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P2P Combating 'Third World Country' Internet, Lack of Profit

17 Mar, 2008 By: Anne Sherber

NEW YORK — The debate over whether to distribute content digitally is over. The big issue in 2008 will be figuring out the best way in which to make it profitable, according to technology executives attending the Distributed Computer Industry Association (DC/IA) P2P Market Conference held here March 14.

Unless service and content providers can accommodate end users with an online viewing experience that they find acceptable, consumers will be reluctant to participate.

Speaker after speaker bemoaned the relatively narrow bandwidth available to consumers in the United States and the limitations that restriction places on the ability of content delivery networks (CDNs) to meet the increasing demand for high-definition video.

“We are a third world country when it comes to the Internet,” said Doug Walker, CEO of BitTorrent Inc.

The spectrum of companies engaged in digital content distribution must figure out how to create customer and shareholder value, Walker said. He said he believes that this will be the year of business model re-evaluation.

He noted that BitTorrent client software, the end user piece of BitTorrent's content delivery service, is being downloaded faster than ever before.

“All of those clients will serve as a platform for our users,” he said. “We are going to learn a tremendous amount this year.”

He said that BitTorrent is also building relationships with studios.

“These guys want to license their content,” he said. “We will help studios connect to a new marketplace.”

Walker believes that ultimately this revolution in content delivery will be good for business. “When businesses try to protect their traditional models by restraining what customers want, businesses lose,” he said. “The recording industry is an example of that.”

Pando Networks also distributes a software platform that enables digital delivery through a P2P network. Pando CEO Robert Levitan noted that in order to provide consumers with an online experience that doesn't leave them frustrated by buffering and low resolution, P2P companies will have to collaborate with the telcos and cable companies. All of the industries involved have undergone an attitude adjustment in the past three years, he said.

“In 2005 content owners thought P2P was a dirty word,” he noted.

But, Levitan said, since 2006, 18 million people have installed Pando on their computers. And using Pando, NBC, which has just launched a site that enables consumers to stream or download its programming with undeletable commercials embedded, “has moved from losing money on every download to making money on every download,” he said.

“You will see more and more ad-supported content available to consumers for free,” Levitan said. “P2P is going to make that business model work.”

Also at the conference, the P4P Working Group, a collaboration between ISPs, P2P software distributors and technology researchers, announced its field trail results. According to the Working Group, ISPs, implementing a mechanism through which they can communicate with P2P software programs about network status and policies, can ultimately benefit from customer use of P2P. Initial field trial results indicate that P4P enhanced download rates for fiber-to-the-home (FTTH) averaged 205% the speed of unmanaged P2P downloads. Some FTTH users saw as much as 665% the download speed of unmanaged P2P.

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