BitTorrent Hits a Non-Comcast Bump

Tough times are hitting BitTorrent, the peer-to-peer file-sharing network that is struggling to go legitimate despite the constant use of it for piracy. The company has had to make some rather drastic personnel cuts recently, but dismissed reports that the layoffs were fallout from the Comcast-FCC agreement.

Comcast and BitTorrent announced in March that they were working together to improve the overall performance of BitTorrent file sharing over the cable giant’s broadband network. This came at the same time as numerous complaints over Comcast throttling excessive BitTorrent use.

With the FCC slapping Comcast for trying to slow down all the piracy that takes place over BitTorrent networks, rumormonger ValleyWag wondered aloud if this would not hurt BitTorrent in its attempts to go legitimate, since the FCC had ordered Comcast to not play favorites in any direction.

Well no, insist both parties. BitTorrent admitted to some pretty severe layoffs – 20 percent of the company – but said it was not the entire marketing department, as ValleyWag reported.

“Contrary to published reports …those impacted were distributed across our organization, rather than focused on a single department. Also contrary to published reports, the layoffs were unrelated to any ongoing discussions to divest a portion of our business. That claim is irresponsible ‘journalism’ and outright false,” said BitTorrent in a statement e-mailed to InternetNews.com.

The company went on to say there is “healthy demand” for its Delivery Network Accelerator (DNA) service and its Software Development Kit (SDK), which brings rich Internet media to the TV.

Comcast denied the ValleyWag claim that it was going to offer some kind of “privileged delivery” of BitTorrent packets. “We never had such an agreement. All we said in March was we were cooperating with BitTorrent on doing tests on how we deliver peer-to-peer content on our network and to find out if there was a more efficient way to deliver those bits, given that p2p hasn’t always been as efficient running over networks as it could be,” said Comcast spokesman Charlie Douglas.

“With respect to BitTorrent, the FCC announcement is about our managing our network by delaying a certain number of peer-to-peer file transfers. We’re moving to a protocol-agnostic network management so all protocols will be treated equally. Our March agreement with BitTorrent continues,” he added.

While it’s fine that the agreement remains in place, almost 20 percent of a 55-person company (12 people total) is a big loss no matter how you slice it. Rob Enderle, principle analyst for The Enderle Group, chalks it up to competition and not the FCC agreement.

“It’s still a tough market,” he said. “It does hurt them and they are still competing with what is largely a traditional distribution market, cable, satellite or DSL. And we still live in a world of good enough. If I can get through a set-top box get most of what I want, why set up a BitTorrent hub?”

BitTorrent is a small company with a unique delivery system that has some unique ideas but is nowhere near as easy as plugging in a cable box, and that is its worst enemy, said Enderle. “The status quo doesn’t lend itself to the BitTorrent market, and as long as the status quo is good enough for most people, it’s tough for BitTorrent to build a market,” he said.