Level 3 Patent Filing Against Limelight Networks CDN Now Online

I've gotten a hold of the filing and all of the documents associated with the Level 3 patent infringement suit against Limelight Networks as it pertains to Limelight's CDN offering. (Download Suit)

The filing talks to four CDN specific Level 3 patents including 6,185,598 - 6,473,405 - 6,654,807 - 7,054,935 some of which were originally granted to Sandpiper Networks back in 1998. After quickly reading through all of the documents two major things come to light.

The first is that the filing states that Level 3 sent Limelight a letter in February of 2007 informing Limelight of various patents owned by Level 3 that pertain to content delivery. Level 3 believes that after Limelight received knowledge of these Level 3 patents that Limelight did not re-design its CDN offering to avoid the claims of the Level 3 patents. While I don't expect Limelight to be able to talk about the suit publicly, the fact that Limelight had knowledge of the patents for nearly all of 2007 and didn't feel the need to license the patents from Level 3, that would leave one to think that Limelight feels it is not infringing on the patents or feels strongly that the patents will not hold up in court. UPDATE: On Monday Dec. 31st, Limelight issued a statement saying they "believe that these allegations are without merit, and intends to defend itself vigorously."

The second thing to note in the filing is that Level 3 says it is suffering damages in "an amount not yet determined" and as of the filing, Level 3 is not asking for any specific amount in damages.

For those who I know are going to ask, I don't expect this suit to stop any potential customers from using Limelight networks. The CDN space has seen many patent suits over the past 10 years and typically, customers don't have any real concern as nearly all of the major CDNs have gone through patent suits at one time or another.

Note: While I have worked as a consultant and expert witness on various patent suits pertaining to IP based video, I am not working on this case and have never worked on any lawsuit involving any content delivery network.

Level 3 Files Suit Against Limelight Networks Over CDN Patents

This morning, Google indexed a filing from December 17th from Level 3 Communications who filed a patent infringement suit against Limelight Networks (Case number 2:2007cv00589) in the District Court of Virgina. I have not been able to get a copy of the filing as of yet but I was able to speak to Level 3 about the filing this morning.

While Level 3 is not giving out many details of the suit, as is common in these cases, they were able to confirm that the patent(s) in question were acquired by Level 3 from SAVVIS as part of the sale of SAVVIS's CDN assets. Level 3 would not say how many patents are in question or give out patent numbers at this time, but they did say that the infringement relates specifically to content distribution. They would not say what kind of content distribution, video, static, applications etc... but were willing to say that the patent(s) in question have never been previously asserted in any patent infringement case.

Level 3 has over 850 worldwide patents and patent applications in their portfolio and did say that when they decided to get into the CDN business that they viewed having patents pertaining to the product as being a key factor that would help determine their long term success. At this time, Level 3 would not comment on any other networks who might be infringing on their patents or speculate on additional infringement cases.

I've put in a request to Limelight Networks and will update the post if I hear from them this weekend. I also expect to have a copy of the filing shortly and am looking to see what records exist that talk about the SAVVIS patents, which really comes from the Cable and Wireless patents that SAVVIS acquired.

Free Product Giveaway: MediaGate Wireless HD Media Player

UPDATE: Guillaume Courouge was selected as the winner using a random number picker website.

The nice folks over at MediaGate sent one of their MG-350HD Wireless HD Media Players for me to review, but with the holidays and other deadlines I am under, I won't have a chance to do a product review anytime soon. I did however find a really positive product review on the unit over at HomeTheaterBlog.com

Since I won't be able to review the unit, they have nicely said I can give it away to a reader of my blog. All you have to do is leave one comment on this post with a working e-mail address. I will pick one user at random a week from today and ship it out to the winner at no cost.  

If any company is interested in getting exposure for their video related product on my blog and is willing to give away the product, contact me. I will post pictures of the product, link to the company website and either write a product review or link to other reviews on the web. It's great exposure on a blog that does over 300,000 page views a month.

CDN Funding Continues: CDNetworks Raises $96.5 Million

Hot on the heels of EdgeCast announcing it had raised $6 million dollars, content delivery provider CDNetworks announced late yesterday that it had raised $96.5 million in private placement. For CDNetworks, this funding now gives them the ability to make a serious push in the U.S. market for content delivery of video and static content. The funding announcement also coincides with the launch of a new company website.

