uTorrent now commands 60 percent market share among BitTorrent clients that are available to file sharers, according to the latest numbers released this week by the Tribler P2P team at the Delft University of Technology in the Netherlands.

That’s bad news for Azureus Vuze, which had been gaining, and the official client from BitTorrent — both of which lost over 20 percent of their share since last month, with BitTorrent’s client on a losing streak since June. In the “winner takes most” world of the Web, these numbers put uTorrent in a commanding lead. However, Transmission is growing at a rapid clip, posting nearly a 24 percent gain over September.

The Tribler team simply counted the client application reported by peers connected to a number of torrent swarms. What’s not clear is how the location, time, or selected torrents might have affected results — for instance, if Tribler was connecting from Delft, the results may be skewed toward European users.

All of which leaves this Vuze user wondering if he shouldn’t switch to uTorrent. Vuze’s attempts to position Azureus as a media platform and not just a torrent download application just seems to get in the way of sharing files.

One would be hard-pressed to find a more appropriate film than We Live in Public to illustrate how broken the independent feature film distribution market is. A rumination on the life and works of online video pioneer Josh Harris, the mad genius behind Pseudo and Operator11, the film explores issues of privacy, surveillance, fame and grandiosity as Harris works through a series of groundbreaking, expensive failures in art and technology. Everyone working in new media and online video today should see it. But unless you live in New York, you can’t — at least not yet.

While Harris was mashing up the downtown art scene and that of Silicon Alley techies in Manhattan before and after the turn of the century, The Real World changed the face of television to feature more — and cheaper — so-called “reality” fare and Michael Moore took independent feature documentaries mainstream. Since then, YouTube and Facebook have turned many of Harris’s predictions into the revenue-generating, over-sharing reality we know today. So you would think that a Grand Jury Prize winner from Sundance with a director who’s now earned that honor twice would have no trouble finding distribution on favorable terms. But the Park City festival clearly isn’t the ticket to big audiences and Indiewood riches it may have once been, if Director Ondi Timoner’s decision to market the release herself is any indication.

Director Ondi Timoner (who claims that she’s still owed royalties from her previous prize-winning documentary, Dig!) turned down all offers from the likes of HBO and chose to go it alone — presumably because the contract details were disagreeable. She and Harris are instead barnstorming around the country, having kicked off their tour in New York City last week, with stops in Boston, LA, Chicago, Austin, San Francisco and Seattle planned over the next few months. The tour is meant to fuel chatter on Twitter, where popular users like Ashton Kutcher, with his tweet featured on the movie’s poster, have been promoting the project; and on the film’s web site, where Q&As after the screening have been broadcast live, online. All the promotion is presumably intended to benefit an online release and DVD sales, since without a distributor it’s unlikely to get a nationwide theatrical release.

It’s an interesting challenge to the system in the spirit of Harris. In a telling scene in the movie, Bob Simon of 60 Minutes has to endure Harris openly challenging CBS’s viability in the coming Internet age. Which leaves Simon wondering aloud on camera when his own show will be available online in comparable quality to broadcast — with Timoner slyly cutting to a mockup of the current CBS site where, 10 years later, you can find just that.

So why not release online today? Because the rules of the Academy of Motion Picture Arts and Sciences demand that it be in theaters for at least 60 days in LA and New York before being shown online (or on TV). Which means you won’t be able to download it until December at the earliest — unlike the web-wide release of Steven Soderbergh’s The Girlfriend Experience, where star Sasha Grey could send thousands of fans straight to Amazon for $9.99 online rentals even before a theatrical release in New York and LA.

While it’s certainly true that a nomination, or even an Academy Award, will doubtless help DVD and web sales down the road, all of the Twitter buzz in the meantime can only be turned into a few ticket sales, not paid downloads. And this was a film made by and for the web: Timoner started shooting footage at Harris’s legendary parties back in 1999, participated in the “Quiet” experiment, and cut 5,000 hours of material down to 91 minutes thanks, in part, to being able to work with others remotely. “The film wouldn’t be here without the Internet,” Timoner pointed out to the audience after a screening Saturday. “It was cut over the Internet.”

