BitTorrent at 25: The Story of a Revolution That Upended Hollywood and Struggled to Monetize

Twenty-five years ago today, a young, little-known programmer by the name of Bram Cohen fired off a short message to a mailing list for peer-to-peer enthusiasts. “My new app, BitTorrent, is now in working order, check it out here,” Cohen wrote, followed by a link to his personal website.

“What’s BitTorrent, Bram?” the founder of the list asked in response.

Cohen never bothered to reply. The world would find out soon enough.

In the following years, BitTorrent quickly became the world’s most popular file-sharing app, unleashing a massive wave of piracy that upended Hollywood forever. At one point, BitTorrent was said to be responsible for a huge amount of internet traffic — some widely cited metrics peg it at half of P2P and one-third of all internet traffic in 2004. And while the entertainment industry succeeded in shutting down file-sharing systems like Napster and Kazaa, it largely failed to curtail the massive flood of BitTorrent piracy.

What stymied movie studios and record labels alike is exactly what makes the story of BitTorrent’s 25th anniversary a gripping one. There’s BitTorrent, the app that Cohen unveiled in July 2001 and which continues to attract tens of millions of monthly users to this day. There’s BitTorrent, the file-sharing protocol, which has been adopted and advanced by hackers and developers from around the world, and which helped birth an entire cottage industry of piracy websites. And there’s BitTorrent, the company cofounded by Cohen, which struggled for years to make money with its technology.

“Going into it, my plan was not to start a business,” Cohen recalls. “My plan was to start a revolution.”

This is the story of that revolution, and all that remains of it today.

Cohen started working on BitTorrent soon after leaving Mojo Nation, a startup that had ambitious plans to combine file sharing, distributed computing, and micropayments, only to shut down in 2002 without ever really getting off the ground.

Cohen helped Mojo Nation improve the efficiency of its file-sharing technology. His approach was to use something called swarming distribution: Instead of swapping large files between a few users at a time, the app would divide each file into lots of little chunks, and then allow large numbers (or swarms) of users to trade those chunks among themselves. The ethos of sharing was built into the software, insisting that users would help upload files instead of just downloading them selfishly.

Cohen was disillusioned by the failure of Mojo Nation but not ready to give up on the underlying technology just yet. “I decided to make a tool that very narrowly just did swarming distribution and nothing else, because that was a thing I knew how to do,” he says.

“My plan was not to start a business. My plan was to start a revolution.”

All this happened as P2P and file-sharing companies were facing massive headwinds. The music industry sued Napster at the end of 1999 and ultimately forced it to shut down around the time Cohen first released BitTorrent. A few months after that, the entertainment industry sued Kazaa and Grokster, followed by legal claims against Audiogalaxy, LimeWire, eDonkey, and other file-sharing systems.

Despite some significant differences in their P2P architecture, all these apps ultimately lost in court or folded ahead of a likely legal defeat. Their Achilles’ heel: They offered users a way to search for copyrighted files and then helped them find others to trade those files with. Courts deemed this contributory infringement, pointing to the fact that the owners of these services knew exactly which files their users were trading.

BitTorrent was different. From the start, Cohen built the app without search functionality, instead relying on third-party websites for content discovery. He also didn’t run a centralized server to help users discover other BitTorrent clients to trade content with, and instead outsourced that piece of the puzzle to so-called tracker servers. Websites dedicated to BitTorrent file sharing would offer a metadata file (the torrent file) for every download, which in turn pointed users to tracker servers that matched up users to facilitate the sharing. Simply put, BitTorrent was an app to help people trade data, but its developer had no way of knowing what that data was.

That structure effectively shielded Cohen and the company he would eventually found from legal liability. To this day, BitTorrent remains the only major publisher of file-sharing software that hasn’t gotten sued by Hollywood and the major labels. However, Cohen insists that the decision to outsource content search and client discovery wasn’t primarily a shrewd legal maneuver, but a simple necessity.

After all, he was just one guy. “My hands were somewhat tied,” he says. “I was writing stuff on my own.”

