Business Overview

Recently, the increased demand for downloadable movies and television shows has greatly increased the strain on iTunes’ central servers. As more and more users demand these large files, it seems likely that iTunes will have no other option than to increase the space available on its central servers. However, by including a BitTorrent-like client into its existing iTunes client, iTunes can spread the burden of uploading these large files to its users, thereby forgoing the cost of additional server space.

The system we plan to propose to Apple incorporates a centralized BitTorrent client into the existing framework of the iTunes store with the purpose of relieving iTunes’ central server of much of the burden of uploading large files directly to purchasers. When a movie is purchased, the iTunes client will (if it determines an appropriate number of users are available to upload the file) connect the purchaser to these nodes through which the movie will be downloaded.

In order to make this system attractive to users, it is necessary to produce some sort of incentive system. The two ways we envisioned the system working are (a) offer the purchaser a monetary discount up front if they agree to allow others to upload the file from them and (b) create a system by which users earn points for the amount of megabytes uploaded to other users, which can then be converted into credits toward future purchases made at the iTunes store. Because a monetary discount up front would do nothing to prevent users from buying media at the discounted price and then moving the file to another location out of iTunes’ reach, we decided to pursue the second option. In order to make a points system work, iTunes would need to keep track of the amount of bytes uploaded by each user. There are a few issues we need to sort out with the points system: (a) the value of points in dollar/credit terms, (b) limits (if any) we should place on the amount of megabytes a user can upload or limits on the number of points available to earn in a specified period of time, and (c) how we equate the profits lost as a result of point payments (as opposed to dollar payments) and the money saved by reducing the strain on iTunes’ central servers. I will also determine what can be done in the way of marketing to make the possibility of uploading through the iTorrent client attractive to users.