After years of giving it away for free, 29-year-old coding genius Bram Cohen and his team want to cash in.
Red Herring - February 21, 2005 print issue
Bram Cohen is a talker. His chin-length black hair is tucked behind his ears, stray waves escaping onto his boyish face. His eyes are at once heavy-lidded, alert, and bored. A consequence, perhaps, of being smarter than almost everyone he meets.
At his home in Bellevue, Washington, Mr. Cohen is barefoot, even as he steps outside—where it's damp and cold—to greet a visitor. The epitome of the genius college drop-out, Mr. Cohen is famous for writing BitTorrent, a peer-to-peer (P2P) file distribution tool able to simplify the hassle of trading large files by dividing them into tiny pieces, or »torrents.«
BitTorrent—an open-source technology—debuted in 2002 at the first meeting of CodeCon, the indie software development conference Mr. Cohen co-founded with privacy advocate and super-coder Len Sassaman. BitTorrent, the company, has been in stealth mode until now, but plans to unveil its first product later this month. Mr. Cohen's T-shirt displays the logo—a blue wave inside a circle—and the motto, »Give and Ye Shall Receive.«
Ask Mr. Cohen any question and his response is endless, his segues seamless as he moves from the theory of ethnicity to eBay auctions to Russian history. After years of explaining the somewhat-impenetrable BitTorrent technology and ignoring potential charges of enabling online piracy, Mr. Cohen is happier to talk about anything else.
Mr. Cohen gives BitTorrent away on his web site. He gets donations from grateful downloaders, and cash from T-shirt sales. But after years of saying he didn't care about money and watching others appropriate and exploit his invention, he changed his mind.
»At some point,« he explains, »you get kind of forced into being a businessman. You have to take care of what you created.« He adds, »It's kind of nice to make money. It was not my initial motivation, but now that I'm in a position to make a lot of it, I'd like to do that.«
BitTorrent is responsible for 35 percent of all Internet traffic, estimates P2P service and research firm CacheLogic. That figure describes Internet traffic by weight, not users or total files—BitTorrent users trade hefty bunches of bits and bytes. »More than 30 million people are using our software today and that number is growing by about 10 percent a month,« says Ashwin Navin, BitTorrent's business manager.
»Everyone smells the opportunity,« says Mr. Navin, who last summer left his Yahoo job in strategy and corporate development. He joined BitTorrent in October, along with three developers, including Mr. Cohen's brother Ross, adding up to five full-time company employees.
After spending the past six months answering press requests and divvying up the workload, Mr. Cohen is ready to head back into the lab (the PC in his rumpled home office). »I'm going to have to get a personal assistant. I can't keep all these phone calls straight.« The duties of a startup are far from what he loves to do. »I would like to stop being the CEO and chief scientist and just be the chief scientist,« says Mr. Cohen.
Mr. Navin handles the money side of the business. He and Mr. Cohen, the strategist and scientist, met at San Francisco's Web 2.0 conference last year, where they discussed the potential in Mr. Cohen's code. They quickly found their opportunity.
»One of the missing pieces is search,« says Mr. Navin. »Torrents live on the web, just like a lot of other content, and the idea is that torrents can be indexed algorithmically and made accessible just like any other content.«
Industry analysts couldn't agree more. »Going forward, search becomes important to all forms of media online,« says Mike McGuire, research director at GartnerG2. »Search is this massively important and horizontal tool.«
Finding the Niche
This idea isn't new or revolutionary. But a search page run by the author of the coolest file-sharing software since the MP3 is enticing; it's the kind of opportunity that venture capitalists drool over.
According to Mr. Navin, several tier-one venture capitalists—he wouldn't name names—are courting BitTorrent as the company seeks out Series A funding. Mr. Navin hasn't finalized the amount he hopes to secure. But he and the four full-time torrenters see gold glittering on the horizon.
»BitTorrent users are among the most heavy web searchers on the Internet,« adds Mr. Navin. »They're probably heavy Google users today.« He does the math: if 30 million BitTorrent users each generate 10 queries per day, with a typical industry income of $0.03 from each query, the search advertising revenue could come to $100 million-plus per year.