To date, CDNetworks primary business has solely been in Asia but over the past few months they have been out in the U.S. market selling services and ramping up their sales team. From the pricing I have seen in RFPs, they are not the low cost leader in the space and they are not, I repeat, not undercutting Limelight and others on price just to win market share. I think all CDN providers understand by now that they can't give this stuff away just to win market share and expect to stay in business. The pricing "war" that so many analysts are "speculating" on is completely overblown in the market. Just because a new provider enters the market does not mean they are selling on price.

Looking For A Brigthcove Guru For Help With Our Player

Now that we have our Brigthcove video player up on StreamingMedia.com, I am looking for someone who knows the Brightcove system well enough who can help customize our player using Brightcove's API as well as setup a bunch of new video titles and lineups for us in the system. Will pay an hourly rate to get the work done and it can be done a little at a time. If interested, please send me an e-mail with your hourly rate and  some background on your expertise with the Brightcove system.

Streaming Media West Session Videos Now Available

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Thanks to ScribeMedia.org and Brightcove, we now have all of the conference sessions archived in video from the Streaming Media West 2007 show. You can access the videos from the home page of our website or at: www.streamingmedia.com/videos

In addition, I will be adding to our Brightcove player all of the videos from our past East, West and Europe shows as well. However, it will take me some time to upload all of the 300+ videos so please bear with us.

H.264 Makes It's Move: Moderate This Session At Streaming Media East

I've got another moderator spot open for someone who wants to organize a session at Streaming Media East around H.264 and talk to the major announcements that took place in the past year and what will become of H.264 next year. This session is probably more geared towards a technical discussion but should also cover content trends and usage adoption taking place in the market. H.264 is a hot topic and is only going to get hotter next year.

Ideally, the moderator is not from a vendor company or someone who is selling a product or service involved with H.264 of any kind or can convince me you don't have a conflict of interest. Again, bloggers and others who write and cover this topic for the industry are ideal. Send me an e-mail if interested.

Who Wants To Moderate A Session About Lifecasting: Kyte.tv, Justin.tv, Zannel and Seesmic?

I'm looking for an individual who covers the lifecasting segment of the industry and has been keeping a close eye on companies like Kyte.tv, Justin.tv, Zannel and Seesmic. I plan to have a session about this topic at the next Streaming Media East show in May in NYC and am looking for a moderator who wants to organize and lead this session.

The ideal candidate would be someone who is writing about these companies in the market, has a blog of their own, or has experience in what is required as a moderator to produce a quality session. If you're interested, please send me an e-mail along with a brief description of why this is a fit for you.

Limelight Networks and Microsoft Team Up To Deliver Paramount's Movie For Blockbuster

As many sites have been talking about over the past week, the new Jackass 2.5 movie by Paramount Pictures will be distributed exclusively on Blockbuster.com starting next week. The content will be using Microsoft's Silverlight platform and will be delivered by Limelight Networks.

I was going to wait to post about this until later this afternoon when I have a call with the companies involved, but a Microsoft blog posted about it last night. I will post most about the project later this afternoon.

Job Opening: Senior CDN Product Manager, Cisco Systems

Cisco currently has a job opening in San Jose, CA for a senior product manager focusing on CDN with both technical and marketing expertise. The position is responsible for identifying and driving Cisco strategy in the enterprise and service provider wholesale CDN market segments. The focus of this position is to build and implement the product and solution strategy for Cisco in these markets, working with the line product management team for strategy execution.

The individual filling this position will have extensive experience in the CDN market, most likely gained through mid/senior level career experience in engineering or technical marketing or product management at one of the CDN service providers or, possibly a CDN equipment company. The key requirement is that the individual have an excellent grasp of the factors driving the CDN business at the business and technical levels, plus demonstrated ability to translate this grasp into business strategy.

If interested, contact Brent Rogers at Cisco who is looking to fill the opening.

Analysts Covering Akamai Should Not Be Worried About AT&T

This morning, I had about half a dozen e-mails from analysts asking about AT&T and their CDN business. Yesterday, at AT&T's analyst day they announced that they will grow their streaming and caching services by 6x and said they were going to increase their CDN capabilities. Because of this, an analyst at Cowen and Co. downgraded Akamai on concerns of greater competition from AT&T.

