By: Gigaom
October 10, 2012 at 10:59 AM EDT
Monetizing BitTorrent helps Australian newspaper keep down video costs
Sydney Morning Herald publisher Fairfax was spooked by the escalating cost of licensing video for its new TV site. So now it's adding cheaper content by legalising BitTorrent videos on producers' behalf.

When a newspaper wants to become a broadcaster in converged times, how does it make the leap across platforms? Australia’s Fairfax Media turns to BitTorrent.

To identify what people might want to watch on its smh.tv video site, the Sydney Morning Herald publisher says it searches the P2P protocol for popular videos, Fairfax’s TV head Ricky Sutton tells The Australian:

“One of our major ways to get content is going to BitTorrent, and other BitTorrent sites, and find what people are illegally downloading to then go to the content owner and say, ‘hey, I watched this last night it’s going awesome on BitTorrent’ and then say ‘how about giving it to us?”‘

“We then bring it over here and we advertise on BitTorrent that it’s legally available on our platform, and then pay some revenue share based on it. That’s worked quite effectively.”

What Sutton mean is, smh.tv wants to license quality documentaries that are currently going unmonetized through BitTorrent, helping their producers earn something in the process.

The tactic is likely cheaper for Fairfax than commissioning shows in the traditional way the TV industry does it.

Two years ago, shortly after smh.tv was launched, Sutton told a conference licensing costs were so high that the service would be paying out $16 million per month soon. The new tactic is a cheaper option.

Using file-sharing networks to identify consumer appetite is smart but not entirely new in other media sectors. Music labels are believed to pay close to attention to what goes down well with freeloaders.

The Australian‘s diary writer jests: “One wonders what advertisers think of Fairfax tailoring content to the tastes of people who don’t want pay for anything.”

Fairfax’s smh.tv also licenses videos more formally from sources like CNN International. The site is also carried on Fairfax newspaper sites like The Age‘s.

Amongst the current-affairs and factual documentaries on smh.tv, the current most popular video is Beer: An Insider’s Guide, an Australian series nearly a decade old.

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