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The Content Distribution Industry is Going to Evaporate

Those aren't my words. They belong to Bram Cohen, the creator of [b]BitTorrent[/b], the hottest P2P application on the Internet these days. In an excellent profile on the software and its creator, Clive Thompson argues in the January issue of Wired http://www.wired.com/wired/archive/13.01/bittorrent.html that BitTorrent and broadband data networks may soon fundamentally change the dynamics of video content distribution. More than 20 million people have downloaded the BitTorrent application, which Thomspon says 'transforms the Internet into the world's largest TiVo.' By 2006, installed BitTorrent clients are expected to reach 40 million. According to traffic analysis firm CacheLogic, BitTorrent already accounts for 35 percent of all the traffic on the Internet. 'During the last century, movie and TV companies had to be massive to afford distribution. Those economies of scale aren't needed anymore. Will the future of broadcasting need networks, or even channels?' Thomspon asks. Cohen concludes: 'The content people have no clue. I mean, no clue. The cost of bandwidth is going down to nothing. And the size of hard drives is getting so big, and they're so cheap, that pretty soon you'll have every song you own on one hard drive. The content distribution industry is going to evaporate." It is a thought provoking piece, one that should be on every MSO executive's reading list. If cable plays its cards right, operators should be able to cash in whether video is delivered via traditional broadcast or on-demand TV, or through cable's fat IP pipes. The bits are still traveling over the cable pipe, and if distribution value can be created, so can service provider revenues.
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