Despite lacking the resources of much bigger P2P companies, Cohen’s BitTorrent app quickly gained traction in tight-knit communities looking to trade large files. Among the first adopters was Etree, an online community of jam band enthusiasts. Bands like Phish and the Grateful Dead had long encouraged their fans to trade bootleg recordings of their shows with each other in the offline world. Etree brought this idea online with the help of BitTorrent, which allowed fans to share show recordings using high-resolution audio files that were simply too big to distribute any other way.

But pirated videos were like rocket fuel. “When it started getting used for anime was when the numbers took off,” Cohen says. Granted, that early success didn’t quite measure up to the tens of millions of users apps like Kazaa were attracting at the time. “It was like, Oh, look, we’re getting a thousand downloads a day, that’s massive,” he recalls.

Things changed significantly with the emergence of major torrent sites, which allowed anyone to quickly find and download movies and TV shows. In 2002, a Slovenian high school student launched Suprnova.org, which reportedly attracted up to a million users a day before its closure in 2004. And in 2003, a ragtag group of hackers founded The Pirate Bay in Sweden. With its open embrace of illicit content and an F-you attitude toward Hollywood, the site turned into a kind of lightning rod for self-described pirates and copyright enforcers alike.

“It was so fast that we initially thought something was broken.”

While these sites quickly became household names, countless others sprung up all across the globe in their shadows. Some catered to specific interests like anime, porn, or ’70s B movies, while others simply welcomed everyone and everything. And while copyright holders were able to shutter some sites, others survived, or reemerged under different names or domains. Plus, all those lawsuits generated countless headlines, effectively promoting BitTorrent to new audiences. By 2004, BitTorrent traffic exploded.

The surge of interest didn’t just alarm rightsholders. It also put some significant strain on BitTorrent’s infrastructure, including the tracker servers that helped users discover each other. One popular tracker, Denis.Stalker.H3Q.com, was run by a trio of German hackers associated with the local Chaos Computer Club.

Initially, their tracker ran server software Cohen had written in conjunction with the BitTorrent client app. But as BitTorrent gained in popularity, their server, which was just a single computer humming along in a kitchen somewhere in Berlin, was bombarded with hundreds of requests per second, slowing it to a crawl.

That’s when Dirk Engling, a member of the trio who is also known as Erdgeist in German hacker circles, decided to build a better-performing tracker software from scratch. He dubbed his server software Opentracker, and the difference was like night and day: While the Denis.Stalker server previously always ran hot, Engling’s code put a sudden stop to the near-constant fan noise. “It was so fast that we initially thought something was broken,” he says.

Engling is not as well known as Cohen. But back then, he made a fateful decision that ultimately helped BitTorrent scale to surpass all other file-sharing networks in popularity. Instead of just using his code on the Denis.Stalker tracker, Engling published it online, free to download for anyone.

Opentracker quickly took off and was adopted by major torrent sites like The Pirate Bay as their tracker solution of choice. Many of these big sites relied on third-party tracker servers like Denis.Stalker, but for years also ran their own trackers as fallback solutions. Every torrent file can point to multiple tracker servers, so sharing continued when one server went down. (Eventually, BitTorrent added further decentralization to allow trackerless trading, but tracker servers remain to this day an important part of the ecosystem.)

“Back then, it was a radical political idea,” Engling says. The thought was to allow anyone to distribute large amounts of data without having to rely on expensive servers — and if some of that was used for piracy, so be it. “It was a movement to democratize [file sharing],” he says.

Engling, for one, wasn’t in it for the money. He distributed Opentracker as “beerware,” an open-source license guided by the notion that anyone who found it useful should buy him a beer, as he half-jokingly explained in a 2007 talk. “I thought: A lot of people are using BitTorrent, so…”

Back in the United States, Cohen quickly realized that relying on the goodwill of others — especially people who used his software to download content for free — didn’t pay the bills. In 2004, he founded BitTorrent Inc. to transform the revolution he had started into an actual business. “That didn’t work so well, unfortunately,” he now concedes.

BitTorrent raised $8.75 million in funding in 2005, followed by another $20 million round in 2006. The money helped the company to staff up, but it also put pressure on Cohen and his teammates to somehow turn an app that was beloved by pirates into a legitimate business.

