The Pirate Bay made headlines earlier this week with yet another dramatic announcement, this time that the notorious BitTorrent site’s tracker has been officially shut down. But the move won’t impact downloading, site admins explained on a blog. Trackers are no longer needed to facilitate BitTorrent transfers, the blog entry explained, because decentralized extensions of the P2P protocol are mature enough to pick up the tab. “It’s the end of an era, but the era is no longer up2date,” the blog proclaimed.

As always with announcements from the folks at The Pirate Bay, there’s a lot of self-serving smoke and mirrors, mixed with a good amount of hubris. However, the announcement does bring up an interesting question: Is BitTorrent really ready for a world without trackers? We talked to some of the major players to find out.

First, a quick primer so we all know what we’re talking about: When you download a file via BitTorrent today, you start off with a .torrent file that contains some meta data, including the address of at least one torrent tracker. These trackers facilitate your download by letting you know who else is sharing the file. The Pirate Bay’s tracker has been one of the biggest and, thus, most important of these facilitators, tracking by some estimates around 50 percent of the world’s BitTorrent traffic.

That’s a pretty impressive number, considering that the whole setup costs not much more than $3,000 per month, but it’s also an Achilles heel. After all, users solely relying on a tracker wouldn’t be able to exchange any files if the tracker became unavailable. That’s precisely why BitTorrent developers came up with a couple of decentralized approaches. Most BitTorrent clients now support a so-called Distributed Hash Table, or DHT.

A DHT is essentially a decentralized P2P network that stores all the information a tracker traditionally offers in the P2P cloud, making it possible to find users to download from even if the tracker server is offline. Most clients also support a feature called Peer Exchange (PEX) that’s meant to let peers talk to each other directly to take the load off a tracker server. The question is: Can DHT and PEX do all the heavy lifting and facilitate downloads for some 20 million simultaneous users without any tracker involved?

The first BitTorrent client that ever incorporated DHT was Vuze back in 2005 when it was still called Azureus, so I figured folks there might have an opinion on this. Vuze co-founder and CTO Olivier Chalouhi seemed bullish. “DHT works well as a technology, and is actually more scalable than tracker sites,” he told me. He cautioned, however, that very new files as well as rare files with few seeders would be served better by a tracker as opposed to a DHT-only environment.

Simon Morris from BitTorrent Inc. seemed a little more cautious. “I wouldn’t be surprised if there’s some impact on performance,” he told me. “In theory DHT and PEX should be sufficient,” Morris explained, adding that the initial discovery of users to download from might be more reliable and robust if you can leverage a tracker server.

I also talked to an admin involved in running one of the big tracker servers that currently functions as the backbone of the BitTorrent universe. He sounded skeptical and said that he didn’t believe DHT to be scalable enough to completely take over.

To be honest, those are all just well-informed musings. We don’t really know what would happen if all of the world’s trackers were to be turned off tomorrow. What we do know is that BitTorrent wouldn’t work quite as seamlessly as it does now, if only for one reason: Bittorrent Inc. and Vuze actually use two different, incompatible DHT networks. This doesn’t matter as much when both clients are connected to the same tracker. However, in a tracker-less world, Vuze users wouldn’t be able to find users of BitTorrent’s client, and vice versa. Chalouhi told me that Vuze is currently working on integrating both DHTs to bridge those two worlds.

The good news is that trackers aren’t disappearing anytime soon. The Pirate Bay may have announced the retirement of its tracker this week, but the site’s tracker has actually been offline since early August, and other trackers have been more than capable of filling the void. In fact, tracker admins are working on new technology that would make their servers part of a federated network to prevent any interruption.

For end users, all of this means that little is changing. You’ll still use a BitTorrent site to search for content, and your client will most likely still connect to a tracker to download it. DHT has been around for years, and it may become more important over time. Some trackers may exchange data among themselves. The overall experience, however, will be pretty much the same. Maybe that’s what The Pirate Bay folks meant when they ended their sensationalistic announcement by proclaiming: “This is the future. And the present.” And the past, one might add.

When BitTorrent co-founder Bram Cohen was introduced at NewTeeVee’s Video Rights Roundtable this morning, interviewer Schlomo Rabinowitz asked the crowd, “How many people in the audience hate this man?” — and a few people actually raised their hands.

Despite being largely vilified in the media industry for being the grandfather of P2P file-sharing, Cohen tried to deflect responsibility for any widespread piracy that has occurred using the protocol he created. But amidst a conversation between content owners and technology companies who were trying to overcome their differences to find opportunities to work together, Bram was still a polarizing figure.

“People expect me to be some kind of copyright crusader or anti-copyright crusader. On some kind of deep level, I just don’t care. To me, they’re just bits. As for what the bits are, I don’t care,” Cohen said. At that, Rabinowitz contrasted Cohen’s attitude with that of Robert Oppenheimer, father of the atomic bomb, who later lobbied U.S. politicians to avert a nuclear arms race with the Soviet Union.

Participants were divided on whether or not Cohen’s BitTorrent protocol was as destructive to the media industry. Ethan Applen, director of technology and business strategy at Warner Bros., generously suggested that the technology is a victim of a bad reputation.

“In terms of our own view, we think P2P gets vilified. It’s just a technology. CNN used it for Inauguration coverage. It can be used for piracy, but as a technology, I think it has a lot of advantages to it,” Applen said. “P2P works really well at delivering an entire season or the entire run of a show.”

