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Friday, November 30, 2012

BitTorrent\'s Plan for 2013? Go Legit

BitTorrent, the start-up behind the popular peer-to-peer file-sharing system of the same name, has an unusual resolution for 2013: to align itself with the entertainment industry and legally distribute movies, music and books online.

“We've been trying to groom the entertainment industry to think about BitTorrent as a partner,” said Matt Mason, the executive director of marketing at the company, which is based in San Francisco.

“It's a constant challenge,” he said. “People don't even know we're a company. They think we're two teenagers in a basement in Sweden.”

The start-up says it has 160 million people using its two official software clients to upload and download files, one called BitTorrent and a smaller, lighter one called μTorrent. Forty million of those users, it says, are active daily.

Those figures, he said, amount to “more than Hulu, Spotify, Netflix combined and doubled,” he said. “We have a massive user base, one of t he largest on the Internet.”

It's the mission of Mr. Mason and the 110 employees working for the company to figure out a way to warm relations with content companies, forge partnerships and monetize the company's reach.

They have tried before. In 2008, the company introduced a rival to iTunes that struggled to gain momentum. But although iTunes still dwarfs BitTorrent's reach (and already has the credit card information of those users on file), Mr. Mason said the company is better positioned to try a slightly different approach.

“We don't want to create a store, just tools so people can figure it out themselves,” he said. “We are a technology company, not a media company.”

In addition, he sees promise in the company's expansion onto mobile. The iOS and Android versions of BitTorrent's official clients are expected to pass the 10 million download mark late next week.

Mr. Mason said that Facebook, which uses BitTorrent's protocol to qu ickly transfer files to multiple locations during server updates, is just one example of how companies could make use of the company's technology.

On the media side, he said BitTorrent was trying to prove that it can go beyond free downloads and actually generate sales.

The most recent example he pointed to was the promotion of Tim Ferriss's new book, “The Four-Hour Chef,” which BitTorrent publicized by making a “bundle” of extra materials, like notes, photos and recipes, available as a free download. Mr. Mason said that 210,000 people downloaded the bundle and another 82,000 continued on to Mr. Ferriss's Amazon page. He did not yet know how many of those visitors bought a book, but he called the preliminary results “promising.”

“We're seeing people go from consuming content in BitTorrent to paying for content,” he said.

These new deals could pave the way for other revenue streams and strengthen the company's reputation. Mr. Mason said . BitTorrent is profitable and makes money a few ways. It offers premium versions of its software clients that include extra features like antivirus measures, and it runs an ad network through the BitTorrent ecosystem, which allows advertisers to reach the service's largely male users.

The company's next move is to work with set-top box makers to embed its software into their hardware so that viewers at home can stream, download and watch content on the device itself. Those will probably come out in Asia and Europe next year, he said. “It'll probably be a little while before those come to North America.”

Part of BitTorrent's new business strategy stems from the rise of streaming services like Netflix and Hulu. Mr. Mason said the company isn't worried about those services. He did say, however, that if they help cut down on the illegal downloading of movies and music, then it's a “win” for the company. He also said that unlike those businesses, BitTorrent has little to no immediate interest in trying to develop its own Web shows and programs.

“The way to solve the content delivery problem is to get out of the way of the content. No one wants to just be the pipes,” he said. “We're already the pipes and we're good at it, so it's a huge opportunity for us to make this transition work.”