News Corp. & NBC Announce New Company Name: Will Keynote Streaming Media West Show

This morning, News Corp. and NBC Universal announced that their new online video portal, most recently referred to as NewCo, will now be officially named Hulu. The release says that starting today, users can sign up at the Hulu website to be included in an invite list for the private beta which will start in October.

Kevin McGurn, VP, National Sales Leader for Hulu will be one of our keynote presenters at the Streaming Media West show in November in San Jose. Keynote presentations are available for free to all registered attendees and online registration is now open.

Level 3 Prepping New CDN Offering: Will Undercut The Market

If you thought the pricing wars between the CDNs was fierce today, just wait till the next quarter when Level 3 (LVLT) enters the market with its new content delivery service for video.

Back in May in a post entitled "Level 3 Could Become A Major Player In The Content Delivery Market" I outlined the reasons why Level 3 has the potential to really enter the market as a major player in the content delivery arena. Based on everything I have seen, Level 3 has finished it's CDN initial build-out for the caching and progressive download of content and is nearly complete with being able to support the delivery of video via streaming. I expect we'll see an announcement about this in the next 30 days followed shortly thereafter by the launch of the CDN service for streaming video.

And if my prediction is right, I expect Level 3 will come to the market with an aggressive marketing campaign talking to competitive functionality and performance at a much lower price. And I don't mean slightly lower, I mean less expensive by a wide margin. While that would not be a new tactic by a CDN, (remember iBEAM?) it is unique to Level 3 since they own the network and should be able to have lower costs than anyone else. While other CDNs in the past lowered pricing to essentially buy market share, none of them ever succeeded, as in the end, their costs caught up with them. If Level 3 is this aggressive, we're going to have to wait to see what impact it has on the market and what tactics the other CDNs will deploy to combat Level 3. While we know that customers are not buying on price alone, and Level 3 still has to prove it has a good service, other CDNs will have to decide how to adjust to the shift in the market.

Now I know that some CDNs will say that it does not affect them as they sell "value added services" and customers will pay more for those, which is true, but only at times. Not all customers need more than a CDN product and if that's all they are looking to buy, then additional services won't allow CDNs to keep their pricing higher for that specific customer. Also, Level 3 is an interesting one to watch in that it also offers co-lo and other services, so some of the CDNs who offer those additional services are getting a competitor on multiple levels when it comes to the product portfolio.

Level 3's caching platform is already fully deployed in the U.S. and Europe and will also be beefed up in Asia by the end of the year. They started selling their progressive download capability last month and will continue to add to it to have nearly 500Gbps of capacity by years end for their caching platform. While Level 3 was able to use some of the infrastructure they acquired from SAVVIS for static caching of content, the streaming assets of SAVVIS were discarded and Level 3 has built a CDN for video from the ground up, which could be an advantage. Yes, late to the market, but a completely new network with no legacy issues that they have to deal with. They own all aspects of what it takes to operate a CDN; wavelengths, collocation, power and cooling, server infrastructure, the largest IP backbone on the planet and direct interconnectivity to other top networks and their core knowledge has always been deep intelligence of their costs to move bits across their backbone, to their customers and to their peers.

Does cheaper pricing mean Level 3 is guaranteed to succeed? No. They have to prove they have a reliable network, have the geographic reach customers want and have all the other services that go along with a CDN offering like reporting, SLA, customer service etc. in order to be taken seriously. But when they have all of that in place, which I expect will be before the end of the year, Level 3 will have a service that the other CDNs will have to compete with. We already know that Metacafe is now a customer of Level 3 and other large customers are currently using signed on and others have been testing the network for both live and on-demand streaming. While Level 3 would not comment on who any of these customers are, or even confirm that Metacafe signed on with them, Dan Golding at Tier 1 Research correctly pointed out last week in a report that the URLs for Metacafe were coming from Level 3. Level 3 has been busy signing up numerous large customers and since they have a huge customer base for other services to leverage, I expect we'll see some announcements about these customers in the fourth quarter. Throw into this the fact that Level 3 acquired Servecast back in July and Level 3 is going to hitting the market in multiple locations globally from a sales, marketing and product perspective.

From day one, Level 3 has also talked about being a major player in this arena in the long run. Level 3 does not need to do tons of revenue next year. The company won't be impacted by the revenue from CDN Services for a long time to come since it already generates billions from other products. But that's also an advantage for Level 3 in that it does not need to ramp revenue as fast and as hard as companies who's sole revenue, or a large chunk of it, comes strictly from the CDN product. Level 3 is not looking at this in the short-term and clearly wants to win not only the business that is out there today for short-form content, but really win down the road when it comes to long-tail content.

Will Level 3 be successful? It's still too early to know. But it would be pretty hard for anyone looking at all of the resources Level 3 has to not realize that they could easily become a serious competitor in the market for the long run. Come the middle of next year, I think the market will shake out quite a bit and that out of all the new CDN players that are entering the industry, we'll see who the real ones are. I would be surprised if Level 3 is not on the top of that list.

Enterprise Speakers Wanted: Tools And Best Practices For The Enterprise Streaming Media Department

Jeff Hanley is moderating the "Tools And Best Practices For The Enterprise Streaming Media Department" panel at Streaming Media West this year and is currently selecting speakers. If you come from an enterprise company and would like to sit on a round table panel and talk about the video market in the enterprise vertical, please let me know and I will put you in touch with Jeff.

We are not accepting any vendor speakers for this session but do welcome any vendor who may have an enterprise customer that they want to get on the panel. I define enterprise as a Fortune 500 company. In the past such enterprise speakers have included Accenture, Bank Of America, MasterCard, Wachovia, Lockheed Martin, Boeing, Lehman, Johnson & Johnson, Pfizer, Microsoft, Target, Vanguard Group, JPMorganChase, Verizon, General Mills and many others.

Thursday, November 8, 2007
11:30 a.m. – 12:30 p.m. B302 (Panel Session)

Tools And Best Practices For The Enterprise Streaming Media Department
This session will bring together four frontline streaming media professionals to discuss their favorite toolsets and techniques for producing enterprise communications and training content. The emphasis will be on in-house production with "off-the-shelf" tools and apps, rather than turnkey or outsourced solutions. Premiere or Final Cut Pro? Camtasia or Captivate? Flash or Silverlight? Or all of the above? What works and what should be avoided? All this and more will be covered in this enterprise-focused session.

YouTube's Problem Is Not Advertising, Its Getting The Videos To Play

For all the talk of YouTube's new advertising model and the number of eyeballs they have, the biggest problem facing YouTube is the fact that half the time, their videos don't even play back properly. Why can't YouTube get poor quality, short-form videos to play back without all of the wait, buffering, and starts and stops that users are experiencing? I first wrote about this back in February with a post entitled "Is Google Having Problems Delivering YouTube Videos?" and since then it has gotten far worse.

Last week, I saw that my February post about the poor YouTube playback experience had quickly become the number one post on my blog that people were finding via Google. TypePad shows me the phrases that people are putting into Google and it's phrases like, "you tube video wont load", "slow youtube videos", "youtube video loading" and "can't load you tube" amongst others.

What is the problem here? This is not an infrastructure problem. Google is not lacking in technical expertise, capital, or the resources to make these videos work. If smaller companies can get high-quality, long-from content to work without these playback problems, then what is Google's excuse? They have no business model today for YouTube, have been working on their "advertising plan" forever yet they can't even get the basics to work.

When it comes to YouTube's advertising strategy, they have a major flaw. In order for their advertising strategy to work, it requires users to actually be able to view the videos. YouTube is the most overrated, over hyped company ever in this industry.