For all the revolutionary posturing and DIY distribution, it seems odd to have bent over backward to please the Academy. After all, as Harris points out in an period interview used in the film, there’s only one click between advertising and a transaction online — why not capitalize on that? Then again, Harris clearly values recognition and validation from peers and the public much more highly than money, and maybe in their long association Timoner took that sentiment to heart. For the sake of the film, I hope her self-reliant marketing approach doesn’t prove to be an idea so far ahead of its time that it’s unprofitable.

As for Harris, he’s apparently living in Los Angeles with Jason Calacanis and meeting with television producers to pitch his latest idea, The Wired City, which sounds a lot like Big Brother. That it’s being pitched to television at all, and not conceived for the web, makes it seem like just another gimmicky reality show on television, and from a creator little-known outside a small set of online fans and colleagues.

The business plans for both Public and Wired illustrate the schizophrenia of new media models: on one hand, an online revolutionary pitching television execs he once wanted to put out of work; on the other, a talented independent filmmaker with a movie tailor-made for an online audience hewing to the outmoded rules of the oldest of old Hollywood.

Fans of Project Runway were happy to see the series continue, if on a new network, when the Lifetime network managed to wrangle the show away from Bravo. And now the network has announced that “ProRun” will be made available for free, with ads, online, something that was suggested — nay, demanded — right here over a year ago.

Like similar reality shows, including Top Chef, there’s so much product placement in Product Runway that the more people viewing it in any medium is simply more value for advertisers. But cable networks have been less willing than broadcast networks to put stuff online out of the fear it would endanger carriage fee revenue paid by cable and satellite television providers, though this is not the first show Lifetime is offering in full episode form online. (Lifetime uses Brightcove for video, but disables embedding — still progress!)

Not that Runway has any trouble attracting revenue, with L’Oreal Paris and Garnier sponsoring a tie-in sweepstakes on the web site and as many as 100 sponsor mentions or more in a typical episode, by our count. The network is also smartly pulling in catty comments live from Twitter and Facebook for the “Buzz Room” site — driving fan engagement and smartly playing up the most enjoyable part of the show, which is snarking with your friends over the inevitable hot mess contestants and their outfits.

It’s unclear what role the Weinstein Co., which produces the show, played in the decision. The company is reportedly in a mess financially, having laid off dozens of employees late last year and hiring a firm to restructure its debt in the hopes of helping cash flow. While those in the know say that the company is placing its bets on the success of Quentin Tarantino’s Nazi-torture-porn flick Inglourious Basterds, if The Kluminator can find more fans online, she might be able to help save the day.

After all, why pay Showtime to air your movies when you can post them to YouTube for free?

Online video distribution is exciting, but it wouldn’t be of much interest if the cameras weren’t also getting smaller, cheaper and more powerful all the time. The latest object of desire I’ve stumbled across is the recently released Phantom Miro eX from Vision Research. While the RED One camera offers incredible resolution, the Miro offers incredible shutter speeds — essential for high-speed photography. Think bullets destroying apples, super-duper-slo-mo slam dunks, and all sorts of visual trickery used in commercial productions.

Yes, it’s a niche interest device that will probably only appeal to cinematographers working at a fairly high level (Vision’s cameras have been used for everything from the Super Bowl to Battlestar Galactica). But similar to computer processors, video processors like the CMOS chips used in the Phantom have a way of getting smaller, faster and cheaper at an incredible rate.

For instance, Vision Research has been creating high-speed video cameras for years, and some of the higher-end models will blow your mind — the company’s top-of-the-line camera, the Phantom v710, will shoot 1280×800 HD footage at 7,530 frames per second with a motion-stopping shutterspeed of half a macrosecond. The Miro is much less powerful, but it can shoot full-color, 800×600 footage at up to 500 frames per second — at least enough to turn out some epic footage of snowboarders tearing up the slopes in ridiculous amounts of motion detail. And it fits in a backpack, so you can shoot on the fly.

