Asia’s P2P Boom

We all know the numbers by now. Some 50 million U.S. Internet users have used file-sharing platforms. Popular networks like Gnutella/Limewire and eMule together make up for eight to nine million simultaneous users at any given time. And BitTorrent is responsible for 30 to 50 percent of all internet traffic, give or take.

But there is a whole world of P2P services with millions of users out there that most of us have never even heard of. Hundreds of thousands of Japanese Internet users get their media through encrypted and secretive darknets. China is on the forefront of P2P television. And then there is Korea, where file swapping is widespread even after major P2P providers were forced to shut down.

Korea actually played a very early part in the P2P war. The Korean file-sharing network Soribada was founded only a few months after Napster, and the two co-founders fought at least as hard as Shawn Fanning and his team against attempts to shut them down. Soribada finally had to give up in 2005 and convert to a traditional, licensed download store, which completely solved the problem of illegal swapping over night.

Oh, wait, it didn’t. People just abandoned networks like Soribada and instead flocked to online storage providers. Recently this became a matter of politics when the Korean government promised to crack down on file swapping, “including so-called ‘webhard’ services,” as part of a free trade agreement with the U.S. — a move that outraged local activists and probably scared the shit out of LG. The company operates the very successful Korean online storage provider

Korean file sharing has always been driven by commercial enterprises. That’s completely different from the situation in Japan, where P2P has been dominated by non-commercial, encrypted swapping applications. The most popular one is Winny, which was invented to be a more secure replacement for WinMX. Winny’s development stopped after its inventor got charged for copyright infringement. The program has still up to 450,000 active users at any given time though, while up to 150,000 simultaneous users swap files over the Winny-like Share network.

China is definitely the big dog in terms of P2P in Asia. Taiwan-based enterprises like Kuro and Ezpeer were forced to change their business models under pressure of the music industry, but there are still literally hundreds of sites that facilitate file swapping and downloads based in mainland China. Some of them have a more corporate background, like the Google-funded BitTorrent client maker Xunlei or its competitor QQ. Others are more appealing to the non-profit P2P crowd, like the eMule-based VeryCD that lists 90,000 movies, TV shows and applications for download.

Of course you can’t talk about Chinese P2P without talking about German soccer — or rather the companies that make it available worldwide via P2P . Chinese enterprises like PPStream and Sopcast were streaming video through their P2P infrastructure long before Joost and Babelgum, and Chinese P2P Streaming start-ups are starting to see some cash for their efforts. PPStream secured $10 million in financing this spring, and UUSee got another $20 million in a second round of financing on top of $10 million it raised in late 2005. The investors include DFJ, Sequoia and Highland Capital.

Looks like Sand Hill Road got the message: P2P isn’t just about U.S. college kids swapping MP3s. It’s a world-wide phenomenon, and one of its epicenters is Asia.