So What Will Become of The Pirate Bay?

You’d think before you announce a sale that alienates many of your most passionate users you’d figure out what your next steps were first. But no, that wouldn’t be The Pirate Bay way. Swedish software company Global Gaming Factory X (GGF) said yesterday it’s in the process of acquiring The Pirate Bay, the world’s largest BitTorrent tracker, for 60 million Swedish kronor ($7.8 million).

We parsed through the salient points, but were still left quite confused about what exactly GGF would do with The Pirate Bay. What’s become obvious is that the folks behind TPB are selling its main asset — its user base — so they can stop being a legal target and abdicate responsibility for the site’s upkeep and liabilities. That 25 million-strong user base, however, which expects to use The Pirate Bay to freely track any and every sort of file on BitTorrent, is far from pleased. So what exactly is next for TPB? Here are some further (if contradictory) clues:

• Spoke too soon? The site hasn’t been sold yet. GGF has to find funding to buy TPB in the next four weeks. If the sale doesn’t go through, somehow TPB expects to press a reset button and have everything go back to normal, spokesperson Peter Sunde told Tomas Wennström (via TorrentFreak).
• The superdistribution model. GGF says the new Pirate Bay will host files legally and pay rights holders for them. The company reportedly expects $56 million per month in revenue from ads on its new legal portal. Its larger plan is to create a system in which users get paid to trade files so as to reduce traffic strain caused by popular pieces of content. GGF also hopes to put its users’ storage and processing power to work. “We’re talking about next-gen file sharing so you can create revenue from storage and Internet traffic optimization,” GGF CEO Hans Pandeya told the BBC.
• Better than nothing. In response to user concerns about GGF messing up TPB, Sunde replied, “I think it could be true, could be faulty, but whatever happens at least something happens, which is the big thing here. I’d rather see The Pirate Bay die in a chance of becoming better, than just dying.”
• To track or not to track? Though Sunde had initially said that GGF was shutting down TPB’s tracker, that actually may not be the case. At least not according to GGF CTO Johan Sellström, who told TorrentFreak: “We had discussed closing it down initially so I think that’s why he said so. The plan is to use technology from Peerialism that makes bandwidth utilization more efficient and then it would not make sense to shut it down.”
• TPB not the only party with legal troubles. Oh and GGF, which is a public company listed on the Swedish stock exchange Aktietorget, is suspected of insider trading. Trading of GGF shares was halted by the exchange earlier this month but then reopened on Tuesday, at which point the acquisition was announced. Aktietorget says it suspects the deal was leaked. (The Swedish Wire)

Personally, after talking to countless peer-to-peer operators and tech providers over the years trying to turn themselves into companies — Napster, Mashboxx, Streamcast, BitTorrent — my expectations for TPB 2.0 are pretty low.

In one example, which involved a model similar to the one GGF described, a little company called Wurld Media launched a revenue-share service called Peer Impact circa 2005. Wurld split 10 percent of a file’s purchase price between the peers who shared it and the members who recommended it. The company signed content deals with NBC Universal, 20th Century Fox and Warner Bros. Pictures. Sure, Peer Impact lacked a significant user base, and it also had execution issues (as well as tax fraud charges levied against some of its execs). It doesn’t exist today.

That one example aside, while TPB may have a massive user base, it’s a particular kind of user base. The anarchistic bent of The Pirate Bay leaders and their users is not going to lend itself to a nice tidy business. As the biggest BitTorrent tracker changes its tack, its millions of users will look for a replacement, and one where content costs money will have trouble holding ground.

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