Microsoft and Limelight Announcement: Analysts Missing The Bigger Picture

Originally, I had no plans to write up any type of post about the Microsoft (MSFT) and Limelight Networks (LLNW) announcement last week. But after reading so many analysts all saying the same thing, it's clear that many of them are missing the bigger picture and not asking the right questions.

For starters, this announcement has nothing to do with Akamai (AKAM) or any other CDN provider. Some analysts did get it right, but way too many of them are asking if Akamai lost this business, if it was taken from another provider or how this may affect Akamai. Akamai did not lose this business. Microsoft did not shop around an RFP for some delivery services. This deal was about Microsoft extending a relationship that was already in place and working with Limelight on some very specific long term goals of improving the Microsoft platform for digital media. And some analysts were saying that Akamai didn't win this business since it is not in the co-location business, therefore it didn't even bid on the business to being with. Limelight is not in the co-location business either. This deal had nothing to do with co-location.

While I must have seen at least a dozen different analysts commenting on the announcement, why is it that not a single one of them that I saw went into detail on the bigger piece of the announcement, that being the cross-licensing of technologies. Why aren't the analysts asking about that? Think bigger picture here guys. Have you ever seen Microsoft cross-license any technology from a CDN before? I haven't. That's not to say that it has not happened in the past. And while I encourage anyone to point me to a similar announcement, I could not find any release by a CDN with Microsoft talking about cross-licensing technology in any public record, over the last five years. Why is no one asking about the details of that and what it may mean for the companies and the industry? Why aren't the analysts asking what is different this time around and what it means for the CDN industry as a whole?

And don't you think this says something about the market and the growth we are about to see? Why would Microsoft cross-license technology from a CDN? Very simple. Microsoft knows very well that what we are experiencing today with content delivery is only scratching the surface of where this business is going to go. They know that a few years from now this will truly be a powerful medium for delivering all kinds of video content and Microsoft wants to prepare now by making their platform ready for when it does hit. So what type of technologies might be cross-licensed? What does each company get from that portion of the deal? What are the longer-term implications that we may see? Why aren't the analysts asking those questions and reporting on the answers? Aren't many of these same analysts the ones who are predicting doom and gloom for the CDN space due to lower pricing and the "perceived" slowdown in the market? Doesn't an announcement like this of cross-licensing technology from a CDN make you think otherwise, or at least question it?

I listen to a lot of the earnings calls these companies have and so many of the analysts all ask questions pertaining to numbers, but not the questions about the products and services that the numbers come from. What about looking at the long term affect that any announcement will have on the industry and companies in this space? It's not about what a company's stock price does in one day.

I wish analysts would ask harder questions. I wish they would know more about the products and services of companies as opposed to just looking at market share, numbers, and all of the financial data. If many of them had a better understanding of the market and of a company's products and services, they would be able to better analyze the numbers that come from those services. Also, while there are now over 30 CDN providers in some shape or form, and there are tons of new analysts covering the CDN space, I'd like to point out that the content delivery market for video is not a new industry. It's been around since 1996. Analysts need to spend the time to look at the CDN landscape over the past many years to see how the business models and market has evolved. There is a lot that can be learned from what's happened in the past and it will give great insight into the market today.

I'd also like to add for those of you who may think I am talking about all analysts that I'm not. I like analysts, I talk to a lot of them daily and I think some of them do a really good job. But I think many analysts should act more like reporters, asking about more than just numbers and questioning any information they are given.

Event Space Needed For Video 2.0 Meetup In NYC Next Week

The Video 2.0 Meetup in NYC usually takes place at Columbia Business School but the building will be closed next week. The organizer of the meetup, Yaron Samid, is hoping someone knows of a space that can be used for next Thursday, August 30th from about 6:30-9:30pm. We're looking for space to accommodate roughly 250 attendees. If need be, the date can be moved if that helps secure the space. If you have a location yourself, or know of a location that can be used for free, please let me know.

While there are tons of spaces out there, most of them are very expensive and the Web 2.0 Meetup is a free networking and demo event for everyone. The way it is kept free is by keeping the costs down to zero or to something extremely small. If your company has the space and is willing to donate it, I'll be happy to promote your company on my blog with a thank you and write a brief description of who you are and what you do. Its free visibility on a blog that gets roughly 300,000 page views a month in exchange for some space.

On2's CEO Gives His Take On The Adobe Flash Video H.264 Announcement

As you know by now, on Tuesday Adobe announced their support for H.264 for the latest version of their Flash player. While I saw many blogs and news sites that covered the announcement, most didn't really provide any insight or analysis into what this announcement by Adobe means for the market. The best posting I saw was on a blog from one of the engineers at Adobe who works on the Flash player. If you really want to know the technical details, it's the one post to read.

In the spirit of not just re-hashing a press release on my blog like so many other sites do, and since a few bloggers already gave the same analysis I would have, I decided to ask Bill Joll, On2's CEO, for his take on the announcement and what it means for content creators as well as his company, which has a big stake in the Adobe Flash platform.

While Bill thinks the announcement is a step in the right direction for Flash video, he correctly points out that many times one technology does not replace another. In some scenarios, H.264 make work out to be the best solution, but at other times, On2's solution would trump H.264.

Bill says that while there are certain markets for which standards-based codecs are important, there will always be an opportunity for On2's state-of-the-art proprietary technology as well. H.264 can be very expensive if you want to distribute millions of encoders for applications like video chat or user-generated video publishing. In addition to licenses and fees to acquire an H.264 software development kit (SDK), a second intellectual property (IP) license is also required from MPEG-LA. And the same is true for the new AAC+ audio standard in Flash, which requires a separate IP license from Via Licensing in addition to a SDK license. Additionally H.264 is a fairly complex codec that requires significant CPU cycles for encoding and playback, especially for HD content. For these reasons, Bill says there will continue to be a strong market for VP6-based Flash video in the coming years.

That being said, On2 understands that there are certain market segments for which broadcast-industry standards are and will always be a requirement. The video industry is moving towards higher definition video and longer form content that requires lower power and higher performance along with the consumption of video anywhere. This translates into a requirement for any video on any device, but it also means that video coding blocks are moving more and more into hardwired implementations. For On2, they see the value in being able to support their own technology as well as standards in the market.

The news that Adobe is adding support for H.264 and AAC+ to Flash is something that Bill says On2 is well prepared to support. He points out that in May of this year On2 announced that they were planning to acquire Hantro, a Finland-based company with some of the best hardware implementations of audio and video codecs anywhere, including H.264. The Hantro acquisition, which is still pending, does two things for On2:  first, it provides a vehicle for hardware-specific versions of their industry-leading TrueMotion video technology, including VP6, VP7, and future codecs currently in development; and, as important, it propels On2 into the market of providing industry-leading implementations of standards-based codecs such as H.264, VC-1 and MPEG-4. In that regard, Adobe’s and On2’s announcements both echo the same base message: both companies are expanding their available market through support of standards-based technology.

Bill says that On2 is committed to two business tracks going forward: continuing to invest in their industry-leading proprietary video compression technology; and embracing standards in a way that will allow On2 to become the leading provider of codecs – any codecs – for any and all applications. On2 is fully committed to supporting the new H.264 and AAC+ Flash formats in their entire family of Flix encoding tools and SDKs which they announced this week. Bill points out that in some cases, these are free upgrades that will protect their customers’ investment in their products and he says On2 will give their current and future customers the option of supporting any and all technologies, whatever their needs may warrant.