Now I am the first one to say I am not a financial analyst, I don't own shares in any company and I have no vested interest at all whether Akamai or any other stock goes up or down. And while I don't pour over the numbers like financial analysts do, I listen and hear what is really taking place in the market from customers. Numbers and spreadsheets only tell you so much.

For the past 4+ years AT&T claims to have been in the CDN market for the delivery of static content and video. Yet in that time, I have never spoken to or heard of a single customer using AT&T for any CDN services pertaining to video. I have never seen AT&T even bid on any RFP, have not seen any customers listed on their website, have not found a single customer case study, have not seen AT&T put out any data on their CDN business and have not seen anyone from AT&T speak at any conference or event about their CDN business. If AT&T is in the CDN business today, and I don't mean via the way of customers delivering content via AT&T's co-location or IP services, where is the business?

Could AT&T be in the CDN business? Yes. But are they today? No. I find it amazing that analysts are going to think AT&T is competition to Akamai or anyone else when they don't have a real offering today, and even by the analyst's own omission, AT&T would not be a competitor until late 2008. You're downgrading a stock based on what a company "may" do a year from now? Am I the only one who does not see the logic in this? It took Level 3 acquiring the CDN assets of SAVVIS and 12 months of build out just to get a basic offering out the door. If AT&T does not acquire anyone, how long would it take them to  be at even 30% of the capacity Akamai is at today? They can't do that in a year. And what about streaming support? Whatever limited CDN service AT&T has today, it does not support delivery via streaming, live or on-demand, has no support for Flash, no content management system, no video reporting etc.... all things Akamai and others have today.

In the report the analyst wrote, "AT&T’s extensive network reach could shrink the average distance between a CDN node and a customer to as little as 100 miles versus Akamai's 25O-plus miles." Ok that may be, but what does that mean for Akamai? How does that affect them? That statement alone does not say how that is suppose to impact Akamai's business. Plus, AT&T is not going to place servers for CDN services at every location in their network, just like Akamai doesn't, so it's not valid to look at AT&T's entire network and say they can leverage that for one specific service offering like CDN.

If AT&T were to go out and acquire someone like Limelight Networks, which they should do if they are serious about being in the space, then they would have a real shot at the getting into the CDN business and providing real competition to the market in the next 12 months. But if they don't acquire any company or assets, they will have little to no offering when compared to Akamai or others 12 months from now.

Also, does anyone remember back around 2000 when Quest, MCI, AT&T, Sprint and others all had CDN offerings and divisions? They lasted about 12-18 months in the market before they all decided to no longer be in the CDN business. Yes, they had a lot of factors going against them in those years, especially being in the market in the wrong time, but how many people "assumed" they would make it just because they are big named networks?

In my opinion, many analysts are too quick to listen to what vendors tell them without doing enough research to really know what is taking place in the market. Speak to customers. Look at RFPs. Evaluate pricing trends. Know what products companies actually offer. Company product to product, not company to company. Anyone can say they are going to be a competitor in any market, but they don't get any creditability in my eyes just because they are a big company.

Market Size For Video CDN Was $450-$500 Million This Year: Should Grow To $800 Million For 2008

As we near the end of 2007, I've seen a few reports estimating the CDN space to have been anywhere between $800 million and $1.4 billion for the year. The reports I have seen do not break out what specific "CDN" products they are talking to and how those numbers were calculated. So with that in mind, here is how I sized the market for 2007 and the data I used to come up with the number. This does not include revenue numbers for P2P only based vendors.

The number I am talking to is for the outsourced delivery of video in the U.S. market and is specific to video delivery, be it streaming, progressive download, live or on-demand. I also looked at all outsourced CDN services and not companies who sold products or services for internal delivery, such as Cisco's CDN solution.

While not all of the companies listed below provide public data on their revenue, many of them tell me off the record what they are billing or I have other data to know their revenue. In these cases, I have grouped some of those companies together below so as not to expose data they have given me privately. In no particular order:

- Internap (run rate of about $24 million for 2007, nearly all of which comes from the U.S.)

- Limelight Networks (estimated to do about $105 million for 2007 and I estimate about $95+ million of that to be from the U.S.)

