Is BitTorrent Realizing That Its Advantage Is In Distribution Technology, Not DRM-Laden Stores?

from the hindsight dept

Thu, Aug 7th 2008 1:16am — Mike Masnick

We were among those who were quite confused last year when BitTorrent (the company, not the underlying technology) decided that its business model would be to give in to counterproductive Hollywood whims and focus on setting up a DRM-protected downloadable movie store. After all, there was plenty of evidence that the market wasn't particularly interested in such things. BitTorrent's advantage had always been in the distribution part of the value chain, and yet here it was basically focusing on things like DRM and e-commerce, where its expertise was minimal, as its business model of choice.

Since then, BitTorrent (again, the company, not the technology) has been almost totally lacking from any discussion about downloadable movies.

So, it's hardly a surprise to hear that the company is laying off a bunch of employees, focusing mainly on its sales and marketing staff. This likely means one of two things: that its business is not doing particularly well, and senior management has decided to scapegoat sales and marketing under the false belief that a new team will somehow magically make things work, or that it's realized this was a bomb of a business model and is about to move in a totally different direction, that requires different skills on the sales and marketing side.

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Filed Under: bittorrent, drm, movies, technology

10 Comments

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PaulT (profile), 7 Aug 2008 @ 4:28am

Since the company had nothing to do with the technology, you have to wonder what they were trying to achieve with the store in the first place. Other than the name, they were not offering anything more than other legal download services and certainly offering a far inferior product to the pirate sites using the same technology.

It's not entirely their fault - I'm sure they'd go DRM-free if the studios would allow it - but there's no way this could have worked. Apart from the brand name, they have nothing to offer.
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Anonymous Coward, 7 Aug 2008 @ 4:28am

A third possibility - they are eliminating expenses that are not necessary while they attempt to sell the company.
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Anonymous Coward, 7 Aug 2008 @ 5:17am

Re:
"nothing to do with the tecnology..."

Except the guy that founded the company also created the technology in the first place.

As far as I can tell, they thought that they could give those companies what they wanted and make money doing so. Its what happens when you only think it part of the way through before deciding on a business plan.
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CEOBasher, 7 Aug 2008 @ 5:42am

Poor Executive Leadership
"This likely means one of two things: that its business is not doing particularly well, and senior management has decided to scapegoat sales and marketing under the false belief that a new team will somehow magically make things work"

Unless they are replacing the executive leadership, then no recognition of bad strategy has been reached. They are simply scapegoating staff (I guess for not succesfully selling something no one wants?). On the good side though in a year or two you can just repost this same thread when it happens again.
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Dom, 7 Aug 2008 @ 6:50am

Passing the buck?
At the end of the day, it was the management's idea to try and break into the downloadable films market, and so if the business is suffering because the idea failed, why should it be the Sales and marketing staff that bare the blame, and lose their jobs?

The managers should take responsibility for their actions if you ask me.
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Anonymous Coward, 7 Aug 2008 @ 9:49am

BitTorrent 2.0 going the way of Napster 2.0, kekekeke...
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Anonymous Coward, 7 Aug 2008 @ 10:57am

"...focus on setting up a DRM-protected downloadable movie store.."

But if you had read the article you liked you would have known that they wanted to do that without the "DRM-protected" part!.

"This likely means one of two things:..."

Conveniently overlooking the obvious 3rd possibility - techdirt is writing garbage again.
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DanC, 7 Aug 2008 @ 1:44pm

Re:
But if you had read the article you liked you would have known that they wanted to do that without the "DRM-protected" part!.

They didn't want to, but their content partners were insisting on it. With that restriction in mind, BitTorrent decided to focus on setting up a DRM-protected store anyway. I don't doubt that they had good intentions, but they decided to go with a business model that was burdened with DRM.

Conveniently overlooking the obvious 3rd possibility - techdirt is writing garbage again.

No, the article is accurate.
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Anonymous Coward, 8 Aug 2008 @ 12:54am

Re: Re:
So if the company doesn't want to do something but gets forced into it, that becomes the focus of their business !!!.

Perhaps you have spent too much time on planet Maznik.
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DanC, 8 Aug 2008 @ 8:42am

Re: Re: Re:
So if the company doesn't want to do something but gets forced into it, that becomes the focus of their business !!!

Knowing that their business model was going to be hampered with DRM, they decided to keep with it anyway. They weren't forced into their business model; limitations were introduced into the model they chose. They decided to focus on their download store, DRM and all.

You seem to be saying that as long as a company has "good intentions", they should be forgiven for making bad business decisions.
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