P2P could also be used as a marketing vehicle, Applen suggested. He pointed out that when an album by the then-obscure Arctic Monkeys leaked online a few years ago, it was great for the band, even though their label may not have loved it.

Cohen noted that an early copy of X-Men Origins: Wolverine that being leaked might have actually had a positive effect on the movie. Despite the fact that the unfinished movie was downloaded more than a million times from peer-to-peer networks, the movie did extremely well at the box office.

However Fox content protection counsel Betsy Zedek disagreed vehemently, saying “There’s no question that it hurt the movie. There are people who saw this online, not as the creator intended, and therefore didn’t see it in the theater and will never buy it.”

When Evan Stone, manager of brand protection at FUNimation Entertainment, said his company was “at a loss” about how to deal with anime piracy via BitTorrent, Cohen replied that the company has actually benefited from consumer awareness of anime enabled by illegal downloads.

“Before BitTorrent, there was a whole lot of anime that no one had ever heard of,” Cohen said. He argued that the wide availability of anime content on torrent sites may have actually helped grow the business. So maybe it’s not all “just bits,” as Cohen had said so emphatically. But hey, it’s only natural to take pride in your work.

Update: This article originally said that FUNimation was at a loss with what to do about anime piracy. The story has been updated to reflect that Evan Stone was speaking specifically about the difficulties of dealing with anime piracy via BitTorrent in particular.

UK-based P2P video platform VODO published its second feature film on dozens of file-sharing sites Thursday, hoping that worldwide exposure will bring in donations, subscriptions and traditional distribution deals. David Miller’s documentary In Guantanamo, which is the result of a press tour of the controversial detention facility, has been downloaded around 15,000 times within the first 24 hours, according toVODO founder Jamie King.

The site’s first feature, Us Now, got downloaded around 250,000 times since its release in mid-October. Part of the volume is due to VODO’s relationships with a number of well-known BitTorrrent sites, with Isohunt and The Pirate Bay currently featuring In Guantanamo on their front pages. VODO hasn’t been quite as successful in making money from these downloads, but King hopes that a combination of one-off donations and a subscription level for documentary geeks and movie buffs will help eventually make the site sustainable and provide an additional revenue stream for filmmakers.

VODO is short for voluntary donations, and King is no newcomer to the idea of giving content away in exchange for contributions from viewers. He is the maker of the pro-piracy documentaries Steal this Film and Steal this Film 2, both of which were released for free online. Viewers donated around $30,000 since the first part of Steal This Film got released three years ago.

The new site’s first documentary Us Now hasn’t been quite as successful yet. The film has brought in less than $1,000 in donations since its release in October, according to King. “If we can get it closer to $5,000 we’ll be doing well,” he told me, adding that he views donations as only one piece of the puzzle for filmmakers. King was able to sell his documentaries to several TV networks around the globe in part because the films were so successful online, and he hopes that others can follow in his footsteps.

VODO passes 100 percent of its donations directly onto filmmakers, but it also asks viewers to become paying members of the site. VODO supporters who pay around $5 a month get access to a pool of movies that are considered for distribution. “We’ve got (around) 15 films we’re considering right now,” explained King. Paying supporters can vote on which of these movies will get picked up for P2P distribution, and VODO also wants to organize online events with the filmmakers for these members. So far, around 50 people have signed up for this online film club. VODO hopes to grow this number to at least 1,500 in the near future.

King and his collaborators have received grants from the Channel 4 British Documentary Film Foundation, the Arts Council England and the Emerald Fund to start VODO , with the total funding being just shy of $250,000. King isn’t sure whether VODO will sign up corporate sponsors in the future. Right now, the funding is enough to keep the site and its development going for a year, and filmmakers seem to be eager to sign up. King told me that he has another dozen movies in the queue, and is talking to a couple dozen more filmmakers who want to get their movies out to P2P sites. “We’re building the new world here,” he said.

Chinese P2P startup Xunlei has sued its competitor Sohu for copyright infringement, according to the Shenzen Daily. Xunlei is alleging that Sohu’s search engine, Sogou, is infringing on copyrights related to Xunlei’s P2P software as well as its own search engine, Gougou.com. Sohu had previously filed its own copyright infringement lawsuits against Xunlei and other Chinese P2P vendors.

China has long been a P2P video wunderkind of sorts. Efforts to establish P2P-based consumer video platforms like Joost and Babelgum have largely failed in the U.S. and Europe, but similar offerings attract millions of users in China. However, the Chinese market is saturated with literally dozens of video vendors, and efforts to grow their business beyond the PC have stalled due to strict government licensing requirements.

Xunlei is a popular Chinese P2P client that combines BitTorrent with web-based downloads. The company’s Gougou.com search engine links to TV shows and movies hosted on various ftp servers and web sites. Users can download these files and automatically accelerate their downloads through Xunlei’s P2P functionality. Gougou obfuscates these links in order to get users to access the content with its own client and sign up for its premium services, which include remote downloading to Xunlei’s servers.

However, that didn’t stop Sohu from allegedly crawling these sites as well and publishing the direct download links without any Xunlei-specific code. Xunlei wasn’t too happy about that and decided to sue last week. Some reports suggest the lawsuits include complaints about cracked versions of Xunlei appearing in Sohu search results. Sohu previously sued Xunlei for broadcasting a TV series that the company had exclusive online rights for, and it recently announced further lawsuits against Xunlei and other competitors under the helm of a newly formed “Online Video Copyright Union.”