It does cost $9,900, but can be rented for as little as $375 a day, and the rental price can be applied to your purchase. Prohibitive for your typical YouTuber, but as the CMOS sensors that power it become less expensive, expect to see the high-speed features filter into prosumer video cameras and digital SLRs (which are increasingly being marketed as dual-use for video as well).

For camera geeks, if not content producers, the future of high-speed, slow-motion cinematography is fast arriving.

If you leave a comment or review on Hulu, your full name as you entered it during the site’s registration process will now appear instead of your username.

Hulu, which updated the legalese on its privacy and terms of use pages a month ago, is warning new users of the policy, and will delete any comments you might have posted since the change took effect. So if you were snarking on a young Claire Danes in My So Called Life thinking you’d be anonymous, think again.

As Hulu’s Eugene Wei explains:

First, we don’t ask a lot of our users to watch all of the content on our site, but we do ask that people be civil in our community areas, like reviews and discussion forums. While anonymity has many benefits to society, helping to maintain a civil community online is not one of them.

The level of discussion in the comments section of almost any popular video on YouTube is an ongoing joke. But Wei admits that it’s still pretty easy to remain anonymous (tip: use a fake “real name”), and of course you can still watch most of the content on the site without registering at all.

The popularity of Facebook, which demands real names from its users, has created a significant precedent of non-anonymity. And Facebook is clearly beloved by NBC, one of Hulu’s parent companies, if the release of a new show on the social network and not on its own sites is any indication. As social networking colonizes online video (and vice versa), you’ll probably see more sites jumping on the real names bandwagon citing community but leveraging it as a commodity.

Swedish courts may have slapped an injunction on The Pirate Bay, but not only has the site stayed up and running but the team behind it is hard at work on the IPREDator virtual private network (VPN) service — and we managed to land an invite to the beta version. As a fan of proxies, VPNs and any other way to get around pesky access restrictions, I gave it a spin. The short answer? It’s easy to set up and use, though if you don’t live in Europe, it’s probably not worth the money for the level of performance.

But IPREDator also suggests two notable things about the future of file-sharing: One, that “darknets” of network traffic hidden behind proxies and encryption may well make unofficial distribution even easier and less risky for users; and two, that sites like The Pirate Bay, which stand accused of profiting from copyright infringement, might be able to subsidize their non-commercial distribution efforts by offering the tools to share files securely rather than selling ads alongside indexes of torrent files.

To sign up for IPREDator, which is named in honor of the European Union’s Intellectual Property Rights Enforcement Directive, you simply sign up with a username and password on the site, pay 15 euros ($21.41) for three months of service, and follow the instructions to log into the VPN. It took all of five minutes on my MacBook, with no software to download.

One thing to note is that for the privacy of users, the site doesn’t store login and password information, so don’t forget your password because it won’t let you retrieve or reset it. Also, you’ll want to make sure you have a software firewall set up on your machine, especially if you configure a router pass-through — just as a VPN lets you tunnel through ISP filters to get to the sweet stuff, any malefactor can tunnel back through your router to get to your machine.

What the VPN does is securely encode all the information sent and received from your computer with state-of-the-industry, 128-bit encryption, and hide all traffic behind a single IP address. So any site you visit couldn’t identify you, specifically, among the thousands of users represented by that address. Granted, the IP address is in Sweden, so you’ll be out of luck if you’re trying to use the service to access geographically restricted sites like Hulu.

And of course, that also means all the data has to travel to Sweden, then to wherever you were trying to access, then back to Sweden before finally returning to you. Latency, in other words, is a problem. Testing the system on a well-seeded torrent also showed a marked decline in download speed and performance. So as pointed out above, unless you live in Europe, you’ll probably want to look into another VPN service closer to home.

And there are plenty. In a piece for PC World last month, I took a look at a number of different software applications that are being designed to limit access to shared files to a known group, as well as encrypt data transfers and obfuscate IP addresses, many of which are free or, like IPREDator, low cost.