When it comes to the ecosystem for online video, no one solution works best for every type of content customer. This holds true for compression, hosting, delivery, content management and many of the other technical pieces that make up online video. One format, codec or bitrate is not going to replace another and we'll always have multiple choices in the market based on the fact that customers all have different needs in different industries and verticals. While Adobe's announcement of support for H.264 is a step in the right direction for the industry and for content creators, in my eyes, it does not have a negative impact on On2 or their business as many may speculate.

Added 8/28: Check out ScribeMedia.org's interview with On2's Mike Savello.

Note: As I have said in the past, I am open to any vendor using this blog to give their take on a market trend in the industry or major announcement that takes place. If something happens in the market that you agree or disagree with, or if you feel you have a different insight into a topic, in most cases I will let you use this blog as an outlet. You can always contact me directly if you want to give back to the market and educate your peers, analysts and customers with your thoughts on what you think is important to this industry. As long as it is not a sales pitch for your company, this blog is a free platform for those who want to use it correctly.

Video To Go: The Future Of Mobile Video

EVDO, DVB-H and 3G. The mobile market is still an alphabet soup of competing formats, protocols, and networks, and with the recent demise of Amp€™'d and ESPN'€™s MVNO initiative, no one can blame you for thinking that mobile video might never take off.

But that's not stopping carriers and content publishers from trying and the market is starting to pick up for video on the go. The October/November issue of Streaming Media magazine entitled "Video To Go" will help readers make sense of the confusion and reveal various experts take on what the future of mobile video holds.

For those who don't already have a subscription, what are you waiting for?!?! It's FREE! So join the nearly 20,000 other readers who get it bi-monthly and sign up today.

When It Comes To The Market, I'm Not A "Financial" Analyst

While I've mentioned this a few times in various post, I think it needs repeating in a post dedicated to the subject. While I provide a lot of data on the market, in particular the CDN industry, I don't provide any data so that I can speculate what a companies stock price will do in the short term, or long term. I don't own any stock in any company, in fact, I have never purchased, sold or traded a single share of stock in any public company, ever.

If the price of a stock goes up or down, or the market valuation of a company changes, I am not compensated in any way. I provide data to the industry so that people can make informed decisions as to what's really happening in the online video industry. My intention of doing this is the hope that the data allows for clearer understanding of our industry and allows for customers to buy and use these services more often, to greater adoption.

If the data I provide is used by financial analysts for any type of financial evaluation, then great, it's being used by multiple people for insight into the industry in different ways. But since so many of my blog postings are now being syndicated by money mangers and financial investors, I think it's important for me to have on record on the blog that I do not benefit in any way from the share price of any company.

Internap Finishing VitalStream Integration: Preparing To Focus On Sales & Marketing Of CDN

Over the past month or so, I have had multiple chances to spend time with Internap's management team to learn more about the company and to get updates on the VitalStream integration into Internap. I've asked them a lot of questions, gotten detailed answers and spent a lot of time looking at their CDN business. While I know Internap provides more services than just content delivery for audio and video, that is the core product I have been speaking to them about and the only product that I have insight into.

For Internap, the hardest and most time consuming task of integrating the VitalStream network and clients into their own network, seems to now be behind them. While everyone knows about the VitalStream acquisition, it's important to remember that VitalStream had acquired PlayStream and EonStreams before they were acquired. So Internap had to integrate three different platforms all into the Internap network. It's not been without problems, as witnessed by the ten-day outage that the small business customers, former PlayStream customers, experienced in the transition.

While they are still working to fully complete the integration, most of it has been done, they have added additional capacity in Europe and are working on adding capacity in Asia. By the end of this year, Internap plans to have two origin sites specific to video delivery in North America, Europe and Asia. In addition to those six origin sites, they also deploy caching sites as well.

Once Internap is fully done with the build out at the end of the year, then they can really focus their resources on selling their CDN offering. While VitalStream was always a company that was growing in terms of revenue and customers, it was limited based on the scale of it's network and the limited geographic reach. There was a lot of business VitalStream could not win, or could not go after based on how their network was setup. Internap now takes the old VitalStream service to a new level since at it's core, Internap is a network and VitalStream wasn't. From a strategic point of view, it was a good fit for VitalStream, but my personal opinion is that Internap overpaid.

That being said, Internap has it's work cut out for them. VitalStream as a brand has died out completely and there has been no new branding by Internap yet of the CDN offering. Internap did away with the VitalStream brand and most don't know that VitalStream is still around, but in a new form and with a new company. This is the biggest marketing challenge Internap has in front of them. While Internap's management is under the impression that the company is well known and has a good brand, that is not the case for customers who are only looking for CDN services and don't even know they offer the service. The majority of all the large RFPs that I see, aren't yet going to Internap simply because customers don't know about them. Can that be changed, yes, but it will take time and a clear marketing strategy needs to be executed on. Right now, the Internap website points you over to the VitalStream website for all the CDN info and while it is no longer branded as VitalStream, it's a completely different website, with very little info. There is no info on the network and all of the other info is the same as it was with VitalStream, just with the Internap name. And if you want info on Internap the company, you then have to leave the old VitalStream website and go back over to the Internap website. Very clumsy and confusing for a customer who is visiting the site for the first time. Needs to be packaged a lot better.

Internap did announce last quarter than even while they were integrating the networks they had signed up 54 new enterprise customers for their CDN service. They were not able to tell me how many of those 54 customer were doing delivery of video content, as opposed to static caching of content, but it clearly shows that no matter what some of the analysts say, the CDN market has not slowed down. The fact that a company can sign up new customers, while doing a major integration and while having a major network outage at the same time, is proof that CDN services are still in great demand in the market.

When Internap really starts to go after the market, it's going to be offering a different CDN offering based on being able to offer more than just CDN. For some customers, that may give Internap a competitive advantage over other CDNs who only offer delivery, but for customers who just want delivery, Internap's IP and co-lo services won't matter to them. No one can say the value these other services hold in the market as their value is determined strictly by the customer based on exactly what the customer needs. Internap has said that it feels that it won't be affected by the lower pricing being seen in the market due to them providing a different level of service and performance, but it could not say how much more a customer would be willing to pay for this if Internap could prove the enhanced level of performance to them. Keep in mind, when we are talking network performance, it's very hard to measure.

Based on some quotes in the media, there has been a lot of confusion in the market when it comes to Internap's SLA service for CDN. Internap does not provide a 100% SLA for CDN services. Internap provides a 99.7% uptime SLA for CDN based on Keynote and a 100% SLA strictly for the IP side of the business. So many people have told me otherwise, yet all it took was me asking Internap directly, and I got a very easy answer. I'd suggest to a lot of those that always "speculate" on what they think they know about a company to simply ask the company first, before you publish it in writing as a fact. Internap was very upfront about their SLA terms and anyone who asked them directly would have gotten the right answer.

I think Internap has a clear idea of who they want to become in the market in regards to their CDN services but have a lot of sales and marketing work to do to get there. If they complete the network expansion by the end of the year as they say they will, then next year they can really focus on the marketing and sales side of the business. They need to get sales reps up to speed, train SEs and focus on the message they want to deliver. VitalStream did roughly $25 million last year in CDN services, so if Internap can grow their CDN business next year, they will still be the third largest player in the space based on revenue derived from the delivery services for audio and video content. On their latest earnings call, they gave growth projections for the CDN business and said it was the product they expected to see the most growth in, so the potential is there for them to do more than $25 million next year. I won't predict how much they can grow that by for 2008 as it would be pure speculation on my part, but it's a pretty safe bet it will grow.

