Ashwin Navin, the president and founder of Bit Torrent Inc. gives a podcast describing how Bit Torrent Inc was started. Bit Torrent was originally an open source peer to peer file sharing protocol developed by Bram Cohen to deliver large amounts of data over the internet quickly. Initial users and evangelists of the protocol were developers distributing Linux. It was a perfect fit: Linux and Bit Torrent were both open source projects so the philosophies resonated, and Bit Torrent allowed Linux to be delivered quickly and cheaply.
However, Bit Torrent distribution really went through the roof was when it started being used for illegal sharing of movies and music. Millions of users across the web (including myself) wanted to get free mp3s. By installing the Bit Torrent client, we were able to download them quickly. It’s an interesting situation to consider:
You are developing a product with the best intentions, but your product is being used to break the law…
Of course, this was a law that most of us felt no moral obligation to… Nobody seemed to be getting hurt and it weas hard to feel bad for the pop-star millionaires complaining that they sold less records.
At some point, Ashwin left Yahoo to start Bit Torrent Inc. The basic idea was to leverage the broad distribution of the Bit Torrent client into a legitimate business. In his podcast, he describes his pitch to build relationships with large media companies:
Mr. Studio Chief… In the next hour that we’re going to be talking, about 70,000 of your movies are going to be downloaded illegally with my software… We got to do something about that…
Pretty hilarious! And for a large part it worked. Bit Torrent may be the closest competitor to iTunes in legal downloads. This is definitely a strategy not taught in Business School, but worth considering as I’d expect it to be repeated in many more new media companies. Consider the discussions online video and music sites such as YouTube, Pandora and Musicovery are having with studios and record labels. – we’re helping users get your content for free – let’s work together to monetize this…
Tagged: Bit Torrent, Media, Startup