So rather than stemming the flow of unlicensed distribution, the crackdown on intellectual property is driving file sharers closer to the edge of secure and anonymous Internet access, with paid services possibly helping to fund torrent index servers and legal defense funds, and developers working on user-friendly tools to make darknets accessible even to the lowliest noob. So even if IPREDator seems too complicated, expensive or distant to be practical, don’t worry, something will come along soon enough to meet your desperate need to watch the latest pirated movie or international TV show. Content providers should still consider letting it be their technology, and not The Pirate Bay’s.

On2 Technologies shareholders have filed lawsuits in New York and Delaware in an attempt to block the company’s acquisition by Google. The plaintiffs complain that the company is worth more than the $106.5 million, or 60 cents a share, being offered. On2 develops video codecs that are widely used in Flash video, and owning the company would give Google backdoor savings on software licensing fees from companies such as Adobe and access to On2’s code, allowing engineers at the Googleplex to further optimize its encoding algorithms.

Shareholders have set up a web site, “Vote No To Google’s Current Offer for On2,” with those representing as much as 20 percent of the voting interest in the company having pledged to kill the deal. Google had hoped to close the deal by the end of this year.

The main points of the complaint are that On2 didn’t shop the company around for the best possible price; that the share price at the time of the announcement was depressed by market volatility, calling into question whether offered price actually represents a 57 percent premium; and that the executive compensation and layoff severance package plans represent a “poison pill” that would discourage a sale to other buyers while enriching top management — who hold less than 4 percent of the voting shares.

The $106.5 million seems a pittance for Google, which has $19.3 billion in cash to play with, and even moreso when you consider what the company might be able to save. If On2’s codec was even one percent more efficient in compressing video, Google could probably save millions a month in bandwidth and storage costs for its YouTube subsidiary, not to mention the money Adobe would have to pay Google to license the codec for Flash.

My guess? Another hundred million and the shareholders will put down the torches and pitchforks.

While representing only 1.6 percent of total online and television advertising spending, and 4.3 percent of the online ad spend total, the market for video ads over the Internet is growing and is not necessarily taking money away from other media channels, according to a report released yesterday by eMarketer.

In the midst of a worldwide recession and an advertising decline — the broadcast upfront was down 20 percent this year — it may sound like great news. But for every dollar spent on TV, search and banner ads, less than 2 cents goes to online video ads.

The good news is that the market grew by 125 percent last year, but it will have to sustain 40 percent growth year over year to achieve the report’s projections of tripling its total share and doubling its online share by 2013, and then still be a bit player in the larger market.

The other bright spot is that for every hour of video viewed, online outlets outpaced television outlets with 17 cents in ad revenue compared with 13 cents. However, the cost of serving all the video that isn’t supported by ads significantly dilutes that 17 cents an hour. And both were down significantly from last year, a trend eMarketer predicts will continue.

With over 100 million total views, Mumbai-based Rajshri Media recently became the No. 1 most-viewed channel on YouTube in India, and the 63rd most-viewed channel worldwide. Music videos and children’s programming have proven especially popular since the channel was launched early last year. Rajshri is the online effort of Rajshri Productions, whose history in motion pictures dates all the way back to 1947. The web site, which was launched in 2006, features both archived television and film content as well as original content for the web.

The company has also created portals for video content in a number of South Asian languages, including Tamil, Telugu, Marathi and Bengali. It set up separate YouTube channels in the hope of topping the charts for those language groups as well. It’s also reaching out on Facebook and Orkut, according to an announcement from CEO Rajjat Barjatya.

But Rajshri’s ambitions, and those of other international content partners on YouTube, could end up cut short by business decisions made in San Bruno and Mountain View, Calif.

For YouTube and other popular online destinations, serving videos to Indian users isn’t likely to become a profitable endeavor any time soon. The data is more expensive to serve abroad, and the audience less attractive to advertisers. Veoh ceased serving videos to large swaths of the planet because the potential returns didn’t warrant the existing expense. And YouTube has been under significant pressure from parent company Google to start paying the bills.