You know the fight for market share is getting ugly when online video companies do the dirty work for rights holders and sue each other for copyright infringement. The irony of these lawsuits is that much of the content indexed by both search engines clearly isn’t licensed to begin with. We asked both companies for their side of the story, but haven’t heard back from Xunlei, and just got a brief “no comment” from Sohu.

The lawsuits shouldn’t really surprise anyone who has been following the Chinese online video industry. The country is home to a number of large P2P video platforms as well as YouTube-like sites. P2P streaming service PPLive, for example, touts up to 30 million active viewers per month, and YouTube-like Youku boasts 140 million visitors per month. Both compete with at least a handful of similar services, many of which also have an impressive user base. There isn’t one clear market leader like YouTube in the U.S., and Chinese online video business models still seem to be in a flux.

At the same time, it’s been getting harder for Chinese video ventures to grow their market beyond the PC audience. PPStream and Xunlei have tried to get their platforms on set-top boxes and connected TV sets, but those efforts have stalled because of the Chinese State Administration of Radio, Film and Television. The government agency views set-top box offerings as equal to over-the-air or cable television programming, which means that online video startups would need to get a special Internet TV license. That hurdle seems to be so high that a Chinese TV set manufacturer actually canceled plans to include PPStream in one of its connected TV sets in September.

Tomorrow is the big launch for NBC’s 2010 Olympics coverage. With 100 days till the opening ceremonies in Vancouver, NBC Sports is flipping the switch on a new site powered by Microsoft Silverlight with help from partners such as Vertigo (which built the player) and iStreamPlanet (which is coordinating the live streaming). In addition to what should be an upgraded video experience from Beijing due to technology and infrastructure improvements alone, NBC is adding social features such as Facebook Connect integration.

However, a big question is what you’ll have to do to actually watch live video. To protect its relationships with cable companies, NBC is planning to require all would-be viewers of live long-form streams to prove that they subscribe to a multi-service operator. You’ll have to authenticate that you actually pay a monthly bill to watch TV.

NBC has been quiet about the authentication process for the games, but the issue has been lurking since word got out earlier this year. All a spokesperson for NBC Sports would tell us today is “There will be an authentication process but the details have not yet been announced.” So, consider it confirmed.

Authentication is the same technique cable companies and other operators are using for their “TV Everywhere” streaming re-run sites. And there’s a precedent; for the Beijing Olympics, NBC blocked Cablevision subscribers because their MSO didn’t agree to a special Olympics package. For Vancouver, would-be watchers may be able to authenticate in advance over the next 100 days. That way you don’t have to go the process of digging out your cable bill right when you show up to see Apolo Ohno race or some famous curler curl.

NBC also has yet to announce which sports will be streamed live online. It’s probably not a good idea to count on figure skating and downhill skiing making it to your PC in real time, though we can hope.

Whatever gets shown and whoever gets to see it, the games are sure to be a major event in live-streaming history. While the Winter Olympics are smaller and shorter than those in the Summer, they’ll be happening in Pacific Time. And workday streams, like those for March Madness, are typically the most popular, as compared to events that are shown in the evenings when people are at home on the couch.

Meanwhile, in Canada, every single moment of the entire games will be live-streamed to all Canadians.

Image via TechCrunch.

Network security vendor Arbor Networks has been drumming up publicity for its upcoming Internet Observatory Report this week. One of the widely reported tidbits is that P2P has “declined dramatically in the last two years,” and that it has been replaced by YouTube and other streaming video sites. Wired News took away from the report that “P2P is dead,” and ReadWriteWeb ran with the title: “So long, P2P, Hello Streaming Media.”

Findings like these are puzzling to anyone who’s been frequenting any of the big torrent sites lately. File sharers still seem to be as busy as ever, exchanging pretty much every movie and TV show episode you could think of. And didn’t Cisco just recently forecast that global P2P traffic will keep growing in years to come? Turns out, it’s all about how you interpret the numbers.

The Internet Observatory Report, which is scheduled to be presented at the North American Network Operators’ Group Meeting in Michigan on Monday, is the result of two years of research by Arbor Networks, the University of Michigan and Merit Network. It’s based on traffic analysis from 110 participating ISPs, and the total amount of data analyzed was more than 256 exabytes, according to an Arbor Networks press release. Yeah, I had to look it up as well: An exabyte is one billion gigabytes.

One conclusion of the analysis of all this data is that P2P isn’t as dominant as it used to be. In 2007, it accounted for 40 percent of all Internet traffic, according to Arbor. Fast-forward two years, and it’s down to 18 percent. However, that doesn’t exactly mean that P2P is dead. It’s just not growing as fast as web-based video streaming, which has been largely responsible for a huge overall growth of net traffic. In other words: A smaller piece of a much larger pie can still be a whole lot of pie.

I asked Arbor Networks Chief Scientist Craig Labovitz about this, and his answer confirmed my hunch that the picture looks very different when it comes to absolute numbers: “We found overall average Internet traffic growing globally at 35-45 percent annually,” he told me. “So the decline in P2P ‘market share’ is likely as much that P2P is not keeping pace with overall Internet growth as a decline in P2P traffic volumes.” Labovitz said that Arbor doesn’t feel as comfortable publishing absolute numbers of P2P traffic because of issues like encryption, but he still suspects that P2P may be dropping slightly even in those terms.

So what does all of this mean? P2P is less dominant than two years ago because of the explosion of web video, but it’s hard to figure out how that relates to media consumption habits. Some users may give up on BitTorrent because of Hulu.com. Others may still download TV shows, but watch disproportionally more web-exclusive and user-generated content on YouTube. Either way, P2P is still very much alive.

