Customers Tell Content Delivery Networks What They Want At Streaming Media East Session

One of the topics that I presented on at Streaming Media East was entitled "Costs for Outsourced Hosting And Video Delivery". (on-demand video here) It was a packed room, with over 150 attendees listening to what the going rates are today for video delivery via outsourced delivery networks for both large and small volume.

It's a session I do every year and enables me to track the pricing from one presentation to another each year. It also gives everyone an opportunity to hear from the customers in the room on what problems they are having and also what they think the vendors need to improve on. The biggest disappointment to me was that of the nearly 10 delivery networks that were exhibiting at the show, hardly any of them showed up to this session to hear from their customers. I never understood why they miss that opportunity to get direct feedback.

The session went well, with a lot of questions and was very interactive with audience participation. Of all the questions and comments we discussed, the following are the ones that were asked about most often or were pain points that they are experiencing:

• Why is it so hard to find out from a service provider what formats they support, from what geographic regions, for streaming and/or progressive downloads both live and on-demand? Case in point, someone brought up the example that all delivery networks websites show large network maps with lots of locations and peering connections but none of that tells the customer exactly what is supported, where and in what form.

• Why don't more networks give you an incentive to push more traffic on their networks instead of penalizing you when you do overages? I'm discouraged to see that as of late, some providers seem to be going back to the early years with their pricing models where they charge you a premium if you do more than you committed to. We know why the providers do this as they have to estimate how much capacity they themselves have to buy and plan for each month, but this is a broken model. You won't keep a customer this way, especially when some of them are then using a second provider just so they don't pay overages. That's a horrible business model when your overage pricing model sends your customer to your competitor.

• Why is online reporting still so poor? I asked for a show of hands in the room if anyone was satisfied with the reporting they are getting from their current service provider. Not a single hand went up in the room of over 150, the majority of which were all large and small content owners. And talking to specific customers after the session, nearly all of them complained about reporting with their current provider, of which they were all using multiple providers. So this is an industry wide problem and not specific to just one provider.

Those were the biggest points of frustration for customers along with why the pricing varies so much from one provider to another. But that's something that has been and always will be case. The subject of P2P came up regarding the role that it may play in delivery but we didn't dive too deep into that discussion since we had a specific session at the show on P2P they could go to. However, it was clear that more customers are looking at P2P and have a lot of questions around it.

The other thing they asked for was a list of service providers, both large and small, for which I pointed them to this list on my blog. The content delivery space is becoming more crowded for the first time in years which is a good thing as far as I am concerned as it helps the customers and more importantly, puts more exposure on the content delivery market and helps the industry as a whole.

UPDATE: As an update to my post from two weeks ago about the size of the CDN market, I have almost completed all of that data and will have it up on the blog shortly. I apologize for not being able to get to it faster but I have a lot of follow up items from the show last week.

Comments

[Yaron Samid]

P2P precisely addresses customer frustration with being penalized for pushing more traffic onto the CDN network and actually rewards them for doing so with better performance and lower cost. Hybrid P2P platforms (like Pando Networks) that work seamlessly with existing CDN infrastructure, enable CDNs to pass on their bandwidth savings to their customers with flat, overage-free pricing models. The most savvy of the CDNs out there get the economics, and realize they can maintain their margins while keeping thrilled customers.

Can't wait for the CDN market post Dan!

[KwangErn Liew]

I share your sentiments. It is something I can never understand on why most business players never get their hands dirty, so to speak, with their users. But then again, is it necessary when the money is already rolling in?

I've looked at various CDNs in the past, and see no comforting zone where I can seriously talk things out for my benefit, as well as theirs. It's always about them them them and hardly about us us us.

Sad really. Makes doing business much harder.

[Divyang Mistry]

Totally agree. We have had difficulty in discovering formats providing and also surprised that there are not more live Flash CDNs. The UK also seems to be poorly served with few local offices especially after Globix was sold.

On pricing, we customers should be getting a discount for using more bandwidth - we always find it difficult to explain to our clients why we have to pass on overage costs when they have a successful webcast.

The quality of stats from the providors we have been using are appalling! CDNs are not geared up to provide detailed stats interfaces and log files on time. Though, they manage to get their overage invoices out quickly!

Dan, please continue with this campaign!

[leftboom]

Not all CDN's charge for overages, a friend of mine owns a small site in SF and use Panther Express who actually DISCOUNTS you the more traffic you pass.

[Dan Putter]

Mirror Image does not charge those annoying overage costs either. They also support streaming unlike some other low cost CDN's.

[Steve Lerner]

I think you'll find that customer service from any managed services provider (CDN is a managed service) will vary greatly depending on how much value the provider is able to add. For example- a provider that has true support for many formats of media transport won't hesitate to tell you where the support is located. They won't publish it on a homepage because for a CDN, location is a competitive advantage. But they will tell if asked.

Providers who don't add much value will always charge very little and compete solely on price- because price is the most important factor of their service... There is nothing wrong with this model- its the same as Costco vs Whole Foods. Both are successful businesses but for different reasons. Costco sells simple things in bulk. Whole Food sells premium items in small quantities.

Just don't try looking for the Organic Kosher Liquid Amino Sauce in a Spray Bottle at Costco- they don't offer it. And don't try to buy a 60pack of paper towels at Whole Foods...

[progdLoad]

Dan - I just don't see that much added value in streaming. Its expensive for customers and providers compared to HTTP Progressive Download, and most people don't need the extra few benefits a stream provides.

[Dan Rayburn]

It's not more expensive than delivering content via progressive download unless it's in the Flash format. As we have seen from what content providers are doing, a lot of them consider delivering content via streaming to have a lot of value. But it's not about using streaming OR progressive download. It's about using the best combination of delivery technologies depending on what type of content you have, who your audience is, what your business model is and what type of device you are delivering it to.