NBCU Entering the Peer-to-Peer Wurld

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At first glance, it sounds like a pyramid scheme: pay a few dollars to download a movie, and some day, you could earn back your money and then some for sharing the content with other Web surfers.

But for NBC Universal, which last week cut a deal to begin supplying pay-per-view content to peer-to-peer Internet company Wurld Media in first-quarter 2006, it’s a new outlet for distributing everything from library theatricals to specials like Jerry Springer: Uncensored.

Wurld Media’s Peer Impact service has some things in common with peer-to-peer networks like LimeWire and Kazaa in that it will deliver video to Web surfers by storing the content on the computers of individual users. But Wurld Media says its technology is legal, as it prevents illegal copying of music or video content.

Peer Impact, which launched commercially in August, is also unique in that the company says the 20,000 people who use its music-downloading service earn back 5% of the 99-cent-per-song purchase price each time someone downloads the same song from their computers. The service also offers video-game downloads.

At press time, Wurld Media and NBC Universal had not released the pricing for the PPV fare — the first programming it will make available. But Wurld spokeswoman Taunia Kipp says it will feature a new “peer cash” model designed to drive the popularity of the programming service.

The deal came a week after NBC Universal announced an agreement with DirecTV Inc. to supply hit shows from NBC, USA Network and other cable networks it owns to the direct-broadcast satellite provider’s digital video recorder subscribers, commercial-free and at 99 cents a piece.

Kipp said many Peer Impact users have actually made more money sharing songs than they have paid for the original copies. The catch: users can only use “peer cash” to buy more songs.

Under its agreement, NBC Universal agreed to supply movies from Universal’s film library to Peer Impact, including Ray, Meet the Fockers and The Bourne Supremacy. Raunchy specials such as Jerry Spring: Uncensored and Blind Date will also be available, beginning in the first quarter, as well as more family-friendly fare such as The Land Before Time and Kicking & Screaming.

Peer Impact will offer the NBC Universal titles in the same PPV and video-on-demand window used by cable and satellite providers.

Unlike song downloads, which Peer Impact users can keep forever, Web surfers that download NBC Universal videos to their computers will only be able to view the content for 24 hours after the first time it’s played. They will also be able to transfer the content to portable media players run by Windows Media software.

NBC Universal Cable president David Zaslav said the company will not provide TV series content to Peer Impact under the current agreement.

“We’re taking it one step at a time,” Zaslav said. “We’ve been very aggressive at looking at all of the new technologies and platforms. As interested as we are in getting our content out there for more consumers to see and acquire, our first mission is to make sure the platform is protected and safe.”

Zaslav wouldn’t detail the revenue split with Wurld for the video content.

Kipp said Wurld, which is talking to other studios, hopes to eventually offer TV series through Peer Impact.

She added NBC will supply the company with master copies, which will be used to download content to the initial customers that order the videos. Subsequent downloads will rely on computers of Peer Impact users, saving NBC and Wurld hosting and distribution costs.

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