Bandwidth-conscious broadcasters have a new way to distribute their live video streams. A group of Uruguay-based P2P researchers recently released the first English-language version of their open-source P2P streaming application, GoalBit. The application, which is based on a BitTorrent-like architecture, aims to compete with P2P streaming services like PPLive and PPStream by giving anyone looking to distribute their own live video programming a way to do so.

GoalBit, which is available for Windows and Linux, currently features just a handful of Uruguay’s TV networks streaming at fairly low bitrates. But the service looks promising nonetheless, and its extensive documentation could be intriguing to anyone interested in P2P streaming.

GoalBit uses a hybrid approach that combines the best of the BitTorrent world, with features from the likes of P2P networks such as Gnutella and KaZaA’s FastTrack network. Its network features a tracker similar to the one used by BitTorrent clients, but it also makes use of so-called super-peers. These are computers with fat pipes that help to distribute the initial signal until it trickles down to users with ordinary DSL connections and limited upload speeds. Super-peers can be run either by the broadcasters themselves, or self-selected based on the connectivity of the individual end user. The idea of this multilayer approach is to prevent too many direct connections to the broadcaster while at the same time making the system scalable.

Another interesting aspect of GoalBit is that channel lists are distributed in the form of small files similar to .torrent files in the world of BitTorrent. Broadcasters simply have to create such a file with the help of the GoalBit client, announce their stream with a GoalBit tracker and upload the file to a web server — and they’re ready to stream to the world. Well, that’s the theory anyway. The developers of GoalBit state that this so-called “Broadcast Yourself” functionality is still experimental, and I haven’t actually tested it myself.

GoalBit is competing with a wide array of P2P streaming applications, most of which are proprietary. Particularly successful examples are PPLive, which claims up to 30 million active users per month, and PPStream, which boasted 1 billion video viewing hours per month a good year ago. Another player in the open-source P2P streaming field is P2P Next, a European project funded with 14 million euros ($20.4 million) by the European Union. P2P Next demonstrated a streaming client dubbed SwarmPlayer in the summer of 2008 and has since been busy developing and testing a set-top-box implementation.

Companies like PPLIve and PPStream cater primarily to users in China as well as Chinese-speaking audiences worldwide, but P2P streaming apps have also always been popular with sports fans looking for their latest soccer or Olympics fix — a fact that was clearly not lost on the GoalBit makers, as is evidenced by the choice of name.

The House Energy & Commerce Committee is scheduled to mark up tomorrow a bill dubbed the Informed P2P User Act (H.R. 1319) that aims to prevent accidental file-sharing by mandating the display of clear warnings during the installation and usage of P2P software. Critics, however, fear that the final bill might end up going much further, regulating FTP clients, web browsers and even complete operating systems.

The bill could also have implications for anyone trying to leverage P2P for video distribution via solutions like the Octoshape Flash plug-in that was used by CNN.com to handle the Obama inauguration livestream traffic. The irony of the whole controversy is that much of the support for H.R. 1319 has been motivated by an almost religious disdain for just one file-sharing program in particular.

The Informed P2P User Act, which was introduced by Rep. Mary Bono Mack (R-CA) in March, is supposed to prevent so-called inadvertent file-sharing, which has in the past resulted in the leaking of Social Security numbers, tax returns and even classified government documents. Inadvertent file-sharing is usually caused by users accidentally sharing their documents folder or even their entire hard disk with everyone connected to the same P2P network. The bill would force makers of P2P software to inform users about its file-sharing capabilities and get their informed consent before installing the software in question. Users would also have to acknowledge that they know what they’re about to do before sharing any file. Sounds reasonable, doesn’t it?

It would be, except the bill defines P2P applications as anything that “designate(s) files available for transmission to another computer” as well as transmits and receives files. Of course, the same can be said for FTP clients — or your browser, for that matter. “There’s little in this definition that limits the scope to an actual p2p application,” wrote Alex Curtis from Public Knowledge, and Declan McCullagh from CNet agreed: “Every copy of Windows, GNU/Linux, and Mac OS X sold in recent memory includes a command-line FTP client fitting that definition.” And the current definition would also affect P2P streaming solutions and BitTorrent clients, even though there is virtually no risk that anyone would share his Social Security number through downloading a torrent or accessing a P2P video stream.

One of the most vocal supporters of the bill is the Progress and Freedom Foundation’s Thomas Snydor, who’s testified before Congress numerous times about the subject. At the center of all of his testimonies is one single file-sharing client: LimeWire. Snydor alleges that the application has been intentionally designed to “prey on the weak” by tricking people into unknowingly sharing files.

He has repeatedly singled out functions of LimeWire that could lead to accidental file-sharing, claiming in his most recent testimony (PDF) that he was able to simulate the accidental sharing of almost 17,000 sensitive files “just by installing LimeWire 5.2.8.” Snydor had to backtrack later and admit that this was only possible because he prepared the PC by installing a previous version of LimeWire, enabling document sharing (an option hidden in a sub-menu that’s labeled with a clear warning message and takes six clicks to activate) and then uninstalling the earlier version before once again installing the client. LimeWire chairman Mark Gorton called the result of these actions in an interview with ComputerWeek “a highly misleading picture of reality.”

Of course, one might be able to argue that LimeWire could be doing a better job to prevent even such highly unlikely cases of accidental file-sharing. But do we really need a new bill for that? Even Thomas Snydor has difficulties justifying one. As he said in his most recent testimony, “[E]xisting laws already provide the authority needed to send a blunt and powerful message that would deter distributors of piracy-adapted file-sharing programs from causing further inadvertent sharing.”