As part of these efforts, the company struck deals with Hollywood to launch a movie download store called the BitTorrent Entertainment Network, which launched with thousands of titles from Warner Bros., Paramount, and MGM in early 2007. However, the company quickly realized that selling DRM-protected movies to an audience that already had access to the same titles for free was a fool’s errand.

“Back then, it was a radical political idea.”

“That didn’t work at all,” says a former senior BitTorrent employee who declined to be named in this story because of fear of repercussions from his current employer. Not only did people not want to buy movies from BitTorrent, but minimum guarantee provisions in its contracts with Hollywood also forced the company to fork over millions of dollars for content no one wanted to buy. “It kind of worked out for the studios,” the former employee says.

“There were gotchas [in those] deals that made them essentially unworkable,” Cohen agrees. “The big copyright holders were perfectly happy with where things [were], and basically didn’t want to create the streaming systems that we have today.”

BitTorrent closed the download store less than two years after its launch while also laying off half of its staff amid a recapitalization. In the years that followed, the company kept trying to figure out other business models, from P2P CDNs to decentralized chat clients — only to hit roadblocks at every turn.

The big issue was always piracy. BitTorrent successfully avoided legal liability, but it couldn’t get rid of its outlaw image. That made it impossible to strike deals that were open to others, Cohen says. “When you’re doing slightly sketchy things, the world doesn’t want to give you a nice off-ramp.”

“I never should have brought on anybody else at all. I could have simply gotten enough money off of doing the slightly sketchy stuff just on my own.”

One thing that worked was advertising. In addition to including ads directly in its products, BitTorrent would also bundle third-party tools with its installers and get a small cut when someone installed a browser toolbar or a similar app alongside the BitTorrent client. But while the ad money was paying the bills, it wasn’t meeting the expectations of BitTorrent’s investors looking for a lucrative exit.

“The [app download] numbers kept growing, but a lot of the use cases were never going to be the kind that you could legitimately either IPO or sell to another company,” the former employee says.

BitTorrent Inc.’s struggles were in stark contrast to the success of Cohen’s technology. “We were moving an exabyte of data every month,” the former senior employee estimates. BitTorrent owed much of its popularity to the wars around file sharing, which got a new poster child when Swedish authorities raided The Pirate Bay in 2006.

The battle between rightsholders and The Pirate Bay is perhaps the best-known part of the BitTorrent saga. The site was up and running again days after the raid, thanks in part to BitTorrent’s distributed architecture. The Pirate Bay didn’t run a file-sharing network, and taking its servers didn’t stop people from downloading BitTorrent’s client, or finding each other via tracker servers. All the raid took offline was a public list of downloadable torrent files, and all it took to get that back online was a recent server backup.

Undeterred, rightsholders and law enforcement continued their crusade against BitTorrent pirates and their alleged enablers, including the three cofounders of The Pirate Bay. After getting charged with criminal copyright infringement in early 2008, in April 2009 they were each sentenced to a one-year prison term and ordered to pay financial damages. Much to Hollywood’s chagrin, their site nonetheless stayed online. The exact identity of The Pirate Bay’s new operators remains a mystery to this day.

Hollywood’s fight against pirates also had repercussions for the German hackers responsible for much of BitTorrent’s tracker infrastructure. Used by a number of big torrent sites, the Denis.Stalker tracker attracted around 100 million daily peers at its peak, which were trading a million files every single day, according to Engling.

“When you’re doing slightly sketchy things, the world doesn’t want to give you a nice off-ramp.”

One day, the Berlin police’s economic crimes unit raided the apartment of one of the three people involved in running the tracker server, confiscating every piece of equipment they could find, according to Engling. “They couldn’t imagine that anyone was running something like this without making any money with it,” he says. However, money was the last thing on the trio’s mind. In the same aforementioned talk, held during the Chaos Computer Club’s annual conference between Christmas and New Year’s, they explained their motivation with three simple words: “Because we can.”

Charging them for knowingly facilitating copyright infringement wasn’t possi