For me, the unanswered question is whether or not a company like Internap that sells many products can focus and sell their CDN offering as well as a company that specializes in just selling CDN as their core service. Also, I don't see a fit for the small business customers that Internap has via the PlayStream side of the business. Customers who spend $100 or $200 a month are not going to take other Internap IP services, so I don't see those as a fit. My opinion is that Internap should drop that side of the business all together so that it does not distract them from their core set of services.

Also, while Internap has been hard at work on the network side of the CDN service, what about the rest of the products that support content delivery? What does their reporting for video delivery look like? VitalStream's reporting was horrible before they were sold and needed a major upgrade. Has that been done? What about the advertising services that are offered via the EonStreams acquisition? Does that have any traction in the market? There is no detailed information on this product, a demo of it, or any mention of customers who use on their website. Is this a service Internap really wants to provide? Does it want to compete against ad networks who could be potential large CDN customers on their network? And what will Internap's customer service and support look like? Network is just one aspect of the entire solution you need to have in place to go to market with a CDN product. So the network may be great once done, but if you have a poor reporting package the network won't save you.

It's too early to tell what potential Internap has for growth in the market for it's content delivery offering. No doubt, they will see some growth as all CDN vendors are, but we'll have to wait and see how quickly Internap can really ramp up the packaging, pricing, marketing and selling of their CDN service once the network is completed. I think we'll have a pretty good idea of where they stand by the end of Q1 in 2008. The opportunity is there, as it is for nearly all the providers, the question is which ones can really move quickly and capitalize on the market ahead of the others.

CDN Bakeoff: BitGravity, Itiva, Grid Networks, Solid State Networks & Move Networks

At the Streaming Media West show taking place in San Jose later in November, we'll be having a special session where four networks will have 15 minutes to demo their solution. While I typically don't allow sales pitches by vendors as part of the conference, with all the questions around P2P delivery vendors and other networks, it's a good way to compare four companies in under an hour. We did this last year with five of the CDN vendors and it worked well.

The four networks presenting will be BitGravity, Itiva, Grid Networks, Solid State Networks and Move Networks. Below is the description from the advance program and you can see all the session descriptions on the show website.

Online registration has now opened and registering early will get you a discount.

Wednesday, November 7, 2007
Session B204: 3:00 p.m. –4:00 p.m.
Demo: P2P and Next Generation Delivery Networks
Within the past year, a host of new content delivery companies based on P2P and other delivery solutions are stepping up to challenge the traditional way of delivering video. But confusion still reigns as to exactly how their technology works, what their value propositions are, and how they differ from other solutions in the market. This special demo session will give four new companies in the space the chance to showcase their technology and answer questions about their solutions. Come see first-hand what Move Networks, Itiva, Grid Networks, and BitGravity have to offer. Bring any questions you may have, as these companies will join Dan Rayburn for a Q&A session after their demos.

Don Michels, Formerly From The FeedRoom, Now CTO Of Medialink Worldwide

Don Michels, formerly the VP of Technology for The FeedRoom wanted me to pass along the announcement that has taken on a new role at Medialink Worldwide as their CTO. If you want to contact Don, you can do so at his new e-mail address.

Updated List Of Content Delivery Networks For Streaming, P2P & Video Downloads

Since my recent posts that listed the video delivery providers for CDN and P2P based services, a lot has changed in the market. In the past few months, new providers have entered the arena, acquisitions have been completed and other providers have come out to give more details on exactly what type of delivery services they are providing.

With that in mind, here is another updated list of all the content delivery networks I am tracking for video delivery. This list takes into account networks that are delivering video via streaming, progressive downloading and P2P. I've also noted what types of delivery each one provides and think I have them all right, but some of them still make it confusing as they may call it something else. If any of the delivery classifications next to a company's name is not right, I'm sure the providers will let it be known in the comments section.

In alphabetical order the networks are:

• Advection.NET (stream, download)
• Akamai (stream, download)
• BitGravity (stream, download)
• BitTorrent (P2P)
• CacheLogic (download, P2P)
• ChinaCache (stream, download)
• CDNetworks (stream, download)
• Digital Fountain (Launching Q1 2008)
• EdgeCast (stream, download)
• Grid Networks (P2P)
• Ignite Technologies (stream, download)
• Internap (stream, download)
• Itiva (P2P)
• Level 3 (download)
• Limelight Networks (stream, download)
• Mirror Image (stream, download)
• Move Networks (streaming via HTTP)
• NaviSite (stream, download)
• Nirvanix (will provide more details next month)
• Octoshape (P2P)
• Pando (P2P)
• Panther Express (download)
• PEER1 (download)
• Rawflow (P2P)
• Rinera (don't know)
• Swarmcast (streaming via HTTP)
• VeriSign (P2P)

Those not included on the list are companies who make products for the delivery networks, providers who are going after small businesses, or those who re-sell one of the providers above.

Keep in mind, in most cases you can't fairly compare one company to another. You can only compare the products amongst the companies that are similar. 

How Is CDNs Network Performance For Streaming Measured?

No matter how big or small a content delivery network is, they all talk about the performance of their network. Small regional service providers, global CDNs, P2P providers etc... all market the value in everything they do regarding how good their network performs. The problem is, the more customers I ask, the more of them say they don't know how to compare one network to another for video streaming - and neither do I.

Aside from the network or servers being down completely and not being able to get the content at all, how does a customer see and more importantly measure the performance amongst any network? I've asked a lot of the CDNs and they all speak to Gomez, which is considered the industry standard amongst the networks, but Gomez doesn't support streaming. It seems that most use Gomez to show network performance for delivering small cache objects and the market just assumes that any content, static or streaming, must see the same kind of performance. But as any network knows, delivering and scaling the delivery of small static images via HTTP is very different than delivering and scaling a 300Kbps stream via RTSP or RTMP.

Keynote provides a service to check your files on a particular network, but that service does not compare it from one network to another and it's not real-world in the sense that Keynote does not have thousands of agents checking the files as if you have many viewers from all over the world testing the content. Keynote has only a handful of locations that tests the content which is evident by the fact that every delivery network in the Windows Media Certification program for hosting has been given an A+ ranking from Keynote, no matter the size of their network or the number of servers they have. I'm not knocking Keynote's service, but it's just not a real-world test if you don't have thousands of clients all over the world, on many different networks, accessing the content.

I've asked many of the CDNs about any tools on the market or any products they have built that customers have access to, but so far, those CDNs I have asked have agreed that there is no easy way to really compare streaming media network performance. If that is the case, what options do customers really have? What is the solution to solve this problem in the market?

If you are a customer of a delivery network, how do you judge performance and what does performance mean to you? For the CDN vendors, what data do you share with customers that gives them an insight into how your network performs? Is there anything you show them that is specific to streaming media delivery?

Discussing The CDN Industry With Money Managers

I've been getting a lot of requests from industry analysts and institutional money managers to do presentations on the state of the CDN industry. Lately I have been doing a lot of these in small private groups directly for firms clients and customers. These tend to work well over lunch where firms can't invite a small group of their clients and we spend an hour or two covering the different CDN vendors and the business opportunities in the industry.

Typically, the discussion covers a breakdown on each vendor in the space, their strengths and weaknesses, product feature sets, competitive differences, industry pricing and trends, market growth potential and details on exactly what customers are looking for in the way of services. I've done many of these over the past few months for multiple investment houses and enjoy discussing the market.