BitTorrent is evaluating a number of search engines to provide the underlying technology for its branded search service, but Mr. Cohen would not disclose details of which companies plan to work with BitTorrent. »We would not actually operate a search algorithm ourselves,« says Mr. Navin. »We would redistribute the search results of an algorithmic search engine, just as Yahoo did for a number of years.« The search engine will first be accessible through BitTorrent.com and a search toolbar. Later on it will be integrated into client software.
Hundreds of applications, web sites, and businesses appropriate Mr. Cohen's open-source Python code. To date, that group includes a few fledgling search sites, like Seattle company Monkey Methods Research Group's TowerSeek.org, and isoHunt.com.
BitTorrent may not be the first or the only torrent search business, but Mr. Cohen wants to climb to the top of the growing mount. »There are others who are trying to tackle this problem,« concedes Mr. Navin. »We hope to be the most comprehensive torrent search engine and strive to offer the most relevant search results. We will definitely bring a much larger audience to this functionality.«
With Mr. Cohen's name and reputation, their wish has a good chance of coming true.
»He's a really smart guy that a lot of folks worship because of his technology and what it makes possible,« says Jeremy Zawodny, a syndicated industry blogger and developer. »He sees the future of online media distribution and is helping show the world what many techies also think should happen.«
Potential Uses
BitTorrent is already a major boon to small-fry artists and web sites, who can avoid lethal bandwidth charges and »the Slashdot effect«—where a mention on the techie news site generates visitor overload—by sharing their large files piecemeal. That's what BitTorrent does: splits a cumbersome unit into manageable chunks between all the people interested in downloading it. Each peer's download rate is proportional to his upload rate. The more people downloading at the same time, the faster the download speed.
Unlike server-based content distribution and file-sharing technologies like Napster, Gnutella, and FastTrack (used by Kazaa), BitTorrent is decentralized and fragmented. Without search capabilities, finding torrent files involves going to a tracker site that compiles torrent locations. This tracker can be secure—like the Linux Mirror Project—or vulnerable, as in the case of sites pointing to unlicensed copyrighted content. Trackers are essentially curators, and the integration of blog, podcasting, and Really Simple Syndication (RSS) can showcase those same fledging artists, whose work has been a needle in the P2P haystack.
In this case the lack of a BitTorrent search engine is not a problem, as few know that this content exists. Nonprofit activist group Downhill Battle's BlogTorrent project facilitates torrent posting on blogs »so that everyone can be a creator, everyone can be an editor, and everyone can be a distributor,« says co-director Nicholas Reville. »It's never going to be something that we're going to charge for.«
Mr. Navin names cache management, publishing, and enterprise business solutions as potential BitTorrent revenue streams. The United Kingdom's CacheLogic has already picked up that thread. CacheLogic's network and server hardware for ISPs deals with the massive problem of P2P traffic overload by caching specific data—for example, torrents—and serving it locally.
That's more efficient, cost-effective, and user-friendly than the traditional solution of throttling traffic. According to CacheLogic spokesman Nicholas Farka, »The future is in legitimate content distribution via P2P. Besides selling our products, we are moving into analysis. In the last year, we started analyzing data from our monitoring network and exploring strategies for distributing video content.«
A group of new projects exploring content management has surfaced in the last few months. France's Aelitis distributes its Java BitTorrent client for free, but charges businesses for setting up file distribution systems. Prodigem— run by lone-wolf Stanford graduate student Gary Lerhaupt—started a content distribution service for individuals in December. Mr. Lerhaupt's dedicated server acts as a »permaseed« for service users, hosting the full copy of a file that's necessary for a download to continue. He fends off illegal use by offering service by invitation, a la Gmail. At press time, Mr. Lerhaupt doesn't even have a PayPal account set up for donations from his happy customers.
Web hosting provider Hurricane Electric announced in late January that it had implemented BitTorrent hosting capabilities as a complimentary service to its existing customers, whose numbers exceed 50,000. Spokesman Benny Ng says that for files 10 MB or larger, serving via BitTorrent requires a simple drag and drop. That's a big improvement for tech-light torrent downloaders, who, until now, had no way to seed their own files.
In all these instances, BitTorrent software serves as a free facilitator, and that's the way it will stay. The big bucks are in the peripherals: ease of use, search, and advertising. »People are going to monetize P2P. It's a fantastic new technology,« says Annalee Newitz, a policy analyst at the Electronic Frontier Foundation, a digital civil liberties advocacy group. BitTorrent search will undoubtedly cultivate a school of »sponsored results« companies that bank on coming up first in a search for every new movie title. That is the kind of bling that Mr. Cohen can use to plan his future.