In April, YouTube’s director of online sales and operations, Tom Pickett, told the New York Times that the company hasn’t ruled out restricting bandwidth to certain countries in order to control costs. And of course, these matters become all the more pressing to American companies and their investors as the economic slump drags on.

Rajshri can always direct users back to its own sites if YouTube chooses to throttle the user experience within India. Indeed, doing anything to abandon such a market on YouTube’s part might turn more users to local providers and result in a net benefit to sites like Rajshri — never doubt the super-powers of Shaktimaan to draw eyeballs on YouTube or anywhere else.

Drivetrain, an application for the Apple iPhone developed by Maza Digital, would have allowed users to remotely control the Transmission torrent client running on their home computer. I say “would have,” because it was rejected by the App Store. “This category of applications is often used for the purpose of infringing third-party rights,” the rejection email stated. “We have chosen to not publish this type of application to the App Store.”

But in fact Apple has already chosen to publish that type of application to the App Store — namely Trackr, from Muzi Software. Neither application offers the ability to actually download content, infringing or otherwise, to an iPhone; both are simply remote access applications. And in a world of tethered devices and technology companies teaming up with content providers, you can probably expect to see more of these arbitrary decisions.

AT&T, the exclusive American carrier for the iPhone, specifically bans any sort of copyright infringement activity over its mobile network. AT&T also happens to be in the content distribution business itself with its U-verse IPTV offering. And Apple CEO managed to get a seat on Disney’s board after that company purchased his Pixar animation studio. But correlation doesn’t necessarily equal causation in this case, especially when in this case two conflicting decisions have been made.

Sure, such vertical integration is great when it makes a Wall-E download a click-buy-watch experience while riding the bus. But it also serves to keep you within the limits of the Byzantine legalese set forth in reams of contracts, terms of service and license agreements for which you sign up. And you’ll have to play by ground rules that will more than likely prove arbitrary, and generally favor the home team.

After all, remember to whom marketers and salespeople are referring when offering you “foolproof usability.”

Well, that was fast. Two days after reporting that folks outside of the United States were using Hotspot Shield to watch Hulu, the site now blocks Hotspot Shield users — even those within the U.S. I wasn’t the first one to mention it (not by a long shot), but if I am in fact to blame for alerting the company to the “problem,” I sincerely apologize. But you did know it was only a matter of time, right?

The good news is that Hotspot Shield isn’t the only VPN service out there, and if Hulu is simply blacklisting a series of IPs from that service, others should still work. And of course, those who still want to watch the programming on Hulu but can’t access it will probably just go somewhere else — torrent indexes and streaming sites like Megavideo, Supernovatube and, my personal favorite, Ninjavideo.

And of course none of those sites have pesky advertising. So Hulu, if you are reading, let me be the one to point out that you’re cutting off your nose to spite your face.

Steven Soderbergh’s The Girlfriend Experience got plenty of buzz after a special screening at last year’s Sundance Film Festival. Shot on the relatively thin dime of $1.7 million in only 16 days using the RED digital camera and starring adult performer Sasha Grey, it was a wild enough experiment as a motion picture production. Even wilder is its motion picture distribution experiment, since it’s now available on Amazon Video On Demand as a $9.99 rental — even though its premier was just last Wednesday at the Tribeca Film Festival and it won’t be in theaters until May 22nd.

The minimal expense and maximal margins of digital distribution mean the film can take that chance. And the upside for the producers — among them Mark Cuban, who will also be airing it on his HDNet later this month — is potentially astounding. But even if it didn’t have a racy subject and a well-known porn starlet, or a big name director and cutting-edge cinematography, by releasing it online the film stands to take advantage of online promotion and marketing in a way that others can’t.

The most oft-cited example of the failure of web buzz to move butts into seats is the now-infamous Snakes on a Plane; all the chatter and “interactivity” online ahead of that film’s release didn’t amount to boffo at the box office. But the difference is that by going online, Girlfriend doesn’t have to convince you to go anywhere but through a link.

