BitTorrent Gets $8.75 Million Backing

By Nate Mook, BetaNews

September 27, 2005, 3:35 PM

BitTorrent, the peer-to-peer technology that has become one of the most popular methods for sharing files, has landed $8.75 million in funding, according to reports. Venture capitalist firm DCM-Doll provided the cash infusion and intends to bring BitTorrent to Hollywood's doorstep.

But whether BitTorrent can shed its pirate image and appeal to content owners remains to be seen. The technology is currently used almost exclusively for the illegal distribution of copyrighted material by end users. Recent statistics have estimated that 33 percent of P2P traffic is attributable to BitTorrent.

BitTorrent itself is not the culprit, however. It is simply a communication protocol that facilitates efficient distribution of very large files. On the flipside, it is not uncommon for those particular files to be copyrighted music, movies or television shows.

This spring, the entertainment industry joined federal agencies in cracking down on illicit file sharing occurring on Web sites used as "trackers" to aggregate BitTorrent files. Shortly thereafter, BitTorrent debuted an online search and decentralized client that eliminates the need for such trackers.

At the time, BitTorrent offered the following statement on its Web site: "BitTorrent gives you the same freedom to publish previously enjoyed by only a select few with special equipment and lots of money."

Still, BitTorrent has found some legitimate uses - most notably helping to distribute Linux distributions from Red Hat and Mandriva, which are comprised of multiple 650MB CD images. And recently, BitTorrent COO Ashwin Navin has attempted to distance the company from any association with piracy.

"eDonkey and other P2P networks can have the entire piracy market because we're not interested in it at all," Navin said, explaining that, "BitTorrent was designed for people with popular content. It is inherently a bad tool for piracy, but it is an extremely elegant tool to make great content available on the Web."

Although BitTorrent has yet to publicly offer concrete plans on how it would market a legitimate service, some ideas have surfaced. For example, the company could help Hollywood studios distribute movies that must be purchased before they can be viewed, or enable independent filmmakers to share their work in return for advertising revenues.

For the past five years, however, P2P companies have struggled with the near-impossible task of appealing to both content owners and consumers. The entertainment industry has long feared the entire concept of file trading, and consumers have balked at the notion they should share their limited upstream bandwidth for something that costs money.

Nonetheless, some industry watchers remain optimistic of BitTorrent's chances.

"The podcast start-ups of today are like Wine.com, while BitTorrent is Cisco of the digital content revolution," says technology pundit Om Malik. "It has actual technology that will help grow the open media. It has the technology that will help distribute the 'video content' next generation bloggers will create or whatever. It is infrastructure - and we know who makes all the money."