- Akamai (it is estimated that about $400-$450 million of their approxiametly $625 million $900 million in revenue comes from their CDN offering. What percentage of that $400-$450 million is specific to video and comes from the U.S. market is up for debate, but I estimate it to be about $300 million.) Note: The $900 million number I originally quoted is their 2008 revenue guidance, not 2007.

-  Level 3 (didn't do much in the way of video delivery in 2007 since their streaming product only recently launched, however their CDN product for video downloads has been around for about half the year. Estimated 2007 revenue about $2 million.)

- VeriSign (why I don't have exact numbers for VeriSign, taking the European business out of the picture, I estimate the CDN revenue in the U.S to be about $8 million for the year, the majority of which was P2P based from the Kontiki product.)

- Mirror Image, CacheLogic, Panther Express, CacheFly and Advection.NET (combined, they will do about $20 million in video delivery for 2007, U.S. based.)

- EdgeCast, CDNetworks and BitGravity (combined, I estimate these companies did about $5 million for the year as would be expected since they all just recently launched their services in the later half of the year.)

- PEER 1, NaviSite and Ignite Technologies (combined, I estimate they did about $8 million in 2007 for video delivery services in the U.S.)

- Regional service providers. While not typically not classified as CDNs as they tend to go after small and medium sized business, they still provide outsourced video delivery services and tend to focus in the U.S. market in particular. (all of these companies combined did under $20 million in 2007.)

So based on that data, the market for outsourced video delivery services in the U.S. for 2007 comes in at $482 million. Factor in an error margin of $20-$25 million and the market for video delivery services in the U.S. for 2007 was between $450-$500 million. Very different than the $800 million and $1.4 billion number that is being reported.

The real question is what it will grow to in 2008? Based on what I am seeing in contract terms, increased volume of bits, higher bitrates, etc... I expect to see the U.S. video delivery market grow to about $800 million for 2008. If you factor in the revenue for P2P delivery networks in the new year, that number could go up another $50 million.

I know some may disagree with my market size numbers and that is fine, but if you can't provide the data to back up the number you published in a report, it's hard for anyone to take that number seriously. Anyone who wants to quote any of my numbers above in a report, press release, on their website or any other format is welcome to do so as long as they attribute it to me by name.
 

I Need Help: Get Paid To Help Program Sessions At Streaming Media East 2008

As the Streaming Media East and West shows continue to grow each year, it is getting harder and harder for me to program over 110 speakers and nearly 40 sessions per show all by myself. This year, I am looking to hire 2-3 people who are experts in a particular vertical of this industry who would like to help AND have the expertise that is needed to organize a topic with a few speakers/presenters.

I'm looking for individuals who are experts in a particular facet of the industry like advertising, content creation, video work-flow, content monetization etc... or are experts in a particular vertical of the market like media, broadcast, enterprise, entertainment etc.... and are willing to create 2-3 session topics around a particular subject or vertical. You would have the ability to create the session topics, discussion focus, decide on the format and organize and select all of the speakers along with my input.

You would not have to moderate the 2-3 sessions but could if you wanted to. You would have a lot of free reign to really design the entire session and this would be your chance to really help shape the discussions around a topic of interest to you. We'll promote you as the person who organized the sessions and pay you well for your time.

The ideal candidates would be those who are well versed in how to organize a discussion or presentation subject and know who the most engaging speakers and companies are that should be represented. This spot is ideal for bloggers who cover a particular topic in this space. Think of it as a way to organize your own mini-show inside of the bigger show and have the ability and responsibility to be a thought leader around a subject that is important to you.

Also, if you don't want to take on as much work, but would like to possibly organize just one session, I am open to that as well and you should contact me ASAP. The advance program is due in nearly 4-5 weeks and I need to confirm the session topics. QUALITY moderators are desperately needed. It is still hard to find those who know the role of a moderator, present well, frame the topic of the session properly, keep the discussion on point and keep others on the panel engaging.

Bottom line, I need help. The East 08 show will mark the 12th show I am having to program and I think  input from others in the industry is needed to really help shape the show and the industry moving forward. This is YOUR show, I am open to ideas and suggestions and thank anyone who is willing to help.

Keynote Speakers Wanted For Streaming Media East 2008

As I begin to think about the programming for the Streaming Media East 08 show in May, I'm trying to collect as much feedback as possible on who you think should keynote the show. What company would you find interesting to hear from or what speaker is engaging and has something compelling to show and tell?