The film is $9.99 for a 3-day “rental,” and if you’re already set up with Amazon it’s literally a once-click experience. You can also download it to Windows PCs or through a TiVo or Roku set-top box. And it’s available through video on demand on many cable and satellite systems as well. Even Grey admits on her MySpace page: “[I] don’t really watch tv anymore.” Having a way to watch it online, instantly, is perfectly suited for online natives like herself.

All Grey has to do is post a link to her MySpace (71,348 friends) and Twitter (12,510 followers) profiles and let her fans go from there. Amazon Associates even get a 10 percent commission on referrals. It’s a shame, however, that the video can’t be embedded, rental button and all, directly on third-party web sites — which would save potential viewers from having to click through a link from wherever they might be browsing.

Beyond that, it capitalizes on the discussion online surrounding the film and its topic in a way that a DVD or a theater screening simply can’t. Love it or hate it, it’s hard not to link to it. “Timeliness is essential for many of these festival favorites,” said Matt Dentler of Cinetic Rights Media, which has specialized in releasing independent features through video on demand that might have otherwise been stuck on the festival circuit — like We Are Wizards and The Lost Coast on Hulu, or On Broadway and The Auteur on iTunes.

But won’t it hurt the film’s theatrical and DVD chances down the road? Not necessarily. “My belief,” said Dentler, “is that one does not cannibalize the other, and CRM has seen stats to back that up.” And if the online margins are as good as they are for DVDs (at or better than 50 percent net), then with a reported $1.4 million budget the entire production could break even with a few million views on Amazon. And I’ll probably still go see it in a theater if only for the novelty of watching something shot on a RED on the big screen.

So rather than have to compete with the multimillion-dollar media blitz of X-Men Origins: Wolverine for eyeballs at the corner multiplex, this film can instead nurture audiences online and reward them with instant gratification. Unfortunately, it’s still not an option for those still struggling to make it into “indiewood” in the first place. But it’s certainly an arousing start.

Updated: For all sorts of complicated legal and contractual reasons, Hulu is not officially available to users outside of the United States. However, funny thing about the web — geographic restrictions have a way of being difficult to enforce.

And so it was with some delight that I noticed in a postscript about Hulu adding classic ’90s sitcom News Radio that a friend in Canada was suggesting an easy solution to watching Hulu north of the border: a free VPN service called Hotspot Shield.

I’ve certainly jumped through plenty of hoops in order to access the BBC’s iPlayer, which is similarly restricted to users outside of the UK. And an email to another friend who resides in London turned up confirmation that Canadians aren’t alone in using Hotspot Shield to access Hulu, as he’d heard reports of the same workaround.

How does it work? Well, VPN stands for “virtual private network,” so when Hotspot Shield is turned on your web connection is encrypted. More importantly, it also replaces your IP address with one from Hotspot Shield, which is based in the U.S. The idea is to protect your browsing from online snoops, but this little side effect means that as far as Hulu knows, you’re as American as apple pie and worthless subprime mortgages.

All you have to do is download the client, which works for both PCs and Macs, and you’re ready to go. It’s a lot less complicated and appears much more reliable than relying on proxy servers. Unfortunately, it doesn’t work the other way around.

I’ll admit, I was skeptical when News Corp. and NBC Universal announced their online video joint venture eventually named Hulu. Now, I couldn’t be more of a fan — it’s easy to find great movies and television shows, which are offered in relatively high quality, and I can easily share my finds with friends through links and embedded clips.

So why isn’t the service being offered to viewers worldwide? Because of legacy distribution agreements between companies like NBC and international networks. Canadian and British broadcasters pay good money for the regional rights to popular shows, often airing them months after they’ve been broadcast in the U.S. Naturally, they wouldn’t be too keen on viewers visiting Hulu instead.

But viewers are already closing those gaps in time and space by downloading shows from torrent links on sites like The Pirate Bay and Mininova. Wouldn’t it be in the best interests of networks to offer them a slick, easy-to-use product they can advertise against rather then ceding the market to less official means of distribution? And couldn’t they locally target those ads, even allowing current regional distribution partners to resell the inventory to local companies?

