Two years ago, DJ Shadow told his fans that “I won’t give my art away”. Now he’s become the latest and most high-profile musician to distribute a ‘bundle’ of music and content through a partnership with BitTorrent. Yes, for free.

There’s a big difference to previous BitTorrent campaigns by Counting Crows, Death Grips, Chester French and other artists though: DJ Shadow is getting paid for downloads of his bundle – the first time an artist has been paid directly for BitTorrent distribution of their work.

How? The bundle will include tracks and related content for DJ Shadow’s Total Breakdown: Hidden Transmissions from the MPC Era (1992-1996) album, but it will also include a “free software offer” from BitTorrent’s advertising partners.

The partner and software will vary by territory, but in most parts of the world it will be a media player application. People can choose not to download that software, but if they do, the partner pays BitTorrent, and DJ Shadow gets a cut.

The deal is a partnership between BitTorrent, DJ Shadow and his digital marketing team Fame House. It’s the latest example of BitTorrent working directly with creators (including filmmakers, authors and games developers) to put its filesharing technology to legal use.

“We’ve seen how relevant and meaningful good content offers are to our users, and how supportive the BitTorrent community is of the content creators we work with,” says CEO Eric Klinker in a statement.

“New business models built on top of the BitTorrent ecosystem are the future of content. This is where fans are. It’s time to bring artists, filmmakers and game developers into that conversation in meaningful ways too.”

It’s an intriguing partnership, so Music Ally talked to BitTorrent’s executive director of marketing Matt Mason – also the author of blog and book The Pirate’s Dilemma – to find out more about the DJ Shadow bundle, and BitTorrent’s wider ambitions.

“That’s actually a real opportunity for the content industries…”

“Shadow has created bespoke content specifically for this BitTorrent bundle, and it’s great to see artists are stepping up to that level now, making content with BitTorrent in mind,” says Mason, who adds that the business model is just as exciting.

“This is the first time in history that anybody’s tried to monetise the BitTorrent ecosystem in a way that naturally plays into its value. The biggest problem with this technology has been that it lets people share things indefinitely at a cost of zero. That’s actually a real opportunity for the content industries if we can build business models on top of it.”

Previous partnerships with artists – Counting Crows for example – have only made money for those artists indirectly – the theory being that making a bundle available to BitTorrent’s 150m active users may spur album, ticket and merchandise purchases, or drive Facebook and Twitter likes/follows.

In this case, DJ Shadow gets paid every time someone downloads his bundle AND accepts the software offer. Mason freely admits he doesn’t know how many people will do that. “We don’t know if this is going to work, we just want to try something new and see if we can figure it out,” he says.

“If it does, it’s huge: it changes the future of the music industry and opens the floodgates for all kinds of creators to see this as a new way to monetise content. It changes everything overnight, and yet this is also just the first step in that very different direction.”

You can imagine plenty of music industry execs tutting while reading those words, especially if they think of BitTorrent purely in terms of piracy.

Yet even the moderate wing of the music business may wonder if this is just the latest example of a technology company looking to impose a new business model on music that suits its own revenue streams most of all.

“The problem is really about two different cultures who don’t understand each other that well…”

Actually, though, Mason – with a background as a DJ, journalist and advertising creative – sits more between the two worlds of technology and entertainment, and has interesting views on the need for compromise from both sides, not just the entertainment companies.

“Silicon Valley and the entertainment industry have both always come at this from the worlds they inhabit,” he says. “The problem is really about two different cultures who don’t understand each other that well, even though they’re both full of smart people trying to do good things.”

He continues: “The way forward is integrating these two worlds and finding new ways to work together. It’s not going to be an old music or Hollywood model that works, but it’s also not going to be an old Silicon Valley model that works. It’s going to be something else we haven’t figured out yet.”

He admits that there are doubters on both sides, though: “A lot of people who don’t want things to change in the entertainment industries, and also frankly in Silicon Valley. Both worlds are guilty of not wanting to innovate or do things outside their comfort zones.”

One risk in the DJ Shadow bundle deal is that BitTorrent users will shy away from the software-offer element – particularly if they’ve had bad experiences in the past with viruses and spyware through filesharing services.

Mason says BitTorrent recognises the risks, and has undergone “a tremendous amount” of user testing in recent weeks. He says it’s a question of trust, and suggests that users “really trust BitTorrent – they know we don’t hit them with stings”.

“It’s very easy to opt out, not get the software and just get the content from DJ Shadow,” he says. “But what we’ve found from our user testing is that poeple don’t mind seeing the offer if they understand that it’s helping the artist who they respect.”

That’s why DJ Shadow is probably a good artist to be working with on this first experiment: someone who’s worked hard to build a direct, honest connection with his fans over the years, including talking openly about the impact he saw illegal filesharing having on musicians.

“I’d rather sell it to 100 people who value it as I do than give it away to 1000…”

In fact, today’s deal marks a turnaround for DJ Shadow. “If you’re holding your breath, waiting for me to boost my cool-quotient by giving my music away for free, it’s not going to happen,” he wrote in a January 2010 blog post.

“The fact is that I feel my music has value. You may disagree, and that’s fine. But I know how much energy I put into what I do, and how long it takes me to make something I’m satisfied with. Giving that away just feels wrong to me. It’s not about money per se; I can donate a large sum of money to charity and not think twice, but I won’t give my art away. I’d rather sell it to 100 people who value it as I do than give it away to 1000 who could care less. That’s MY choice.”

A great big hypocritical U-turn? It could be painted as that, but actually, blogging so honestly about how he felt about giving music away online was just one example of Shadow’s relationship with his fans – the very relationship that could make this new BitTorrent bundle a success.

Also, the fact that an artist who used to be so vehemently against giving his music away for free has now changed his mind hints that BitTorrent may be onto something with its new scheme.

“If there is one kind of truth that people should take away on how to distribute stuff online, it’s that you need to have as personal and direct a connection with your fans as you can,” says Mason. “Make them understand that it is you the artist on the end of this transaction.”

BitTorrent is clearly getting its message through to some artists – particularly those who own the necessary rights to authorise these bundles without requiring a label’s approval. However, Mason is keen to stress that labels are just as likely partners for BitTorrent as artists.

“DJ Shadow has a great management team with a major label behind him, Counting Crows are managed by The Collective, Death Grips are signed to Epic through Sony,” he says.

“These are not individual actors, they are people with labels and some of the best management teams in the world behind them, and they’re coming to us and figuring out ways to extract value from the technology that we create.”

In the coming months, Mason says BitTorrent will be running more experiments with labels, artists, game developers, software creators, filmmakers and authors, with even more of a focus on helping them make money directly as well as indirectly from BitTorrent.

“This isn’t just us creating a cool solution. We want to give other people tools so they can go and figure stuff out themselves,” says Mason, citing the recent launch of the BitTorrent Torque technology as a prime example.

“We’re not trying to build The Thing That Will Save The Music Industry: we’re trying to build the thing that the music industry can use to re-imagine the music industry,” he says.

There are a host of chewy questions to be answered about this kind of campaign, though. How many BitTorrent users really need a new media player? How much money and how many willing partners will there be to provide it? And how on earth do publishing rights work for this kind of thing? All matters we’ll be digging into for a follow-up piece.