Some upstarts in the video Web market are betting on a new content-delivery model. Instead of paying for professional hosting, they’re hoping people will open their digital subscriber lines and cable modems to transfer data between users instead of sending everything from a central server. This “peer to peer” setup has been successful for online phone service Skype, purchased last year by eBay, and underground file-sharing networks using software called BitTorrent, which some say is responsible for one-third of all Internet traffic.

Gilles BianRosa, chief executive of BitTorrent-software maker Azureus, says peer-to-peer networking could save his company 95% in hosting costs when it launches a community-based video site in the next few months. Other companies are already onboard: WurldMedia Chief Executive Gregory Kerber, whose company will start serving movies and television shows for General Electric’s NBC-Universal this year, says the peer-to-peer model is the next step in Web video evolution. “We can sell to the consumer at the same price point that they’re used to, but we’ll be giving them a higher-quality product that’s more versatile,” Kerber says.

But peer-to-peer transfers can be flaky. They require willing participation and good behavior from users, including access to their upstream bandwidth that most broadband service providers already cap tightly. As a result, some video-delivery specialists such as Solid State Networks are hedging their bets with a mix of peer-to-peer and traditional content-delivery. Solid State Chief Executive Rick Buonincontri eyeballs cost savings around 50% over standard hosting while maintaining a professional service-quality level.