Many people in the online video space are trying to make sense of the lawsuit Joost filed against former chairman and CEO Mike Volpi earlier today. The lawsuit has something to do with the supposed revelation of trade secrets in connection to the sale of Skype to a group led by Volpi’s new employer Index Ventures (which is also named in the suit, as it invested in Joost). But what does a failed video startup have in common with a VoIP operator? The answer comes down to one name: Joltid.

Joltid is a P2P technology provider incorporated in British Virgin Islands. It is owned by Joost and Skype founders Janus Friis and Niklas Zennström, and its tumultuous history makes the current fight with Volpi, Skype and eBay look like nothing special. Licensing conflicts that lead to the potential shutdown of a market leader? Been there, done that.

The roots of this conflict were planted all the way back in 2001, when file sharing was all the rage and Napster was being sued by the music industry. That was when Friis and Zennström came up with the idea of Kazaa, a file-sharing network based on a distributed database that would operate without central servers. The duo decided early on to apply this distributed architecture to the structure of their business as well.

Kazaa’s code was developed under contract by a startup in Estonia, with all of the work being coordinated from the Netherlands. Kazaa became Zennström and Friis’ flagship peer-to-peer product, but the idea was always to license the underlying P2P technology through a separate corporate entity called FastTrack BV. FastTrack’s code became part of a number of file-sharing clients such as Grokster, Morpheus and iMesh.

Morpheus proved to be especially successful and eventually managed to get more users than Kazaa itself. Then, out of the blue, the Morpheus client stopped working in early 2002. It quickly became clear that FastTrack had shut down the client by denying it access to its P2P network. Morpheus alleged at the time that this was a ploy to steal its user base and once again make Kazaa the most popular file-sharing client. Friis and Zennström had a different take and argued that Morpheus had failed to pay its licensing dues.

Morpheus quickly switched to an open, licensing-free technology to keep its service running, but had trouble providing a stable version of its client for some time and, in turn, lost countless users to Kazaa. The company filed a number of lawsuits against Friis, Zennström and related companies, but failed to convince the courts and eventually shut down due to overwhelming legal fees.

The Kazaa founders, on the other hand, were forced to sell their P2P client in light of mounting legal pressure, but held onto their P2P technology, which they continued to license through Joltid. Kazaa’s P2P core not only continued to power file-sharing networks, but also became the basis of Skype and eventually Joost, and Joltid in turn became a little-known but influential P2P powerhouse.

Fast-forward a few years: Kazaa and all of the file-sharing clients that used its technology have shut down. Joost abandoned its P2P roots under the leadership of Volpi. Skype is getting sold. eBay turned down an offer by Friis and Zennström, and the duo, seeing its influence wane, once again mounted a fight over licensing issues. Funny how history repeats itself, isn’t it?

Of course, the struggle and eventual demise of Morpheus isn’t exactly a good omen for Skype. But how does the lawsuit against Volpi fit into the picture? Joost and Joltid allege that Volpi gained insights into the inner workings of Joltid’s P2P technology through the process of bringing the video service to the web, and that this knowledge would help to develop a Skype version that doesn’t rely on P2P.

That’s a pretty dubious claim. Joost replaced P2P video delivery with Flash-based streaming. Skype, on the other hand, would have to switch to SIP and deal with issues like NAT traversal that just don’t matter if you operate a centralized streaming service. It’s like two very different vehicles that once shared the same road. Looking under the hood of one of them won’t help you to drive the other one.

However, if the Morpheus spat has taught us anything, it’s that this won’t end before at least one of the cars has been scrapped.

The sale of The Pirate Bay hit another serious roadblock this week when shares of its prospective buyer, Global Gaming Factory X, were delisted from the Swedish stock exchange for allegedly misleading investors about the proposed transaction. AktieTorget claims that GGF misrepresented facts about its financial situation and its deals with the entertainment industry, though GGF CEO Hans Pandeya subsequently asserted to CNet that the transaction will nevertheless go through.

The entire saga over the sale is quickly becoming a kind of déjà vu. The Pirate Bay is not only known as the world’s largest BitTorrent tracker; its founders also gained notoriety for continuously announcing project after project, only to abandon most of them later on. There was the plan to buy an island, the idea to encrypt the entire Internet, the ad-supported music site Playable and the next-generation BitTorrent protocol, to name just a few. All of these non-starters did, however, help to keep The Pirate Bay in the news and accomplish things well beyond the stated aims of the The Bay’s site, as Co-founder Peter Sunde recently pointed out.

Sunde, who only recently resigned as the official spokesperson of The Pirate Bay, gave a talk about the company at this year’s iWeek conference in South Africa a week ago; the video of the talk is a pretty interesting look behind the curtain of the world’s most notorious BitTorrent site. Granted, he spent fair amount of time reminiscing about its early days, and some of his attempts to contextualize piracy didn’t really make any sense. (Copying is evolution? Don’t tell that to Darwin, or any biologist, for that matter.)

But Sunde was also brutally honest about the reasons why The Pirate Bay has been so confrontational when it comes to dealing with rights holders. Take its infamous responses to takedown notices, which regularly ridiculed everything from Hollywood to Linotype. “This is a very good way to get attention,” Sunde explained, adding that so far, a quarter of the site’s visitors have viewed the notices.

