BitTorrent, a tech company whose name is commonly and incorrectly associated with pirating, has been running a legitimate business since 2004 with over 2 million pieces of licensed content in the BitTorrent download manager, which serves more than 170 million people monthly. The company is now beginning to launch a new endeavor to empower those in the content creation business. BitTorrent Bundle provide a way for creators large and small to have all the advantages of the peer-to-peer protocol while also maintaining control over their content by creating 'gates' that must be unlocked by the consumer. We had a chance to chat with Matt Mason, VP of Marketing at BitTorrent, who is very impassioned about what this new publishing platform could potentially mean for creators. Read on for the interview and get the full scoop:
NFS: What is BitTorrent Bundle? How does it work, and what is a 'gate' or 'gated' content?
Matt: If you look at the way content is sold, films or music, the idea is you have a piece of content and you put it in a store and you buy it there. This is something that works in a centralized system. The internet is a completely decentralized system and I think the big problem we have in terms of transferring the physical business model of selling content into the digital world is that we apply these physical constraints and think about centralized models and stores, when in fact that's going against the grain of how the entire internet works. [The centralized model] is not a holistic answer, it's not something that's going to work in the long run because it's at odds with the rest of the organism.
What we tried to do with the Bundle is not 'put some content in a store,' the idea is 'put a store in some content.' The gate is in the file and the consumer has to do something to open the gate. As long as there's enough information and content in front of the gate to interest people, there's a reason for them to open the gate. This can exist all over the existing BitTorrent ecosystem, and this can turn The Pirate Bay into a legitimate store, or IsoHunt, or any of these piracy websites. Or you can use it as a flyer and you can push people to iTunes or Amazon or the one place that you want to get content.
There's two big ideas: One, it's completely decentralized, the piece of content can spread around the internet as it will anyway, but in each version of that piece of content there's an interaction, there's a way for the creator of the content to earn money.
Two, what we've learned working with content creators for the last two years is that there isn't one business model for digital content, there's as many business models as there are pieces of digital content. The big idea in the long-term is that when you publish these bundles of content, you as the creator will get to decide: How will people open this? Do they pay $5? Do they pay whatever they want? Do they give you an email address? We don't wanna set those rules, we just want to give people a set of publishing tools so they can configure the Bundle to work best for their business model.
NFS: So the opening of the gate happens after you download it?
Matt: The way that we've been testing them is: you always get something for free for downloading. We feel this is just good best practices: don't make somebody do something without rewarding them. We want people to share these Bundles, and for them to be worth sharing there's gotta be something in front of the gate. You can't just say "Hey, enter your email and you'll get this thing and you have no idea what it is." You'll see less people doing that. If you're an up and coming content creator, it's probably good to let people know what they are getting.
NFS: What are the advantages of peer-to-peer file sharing for entertainment distribution?
Matt: Because the BitTorrent ecosystem is completely distributed, peer-to-peer essentially means you can move really large files without any servers because everybody who is sharing the file is part of the processing power of storing and sending that file. The BitTorrent Bundle is the internet's media format, it's a format that works the way the internet works, it's distributed by nature, it's designed to be shared infinitely and still add value to content creators, and you can put anything inside a Bundle. It could be high-def or 4K, and you could ship that Bundle to an audience of hundreds of millions for a cost of zero dollars. It's the most efficient way to move large files around on the internet, that's what the BitTorrent protocol was designed for. That's what it does. Every day the BitTorrent protocol already moves more data that everything on HTTP combined. It's a proven technology and we wanted to build something that allows publishers and content creators to take advantage of that.
The reason Bram our founder invented BitTorrent was: he saw the future and the future was that HTTP which was designed for moving hypertext was just not gonna work for moving videos, music, large code updates -- the files are getting bigger and BitTorrent was designed for that as a protocol, and now we're at the stage that so many content creators want to publish with BitTorrent that we felt it was time to build this format that allows them to do it.
NFS: So you've seen this coming for a while and have been ready for this?
Matt: We're not a content company, this is about technology. Yes people are scared of us and they think we're some kind of piracy thing because people wrongly use the word BitTorrent to mean 'stealing movies.' But we've always known when this day would come. As soon as 4K was announced, the Consumer Electronic Association got in touch and said "We can't move 4K files to TV without a peer-to-peer architecture, and BitTorrent is the largest peer-to-peer architecture in the world, so... we should talk."
