BitTorrent, the company which aims to create a leading legal peer-assisted content delivery platform from the open source file sharing system of that name, has received a further $20 million in venture capital investment. BitTorrent plans to launch a video store to enable users to download movies from major Hollywood studios.

Following recently announced distribution deals, over 20 film studios and television networks, including 20th Century Fox, MTV Networks, Paramount Pictures and Warner Bros, are expected to publish thousands of movies and television shows on

The company also plans to power third-party web sites, including those of other distributors.

BitTorrent plans to make video downloads available for viewing on a personal computer or other portable device, including movies distributed day-and-date with their DVD release, popular television series, catalogue titles and cult classics.

One studio, Palm Pictures, plans to be the first studio to utilize the BitTorrent platform to release full-length feature films before both the theatrical and DVD release dates.

Most movies will be available on either a retail or rental basis, while television programmes will all be available as download-to-own titles.

The news came as Wal-Mart, the largest retailer in the world, launched its own movie download service, although curiously this currently only allows customers to download a movie after they have bought a copy on DVD.

Both Amazon and Microsoft have launched movie download services, although they have come in for criticism as a result of limitations and service issues.

However, Hollywood appears to be embracing BitTorrent as a distribution mechanism, with the addition of digital rights management, to provide electronic sell-through opportunities at minimal distribution cost.

The hope is that users, many of whom routinely use BitTorrent compatible software to obtain illicit copies of material, can be converted to purchase movies and television programmes if they are made available for legitimate download.

“We come to the table with a solution to piracy,” said Eric Patterson, general manager of consumer services at BitTorrent. “Millions of people are using BitTorrent to download content legally and illegally. We know from our research that 30% of that audience will pay for content. We’re going to help the studios turn an enormous problem into a viable sales channel.”

“When I created BitTorrent in 2001, my mission was to solve the problem every website has when distributing large, popular files,” said Bram Cohen, the co-founder and currently chief executive of BitTorrent. “This mission is still what drives BitTorrent today and couldn’t be more relevant as the Web grows into a channel for consuming large, high-value entertainment and information content.”

BitTorrent Inc. was founded by Bram Cohen and Ashwin Navin in 2004 to exploit the commercial potential of the open source file sharing protocol which is estimated to be responsible for as much of 40% of worldwide internet traffic.

The privately held company is based in San Francisco. The latest round of funding was led by by Accel Patners with participation from initial investor DCM. Together they control funds of more than $5 billion.

“We’ve had strong conviction for peer-assisted content delivery and BitTorrent is the clear leader in this space,” said Ping Li of Accel Partners. “It has proven technology, the leading brand and a team in place to successfully execute in content delivery.”

“BitTorrent’s advantages as the early market leader for digital content delivery are increasingly apparent as it continues to grow its loyal user base and menu of premier content from the motion-picture, entertainment and other industries,” said David Chao of DCM. “Bram and Ashwin and their team have done a tremendous job of continuing to build value around what is one of the world’s most compelling technologies for digital delivery.”

“BitTorrent has fundamentally changed the internet architecture by enabling high-speed and high-quality content distribution on the web,” said Ashwin Navin. “We see a future that involves BitTorrent’s content delivery platform powering thousands of websites including those of content creators themselves, offering them the profound benefits of our technology.”

Commercial competitors to BitTorrent include Kontiki, now owned by VeriSign, which will be used to power the peer-to-peer distribution systems of leading broadcasters in the United Kingdom.

BitTorrent already has millions of users. The benefit of its open source basis is the ability to create open architecture systems across different platforms and hardware devices, although this may be limited by requirements to impose digital rights management.

The real issue for rights holders may be drawing the distinction between the use of the protocol for illicit file sharing and the company providing a legitimate distribution platform.