The file-sharing company BitTorrent has begun testing an advertising model through which it would share ad revenue with content producers whose work is downloaded through the service, promising a way for artists to monetize informal sharing of their digital content.
BitTorrent is launching the revenue model through a pilot program using a selection of songs by hip-hop artist DJ Shadow. The music is promoted visibly on the website. When users download it, they can also opt in to download one of several free applications, such as the RealPlayer video player. Each time a user downloads an app, the software vendor will pay BitTorrent an advertising fee, which BitTorrent will share with DJ Shadow, BitTorrent said on Tuesday.
BitTorrent sees the revenue-sharing model as "a potentially sustainable way for all artists to monetize BitTorrent," it said in a statement. BitTorrent claims to have 150 million monthly active users and says the file-sharing protocol it pioneered drives more than one-fifth of all global Internet traffic.
BitTorrent, like other file-sharing services, is often thought of as a hub for illegal sharing of copyrighted material. The entertainment industry says that practice unjustly deprives artists of the proceeds of their work. But some BitTorrent users share files that are not protected by copyright.
The company did not immediately make anyone available for an interview.
BitTorrent has in the past made arrangements with artists to feature their work on the site. It claimed that such promotional efforts delivered "ancillary revenue" to artists even though no revenue was shared. For example, featured artists may have seen ramped-up concert ticket sales as a result of the promotion.
Rebecca Lieb, an analyst with Altimeter Group, saw the move as an effort to develop more revenue streams. BitTorrent already features display advertising, but the program announced Tuesday would lead it additionally into content promotion, Lieb said. It's likely BitTorrent will charge artists and their marketers to feature their content in addition to sharing the resulting ad revenue, she said.
"The music business is a tough business. People will do a lot to gain visibility. It's not easy to be widely visible in iTunes, just as it wasn't easy to get a floor display in Tower Records 20 years ago if you were an unknown," she said.
BitTorrent's initiative, she said, "is a really interesting model to disrupt digital music and media distribution methods."
But is the move an effort by BitTorrent to distance itself from the unsavory world of file-sharing, which has been in the public eye during the ongoing Megaupload case?
"Public relations and image and reputation could be part of it, but I also think BitTorrent is looking to monetize an extremely popular application and treat it as media," she said.