Dunno. I’m no media executive. What I do know is that if you’re outside the U.S., Hotspot Shield will get my embed of The Last Days of Disco above working fine. The movie isn’t even available on DVD thanks to (you guessed it) rights issues, so enjoy it while you can. Update: That didn’t last long; Hulu is now blocking Hotspot Shield users. Check out the full story.

Roger Friedman, who writes the “Fox 411″ entertainment column for the Fox News web site, may or may not have been fired over the weekend for a piece published Thursday that included a glowing review of the leaked X-Men Origins: Wolverine workprint — produced by fellow News Corp. property 20th Century Fox.

Update: Friedman has left Fox News, according to a statement.

The piece itself has since been pulled from the web site, but archived copies remain:

Right now, my “cousins” at 20th Century Fox are probably having apoplexy…But everyone can relax. I am, in fact, amazed about how great “Wolverine” turned out…I was completely riveted to my desk chair in front of my computer.

Friedman went on to exclaim that he could easily find all sorts of top movies and television online to stream and watch. “It’s so much easier than going out in the rain!” he gushed.

Welcome to the 21st century, Mr. Friedman.

The column certainly hit the nail on the head with the “apoplexy” comment. Cue official reprimand:

We, along with 20th Century Fox Film Corporation, have been a consistent leader in the fight against piracy and have zero tolerance for any action that encourages and promotes piracy.

The statement says that Fox News has fired Friedman for the gaffe. Or did they?

Friedman’s Friday column was duly posted online. Friedman later told Daily Variety that he hadn’t, in fact, been fired. And a meeting was reportedly scheduled for today to give the columnist a chance to argue for his job. Some points he might like to make?

• It doesn’t look good for the independence of Fox News if bad news for a sister company is underreported or censored. In fact, it looks more like corporate synergy and media consolidation run amok when instead of being “fair and balanced,” reporting must hew to the movie studio party line.
• While the corporate overlords cited the ethic that reporters shouldn’t break the law in service of a story, downloading the workprint wasn’t a criminal offense — it’s a civil matter. Yet felony battery in pursuit of a parking space comes straight from obsequious Fox News anchor Shep Smith’s playbook.
• More relevant, The New York Post, another News Corp. property, was busted for reviewing a leaked workprint of Passion of the Christ back in 2003 — a film for which 20th Century Fox had first-look distribution rights.

The unfinished film has been downloaded over a million times, even as 20th Century Fox fires off takedown notices left and right and has enlisted the help of the FBI in finding the source. Australian effects company Rising Sun Pictures denies any involvement in the leak, arguing that no one in the company had access to a full-length version. Speculation has also included a Rupert Murdoch hater and even the studio itself.

As for box office impact, the film’s chances can’t be hurt by all this publicity.

Screen capture from Crooks and Liars.

The Hugh Jackman cat is out of the bag, as a workprint of X-Men Origins: Wolverine dated March 2nd (the film’s release date is currently scheduled for May 1st.) is now roaming the Internet. The copy is being called “DVD quality,” because it’s clearly a straight digital transfer with no visible watermarks or timecode. But I’d say it’s a stretch to call something DVD quality when you can see the wire work and much of special effects are missing (though the New Zealand locations are stunning as usual).

Twentieth Century Fox has already armed and fired the propaganda cannon in response, but will this really affect the market?

It’s certainly a neat look behind the curtain at how a summer blockbuster is put together. While reports on message boards claim there are no scenes missing, there were reshoots just a few months ago that likely just haven’t made the cut yet. And in the wake of this release I wouldn’t be surprised if the storyline was edited further.

There is a basic problem, however, with suggestions that the leak will hurt box-office business. Films don’t really make most of their money in ticket sales any more — DVD sales are where it’s at. Would studios accuse theaters doing banner business of hurting the DVD market? No. And the second the DVD is out, it will be all over the Internet anyway. Will it still sell millions of DVDs, leak or no leak, boffo B.O. or no boffo B.O.? Yes.

