Opinion: BitTorrent Inc. hits 100 million (legal) file shares with Bundles

TorrentFreak, a website that tracks (and often cheerleads for) illegal file-sharing, reported Monday that the season finale of “Game of Thrones” was on its way to an estimated 7.5 million illegal downloads via the BitTorrent protocol. If that proves true, it would be the highest total the site has ever documented.

Less sensationally, BitTorrent Inc. -- the company behind the BitTorrent protocol -- reported Monday that its BitTorrent Bundles program had now surpassed 100 million legal file shares. In the grand scheme of things, 100 million downloads and streams isn’t a big number. Pandora streamed 1.7 billion hours of audio last month alone. But for a fledgling service whose technology is still missing a couple of key pieces, it’s a healthy start.

The BitTorrent protocol is particularly well suited for distributing big files and huge quantities of data. That characteristic has made BitTorrent the vehicle of choice for many illegal downloaders and online piracy hotbeds, even though the company has long tried to establish itself as a legitimate business partner for filmmakers, musicians, book publishers and other content owners.

A little more than a year ago, BitTorrent Inc. launched the Bundles program to let content owners obtain something valuable in exchange for their files. It works like this: People can download the initial part of the package for free, but the rest is locked behind a virtual gate, with the content owners holding the keys.

The most popular bundle of 2013 was from Moby, who had 8.9 million downloads for a make-your-own-remix version of his latest album, “Innocents.” According to Matt Mason, BitTorrent Inc.’s chief content officer, that total was 3 million higher than the most pirated TV show (by TorrentFreak’s reckoning), that year’s season finale of ... “Game of Thrones.” In fact, Mason said, the top five bundles of last year all were downloaded more often than that episode.

The most popular bundle of 2014 is from Drafthouse Films, which offered supplementary content for “The Act of Killing,” its documentary about Indonesian death squads. That one has been downloaded 4 million times so far, Mason said, including a significant number from Indonesia, where the film isn’t available.

But as Mason noted in a recent interview, Bundles is “not a finished product yet.” Publishers can’t yet demand payment for locked content; at this point, the most they can do is obtain the downloader’s email address and offer a link to a site where content can be purchased. And while the technology has improved over time, adding such features as the ability to stream as well as download files, the company still hasn’t developed the ability to customize the bundle geographically so downloaders in Lima, Peru, can be offered something different from those in Lima, Ohio.

Those shortcomings help explain why the Bundles program has been more popular with lesser-known artists and creators, although it has attracted some independent-minded household names (such as Moby, Madonna, Public Enemy and Eddie Izzard). More than 10,000 publishers have signed up to use the program, with about 1,000 bundles released so far.

A turning point for Bundles is likely to come next month. That’s when Mason said the company will add a “pay gate,” enabling publishers to put what amounts to a store inside a torrent file and charge for their content.

The first such bundle will be from a well-known artist, Mason said. “It’s going to be a big deal,” he said, but offered no further details.

That doesn’t mean that the millions of people who use BitTorrent’s software to obtain free bootlegs will be willing to open their PayPal accounts to buy legitimate downloads and streams. According to Mason, the typical bundle has a conversion rate -- the percentage of people who surrender their email address to unlock content or click to buy the file at iTunes -- is only 2%. Yet that’s an order of magnitude better than the conversion rate for an online ad. And the rate is likely to improve when pay gates arrive and publishers offer more valuable content.

But why would content owners try to sell to an audience of file-sharers? For starters, the audience is enormous, even if it may not be as large as it once was. According to online monitoring company Sandvine, BitTorrent usage accounted for 4% of the Internet traffic in North America in the second half of last year, less than Netflix and YouTube but more than iTunes, Hulu and other legitimate content outlets.

Second, unlike just about any other distribution method online, BitTorrent software performs better as the demand for content grows. Rather than distributing a file from a single server, BitTorrent grabs pieces of a file from anyone running the software who’s already downloaded it. The more people who’ve downloaded a file, the more who can upload pieces to other users. That’s one reason the trippy hip hop band De La Soul signed up to use Bundles after its effort to give away downloadable albums via Dropbox crashed minutes after launching.

Third, and perhaps most important, the economics of Bundles are better than those of other online distributors. BitTorrent Inc. takes a fraction of the split demanded by the likes of iTunes (typically, 30%). The potential difference is most pronounced in streaming, where the royalties paid by subscription services (e.g., Spotify) and online radio outlets (e.g., Pandora) are microscopic. The Bundles program also enables publishers, not BitTorrent Inc., to gather crucial data about sales patterns and demographics.

Mason noted that the world seems to be shifting toward on-demand streaming and away from selling downloads to consumers who build their own libraries of content. But artists haven’t given up on that idea, he said. “They all want to sell stuff directly to their fans. We’re building a product that enables them to do that.”

Follow Healey’s intermittent Twitter feed: @jcahealey