The East show will have four keynotes this year and all of them will be from end users. I'm thinking I'd like to have a good mix of speakers representing an agency, (advertising), a major TV broadcaster (content monetization), a portal like Amazon or eBay (commerce) and a Fortune 500 corporation (enterprise). But I am also open to other ideas.

While I have many contacts and will be reaching out to various companies, I am open to ideas and suggestions of someone you know, a customer of yours or a company you may represent. Please send me an e-mail with any suggestions. If they end up working out and become a keynote speaker I will make sure to take care of you or your company in the way of payment or other compensation.

I have to lock down all four of the keynote speakers by mid January so I don't have as much time as some may think. Please contact me if you think you have someone good in mind. Thank you.

Adobe Launches New Websites Showcasing HD Video Content

Yesterday, Adobe quietly launched two new HD websites that showcases content in HD quality using the Flash platform. The launch of the sites also coincided with the launch of a new product section at the top of the main Adobe.com website. Different images and products are highlighted each time you load the page and one of them promotes "The fusion of TV and the Internet" and links to a site I had not seen until now at adobe.com/flashon. The flashon site contains movie trailers from some of the major studios as well as some other content. It's been a busy week for Adobe and they have really increased the volume of HD quality content for demonstration on their websites.

The bad news, if you want to see anything at 720p or higher, you need a really, really, fast machine. Adobe very clearly states the hardware requirements but most won't really have the power to watch the high-res content at 720p or 1080p. I'm on a year old MacBook and my 1.8GHz processor is the minimum requirement for 720p content but I can barely get it and it keeps stuttering.  No doubt Adobe is using this showcase to promote Flash and does not expect everyone the web to be able to see the stuff, but as of now, only those with very new computers can see the content at the best quality possible.

I have not had time to really watch much content and give the sites a thorough review but will do so over the weekend and post more about them next week.

Brightcove's Consumer Upload Service Cancellation Overblown By Many

Last week, Brightcove announced via an e-mail to users that it was shutting down its consumer upload service at their Brightcove.TV destination. Many of the blogs that covered the announcement pretty much agreed that Brightcove should not have offered the service to begin with and felt that it didn't align well with their core service offering around professionally produced content; which is something I agree with. But much of what posts about Brightcove on WebTVwire, InsideOnlineVideo and Mashable talk about I completely disagree with. (note: I can read the InsideOnlineVideo article in Google Reader, but the link to it on their website is broken, hence why I don't link to it)

For starters, too many of them compare the Brightcove.TV service to YouTube or wanting to compete with YouTube which was never Brightcove's intention. Anyone who looks at the content on Brightcove.TV could easily see that it was not the same type of content shown on YouTube. Yes, there was some overlap, but not much. Most of it was still relatively well produced content, something YouTube isn't. And as the story on Mashable pointed out, Brightcove's cost to run such a destination site was probably extremely low since they were simply re-purposing the platform they already had in place. It's not like they re-invented the wheel and dedicated a lot of internal resources to the offering.

That being said, I disagree with the Mashable article as it portrays Brightcove as a company being in trouble and not being focused with it's offering. Shutting down Brightcove.TV does not put the company in jeopardy. It's focus from day one has always been about it's platform, their tools, syndication and advertising. The fact it used those tools to showcase consumer content in addition to professional content is not a big stretch. Yes, the consumer side is probably not a viable business model today, but if it costs them next to nothing to offer it, gets branding for the company name and Brightcove is smart enough to stop the offering as soon as they saw it didn't make sense, how does that put them in jeopardy? Mashable says management has problems but the fact they shut it down only a little while after it came to market, shows to me that management understands the market opportunity and moved quickly to address it. In my eyes, there would be problems with management if they waited years to shut it down all the meanwhile saying how great it is working out, like many companies in this industry do.