It should be powering everything, there's no reason BitTorrent shouldn't be powering Netflix, they would be much more efficient if it was, but people have stayed away from BitTorrent because of this old broad perception issue. Peer-to-peer architecture is critical to moving large media files and will get more critical, and that's why we felt it was the right time to do this.
NFS: Does BitTorrent take a cut?
Matt: There are no current plans to do that. As we scale up we might have much higher costs in supporting this ecosystem, so I don't wanna say we'll never figure out how to monetize it. One way we definitely will be monetizing bundles, we have an Ad network inside the BitTorrent download manager that 170 million people use every month. That ad network serves up 6 billion impressions a month, so we make money by funneling people towards good legitimate content. So the more time people spend in BitTorrent with Bundles looking for cool stuff the more we can engage a user and serve them more ads.
So yeah this is a way for us to make money, but the primary goal of doing this is: if we can help content creators start to understand that BitTorrent is a good technology, then that helps us solve this brand perception problem for us, which is a big problem. Quite honestly we're a profitable company that's been that way since launching in 2004, and our business model is licensing our technology, our ad network, and selling premium versions of our software, and we've never been sued. We're a really solid company, and the only thing that's stood between BitTorrent and being able to grow faster is that people are scared of it.
NFS: Are you trying to reform the piracy destinations with Bundles?
Matt: The best way to stop piracy is to compete with it, there's no fighting it. You just get in this endless futile game of whack-a-mole. We do everything we can to point people towards good content and we feel that's the best way to combat piracy. But it's not about trying to change the existing ecosystem because we feel it's a really good place for consuming content. Billions of people use the internet to find all kind of content, and they use all kinds of torrent sites, so instead of trying to block things, why not turn that ecosystem into one where legitimate transactions can happen too?
The two ways we're thinking about affecting that ecosystem are: we want to fill it with these content Bundles, and then we can start prioritizing those Bundles in search results. We've currently got an alpha product called Surf available in the Chrome store which does this. Search is something BitTorrent has never done, we've never wanted to point people towards content if we weren't sure of the legitimacy of that content. The only way to find a pirated torrent file is to use Google, Bing, Yahoo or your web search provider. If you're just using the BitTorrent download Manager or the BitTorrent protocol, it's literally impossible to find pirated content. The only way people use us for piracy is that we're part of a technology stack that's been wrongly called BitTorrent. That's our fault for not telling the story well before, but we're making an effort to do that better now.
NFS: That's great, so we'll be seeing these Bundles in places like The Pirate Bay?
Matt: Yeah, hopefully. We've seen such great results from people wanting to be able to search for good stuff within BitTorrent, that we're really committed to prioritizing the good content and helping surface it. My dream would be that by the end of this year for the top 10 most downloaded things on The Pirate Bay to all be legal pieces of content. And I'm sure The Pirate Bay will have no problem with that either, and why would Hollywood or the record industry have a problem with that? If The Pirate Bay just becomes another place where people are doing legitimate stuff with content then you're giving people more options, and that's the way to stop piracy.
NFS: Then you can just eventually flood the piracy websites with legitimate content, then it's anybody's game.
Matt: Yeah, but just to clarify, we don't have a relationship with The Pirate Bay or any of those piracy sites, we've always been a legal legitimate business. It's funny that we keep getting these stories, you know "BitTorrent goes legit," when we've always been legit. We'll probably get that for a little while longer until the media sites catch on, but it's more about a maturing point of view about the technology itself and how it actually can add value to content creators.
NFS: Can you talk about your partnership with Cinedigm and what you did with the recent indie-release Arthur Newman? Did you feel that was a successful test?
Matt: Cinedigm is the largest independent distributor of film content in the world. Their background is they're a tech company, so they really get what's possible with BitTorrent. The last time I checked, 2.6 million people have downloaded the extended preview that we offered of Arthur Newman. That's pretty good when you consider that only 60,000 people watched the trailer on YouTube. What was even more encouraging was that 35% of people on average converted from watching the trailer and looking in the contents of the Bundle, to clicking through to the Arthur Newman website. It was a really successful campaign. BitTorrent is a really great awareness driver, but it doesn't mean you should also do billboards and the other things that promote a really good movie. They asked us to drive awareness, and we drove more awareness than any other channel that they use.
