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In a move to continually test the waters on what will or will not work online, big media companies continue to make distribution deals with a number of Internet companies to see which one will work the best for them. The most recent deal was by several companies like Fox (NWS), MTV, and Paramount to allow Internet company BitTorrent to distribute movies and shows via a video store - starting this spring. They already have a deal with Warner Bros. Home Entertainment (TWX) in place.

With a number of huge players entering the market, it will be interesting to see if smaller companies like BitTorrent will be able to compete against them. Wal-Mart (WMT) is the most recent entrant into the field, which has launched their own video download service just yesterday.

Executives at BitTorrent said that one of their points of differentiation will be the speed with which they offer a consumer to download a movie. They added that the deal will help media companies offer an alternative to piracy.

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

Some analysts are saying that the entry of the big companies into the fray shouldn't cause smaller players to leave the space. Big players like Wal-Mart and Amazon (AMZN) have tried to do it with offering online music downloads and have gone nowhere.

The only thing I would consider with BitTorrent, and other smaller companies like them, is if they plan on competing on technology alone, it probably won't work. Right now they may offer quicker downloads, but everybody eventually catches up with that. They need to continue doing that while looking at other ways to compete that will help them to stand out.