If you are interested in organizing a lunch like this, please contact me to set one up.

CDN Pricing Data: What The CDNs Are Actually Charging For Delivery

In the last few weeks, we've seen a lot of analysts and others commenting on CDN "pricing wars" but none of them are mentioning any actual numbers on what the CDNs are charging or showing any real data on the pricing trends. So with that in mind, I'll detail what the going rates are today, how they have changed from last quarter and who it's affecting most in the market. In many cases, the pricing wars are not as drastic as many make it out to be, as many times, services are not being compared equally. Also, a lot of customers still don't know what the going rates are and are still signing contracts at high rates.

As an example of customers who don't know the going rate, last week two content companies each of whom do over 100TB a month in streaming delivery called me asking for data on pricing trends. In both cases they said they were paying just above $0.40 per GB with Akamai. They simply didn't know that the going rate for 100TB a month is on average, between $0.12 - $0.19 at Limelight Networks, Internap or Mirror Image. And I'm talking straight vanilla delivery of video via streaming and progressive download, not some custom need or custom requirement.

In many cases, Akamai is still getting paid 2x what the going industry rate is when charging customers on a monthly per GB delivered model. Now Akamai and others may say that Akamai is charging more due to a different level of service, reach etc.... but that can only be determined as being true or not true by the customer themselves who are comparing the same product from one CDN to another. That being said, Akamai is feeling the pressure to reduce it's pricing as more and more customers see that the pricing gap between Akamai and everyone else in the market has been so wide, for so long. Yes, two years ago Akamai was the only game in town for certain sized deals. But today, no one can argue that when it comes specifically to content delivery for video, there is more than just one option. With more providers in the market and some customers using a dual-vendor strategy, Akamai is no longer the only game in town for most deals.

Over the past 60-90 days, Akamai been aggressively cutting their pricing in half on large deals to be able to keep the business. While they are not matching the lowest pricing in the market, they are coming close to it on large deals, classified as over 100TB a month. I've heard from at least six customers in this time frame who have confirmed their pricing to me as being half what it was last year with Akamai on large deals. In some of these cases, when they negotiated these contracts six months or a year ago, the Akamai pricing was still the same. It's only in the last 60-90 days that Akamai has really started to reduce pricing on larger deals due to pressure in the market.

I'm also hearing that two year deals are not being signed as much and that customers are doing quarterly and yearly bandwidth commits with all the CDNs, instead of monthly commits. Another trend I am seeing is not bandwidth commits, but rather revenue commits where a company promises to spend X amount of dollars on any service with the provider over the course of a year. This practice is not new, but I am seeing more of them and they are more common with Akamai since they offer more than just CDN services. In many cases, the bundling of services other than content delivery for video is a major reason why many of the streaming only CDNs lose business. It may not be because their service is not as good as an Akamai, it's that they don't offer other products like whole site hosting, application delivery and other non-CDN products. For some customers this does not matter but for others it does and it's a deal breaker.

Every week, customers from the media and entertainment, broadcast, government and enterprise verticals call me asking for pricing data. They want to know who is out there, what they charge and what the going rate in the industry is. From all I have seen in actual contracts, RFP responses and pricing negotiations, Internap, Limelight Networks and Mirror Image are all about the same price wise. In many cases, Internap is a bit higher in pricing but I see most of that from the legacy VitalStream side and once Internap is finished integrating VitalStream into their network, I am curious to see if their pricing changes. It should go down since Internap owns the network and VitalStream didn't.

CDNetworks and EdgeCast would not share any actual pricing information with me so I can't say if they are around the industry average or are more expensive. And since they are new in the space, I have yet to see a customer who uses them or has included them in an RFP so I'll have to wait to see what they are charging. Panther Express is undercutting all of the CDNs out there on pricing BUT keep in mind, that they only support HTTP delivery, not content delivered via streaming media protocols. And there is a difference since HTTP is easier to deliver and costs less to scale. NaviSite's pricing I have not seen in awhile so I can't speak to their average rate. Since Doug Mow left the company I haven't heard anything from them or seen any RFPs that they have been included in. Same goes for VeriSign. I don't see them being included in RFPs and I have not heard of any customers of late that have signed with them. That's not to say that no U.S. customers have, but of the ones who call, none of them were using VeriSign. As for CacheLogic, they are working on a pricing model that charges customers not per GB delivered but per asset, so I really have no way to fairly compare them to the others since it's a different pricing metric. Level 3 is not yet offering streaming media delivery so we'll have to wait till Q4 of this year when their service goes live.

As for Amazon's S3 service, they don't do delivery. If you are interested in reading more about what Amazon does and does not do for CDN, read my post from two weeks ago entitled "Amazon Not Providing Content Delivery For Streaming."

Outside of the smaller regional service providers who are going after smaller customers, it leaves you with the P2P players and also companies like Move Networks. Keep in mind, many people think Move Networks distributes their own content - they don't. They use Mirror Image, Akamai and Limelight Networks to deliver their customers content. So I can't really compare Move Networks pricing to the CDNs since Move Networks uses them and it would not be a fair comparison anyway. The bottom line with Move Networks is that you pay a little more than you pay now to a CDN in order to use the Move Networks platform, that's the value they are offering, their platform and technology, not delivery. (My profile with Move Networks will be posted this week as well as an audio interview they did with Forrester)

That leaves you with the P2P players who to date, have not grabbed much market share or convinced content owners to move from CDN to P2P. In many cases, the P2P delivery networks are selling with the attitude of P2P "replacing" CDN instead of selling it as a compliment. Remember, it's about using the right form(s) of delivery based on the type of content you have, the format it is in, who the viewer is and the device it's being played back on.

So with all that being said, below is what the going rate is for streaming media delivery. These figures are based on actual contracts and RFPs I have seen in the market and comes from customers telling me on a weekly basis what they are paying. Since last quarters pricing, which I detailed here, the biggest change is at the 50TB+ per month commitment. Anything below 50TB+ has pretty much been level all year. Only above 50TB+ and really at 100TB+ is where the price has dropped from last quarter.

• 1TB: High, $2.00GB, Low $1.50GB (no change)
• 5TB: High, $1.60GB, Low $0.95GB (no change)
• 10TB: High, $1.20GB, Low $0.89GB (no change)
• 25TB: High, $0.95GB, Low $0.75GB (no change)
• 50TB: High, $0.50GB, Low, $0.40GB (Q2 high was $0.65GB, low $0.45GB)
• 100TB: High, $0.24GB, Low, $0.15GB (Q2 high was $0.29GB, low $0.19GB)
• Above 100TB: It's all over the map. I've seen it as low as $0.12GB.

Note that these are what the going rates are, not necessarily the rates that ALL customers are being charged. Also, I know some people are going to write in and say my hosting provider or co-lo facility gives me a cheaper per GB rate. But I am talking CDNs here, which I classify as those who serve video content via streaming media protocols from multiple locations in the U.S. and at least one other region of the world like Europe and/or Asia.

I've always felt that as a whole, CDNs try to keep their pricing too secret. Doing a little bit of work, it's not hard for anyone to find out what any provider charges and how that compares to the market. Yes, there are situations where the above numbers do not apply when it comes to a customer needing something specialized or custom, but that's not most of the time. I would encourage all CDN vendors to share more of their pricing data and metrics with the industry since it's not a secret anyway. What is the average per GB price that a CDN charges between all of it's contracts? Of the customers you sign up each quarter, how many of them are specific to CDN services and out of those, what percentage are specific to  the delivery of video? There are a lot of metrics like this that providers could break out in the market.

