January 2010

Telcos Not Yet Willing To Run Their Own CDN: Bharti Airtel Enters Via Limelight

Airtel_Logo Over the past two years, more than a dozen telcos and carriers have entered the CDN space, all with the strategy of re-selling or partnering with a pure-play CDN provider like Akamai or Limelight. In that time, Level 3 has been the only company with the strategy of wanting to own and operate their own CDN, laying the groundwork today for what will be a big business in the future. This morning, Asia’s largest telecom provider Bharti Airtel announced they too would enter the CDN space to serve the Indian market via a partnership with Limelight Networks.

With this announcement, more than 20 telcos and carriers have entered the CDN market and I know of other carriers who plan to make similar partner announcements this year. While Wall Street and others want to continue to speculate that telcos and carriers will one day rule the CDN business, thereby forcing pure-play CDNs out of the market, that won’t be happening anytime soon. Yes, carriers who own their own fiber have a distinct advantage over pure-play CDNs who don’t operate their own network, but the delivery of bits is only one of the many pieces required for a real CDN offering. Vendors have to be able to do more than just own their own network and deploy a bunch of boxes. If it was that easy, all of these carriers would have done it already and would not be partnering with pure-play CDNs.

Right now, the CDN market for video is too small for most carriers to spend the money to build and deploy their own network. By my estimates, the entire market size for video delivery services globally was only $500M last year, which while a big number, is small in comparison to the other markets that telcos and carriers are in. Until the market size and opportunity is larger, I don’t expect we’ll see many of these companies who have partnered with pure-play CDNs doing anything on their own and bringing CDN services in-house to their product portfolio.

FOX On Demand Goes Live With Brightcove For Their Long-Form Video Content

Images Yesterday, FOX on Demand, which provides full episodes of 24, Bones, Family Guy, Glee, House, and The Simpsons went live with their new Brightcove powered video player, The site, which used to be powered by Move Networks is the latest FOX property to use Brightcove in a partnership between the companies that dates back to 2007.

While Brightcove had previously been adopted by FOX for over a dozen sites like FX Networks, SPEED and others, this is the first FOX property that I am aware of that is using Brightcove for their long-form ad-supported video content. On other FOX properties, Brightcove is been used with short-form promotional content but not content that FOX was directly monetizing. This is a big deal for Brightcove as the company has said they will be focused in the New Year at trying to get content owners to use their new Brightcove 4 system to generate money for long-form video content.

As for FOX no longer using Move Networks platform, the change is really not surprisingly at all considering that Move is now focusing all of their efforts on the TV Everywhere space. At the same time, FOX was one of Move Networks first major customers, a client they use to always use in marketing collateral and a content partner who generated a lot of consumers to download and install Move's player. I guess none of that is important to them anymore since they have shifted all of their efforts to working with major cable operators.

Intercall Acquires NYC Based Webcasting Platform Provider Stream57

Stream57logo_color Yesterday, Intercall, which brands itself as "the world's largest conferencing and collaboration services provider" announced that it had acquired privately held Stream57. The company, founded by Ben Chodor in 2001 and headquartered in NYC, specialized in providing customizable web events with their webcasting platform and provided live event services. Terms of the deal were not disclosed but I will update this post if I get some details.

Related:

- Thomson Reuters Acquires Webcasting Platform Provider Streamlogics

Akamai Granted Patent For Webcasting Meetings, Looks Pretty Broad To Me

Last month, on December 29th, Akamai was granted a patent (number 7,640,303) relating to a "Method of, and system for, webcasting with just-in-time resource provisioning, automated telephone signal acquisition and streaming, and fully-automated event archival."

Reading over the details of the patent, the focus appears to be on a system that allows for the real-time provisioning of a live meeting and the automated process to be able to handle things like audio signal acquisition, encoding, monitoring, archiving, reporting and billing.

While the patent filing makes reference to prior art and systems that already do this today, the basis for the patent seems to be the claims that all of these other systems have deficiencies, which the Akamai patent supposedly overcomes. Some of these deficiencies include:

  • "traditional Internet conferencing casting systems have several
    deficiencies. These applications typically use databases to generate
    reservation information, to initiate events, and to authenticate a host
    or the attendees. The database dependency creates a potential single
    point of failure because if the database is unavailable, events cannot
    be run."
  • "a typical application runs the event streams from a single server,
    which again represents a single point of failure and limits
    scalability, i.e., the number of attendees that can attend the
    conference."
  • "prior art conference casting systems also do not have the capability to
    archive the event in an automated manner and/or to manage when
    particular streams get interrupted before the event is terminated."
  • "the prior art systems require advanced setup for the streams, which
    dictates a blackout period between the time that an event is reserved
    and the occurrence of the event itself. Thus, once an event is
    scheduled, a service provider typically must provision or allocate in
    advance various system and other resources. Such resources include,
    without limitation, media encoders, storage, network connectivity,
    streaming server ports or publishing points, and the like."
  • "prior art conference casting systems do not have the capability of
    reserving and then immediately executing the event, with the resulting
    stream being immediately available to an audience member. In prior art
    systems, stream redundancy typically requires special handling and
    raises costs."

What seems broad to me is Akamai's assertion that all other systems reserve physical resources ahead of time. They are implying that no events based webcasting system on the market today can generate a live stream, or provision any audio resources on the fly, or what they call "just-in-time", when requested. The patent also mentions multiple times that the Akamai patent "provides significant flexibility and reduced costs as compared to prior systems", which sounds like marketing speak to me. They also say that, "In addition, the system is able to handle large numbers of simultaneous events and massive total audience sizes." Again, lots of marketing words, but no definition of what "large numbers", "massive" or how many "simultaneous" streams they are talking about.

Clearly this patent is aimed at the business side of webcasting since
typically, those are the events that have registration databases
involved and audio conferencing bridges. Most of your one-off media and
entertainment events, sports and concerts, don't involve that kind of
functionality.

I'm very curious to see if Akamai does anything with this patent and if they try to go out to the market to enforce it in any way. That may not be their intention, or they may view it as something they want to try and enforce, we just don't know. Since Akamai has a company policy of not commenting on anything patent related, I didn't ask them what they plan to do with it.

Akamai Gaining Market Share With Their Lower CDN Video Pricing

For a couple of quarters now, Akamai has been talking about being more aggressive with their CDN pricing. But historically, those pricing reductions have only been with a limited number of customers that Akamai defined as "strategic". After the Streaming Media West show in November, I wrote that Akamai had begun to get a lot more aggressive across the board and they have only accelerated this trend last month and into January.

Over the past four weeks I have seen bids where Akamai has matched pricing from Limelight, Level 3 and EdgeCast or in some cases, undercut their pricing all together. I have seen fewer video contracts steer away from Akamai in December and January and it's clear the company is taking a serious pricing reduction strategy and applying it to a wide portion of their video business. I estimate that by the third quarter of this year, Akamai will have re-priced roughly 75% of their contracts that include video.

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