However, something that's worth talking about is: I don't think the biggest problem of indie filmmaking is distribution. There are lots of ways to do it. We're going to solve distribution. The biggest problem for the future of filmmaking in the digital realm is marketing. Learning to do relationship-based marketing with audiences, learning how to release things online is going to be the biggest challenge of the next 10 years, it's not gonna be distribution, it's not gonna be piracy. There's enough good places for people to find out about your film now, it's about getting that person into the right marketing funnel and forming a relationship with them.
What's happening in the movie business is what happened in the record business. It used to be a much more straightforward model. Make a video, blast the record on the radio and between MTV and ClearChannel you've got everything sewn up. And you can't do that anymore. You can't throw your song up on YouTube and expect people to instantly buy a T-shirt with your name on it. However, people will do that if you form a relationship with them, if you get their email address -- and an email address in the music industry is now more important than a single sale to most smart people doing digital marketing, they realize that the lifetime value of an email address is more than the 99 cents they'll make in iTunes.
Especially for young filmmakers coming up, it's not about getting signed and then someone takes you from 100 miles an hour to 1000 miles an hour, it's getting from 0 to 60, it's about getting off the starting block with any project, and that's about good marketing. The thing that Bob at TopSpin already says is: 'don't even think about making an album until you 2,500 email addresses because nobody is gonna buy it.' I don't know what that number is for filmmakers, but filmmakers need to learn to love email addresses because that's how you're gonna build an audience. If you've got an audience of people who love you as a director or screenwriter and you've got permission to contact them, not via a social channel, but via email you can really engage with that person. If you've got 100,000 people who have asked to get emails from you and would highly like to see your next film, that's an audience you can use to drive box office.
We worked with a filmmaker named Vikram Gandhi on a documentary called Kumaréthat he made that won the audience award at SXSW in 2011. We were talking to Vikram about how he was distributing it, and his distributer said: "Okay, the film is great, let's open in New York at IFC. If it does well, we'll open in LA. If it does well in both NY and LA, we'll open in 15 cities."
So we built a Bundle of content and asked people to give us their email addresses, at the time we had about 4 million people downloading the Bundle of content from Kumaré, which was an extended trailer, some MP3's, behind the scenes photos, and we got about 20,000 email addresses from that campaign. And what we were able to do was email everybody on that list when the film opened in New York, and that got enough people out to IFC that the film sold out in two weeks. His distributor saw that, said: "Great, let's open in LA." We kept up on the email list, and they did a really good job of emailing people with really engaging emails, giving them a reward for opening the email, and they were able to sell out LA and eventually open in 15 cities. And that affects the rest of your release window too, that affects how much money you're gonna make on VOD, negotiations with Netflix -- everything.
Matt Mason of BitTorrent
The traditional model has been get that big bang on box office weekend because that sets the price for the 60% of your money that you're gonna make on VOD later. The campaigns that do well on BitTorrent are the ones that have long lead in times, and get email addresses, get an audience excited about your film months before you're releasing anywhere. This isn't an unusual tactic for a big Hollywood blockbuster, but this isn't something that independent filmmakers necessarily think about that far in advance. Being able to hustle like that and be great at digital marketing is just gonna become so important.
I'm sorry to ramble on about this, but I'm really passionate about this because I think this is the key to unlocking how digital is going to work for filmmakers, and we're building the Bundle so it can really help people do marketing this way.
NFS: Are you curating content? What about for small independent filmmakers who have a film that want to get it out there via BitTorrent? Is it just going to get lost in the sea?
Matt: At present we've been curating things, not because we want to but by design because we haven't built this platform yet, everything you're seeing from us is a hand-made project that takes 20 people about 2 weeks to put together. It's tough to make a Bundle by hand. We've been choosing the projects that we work with based on what we need to learn next. With Arthur Newman we've never done a theatrical scripted release before with A-list talent, and we've never done anything with Cinedigm and they're a really forward thinking company so we were keen to work with them. We're learning about digital marketing ourselves as we do this with everybody which informs the kind of product we build.
So we're curating for 2 reasons, one we want to work with things we think our audience would be interested in and will help change the perception of BitTorrent, so if we work with big filmmakers or record companies, obviously that's good for us, but we also work with a lot of very obscure people that we just thought were really cool.