Any provider who wants to use my blog as a way to share real data on pricing or any other aspect of their business, with actual numbers or ranges, you're welcome to do so in the comments section or you can write me directly and I will publish it or write a story about it with your input.

The Real CDN Market Share Numbers

In my eyes, the worst data that is routinely quoted in the market in all forms is the percentage of market share that any CDN vendor has in the market. None of those numbers are accurate because they are not backed up by any real data simply due to the fact that CDN providers and content owners do not release the majority of their data to the public or to research houses. For all those research reports you see about the size of market share, the number of streams delivered etc... all of the CDNs will tell you if you ask them that they provided ZERO data, other than what is already public, to the analysts who write the reports.

In two different articles about content delivery vendors last week, one said Akamai had 60% of the CDN market share and the other one said 80% market share. Which one is it? That's a big difference in a market that is a few hundred million dollars. I see reports that say Limelight Networks has 10% market share and I also hear numbers up to 25% market share. So which is it? The answer is, no one truly knows. And the question we should be asking is why does anyone care? Does size or market share equal long term success?

Recently, when speaking with CDNetworks they said they had 8% of the market share for CDN services and that Limelight Networks had 9%, based solely on revenue. When I asked where those numbers came from, the said from a Frost & Sullivan report on CDNs and they included a slide in their presentation showing the data.

 

I've see this data before from the Frost & Sullivan report as many use it, but it is just plain wrong. Not my opinion, but fact based on how they present the data. Even in the slide shown above, they contradict themselves with the data. We know that Limelight Networks did $64.3 million last year and that CDNetworks did $38.5 million. That's a difference of $25.8 million. So how does that equal 1% difference in market share? And we know that VitalStream last year did $24 million before the Internap acquisition. So the different between CDNeworks and VitalStream is $14.5 million. But that $14.5 million apparently represents 4% of the market share? The numbers just don't add up.

And the biggest problem with all of these reports is that none of them say anything about what market share they are talking to. Is this the CDN market share for all CDN products including those CDN services used to deliver JPG's and GIF's? Or is this the CDN market share just for the delivery of audio and video content? And is this the global market share or the market share in the U.S.? If it is global, then why aren't companies like ChinaCache included? If it is global CDN market share numbers, they may say that ChinaCache is included in the slice on the chart that says "5% other". But the problem is that ChinaCache did over $10 million last year in revenue, so clearly they would not be included in the other companies that make up the 5%.

Some will say why do I care, at least someone is tying to put out some numbers on the market. That may be, but putting out numbers is useless unless the data is accurate. So what are the real market share numbers? No one knows. And no one will know unless all of the CDNs publish their revenue or the volume of data or streams they deliver. In order to compare one to the other to determine the market share, you have to have a metric to measure them all by.

Market share numbers do not matter. Revenue, profit and a sustainable business model is all that matters and those are not reflected in market share numbers. Netscape had more market share than IE, then what happened a few years later? Did their market share matter anymore? No, because their business model no longer worked. There are lots of examples like this. The industry should be focusing on the business and the long-term opportunities in the market and not where a company shows up on a pie chart.

Despite Limelight Networks Earnings, CDN Growth Still Strong

It's good to see I'm not the only one who doesn't think anyone needs to panic over Limelight Networks Q2 earnings that were reported yesterday. Light Reading's article entitled "Limelight Outlook Won't Doom CDNs" also talks to the tremendous growth in all aspects of the CDN market that I also see on a daily basis.

As much as Limelight Networks feel short of their projections by about $3 million, they did sign up 149 customers and grew revenue from Q1. The bottom line, all of the CDNs revenue from content delivery services are growing each quarter. Are they growing as much as investors want, maybe not. But since I don't own any stock in any CDNs, I don't care about stock prices. Stock prices do not reflect the true market opportunity. Stock prices go up and down based on many factors, most of which are all short term. And none of the CDN providers are thinking short term, they are all focusing on winning this game for the long run.

That being said, the number of analysts and writers out there who keep talking and writing about the vendors incorrectly seems to be increasing every day. No wonder there is so much confusion in the market. It's a sign of just how hot the CDN industry is right now. But these folks need to take a deep breath, learn the market and then talk about the vendors with some clarity.

As an example, I was reading an article on Reuters about Limelight's numbers and it says "CDNetworks is sniping at Limelight's heels and said in July that it is well positioned take the second spot in the race to supply so-called content delivery networks used to speed up Web services." CDNetworks has less than 30 customers in the U.S. for content delivery and half a dozen employees. Limelight has over 800 customers and 58 employees just for sales alone, not to mention $100 million in sales by year's end. CDNetworks has a third of Limelight's revenue in Korea and will only do a few million this year for U.S. based sales. Mirror Image and Internap will do more revenue in the U.S. this year for content delivery than CDNetworks will do, so why wouldn't they be nipping at the heels instead? The reason is that the quote the writer used is from CDNetworks and they take it as they are given it, without doing any analysis of what they are being told.

There are also a lot of articles being published talking about "startups" that aren't startups and have been in the space for years. For instance from an article this week, "There are also an increasing number of startups in the CDN space, including players like CacheLogic, NaviSite, and Panther Express." Panther Express launched almost 2 years ago, and CacheLogic and NaviSite have been in the CDN space for a long time. The startups in the U.S. are folks like EdgeCast and CDNetworks who have launched in the past few months. That's a startup.

In another article posted on Seeking Alpha, which talks about Akamai and the content delivery market, the author says "Upstart competitors Limelight Networks, Internap, and EdgeCast have recently received glowing press and funding from big names." Really? EdgeCast got reviewed by one press outlet. Limelight has been around for over five years and Internap is not new to content delivery. And Limelight is the only one that has gotten large funding lately.

The bottom line, there is huge growth coming from all customers. I hear from them directly and they are all putting more content online, at higher bitrates and getting longer playback times. Yesterday alone, two large content owners called me to ask advice on the going rate for CDN pricing and both said they expected to do two or three times the volume of delivery next year than they did this year. Both of whom are currently spending over $300k this year alone.

Content delivery has been around since 1994 when Sandpiper, InterVU and RBN started providing delivery services for video and it's taken the past 14 years to get where we are today. As much as it's been 14 years, the market is just now taking off and we've only scratched the surface of where this is going to go and the explosion we are going to see over the years for video delivery.

As much as people always says "content is king" the real winners in this space are not the ones who own the content but rather the ones that control the flow of delivery. The real game has just started and the winners, of which there will be many, will be the ones that are in this for the long-haul.

Streaming Media West Show: Program Online, Content Speakers Wanted

The advance program for the Streaming Media West show is now completed and online. You can download the PDF by clicking on the cover image or you can see all the session topics on the website.

If you are from a content company, major portal, TV broadcaster or ad agency and did not send in a speaking request, contact me ASAP if you see a session in the advance program you'd like to be involved in. I am not accepting any more submissions from vendors as I already have over 800 submissions I have to go through and I only have 110 speaking spots.

We've got 33 panel and demo sessions taking place at the show. Here are just a few of the topics:

• YouTube for the Enterprise
• Compelling Video Advertising Campaigns
• IPTV & Video On Demand Cable Services
• Video Search, Finding Content In A Thousand-Channel Universe
• P2P and Next Generation Delivery Networks
• Publishing Media for Microsoft’s Silverlight Platform
• Marketing Your Institution with Media
• The Outlook For Investment In The Online Video Sector
• TV's Last Gasp, How Broadcasters Are Making The Move To The Web
• CDN Pricing, Costs for Outsourced Video Delivery
• Using Adobe Flash Media Solutions to Encode, Deliver, Protect, and Monetize Video

You can view all 33 of the sessions, along with descriptions of each here. We'll also be having some unique sessions this year called demo sessions, with the intention of showing more real-world examples of video content across many verticals. We'll also be having a P2P vendor bake-off session and two different sessions with the analyst community and the financial analysts.

