a long way toward legitimizing what they've been doing,” Jupiter Research Vp Michael Gartenberg said. Cohen and company long have called BitTorrent “simply a content distribution system that doesn’t promote piracy” and the firm has renounced those using the platform illegally. That got Hollywood’s attention and studios realized they could “gain value by this type of distribution vehicle,” Gartenberg said.

The agreement won’t matter to those who don’t care where their online entertainment comes from, he said. Illegal file-sharers will keep swapping movies and music, no matter how many legitimate platform emerge, Gartenberg said. “But there are a lot of people looking to do the right thing, the right way,” he said: “This is an experiment to see how the market reacts when there is legal content out there. This is not a long-term strategic direction for them but it is an opportunity to test the waters.” As the service gains users, more titles will be added, a la the iTunes model, he said.

Other content owners will seek digital delivery deals, Gartenberg said. “We'll see all sorts of different distribution strategies,” he said, pointing to availability of TV shows on iTunes, via Google Video and other Web outlets. Longtime digital-distribution holdout News Corp. finally joined its peers, adding content from Fox and other networks to iTunes (see separate story). “No one knows the real right approach but it’s a matter of finding out what consumers want to pay for,” Gartenberg said. The BitTorrent deal is the latest example of the “movie and TV side really trying to move forward quickly, rather than reluctantly as they did on the music side, in exploring new models online,” Strategy Analytics broadband analyst Jim Penhune told us. BitTorrent is a classic repositioning of “an outlaw turned in-law” in the entertainment industry, he said.

Among the most interesting aspects of the announcement is availability of the download the day of DVD release, erasing the release window for studios, he said. Down the road, studios would like to “take back distribution for themselves and not be as beholden to retailers in terms of getting content to consumers,” he said. Working on P2P platforms lets them to build a direct relationship with the consumer, Penhune said.