That attention, and the massive amount of users that come with it, was used as leverage for more serious matters, like The Pirate Bay’s successful campaign against an ISP that blocked access to the controversial (and now defunct) Russian music site Allofmp3.com. The Pirate Bay responded by blocking the ISP’s access to its own site, which resulted in an uproar among its customers and the eventual resignation of its CEO, according to Sunde.

Radical interventions to move the debate forward are something The Pirate Bay has been pretty good at, and it’s a purposefully utilized strategy. “If you go to the extreme, people have to go your way,” Sunde told the audience at iWeek, adding that “it doesn’t really matter” whether you actually believe in these radical positions or not. Play the bad guy successfully enough, he said, and you open up all kinds of doors for startups (like Spotify) to establish themselves as the good guys and operate services that the industry would have never agreed to in the first place.

Things aren’t looking quite as rosy for Global Gaming Factory. AktieTorget is alleging that GGF used factually incorrect press releases to manipulate the market. With the company delisted, it’s becoming increasingly unclear if the sale will go through, especially since half of the price was supposed to be paid in now potentially worthless stock. GGF CEO Hans Pandeya did tell CNet that he’s going to guarantee the purchase with his own money. The question is, does he have any? Swedish authorities recently reclaimed his yacht and other assets to make up for failed tax payments, and GGF’s former CTO Johan Sellstroem has claimed that Pandeya owes him $840,000.

Maybe Pandeya should take a lesson from The Pirate Bay and announce another crazy endeavor. How about buying an island?

LimeWire just announced that it’s been forced to disable its Facebook integration. The feature, which was introduced with the launch of LimeWire 5.2 at the end of July, enabled users to privately share files with their contacts after logging in with their Facebook credentials. The social networking site allegedly demanded a number of changes before eventually notifying LimeWire that it would disable the feature due to “policy violations.”

LimeWire’s VP of product management, Jason Herskowitz, called the dispute “unfortunate,” adding that the two companies have a common goal: to help their users to connect and share. Herskowitz also said that LimeWire will continue to offer private file-sharing functionality for users of Google Talk and other Jabber-based services. And he apparently couldn’t resist taking a stab at Facebook by noting that his company is looking forward to working with “a number of other open platforms and social networks.”

LimeWire is one of the oldest existing file-sharing clients, but the company has been doing a lot to reinvent itself as a social media company. Part of that process has been the introduction of social and private file-sharing functionality with the launch of LimeWire 5.0 a year ago. The client has since been offering an option to share files with users from various social platforms, including Google Talk and LiveJournal.

Sharing is facilitated within the client, which means that your Google Talk or LiveJournal contacts need to have LimeWire installed in order to swap files with you. LimeWire extended this functionality to Facebook in July, but has disabled after being notified by the site that the feature wouldn’t work anymore.

This isn’t the first time Facebook has taken a stance against file-sharing. Earlier this year, The Pirate Bay offered users the option to publish links to their favorite torrents on their Facebook profiles. Facebook quickly disabled this feature, arguing that its Terms of Service prohibits links to infringing content. The exact rationale for booting LimeWire off of Facebook, however, is unclear, since the implementation didn’t actually link users to content, only to other users. We reached out to Facebook about this, and the company’s Director of Policy Communications Barry Schnitt referred to “potential policy violations in LimeWire’s use of Facebook Connect” as the reason for the spat.

The whole controversy isn’t without irony: Facebook’s founders briefly operated their own file-sharing service dubbed Wirehog that allowed users to privately share files with their contacts much in the same way LimeWire did. Wirehog quickly became popular with college students looking for an alternative to services like Grokster and Kazaa, but the service was shut down in early 2006.

It’s been a rough year for file-sharing sites, legally speaking. Today a Dutch court ordered Mininova to remove all torrents of copyrighted works in the next three months or pay up to $7.16 million in fines.

Copyright holder group Stichting Brein had sued Mininova for inciting and profiting from copyright infringement. The BitTorrent search engine and directory already removes files after receiving takedown notices and moderates pornography, viruses and fakes.

Given that Mininova is already doing some proactive filtering, the court said the site should assume all commercial works are copyrighted.

“The court believes it’s generally known that commercially made films, games, music and TV series are copyrighted and that these works are only copyright-free in exceptional cases.”

Mininova maintains that torrents themselves do not contain copyrighted work. Mininova co-founder Erik Dubbelboer told Wired.com’s Threat Level blog,

“We are obviously not satisfied with this ruling. The result of this ruling for Mininova is that we have to reevaluate our business operations. At this time, we cannot determine what this will actually entail or imply. We will have to examine the verdict thoroughly first. We are considering to appeal this judgment.”

Fellow BitTorrent index and legal trouble magnet The Pirate Bay was taken down completely earlier this week, but it’s back up now. Global Gaming Factory, the company trying to buy the Pirate Bay, claims the deal is still on, but Swedish regulators are investigating a possible stock-price boosting scheme and GGF business partners claim the company doesn’t have enough money to complete the transaction. See the latest update at CNET.

TVU Networks this week introduced PVR-like functionality for its P2P TV platform, letting subscribers record 300 or so live TV channels from around the world, including Cartoon Network, BBC World News and Telemundo. Users can record shows in real time or schedule them for later. Due to the nature of the service, however, there’s no TiVo-like programming guide available; Mountain View, Calif.-based TVU essentially picks up signals from its broadcast partners and redistributes them with the help of P2P technology.

That also means users have to install the startup’s software in order to make use of the DVR functionality — or watch any of the TV channels in real time, for that matter. And finally, they have to cough up $2 per month for TVU’s DVR service. But while all these factors make the service seem unlikely to succeed, something tells me that TVU’s audience is a forgiving one.