NFS: Have major Hollywood studios been reluctant to associate with your brand, or have they been excited?
Matt: It's been both. If you look at the history of Hollywood, they've always been scared that something is going to destroy their current system, and nothing every has. Hollywood used to sell film by the foot, they weren't about storytelling at all. The more good technologies have come along, the better Hollywood has gotten at telling stories. BitTorrent is only gonna help do them do that better. If you've got a Bundle that you can literally put anything in, then what are you gonna put in there? You can create the most immersive little world of all different mixed media to tell a story. I'm so excited to see what people do with the Bundle, I think the things that we've done, frankly, will lack imagination and I'll be embarrassed by the amazing things that people do with Bundles once anybody can do anything with them.
The conversations we've had have gone well. The people in Hollywood who are scared of us aren't talking to us, but the people that are excited. Some are afraid of "I don't want my film to become more pirated because of working with you guys" when that's not gonna happen. In fact it's the exact opposite, once people in Hollywood understand exactly what we're trying to do. There's so many assumptions that we need to change, but people are more open than you'd think. You're gonna see some really interesting things happen between the major studios and BitTorrent over the next 12 months.
NFS: How will Bundles compete with the other rising stars of digital distribution?
Matt: I love Netflix, I love Vimeo, I love everybody in the business who's trying to make things better for filmmakers. The way we look at the Bundle is, this is something that might add value to your business model. If your business model is to spread awareness about your film all over the web but drive people back to Netflix or Vimeo, we want that BitTorrent Bundle to allow you to do that. We don't ever want this be a platform or a centralized place that we're dependent on or earning too much money from that it becomes this shut down walled garden, because that's limiting people. If you collect millions of likes on Facebook, you can't message all those people for free, Facebook is gonna charge you money for that. We never want to be a middleman between you and your fan.
BitTorrent is a technology company that makes protocols, we don't need Bundles to become a closed-off platform, that's exactly what we don't want to happen. We want to add another unit of content to the existing internet ecosystem that augments it, rather than tries to siphoning off another audience from somewhere else. That's everybody's else's business model, but the one big gap we see is that nobody is trying to do the decentralized thing because it doesn't really make sense as a business for anybody except BitTorrent.
NFS: As a filmmaker myself it's exciting to hear about this very forward-thinking approach to these new problems in the digital world. I consider myself someone who's pretty informed on these issues, and I feel like I learned a lot just talking to you. So happy to spread awareness about it.
Matt: Thanks man, I appreciate that. Once the Bundle platform is out there, we want to hear what you think and what we can do to make it better. It's gonna be a work in progress, we need the help of all the different creative communities to get this right.
NFS: If someone has a project they think is right for you, how can they go about getting your attention?
Matt: Yeah, absolutely. My email address is matt@bittorrent.com, just hit me up and tell me about your project, we're always open to working with people. Our biggest challenge with the content industry today as a company is not that people think we're a piracy company, it's that we can't build this publishing platform fast enough. We get flooded with emails and calls, major labels, big Hollywood studios and independent content creators from all around are now pitching us projects to do. We wish we could do all of them, and by the time we get the publishing platform out there, we will be able to do all of them, then our job is just making sure the good stuff rises to the top. Once we solve publishing, the next thing we've gotta figure out is discovery. Discovery in BitTorrent has to be at least as good as it is everywhere else on the web, if not better.
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In a world where everyone wants to corner their share of the market and get their piece of the pie, it seems BitTorrent are focussing on cracking the whole thing wide open, which is quite refreshing. In the past BitTorrent has developed other tools like BitTorrent SoShare and BitTorrent Live, which aim to empower creators, and this latest development from BitTorrent immediately strikes me as a much more 'big picture' approach the digital content problem. The open source, peer-to-peer, direct-to-fan publishing method opens a whole slew of possibilities for creators, large or small.
With how much data is transferred via BitTorrent's technology, it's no wonder that this hasn't happened already, and I'm almost ashamed to say I didn't see this coming. As someone who considers myself relatively informed on these subjects, I was pleased to learn a lot about this technology and BitTorrent's ethos during this interview. Peer-to-peer architecture is a simple and powerful way for us to share, and I hope we can spread more awareness about its potential in the legitimate market. What do you think? Is this something you'll likely try to utilize for the distribution or marketing plan for your next film? Join the discussion below.
