BitTorrent recently has made a push to reinvent itself as a content distribution company and has signed deals with Warner Brothers and other studios to distribute their movies and shows. DigiTimes.com had an opportunity to talk with Ashwin Navin, co-founder and president of BitTorrent, about his vision of using BitTorrent for the distribution of content not only on computers, but also on non-PC devices and throughout the Internet in general.
Q: Can you please provide a bit of background information about BitTorrent?
A: BitTorrent was invented in 2001 by Bram Cohen. When Bram looked at the way that content was delivered on the Web, he realized that a lot of bandwidth from the audience of a website didn't get used. Bandwidth has been referred to as a commodity but it doesn't behave like an actual commodity. It is not something that you can buy and then store for later use. If you don't use it at this moment, it's gone. The audience of any website has the ability to upload as well as download and very rarely do people use the upload capacity they have.
Bram set out to build a tool that allows the website owner to tap into resources which were not being used, by putting that upload capacity to work. Bram started working on this in 2001 and by 2003 it became the standard for what we call peer-assisted distribution because so many websites and users were using it. Since then, the software has been downloaded about 80 million times and by most measures it accounts for between 40-60% of all Internet traffic.
In 2004, Bram and I got together and incorporated the company to build commercial applications for this technology. We took inventory of what people were using BitTorrent for, and though it wasn't designed for any one specific or particular purpose, BitTorrent found its use as a media distribution tool. In many cases, media being downloaded wasn't licensed, so we approached the owners of the content to craft a model where they, as well as BitTorrent, could benefit from BitTorrent's popularity.
We've been quite successful working with the entertainment industry. We're allowing artists and content creators to potentially benefit from the efficiencies with which we distribute content.
Q: Many online companies are struggling to find a viable income stream with some being based on fees or membership while others depend on advertising. What is BitTorrent's current revenue model?
A: We have two businesses. We aggregate and sell content, and that's a revenue-share model. We also have a Website Accelerator which allows customers to distribute content from their own website and our revenue is based on the amount of data transferred from the site.
Q: In order to keep track of data transfers, you must be able to keep track of how much information is transferred. Do you do this through your tracker servers?
A: BitTorrent has always had a central point of control that allows the content owner to control access to the content as well as keep statistics about the content being downloaded. The tracker servers are an area in which we've invested a lot of engineering resources over the last two years. We've made a lot of enhancements that are not open-source, and in some cases are even patented. These enhancements allow BitTorrent to scale from being able to support tens of thousands of users to an environment that can support millions of concurrent users with a high quality of service.
We developed what we call a distributed hash table (DHT), which is appropriate for people using the open-source tracker version of BitTorrent. It enables a user to continue to publish their content even when their tracker fails.
Q: But doesn't this undermine your need for central control?
A: Well, it's great for your open-source, free distribution customer who is more cost-conscious. However, in a commercial model we obviously don't use a trackerless application. Instead, we use a scaleable tracker service. We still maintain the open source version of BitTorrent, but most of our energies are going into the commercial server application.
Q: According to a recent report from Light Reading Insider, network operators worldwide spent US$96.8 million on Deep Packet Inspection (DPI) in 2005, but the sector is poised to grow by more than 75% this year, to about US$170 million, and top US$586 million in 2010. Is the use of DPIs by ISPs to identify and throttle bandwidth an increasing problem for the BitTorrent protocol? How goes your efforts to encourage ISPs to traffic cache the most requested files and what is BitTorrent's long-term plan in working with ISPs?
A: Broadband ISPs have sold more capacity than they actually have. If you take the number of subscribers and multiply it by the amount of bandwidth they have sold to each subscriber, the resulting figure is much larger than the capacity the ISPs actually own in their core networks. BitTorrent makes efficient use of all available bandwidth for the distribution of content.
Peer-to-peer traffic is very concentrated on a small number of files. About 80% of the traffic comes from 5% of the content that's available. If that content can be cached in strategic parts of the network, then the network can scale more effectively and support the peer-to-peer architecture.
We're encouraging ISPs to invest in architecture that supports peer-to-peer delivery, not only because users want it, but also because ISPs are going to want it to deploy services in a peer-to-peer architecture to support their own business models. Numerous ISPs are going to launch their own branded IP video services and BitTorrent's architecture is ideal for that application.
Deep-packet inspection, or traffic shaping in general, is important alongside caching because you're ultimately going to want to dedicate a percentage of data network capacity to various applications such as VoIP, video over IP, or "best efforts traffic."
Q: How have ISPs responded?
A: We're obviously not going to convince all of them, but we've convinced many, like NTL, one of the biggest cable companies in the UK. They saw all the BitTorrent traffic on their network and from a pure engineering perspective recognized that it was the smartest way to deliver content. Thus they are seeking a way to manage it and leverage the protocol for their own IP video services. We're talking with other cable carriers throughout the world about the same thing.
The beauty of the broadcast model is that you can reach a very large number of users within your broadcast footprint and it scales. If the population within your broadcast radius doubles, triples or quadruples, you don't need to spend extra money to reach the increased number of people. The way that people are currently distributing content on the Internet, incremental users have incremental costs. That doesn't scale.
Q: BitTorrent signed an agreement with Warner Brothers to deliver content from the movie studio. What does the deal exactly entail and what is the current status of the agreement? How will you generate revenue?