TVU was originally developed in China, where it competes with other popular P2P TV services like PPLive and PPStream. The company received $2.7 million in funding from New Atlantic Ventures last fall, claims to have 40 million viewers, and has been able to secure a couple of deals with major U.S. advertisers as well as broadcasters.

That being said, the majority of content on TVU is still non-English programming. There are a bunch of channels from China and India as well as some oddities, like the one that only features sessions of the French Senate. You’ll also find the occasional unlicensed stream of Family Guy episodes coming directly from somebody’s living room. The experience is a little like watching basic cable on your overseas vacation: lots of channels to flip through, but nothing to watch.

I had a chance to play with the PVR functionality a bit today, which is only available within the newest Windows version of the player. There’s also an OS X version, but it doesn’t feature any recording capability yet. What did I think? Well, to be honest, I was somewhat underwhelmed. First a few words about the sign-up process: Web sites that respond to me entering my credit card with a server error are not all that reassuring, but I guess stuff like this can happen. More irritating was the fact that TVU’s site promises a free 30-day trial, but I was informed via email after signing up that my credit card will be billed for a whole year if I don’t cancel within the next 24 hours.

So what about the recording? It works pretty much as advertised. You can click on a red button within the player to record any ongoing program, or schedule upcoming recordings by time and date. Recorded shows are only available from within the player and can’t easily be burned or transferred. TVU is modeled after a single-tuner PVR, which means that you can’t watch a show while you record another — a restriction that’s likely in place to avoid bandwidth issues, but it would be great if users with fat pipes could add additional recording sessions.

The lack of an interactive programming guide to schedule recordings is definitely a major letdown. TVU features a basic guide in its sidebar, but there’s no way to select any of the listed shows and start recording right away. Instead, you have to search for the channel, see whether it’s available and then manually program start and stop time of your recording. It’s kinda like the good old VCR, only for online video.

So why would anyone actually pay money for this? One word: Sports. TVU is carrying a bunch of channels from around the world that feature soccer games and other sports events. Some of this content may be licensed; some is clearly not; and a lot is broadcasted at times when many of us are supposed to be working. Sports fans have been using P2P TV services to get their Bundesliga and Premier League fix for a long time, and dedicated sites like All P2P TV or MyP2P.eu actually list extensive programming guides for sports events.

Some of these sites also offer software for sale that makes it possible to capture the video of a P2P TV application. It’s only logical that TVU Networks would want a piece of that pie, and you can bet that some users are willing to pay for it.

People all over the world are downloading movies via BitTorrent, according to new research (PDF) presented at last week’s P2P Research Group convening at the 75th IETF Meetings in Stockholm. And we’re literally talking all over the world: A popular movie torrent analyzed as part of the research was within a week accessed by people from 165 countries. “Considering that there are about 192 countries recognized by the UN, this is a sizable spread of the swarm across the countries,” said Bell Labs researcher Vijay K. Gurbani.

The fact that Hollywood fare is popular around the world probably isn’t all that surprising, but the research also shows that foreign movies can be just as popular. In fact, a Cantonese movie analyzed by the researchers received even wider global distribution through BitTorrent than a Hollywood flick with roughly the same number of downloads.

Bell Labs’ Gurbani and P2P veteran Stas Khirman conducted a detailed analysis of two popular BitTorrent swarms in early June, meaning they looked at all the users who were downloading and redistributing two movies via The Pirate Bay’s tracker.

The duo’s goal was to look at popular movies with significant cultural differences, and they ended up choosing the Dakota Fanning teen action flick Push and the Chinese action movie The Sniper as their two samples. “We assumed that Sniper…would attract a Cantonese-speaking population and Push…would attract an English-speaking population,” Gurbani told me in an email. However, it turned out that the Sniper download was much more popular in the U.S. than in China, and even countries like Norway that are not really known to be home to many Cantonese speakers showed lots of downloader interest.

One should note at this point that the Sniper torrent featured an English-subtitled file, so it wasn’t completely impossible to watch the flick if you don’t speak Cantonese. However, subtitled movies tend to attract a far smaller audience through regular distribution channels. That’s not the case with BitTorrent. Multiple copies of The Sniper are available via BitTorrent, and the one tracked by Gurbani and Khirman attracted an audience of 122,437 users from 165 countries within seven days. Push, on the other hand, was accessed by 136,259 people from 159 countries.

BitTorrent users from the U.S. were the biggest faction in both swarms. Push proved to be extremely popular in Poland, while The Sniper attracted more users from Canada and India. But those differences aside, a lot of the data related to the downloading behavior actually looked remarkably similar. “(I)n both swarms, the ratio of the seeders to leechers appears to have stabilized on the fifth day,” explained Gurbani. “Intuitively, this suggests that the swarms matured at that time and started to degrade after that.” In other words: New movies are rapidly distributed within a few days, after which downloading movie buffs seem to lose interest.

One particularly interesting aspect about these two movies is how organic the buzz around them was. Push was released theatrically in the U.S. a few months before its eventual online leak, so it’s highly unlikely that people downloaded it after seeing a trailer or reading a review. The Sniper, on the other hand, premiered on the Seattle International Film Festival around the time the film exploded online, but has yet to get any U.S. distribution. BitTorrent sites like The Pirate Bay, where both movies popped up in the Top 10 list in early June, seem to have played a major role in generating this buzz among movie buffs all around the world.

