UTorrent's Monetization Of File Sharing Proves Online Piracy Is Big Business, Even After Demonoid

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While most of the online-piracy community has been mourning the loss of its beloved Demonoid, uTorrent has quietly been able to pick up some of the now-defunct site's traffic and turn it into advertising revenue.

It's a big step for the BitTorrent Inc. file-sharing industry, and one that few would have expected back in the days of the Metallica v. Napster Inc. lawsuit.

As a result, uTorrent has quietly become the world's largest BitTorrent client while hosting more than 125 million active users every month, according to TorrentFreak.

The uTorrent shift to ad-driven revenue came quietly this month when an administrator posted an announcement on the site's forum. Perhaps predictably, the announcement was met with a less-than-welcoming response. Many users -- who illegally download movies, games, and music regularly -- complained that the ads hurt the quality of their experience on the site.

With users reacting so negatively, uTorrent (acquired by BitTorrent in 2006) made ads on the site optional. Instead, it was announced that there would still be sponsored torrents (like sponsored tweets on Twitter), but users would be able to turn those off if they so choose, TorrentFreak reported.

Torrent Freak also reported that a source at uTorrent said the company generates between $15 million and $20 million annually and that it has millions of dollars in backing in venture capital.

Even with the backpedaling, uTorrent's ability to put advertisements on the site is a clear sign that online piracy is big business. When Demonoid was taken down at the end of July, the news that the site's domains might be for sale caused quite a stir online.

The legality of uTorrent, the Pirate Bay, and the like no longer seems to even be an issue. The Motion Picture Association of America and Recording Industry Association of America have made the Pirate Bay one of their favorite scapegoats for profit loss, but the organizations' efforts to enact legislation and even sue individual users have proven to have almost no effect.

The uTorrent decision to follow the advertising route implies the service has expanded enough to have to pay more employees and higher service costs. PC Mag.com reported that in the future the ads could be specifically tailored for each individual, the way Facebook does now. If a certain BitTorrent user illegally downloaded "The Avengers," that user might log on the next day to see sponsored torrents for "Thor" or "The Dark Knight Rises."

The uTorrent forum post also contended the revenue from advertisements, sure to be high because of the number of active users, would eventually "directly benefit the artist community including filmmakers, recording artists, game developers and more" (i.e., those whose copyrights have been violated). That move could go a long way in showing a willingness on the part of online piracy advocates to improve their relationship with the artistic community. It might not be the best situation for those artists, but, with the way the use of BitTorrent has grown, it might be their only option.

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