»I Appear to Have a Third Eye«
Mr. Cohen fosters peculiarities. His obsessive love for the Rubik's Cube. His talent for juggling. And his self-diagnosed Asperger's Syndrome, a mild form of autism. But after all the strange quirks and proof of his amazing intellect, Mr. Cohen is a man—a husband and father. His six-year-old stepdaughter Riley runs past him, grabbing a pyramid-shaped puzzle from the couch—a spare. »Riley's playing ‘Scramble Daddy's Cube,'« says Mr. Cohen.
His wife Jenna and their two children—Riley and six-month-old son Cantor—need him. He is the provider, even if the new job fits stiffly, like a new pair of shoes. »It's possible to make a lot more money than I'm making,« he says, as Jenna walks in the door after a long day of shopping, carrying a new baby seat and bags of groceries.
Mr. Cohen is quick to minimize his smarts, but also states facts that, if they weren't true, would sound grandiose. »I appear to have a third eye, or at least people think I do,« he says.
He mentions Google's success, saying it's based on offering customers what other companies didn't. What makes Mr. Cohen think he can be as successful as Google? »I wrote BitTorrent without any help from anyone else on an old laptop in my living room using off-the-shelf tools, and it now accounts for about 35 percent of all Internet traffic. So it would appear that I have outdone a lot of people with vastly greater resources than me.«
Besides his technological acumen, Mr. Cohen has a sharp entrepreneurial mind that carves graceful business theories out of a mountain of mumbo-jumbo. »The traditional business model is, you get eyeballs and you monetize those eyeballs,« says Mr. Cohen, opining about the outdated way television executives make money. »How did they get those eyeballs? Broadcast content and then monetize it by selling advertising. But there's no appeal to the consumers and it creates hostility. You have a captive audience that doesn't want to watch the ads.«
Again, GartnerG2's Mr. McGuire agrees. He says today's consumer is in »asynchronous mode.« That is, »because of all the various options and consumption tools I have via my PC, I decide when, where, and how I want to consume.« So in order to »monetize the eyeballs« these days, companies must do it without annoying the newly empowered customer.
In the Clear?
But what about the fact that many of these empowered consumers don't expect to pay for content? BitTorrent is ready with its prefab answer: »Our mission has always been to make the distribution of large files economical. Because we develop a protocol, we're not developing a network or index of content that may include pirated stuff, so we believe we are above the fray of all that stuff,« says Mr. Navin. Mr. Cohen is dismissive of any possible legal problems: »We don't have anything to do with it.«
The Recording Industry Association of America and the Motion Picture Association of America continue to battle P2P application distributors and BitTorrent tracking sites, though they haven't gone after Mr. Cohen. John Malcolm, director of worldwide anti-piracy operations for the MPAA, filed a second set of lawsuits against torrent tracking sites on January 26, posting take-down notices to over 200 server operators in 20 countries.
»We don't believe somehow that a little bit of illegal content is okay,« he says. »File-sharing sites and applications are the ones who are anti-technology, not us. They are making it more difficult for content providers to feel comfortable about putting their content online.« But Mr. Cohen's new business foray could be Mr. Malcolm's next legal opportunity—search capabilities may be more culpable than the old lines of code, as they do point directly to unlicensed content.
But Eric Garland, CEO of BigChampagne, a P2P analysis firm, isn't shy about criticizing the motivations of his own income provider—the entertainment industry that pays him for his research and opinion. »Paying or not paying, piracy versus legitimacy, that's really the bogey man,« he says.
»Consumers all agree creators should be compensated, and intellectual property does have value. The real issue, not the scapegoat issue, but the real issue is: how do we in big music and big film industry preserve price point, and how do we preserve scarcity? I've never met a consumer or an artist interested in that.«
BitTorrent's mastermind is clear how he hopes to succeed. »You have content providers in competition with each other,« says Mr. Cohen. »But they're all probably going to be using the same technology. So you want to be the one who creates that technology and—to some extent—controls that technology. And then, you get the eyeballs.«
These are strong proclamations from someone who never wanted to run a business or be a CEO. Are Mr. Cohen and BitTorrent the future of online content? »I don't want to make any grand statements,« he says. »In technology, everything changes.«