For CDN Services, Compare The Product, Not The Companies

The only way to fairly compare any product or service from one provider to another is via a level playing field. Sometimes this can be hard to do. But when it comes to the content delivery networks, for many aspects of their services, it is extremely easy to do, but it seems most don't want to. I continue to read articles and blog posts and hear from institutional money managers who are not comparing vendors in the CDN space properly.

Everyone wants to compare one company to another even though most times, the companies involved offer many different services and have cross over with only one product. When that is the case, you can't compare one company to another, you can only compare that specific product the companies have in common.

There are a lot of examples of how this is being done wrong when it comes to the CDN space. I keep hearing or reading that Panther Express is a competitor to Akamai for video delivery. That's inaccurate. Panther Express currently supports video delivery by progressive download only, that means content delivered via the http protocol. So yes, Panther Express can compete with Akamai for any customer who wants downloads. But that is not streaming. If you want to stream content in the Windows Media, Flash or Real formats, or want to broadcast something live (webcasting), Panther Express does not support this. It's not a knock against Panther, they are focused and support one kind of delivery. But is it then fair or accurate to say they compete against Akamai for streaming media delivery? No.

It's the same thing I hear every day about Limelight Networks and Akamai. Money managers say Akamai did over $400 million in CDN revenue last year and Limelight Networks did over $60 million. No, that is wrong. Akamai offers products and services Limelight Networks does not offer nor wants to offer. Stop comparing the companies as a whole and only compare the one product between the two companies that is similar.

There is really no excuse for all of this confusion in the market. When I point out many of these differences to people, they act all surprised and amazed how I have all this great info. Yet, all of this info I tell them in regards to the differences between the companies is right on the companies websites, in their press releases, and in their marketing materials. Or, you could just ask them. For instance, no where on the Panther Express website do they even use the word "streaming". Kudos to Panther. They don't pretend they do something they don't do and they use the proper terminology. Anyone who reads their products page can see very clearly, Panther does not do streaming delivery, only download.

All this info is out there. It's easy to collect and not very hard to compare one product to another via multiple content delivery networks. I'm happy to continue to give people all the info they want and educate as much as I can, but as more vendors enter the CDN market and more exposure continues to be focused on the CDN space, we need more clarity in the market and a sharing of accurate data and facts, as opposed to statements that are untrue that no one ever questions.

In all aspects of the online video industry there is confusion. But I think more than any other facet of the space, the CDN market has become one of "perception" becoming reality, instead of facts becoming reality. Do we want to be a market that only cares about any info put out there, or instead a market that cares about accurate info? You can't make informed business decisions off of inaccurate info.

Digital Fountain Building Out Content Delivery Network For 2008 Launch

Back in April, Digital Fountain quietly announced at NAB that they would be building out a CDN for streaming media delivery and last month, again quietly announced they had hired a GM to run the CDN business unit. I had the chance to speak with Digital Fountain last week about the build out and get a sense of where they see themselves competing in the market.

While I believe that there is still plenty of time left for companies to be bale to enter the CDN market, Digital Fountain did say that they don't expect to be able to offer their CDN service until the first quarter of next year. That time frame is going to position them really far behind most of the competitors, especially when the service when it launches will be so limited.

When the service is ready next year, it will only support streaming media, no progressive downloading options will be available and they will only be targeting customers with long-from content at bitrates over 500Kbps. They plan to only support H.264 at launch and customers who want to use their delivery services will need to have end-users download a client based plugin, similar to what you need to do today if you use Move Networks platform.

I had a long chat with Digital Fountain about many aspects of the CDN business today and the needs that customers have for content delivery. But we don't see eye to eye. Digital Fountain really believes that if the quality of video on the web can be increased, then more consumers will watch more video and the CPM rates will then increase. I disagree. If the technology and quality is the hurdle, then why don't content owners today encode all of their content at 750Kbps? It would not take much to increase the quality. Most of the broadband content today is encoded at 300Kbps, the same bitrate it was 2-3 years ago. The problem is not the technology but rather the additional costs content owners will have to pay to distribute the additional bits. If a company can increase the quality and also decrease the price, great, but that is what the P2P providers and others "claim" to be able to do, but to date have gotten very little traction at all. I think they forget that it's not about replacing traditional CDN delivery with P2P or any other technology, it's about using the right combination of technologies based on many factors. Does streaming media replace progressive downloads? No, they are compliments to each other and choosing the right combination is based on many factors surrounding the content, the device and the user. Delivery is the same way.

Does Digital Fountain have a chance? Possibly. In this industry I think anyone has the ability to carve out a section of the market since here is still do much business still out there. Will the market still be like that come Q1 next year? I believe it will. But Digital Fountain will be very limited in who they can sell the service to if it only support streaming and H.264. There may be a market out there for only H.264, but it is a very small one at that. If Digital Fountain expands their offering a bit and supports more in the way of what customers want, they have a better shot at being able to go after a larger percentage of the market and a greater chance at success. But only time will tell. By the time they launch the service, they are going to be years behind their competitors.

EdgeCast Networks Launches New CDN: Claims It Will "Change CDN Forever"

I think it's great that new providers are entering the market for all kinds of services, especially those for delivery of video content. But I would also think that by now, these new companies entering the space would realize that you can't win business or market share simply by using a lot of buzz words and marketing terms with no data behind them. And you can't enter a market by making broad statements about how all the CDNs today are crap and you are going to revolutionize the industry.

Yesterday, EdgeCast networks, a company based in LA that has been building a CDN for the past year, with two rounds of private funding, announced via their press release that they have "emerged from stealth to change content delivery forever." But reading the release and their website gives you zero data on how they plan to do this and is filled with lots of marketing terms, but no real details.

For starters, they talk to how they have built a "multi-million dollar, four-continent content delivery network architected especially for today's rich media Internet." That's great but your competitors, like Limelight Networks for instance, plans to spend close to $40 million this year alone on network improvements. So spend multi-millions does not guarantee you success or give you any kind of advantage.

The worst part in my eyes is that for years, all the networks always say they are better than one another with lots of marketing terms but them don't back them up. EdgeCast says in their release that "the EdgeCast network outperforms rivals by significant margins" and "dramatically outperforms rivals." What margins would this be? Why is there no data to back this up? Do you mean your networks reach? Capacity? Speed? How can you make that statement without backing it up? And where is the proof? And why does your website give no metrics when you make such a bold statement?

The press release goes on to say, "The last couple of years have given rise to an explosion in rich media, leaving media companies struggling and rendering the previous generation of CDNs inadequate," said James Segil, president of EdgeCast." If previous generations of CDNs are inadequate, then how did the CDNs do over half a billion dollars last year combined in revenue? That's a big market for companies that are supposedly "inadequate". You can't make statements like that and expect anyone to take you seriously, when you are implying that you are the only company out of 20 delivery networks, that has  delivery technology that works.

If EdgeCast is as large as they say, then why aren't they a Certified Adobe Flash Video Streaming Service provider or a Certified Windows Media hosting provider? If you're not in either of those programs, then in the Adobe Flash case, you're not using the latest build of Flash that the certified providers get access to.

