It's a turbulent time in the world of content distribution. Despite a successful protest against overly restrictive anti-piracy legislation, law enforcement has demonstrated its already considerable power to take copyright-infringing websites offline, and several hosting and torrent sites have gone dark voluntarily to evade prosecution.

In the middle of all these warring groups—or perhaps more accurately, completely removed from them—stands BitTorrent, Inc., a company whose technological innovation gave the Internet important new capabilities, making it easier for everyone to share files, both legally and illegally. Although the word "BitTorrent" is often used in context with the word "piracy," the company itself has steered clear of legal problems by avoiding any distribution of unlicensed content, and narrowing its focus to delivering the best Internet file-sharing technology it's capable of building.

BitTorrent, Inc., developer of the BitTorrent peer-to-peer file sharing protocol and owner of the popular BitTorrent and uTorrent client software, says its monthly active users have increased from 100 million to 150 million in the past year. Despite the recent upheaval noted above, such as the shutdown of torrent search engine BTJunkie and even lawsuits filed against BitTorrent users, BitTorrent Chief Strategy Officer Shahi Ghanem tells Ars he expects nothing but continued growth. And the company has its eye on new markets, including live streaming of content and an experimental "cloud storage" service taking advantage of the same peer-to-peer technology BitTorrent is known for.

"From a legal perspective we've always gone to great lengths to make sure we're abiding by the law," Ghanem said in a phone interview. "A rash of things are happening legislatively and legally, but they haven't had an effect on our business, nor do we expect it to have an effect on our business. We've always focused on being a technology company, and building technology to make the Internet work better."

Founded in 2004 and headquartered in San Francisco, BitTorrent is a private company. While it doesn't release financial information, Ghanem says BitTorrent today is profitable, making money from licensing its software, sales of premium versions of its software, and advertising. It wasn't always such smooth sailing. In the mid-2000s, Ghanem notes that BitTorrent tried its hand at becoming a content distributor before realizing it was the wrong move.

"We moved into the content business in the mid-2000s, and became one of the largest licensees of Hollywood content in history," Ghanem said. "We realized that wasn't a viable business model for us.... It almost killed the business. We are not a media company, we are a technology company."

BitTorrent exited the distribution business in 2007 or 2008, Ghanem said, and is now focusing on a few key goals. In addition to developing the BitTorrent protocol that most Ars readers will be familiar with, BitTorrent, Inc. also developed the uTP protocol to relieve Internet congestion problems that BitTorrent traffic contributed to. Ghanem said uTP now regulates the majority of BitTorrent traffic, intelligently ratcheting back BitTorrent activity to allow more critical traffic (such as Internet-based phone calls) to come through, and giving bandwidth back to BitTorrent after the critical traffic has passed.

The BitTorrent protocol accounts for roughly 20 percent of Internet bandwidth usage. There are dozens of clients using the protocol, but BitTorrent and µTorrent make up about 80 percent of market share by number of users—excluding China, a country in which the company has only a nominal presence. How do you build on those numbers? BitTorrent is taking several approaches.

Creating new ways of sharing

The company's new live streaming technology, BitTorrent Live, is available in beta, and already being used to stream concerts. A personal sharing app, available in alpha, is designed for users to send videos, photos, and any files to friends without any limits on size. Perhaps most ambitiously, BitTorrent is working on a peer-to-peer cloud storage system, but the project is just in the R&D phase and Ghanem could give no indication of when it might become available publicly.

"We have figured out how to become the dominant provider of technologies that allow distribution of data across the Internet in a peer-to-peer fashion," Ghanem said. "What we're looking at now is, 'can we take these billion PCs around the world that are networked together and create a way for them to have distributed storage capability?' Rather than uploading everything into a data center, which is called a cloud, can't the cloud be these billion PCs connected to one another, sharing disk space, sharing backplane, sharing computational power, and sharing bandwidth?"

It won't be easy.

"The technical challenges are data redundancy and data availability," he said. "If we're doing distributed storage, it's not one-to-one mapping. If I say I'll give up 5GB of my hard drive if you give up 5GB of your hard drive, I don't always know if your 5GB will always be available to back up mine, and vice versa. That's where the challenging bits of the algorithm live."

BitTorrent has also built publishing tools to help content creators distribute content through BitTorrent to users (including educational materials), has applications for Android, and says it's in talks with system-on-chip vendors and device-makers about optimizing chips and devices for distribution of content to TV set-top boxes, Blu-Ray and DVD players, smartphones, and tablets. Ultimately, Ghanem says the company wants BitTorrent software to have the reach of iTunes, but without proprietary restrictions.

BitTorrent's technology has been touted as a good example for copyright owners by piracy researcher David Price, who says that instead of trying to sue the pants off everyone and push for restrictive Internet legislation, music and film companies should emulate BitTorrent by providing more convenient ways for consumers to get the content they want.

There's no way to determine the proportion of pirated to non-pirated content flowing through the BitTorrent network. "We've tried to work closely with Hollywood to make sure we're always attempting to get good content into our network," Ghanem said. "In terms of being able to monitor and police the network, it's both technically and legally impossible, just by the sheer nature of what we do. Everything is distributed so we don't maintain any content servers or anything centralized regarding content distribution. I don't know what you have on your machine any more than a browser company would do or a codec company would do."

Although BitTorrent users and sites that link to torrents have been sued for violating copyrights, the RIAA (Recording Industry Association of America) says it has no objection to BitTorrent itself. "As we’ve often noted, it’s not the technology we take issue with," the RIAA said in a statement e-mailed to Ars. "High-tech innovation has helped spur the music industry’s digital future with now more than half of our revenues deriving from digital platforms. Where we draw the line is the abuse of the technology by those who want to get their music and movies for free."

Ghanem says the music industry is "reconsidering us as a great distribution mechanism as opposed to the issue of their woes." Both signed and unsigned artists have released music through BitTorrent, although the company has no deals directly with major labels, he said. BitTorrent is also in talks with Internet service providers to deploy uTP more widely, although names haven't been released, and these talks are happening primarily in Europe and Russia rather than the US, he said. "We used to be at odds with the operator industry, but we've become kind of an ally to them and they're looking to deploy this [uTP] technology within their networks."