Gurbani and Khirman have told me that they want to continue to analyze BitTorrent swarms to get a better sense of the download patterns for different movies in various countries. This could also help them understand the impact of anti-piracy enforcement on these types of downloads, explained Khirman. “(I)t will be interesting to check if indeed differences in anti-piracy laws make any significant impact on peer participation trends,” he added.

Stop slowing down our torrents! That’s the message BitTorrent Inc. has been sending to Canadian ISPs this week with a last-minute submission (PDF) to the Canadian Radio-television and Telecommunications Commission (CRTC). Bell, Rogers and other Canadian ISPs have been throttling their subscribers’ BitTorrent traffic for years, and the CRTC recently started public hearings to figure out if government intervention is necessary.

The whole episode is reminiscent of the controversy that broke out when Comcast started to slow down its subscribers’ torrent downloads in the U.S. — especially when it comes to BitTorrent Inc.’s allegations. The company did, however, share a few interesting tidbits in its submission that clarify how much of an impact such throttling measures have and what BitTorrent is doing to address network congestion issues.

Anyone who even casually followed the Comcast controversy knows the arguments of both sides by now: ISPs claim that P2P users are bandwidth hogs and that selective throttling measures help to maintain the overall health of the network. P2P vendors, on the other hand, claim that this amounts to unfair competition. Slowing down P2P-based video platforms while others can operate freely essentially favors some vendors while discriminating against others, they say.

BitTorrent Inc. repeated these arguments in its filing with the CRTC, and included some internal numbers to prove its point. The company has been offering its DNA services to content providers to help with the distribution of video games and other large files. DNA combines BitTorrent distribution with traditional, CDN-based file hosting. A DNA customer usually sees an average of 80 percent of its traffic facilitated via BitTorrent, according to the filing. However, in Canada, the percentage drops down to 30 percent, making P2P-supported CDN solutions much less attractive to Canadian customers.

The company also shared some internal data to disperse a common myth about BitTorrent. Rogers and other ISPs have argued before that BitTorrent is a 24/7 application that puts huge strains on networks by seeding files even when users aren’t in front of their PCs. BitTorrent Inc.’s own servers, however, paint a starkly different picture. “The average BitTorrent client is only active around 4 days each month, or between 10-20% of the time,” the filing reads.

Another contentious issue has been the behavior of BitTorrent clients, who, at least according to some, use as much bandwidth as is available without regards for other apps or services. BitTorrent Inc. has been dealing with this issue by introducing a new protocol with enhanced congestion control called uTP. There was a bit of controversy surrounding uTP when it first surfaced in late 2008, but eventually even critics seemed to be persuaded that the protocol would do more good than harm.

So where do things stand with uTP today? Some 400,000 beta testers are using the protocol in the wild, according to BitTorrent, and the company plans to roll it out to all of its users within weeks. From the filing: “[T]he eventual transition to uTP should have some very positive effects for the ISP community in the area of network congestion.” Unless, of course, the ISPs in question are still throttling BitTorrent.

Wayne Rosso, the long-time outspoken P2P exec, pulled out of efforts to reformulate The Pirate Bay earlier this week, as first reported by CNET. Swedish public company Global Gaming Factory had announced yet-to-be-executed plans to acquire the enormous legally troubled file sharing site and tracker last month. Rosso explained to us this week that he walked away because, “The the deeper the discussions got with [Global Gaming CEO Hans] Pandeya the more obvious it became that there was a lack of a real plan to move forward.”

Every day there is a new development in The Pirate Bay saga, and none of them bring confidence in the site’s potential to exist long-term. While our aim is not to give him a self-promotional platform, we figured it was worth asking Rosso what exactly it would take to make a legal P2P service work. Turns out Mr. Bombastic has some solid ideas.

Rosso said the allure of TPB’s 20 million file-sharers had already drawn serious interest from major labels in the short time he’d been affiliated with GGF. However a key factor of a successful service, and one that didn’t seem to be an option for The Pirate Bay, would be to switch over from an infringing offering to a non-infringing offering at precisely the moment when new owners take over. If a new owner had to turn off the tracker while prepping an alternative, a huge chunk of users would depart and never come back. And on the flipside, leaving the tracker on under new ownership means assuming its liabilities. Rosso emphasized that a new site owner would have to be rigid about copyright law; any grey area makes the project a non-starter.

To be fair, Rosso has yet to get a licensed P2P startup off the ground, having tried with Grokster, Optisoft and Mashboxx. The big obstacle, he said, was funding. Securing the licenses to launch an authorized music service would cost $20 to $30 million, he said. That’s far more than the $5 million GGF may or may not have on hand.

Launching a legal video file-sharing service, said Rosso, is probably out of the question, because it would require contending with TV licensing processes. He joked that launching an authorized P2P video service would probably cost more than the U.S. economic recovery plan. “The licensing is so complicated, with so many different owners and producers, and so many windows for release in so many regions in the world. You’re talking about a real analog model. It’s such a morass now, I don’t even know if it’s possible.” Besides, added Rosso, the technology for audio filtering is much more advanced.

Lastly, said Rosso, such a service would have to take a smart and consumer-friendly approach to search, discovery and personalization. True enough. But where his theory falls down is that Rosso underestimates the challenge of converting file-sharers to paying customers. Once you start locking up content with DRM, many of those 20 million users won’t even look back.

Will Rosso ever get to live his dream of turning P2P legit? He’s still looking for that opportunity, he said. But he added, “I’m like Groucho Marx, would you want to join a club that would have me as a member?”