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Much has been written in recent weeks about the future of The Pirate Bay, as well as about BitTorrent piracy in general. The sale of the site spooked some, while others are hoping to transform the new Pirate Bay into a legitimate, multimillion-dollar business. One aspect that has been largely overlooked is that the current Pirate Bay, due to the nature of P2P, is actually a relatively small and cost-efficient operation. The site’s trackers facilitate countless downloads of Hollywood blockbusters and music albums, but according to an insider, running these trackers could cost as little as $3,000 per month.The implications of a number like that are huge. Not only does it mean that anyone with a medium-sized checkbook could replicate The Pirate Bay’s infrastructure in a heartbeat, but it also casts shadows over the hopes of anyone thinking about selling digital content online. Music fans were not longer willing to pay $20 for audio CDs once they noticed that blank CDs only cost a dime. How are they going to feel about download stores knowing that running the world’s biggest download service is that dirt cheap?Earlier this week, when I was researching my story about federated tracker networks I had the chance to talk to some insiders close to The Pirate Bay as well as some folks working on newer projects aimed at picking up where it is leaving off. During one of these conversations, a person with inside knowledge of The Pirate Bay’s infrastructure estimated the total monthly costs of running the site’s trackers to be around $3,000. Compare that with recent reports that put YouTube’s bandwidth costs anywhere between $130,000 and a million dollar per day, and you’ll understand why I haven’t been able to get that number out of my head. : $3,000. What a steal. Literally.Of course, that number doesn’t actually reflect all the costs associated with running The Pirate Bay in its current form. The site itself clocks more than a billion page views per month, according to statements from the prospective new owners, which should amount to a whole lot of additional bandwidth. The complete Pirate Bay set-up consists of a little more than 30 servers, of which less than a third are dedicated to tracking torrents.Still, the impact of The Pirate Bay’s trackers are enormous. It tracks up to 2 million torrents and connects around 20 millions peers at any given time. Researchers estimate that 50 percent of the world’s publicly available torrents are tracked through The Pirate Bay. So how can just a massive system be so cheap?The answer lies in the way the BitTorrent protocol work. Tracker servers never actually touch the files that are exchanged between users, and don’t compile huge lists of file names to query, either. Instead, these machines just collect the hash value of each torrent tracked. Users’ clients then query a tracker with these hash values, asking them for the IP addresses of others sharing the file associated with a particular hash value. So the whole message flow between client and server consists of just a few bytes, even if the files exchanged are massive Blu-ray videos.I finished Chris Anderson’s new book “Free” this week, and I couldn’t help but think about The Pirate Bay’s $3,000 tracker while I was reading his theory of how the ever-decreasing costs of processing power, bandwidth and storage inevitably bring down the prices of digital goods as well. In the book, Anderson writes:“In a competitive market, price falls to the marginal cost. The Internet is the most competitive market the world has ever seen, and the marginal costs of the technologies on which it runs – processing, bandwidth and storage – get closer and closer to zero every year. Free becomes not just an option but an inevitability.”Of course, content owners would rightfully argue that the cost of producing a Hollywood movie or a TV show is not zero. But that’s beside the point. If all it takes to distribute Hollywood’s entire creative output online is $3,000 a month, then there’s always gonna be someone who will offer this stuff for free — and you’d better find a really good way to compete with that.