EdgeCast seems to be really focusing on how their pricing model is different and will be more attractive to customers, but don't give any details on how. They say, "EdgeCast's groundbreaking business model separates the cost of bandwidth from the cost of services, freeing publishers from the constraints of fixed, contractual bandwidth pricing." That doesn't mean anything. If I am taking storage and delivery services from a CDN, then what are you separating from the bandwidth cost? All I am paying for is bandwidth. Where are the services? And their website says "our bandwidth buying power works to your benefit, giving you access to our volume discounts". Great, but that's what all the CDNs already do, discount the price based on volume. Not groundbreaking by any means.

Their press release goes on to say, "EdgeCast is the only CDN that gives publishers their own virtual CDN without the hassle and cost of building one." They say they do this by "leveraging bandwidth from the top ISPs", "maintains content caching points of presence located in tier one data centers", which are all "strategically located near primary Internet exchange points". Sounds like every other CDN out there. So how is EdgeCast the "only" CDN to do this?

Their release does say that they have a very detailed reporting and analytics package, which if true is good, but then they don't give examples of what data the product provides and the website has no details either. And I would have left it at that but they had to go and say that they reporting package is "A first-in-the-industry Media Control Center delivering unprecedented visibility and control along with near real time reporting." Their website says their reporting is "calculated every hour ," but I know of other CDNs who provide data every 10 minutes. So they are not the "first-in-the-industry" and other CDN do it faster.

To EdgeCast, I think it is great that you are entering the market. I think more CDN providers are needed especially as the demand for video delivery increases. But you have to realize that you can't enter a market like the CDN space, that has been around and evolved for the past 10+ years, and make the kind of statements you do in your press release and on your website. To call out the CDN market as being a failure up until your company arrived is not the best way to launch a company and is not the marketing angle to get traction.

If you really want traction, use less marketing terms, less buzz words and less references to being the "first" at everything. Say what you do clearly, give examples, say how you do it in detail, show real data and back up what you want to do with real knowledge that customers can use to make informed decisions.

And last of all, give the other providers in this space who have helped build the CDN industry into a real business over the past many years some credit. You don't have to like what they do or copy the way they do it, but they are responsible for creating the market you just entered.

Update: Adobe has informed me that EdgeCast is a Certified Flash Hosting Provider but that Adobe has not updated their page which lists the partners. Adobe says it will update the page by the end of the week to reflect EdgeCast's logo. Odd though that EdgeCast didn't even mention in their launch release that they are in the program.

In The Mobile TV Wars, It's Not MediaFLO Versus MobiTV

Last month, Business Week had an in-depth article entitled "The Mobile TV Wars" talking about how Qualcomm's MediaFlo and MobiTV's service are going to compete with one another to try and dominate the market. While the article is a god read, I think it misses the major point. That being that it’s not MediaFLO versus MobiTV.

MobiTV is simply an aggregator that is filling a spot in time similar to the role that Moviso and Infospace once filled for ring-tones. Once the content market matures and mobile discovery is more effective, MobiTV will become a footnote. MediaFLO is a $800M Manhattan project that is built on the belief that video cannot be delivered in-band due to a scarcity of spectrum. By taking the delivery out-of-band MediaFLO simply trades a scarcity of spectrum for a scarcity of content.

I'm not the only one that thinks that the capabilities of broadcast delivery compared to unicast are more economic than technical. Just as airlines use different aircraft depending on load and demand; video will be delivered via different mechanisms based on demand. The real issue is how to deliver the appropriate experience at the appropriate time. The best way to do this is develop tools, systems, and delivery networks that are designed for the mobile use case.

I'd like to see an article that really details the economic differences between broadcast and unicast. It’s not a technical issue as most make it out to be but rather, it is simple economics.

NY Times Writer Thinks Video Window Is Postage Stamp Size

Why is it that so many writers doing a story about some aspect of the streaming media industry always want to portray our technology as one that has not evolved over all these years? The NYTimes.com has a story today entitled "Nothing to Watch on TV? Streaming Video Appeals to Niche Audiences" which brings good exposure to the value of streaming.

But in the very first sentence of the article it speaks to our technology as if it's still 1998 by saying, "Buffering ... buffering ... buffering. Seeing these words blinking at the bottom of the postage-stamp-size screen..." I don't disagree that there is buffering, that's how streaming media works. But to say that the window of a video clip is the size of a postage stamp is just flat out inaccurate. The average window size of videos on the web today is 320x240 pixels. That's more than 8x larger than a postage stamp. Has anyone seen any video over the past few years in a window as small as the postage stamp above? Absolutely not.

To some, it may seem like I am splitting hairs here, but to me, it's an important distinction to make. We've worked hard as an industry for many years to get away from the misconceptions that people still talk about like the "Victoria's Secret webcast" or "postage sized video" and it's time these writers doing stories on our industry and technology get it right.

Amazon Not Providing Content Delivery For Streaming

Last week, there was a lot of speculation about whether or not Amazon has built out a portion of their content delivery network specifically to deliver video via streaming media protocols. Based on a post two weeks ago on the Amazon blog, which spoke to a Justin.TV webcast, many believed Amazon may now be delivering streaming media services to content owners.

While Amazon did work on the Justin.TV webcast, it was Akamai that delivered the streams. Content owners who want to deliver Flash streaming can use Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service (S3) along with a CDN to deliver streaming media based content. Another way technical savvy customers are utilizing Amazon's EC2 and S3 service is with a product like the Wowza Media Server Pro.

Combining the Amazon services with Wowza Media Server Pro and you have a cost-effective and elastic hosting environment for Flash streaming applications. For those not familiar with Wowza, every Wowza Pro edition server has four key features that make it especially well suited for deployment on Amazon's EC2/S3 for live and on-demand streaming:

• Live Stream Repeater: For live streaming, you can configure one server as the “origin” server to which you will send your live stream. The origin server then sends streams to each edge server in EC2, and the edge servers send the streams to viewers. Adding capacity is easily done by adding more edge servers.

• Load-Based Load Balancing: For live or video on demand, load balancing is a key factor. You don’t want to have one server overwhelmed while other are mostly idle. Wowza Pro has very effective capability that enables you to ping a server over http to determine its load. This capability enables you to set up the system so that the latest viewer always attaches to the least used server in your cluster of EC2 servers.
  

• Efficient Code: Wowza Pro is a very efficient server application that is well suited to the low power CPU of an EC2 instance.

• Simultaneous Recording: Live events can be streamed and recorded on S3 at the same time.

Combining these features with Wowza Pro’s high reliability and performance makes the combination with Amazon EC2/S3 a potentially very attractive solution for Flash streaming. The ability to dynamically add or reduce capacity on Amazon EC2 matches well with the audience fluctuations and the need to dynamically provision for time-limited live broadcast events and when an on-demand video becomes viral.

Amazon's EC2 is a reasonable and a cost-effective way to go if you know what you’re doing and have a technical and operational experience. As with any webcast, not just for EC2, the quality of live video is very much dependent upon the quality of the link from the video encoding source to the streaming server. Companies have seen some great results with EC2/S3, but your mileage may vary depending upon your connection.

So far, Amazon shows no signs of getting into the CDN business themselves for streaming media delivery. That's not to say they couldn't if they wanted to, but to date, they have been happy to work directly with the CDNs and other solutions on the market like Wowza that tie well into EC2/S3. All in all, it’s great to have a broader range of options, and given the economics of both Amazon EC2 and Wowza, this one warrants a serious consideration for tech-savvy content owners who want to delivery their content themselves.