A: Warner Brothers in May was the first movie studio to join us in our effort to develop legal services using BitTorrent. We are licensed to distribute their movies and TV shows through BitTorrent to our users. This will be the same service that our hardware partners will be hooking into, so that Warner movies and TV shows can be consumed on their hardware, even if it's not a PC. The service will definitely launch sometime in the fall.
We're currently in content acquisition mode where we're trying to aggregate as much content that's differentiating and compelling. As soon as we've got a comprehensive enough catalog, we'll launch the service. For this service, we'll charge consumers for the content and we'll get a percentage of that. We've come up with a price but we're not ready to publicly disclose that yet.
There are a lot of services launching right now but the pricing isn't really compelling yet. The entertainment industry is in the very early stages of a new product cycle. Just as the laser disc and the DVD were very expensive during their respective first couple of years, entertainment companies are going to start high and work their way down.
We are trying to be a voice of reason within the industry and advocate compelling prices for this business model. However, you need to realize that this is going to be evolutionary and is not going to be what everyone wants starting from day one.
A few years ago, no one would have predicted that BitTorrent would be in the business of legal distribution but we now have a seat at the table with all the media companies trying to come up with a way to work together.
We are now in version 1.0 of using the Web for video distribution services. A lot of services, including YouTube and other streaming sites, have been launched. They aren't optimizing for efficiency today, but are optimizing to get their services launched. They are mostly concerned about time to market and in some cases they are using content to drive another area of their business. In the case of Apple, they're clearly driving more hardware sales, so they are not strictly a content distribution company.
Version 2.0 of all of these services will have a peer-assisted component because at some point profitability and quality will be a concern to them. If your competitor is more efficient in distributing higher quality content, then you will have to respond. What BitTorrent is doing is taking actions that will force all of these other companies to react so that their version 2.0 will have to use our technology or something like it.
Anyone can use our technology. We'll talk to anyone about how we can deploy BitTorrent's architecture for his or her business model and in some cases we'll even support companies that offer content similar to ours.
Q: What kinds of copyright management scheme will the BitTorrent movie selling/rental service use?
A: Our DRM licensing servers currently use Window Media DRM because most of the content companies are comfortable with the Windows DRM. But we can support other DRM schemes. I foresee that content will eventually be delivered supported by advertising without DRM. In the short term, companies want DRM because they are cautious about online distribution.
I think in the long term DRM is bad for the artist and content makers because the content owner wants to see the content on as many types of platforms. The major DRM schemes currently in wide use are used to feed other businesses. In the case of Windows, it's used to feed more licenses while in the case of Apple, it's used to feed more hardware sales. Neither scheme plays nice across all platforms.
Media will be supported by how often it's distributed and shared. You would want to encourage your users to share and extrapolate value from its distribution. We're trying to advocate this kind of business model. It will be an evolutionary process on the part of the media company.
Q: Can you elaborate a little on why you are here in Taiwan?
A: We're in Asia working with content companies that own Chinese, Japanese and Korean language content so that they can reach a global audience. We're also working with hardware companies to provide the bridge between content and hardware. We're building services that allow people to access content on a variety of platforms. We haven't announced anything specifically, but we'll be making several announcements soon.
There is a lot of hardware that is Internet-connected but non-PC where BitTorrent can reside and perform the downloading function even when people are away from their homes and computers. Some vendors are using BitTorrent in wireless router applications and we expect to work with numerous manufacturers to develop similar applications.
We give hardware companies a service allowing their consumers to get content legally using our tools, which already have significant, brand recognition around the world.
Q: In terms of non-PC hardware, does that include things like set-top boxes (STBs) and mobile phones?
A: Yes, set-top boxes, personal media players, network-attached storage devices, basically wherever you would want to download content. In terms of mobile phones, there currently is not enough network connectivity. However, when they have Wi-Fi radios and enough storage, people will want to put content on the device and we are anticipating that application.
I think the first foray for handsets will be Wi-Fi-enabled mobiles because the carriers that offer Wi-Fi services are numerous and aren't as restrictive about data transfer.
Taiwan has a large number of innovative hardware companies that can benefit from the integration of BitTorrent's technology in their hardware and from tapping into a revenue stream that BitTorrent can offer them.
An important thing about Taiwan hardware makers is that they use standards-based technologies. They innovate based on standards rather than trying to force a new proprietary standard on the industry. Things have gone pretty well during this visit and I think we're going to be here a lot.
Q: On your blog, you stated that BitTorrent is responsible for 70% of Internet traffic in China. Given the popularity there of the protocol, what are you plans for China?
A: BitTorrent is extremely popular in China. We are currently evaluating the regulatory environment there for the establishment of some sort of business presence.
No one is making money online in China now as far as content distribution is concerned. We're trying to develop a platform so that all parties can benefit and where consumers want to adopt it. It's incumbent on us to invest the time and energy to find out what the consumer service needs to be.
Q: It was reported that BitTorrent entered into licensing agreements with Chinese content makers for the distribution of media using BitTorrent. Can you elaborate on this? What is the current status of such agreements?
A: We've licensed Chinese, Japanese and Indian language content, and we'll announce more with the formal launch of our content distribution service in the fall.
Q: Where do you see BitTorrent going?
A: We're developing an architecture to allow the Internet to be useful for a number of services that are being conceived today that are going to tax the network in ways it has never been taxed. BitTorrent is the most sensible way to deliver high-value content on a data network. We expect that once the architecture is in place, people will be able to enjoy the benefits, empowering both artists and consumers.
Ashwin Navin, co-founder and president of BitTorrent
Photo: Company