The other problem with these assumptions is that commenters on Mininova and other torrent distribution sites almost unanimously say they’ll be going to see the movie in theaters. Since, after all, most potential fans aren’t slavering to see Hugh Jackman’s finely textured performance as an actor. If they wanted to see a middle-aged Australian prancing about without any bloody stabbing or explosions, they would have bought tickets for The Boy from Oz.

The highlight of the day comes from comments made to Deadline Hollywood Daily by unnamed studio officials: “Twentieth Century Fox claims it’s an old rough cut without FX, music, etc — and may contain an April Fool’s virus,” writes DHD reporter Nikke Finke.

While a few malefactors might try to capitalize on the opportunity to post fake files that are virus-laden, the file-sharing community is usually pretty quick to sniff these out, and certainly the Xvid-encoded versions that are racking up tens of thousands of downloads within 12 hours of release can’t spawn any viruses or malware.

Rather than representing the modern threat of the Internet to existing business models, the leak simply represents the expansion of the movie business fueled by digital technology. Where once only Angelenos in the biz had access to early leaks, with the occassional New Yorker seeing a third-generation videocasette dub, now it’s worldwide. In this case, the workprint is from Australian company that’s involved in an American film shot in New Zealand and Canada. You can’t have that digitally enabled globalization cake and not have to eat it once in a while, too.

If Hollywood is serious about stopping these sorts of leaks, it should stop complaining about the Internet and give employees and subcontractors stakes in the profits. After all, post-production crew working long hours and earning day rates could really care less if a movie does well in the market. And trust me, this one will still make plenty of money.

While nobody knows how the media economy of the future will eventually work, it’s clear that independent producers will continue to struggle if Cruxy’s story is any indication. The site offered well-engineered tools for marketing, selling and distributing digital media in open, customer-friendly formats. And it’s going out of business.

Cruxy, where independent artists and producers could sell creative content, will be shutting down at the end of the month. “Cruxy is not needed or used by enough people for us to keep going,” co-founder Nathan Freitas wrote in his goodbye letter — entitled “the fat lady has uploaded her song.”

Cruxy was first envisioned back 2004 as something called “DigiPay” and then “OpenVision”, and then ultimately Cruxy, a crossroads of creativity and commerce. Cruxy is also a rock climbing term for a very difficult climbing problem to solve, like perhaps when you have to cling from your fingertips to a horizontal rock shelf and pull yourself up, sweating, planning and thinking the entire way. That’s a bit how the last four+ years have felt…and we are exhausted.

It’s bad news for the Cruxy community, and creators generally. Even with working technology and great ideals, it illustrates the difficulty in making content pay online if you’re not already a part of the existing system.

When reached by phone, however, Freitas seemed relatively upbeat. “In contrast to the world’s problems, it’s kind of a relief,” he said. When asked if what the site needed was a breakout hit, he admitted that the small team was focused on the technology and didn’t start looking for content partnerships until possibly too late.

While companies like Apple have proven that digital content can be sold in significant quantity online, the iTunes Store is still primarily about keeping people buying iPods, where Apple makes much larger margins. But basing a business exclusively on selling content hasn’t proven profitable yet. “A lot of people who’ve tried to do what we did have gone out of business.”

As for the technology, Freitas lamented, “I don’t want it to just go away.” There’s been some interest, he said, “But there’s strings with that.” In his letter, he pointed to some other places where Cruxy’s creators can sell media, including fellow Brooklyn-based startup Drop.io.

Clearly people will pay to download video and other content. Cruxy and the artists who posted work there did make some money, just not enough to make the business viable — leaving Freitas not particularly optimistic about digital media sales. “I don’t necessarily think it’s the best course anymore for creative content.”

And it doesn’t bode well for the prospects of people just looking to make “the small time” — earn a living creating motion pictures with niche appeal, without the marketing budget of a Hollywood studio.