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February 27, 2005 The Distribution of Web Content
In the Red Herring released on 21 February 2005, there was an article called "Harnessing BitTorrent's Storm" that interviewed BitTorrent creator Bram Cohen. Unlike a similar article published by Wired Magazine that was focused mainly on the rapid adoption and success of BitTorrent, the Red Herring article touched on a critical piece of information: Bram Cohen is looking to cash in. For those that haven't been following the file sharing movement, a quick description is that Bram wrote, by himself, an application that allows you to download very large files very quickly. He distributed his software freely as open source starting in 2002. He does accept donations via PayPal, but while he's reportedly made some good money from the donations, it's not anything close to what he could be making if he were to build a multi-billion dollar company off of the technology. With a user base of 30 million and a growth rate of 10% per month, the product has a significant reach and potential for monetization.
But how do you ensure you become a Google, and not a Friendster?
Bram Cohen seems to have some strong opinions about how to monetize his user base because, as the Red Herring article describes, he is focusing all his efforts in this area. What surprised me was his approach. He didn’t go down the typical advertising route like Google with a CPC (cost per click) and CPM (cost per thousand impressions) strategy. Instead he seems to be focusing on the content providers themselves: the Rupert Murdochs. He explains: “You have content providers in competition with each other, but they're all using the same technology. So you want to be the one who creates that technology and--to some extent--controls that technology.”
Why is this of interest to me? Why do I care so much about the desire to create new methods of distributing web content? More on that later.
Posted by johnnie at February 27, 2005 12:17 AM
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