The WebTVwire article also questions the long-term success of Brightcove as a company and says, "Whether the company has a shot a succeeding now is still a question that is up in the air." True, but that can be said of any company, but I don't see how shutting down Brightcove.TV now creates more doubt. Yes, Brightcove has raised over $80 million and if we know how much revenue they were doing I'm sure their evaluation multiple would be quite high, but Brightcove is signing up a lot of new customer and content companies we have all heard of. They have large customers and they are getting more of them. While we don't know the average price they are paying, Brightcove had 800 customers at the end of 2006. Today, Brigthcove says they have over 4,000. No, customer count does not help us in trying to figure out revenue, but look at how many companies in the industry won't say anything about how many customers they have. At least it's one metric we can use to show Brightcove's growth.

As for the Brightcove service itself, options vary on how Brightcove's solution stacks up in the market. The post about Brightcove at InsideOnlineVideo says, "Their platform is a commodity, and they’re about to kill their own community. We may as well relegate Brightcove to the deadpool." The Mashable article likes Brightcove's platform and says "...they have the absolute most complex and cool back-end for their video management system that allows for customization of how your videos display. Personally, of the solutions I have used and looked at, I think Brightcove has the most robust tools and features in the market, however I don't use the advertising component of the platform so I can't speak to that functionality.

Some say that others have better tools than Brightcove and I'd love to see in the comments section who readers feel those companies are. Who do you compare to Brightcove when it comes to their platform?

For me, the bottom line is that more and more sites I visit are using Brightcove and years later, they are still focused on their core offering, that being their platform. I know what they do, what they offer and what the value is to a content owner. That is a lot more than I can say about many companies in this space who's service offering is confusing, complex or every changing. Is Brightcove guaranteed to make it in this space? No. No one is guaranteed anymore. But the fact that many companies have made acquisition offers for Brightcove and feel they have a platform worth owning also tells me that their business is not "shaky" or "in trouble" as some bloggers suggest.

Speakers Wanted: Streaming Media East 2008 In NYC

The next StreamingMedia.com conference and exhibition will be Streaming Media East, May 19-21st, 2008 at the Hilton Hotel in NYC. I have just opened up the call for speakers and all submissions should be sent in via the form on our website. If you are interested in speaking, or are interested in submitting for a company you represent, I can't stress enough how important it is that you get the submission in on time. The deadline is January 1st 2008.

Many don't realize how much work goes into planning a show months in advance. Last year I got some really great speaking submissions a few weeks before the show after the program was already complete. The East show has over 100 speakers and 35 session slots, it's not something you can just program a few weeks in advance. So if you want to speak, please get the submission in by January 1st.

If you have any questions about a submission, ideas you want to run by me, thoughts on what you can do to help the show, call me at anytime. 917-523-4562. I pick up my phone 24 hours a day 7 days a week. I am always reachable. Don't let the fact you may have a question stop you from getting your submission in on time. If you have any questions at all on the submission process, contact me so you can get it in on time.

Blog Traffic Growing Nicely: Thanks To Readers And Sponsors

It's been 8 months now since I started this blog and in that time the number of page views, readers and RSS subscribers continues to climb nicely.

This is largely due in part to the loyal readers and subscribers of the blog and all the sponsors who enable me to be able to sit down and write something nearly everyday. Thanks to Limelight Networks, Tremor Media, Ignite Technologies and PEER 1 who have been long time sponsors and also thanks to Ortiva Wireless, Akamai and EdgeCast who are recent additions to the blog.

While many blogs and sites charge a lot to get exposure on their site, my goal has always been to keep the sponsorships affordable on the blog and give as many companies as possible the ability to get exposure from a few hundred thousand page views a month. And while sponsorships are not sold on a CPM model, comparing it to a per CPM model it can be as affordable as a $3 CPM for those who sponsor for an extended time.

If you are interested in sponsorships details please contact Joel Unickow or myself and I will be happy to get you connected with Joel. Over the next few weeks I will also be adding new ad positions on the blog and will be adding additional ways to make it easier to find content.

Thanks again for everyone's support and as always, if you have ideas for the blog, if there are topics you want me to write more about, I am always open to feedback, good or bad.

Adobe's New Flash Server Pricing Improves CDNs P&L, Lowers License Fee For Customers

While Adobe has gotten a lot of traction in the market with their Flash video platform, many content companies have not adopted Flash streaming due to the server license costs or the license fee that CDNs are required to charge for Flash streaming. With today's announcement by Adobe of Flash Media Server 3 and the new Flash Media Interactive Server, those licensing costs have now been drastically reduced.

As was expected, Adobe cut the cost of the Flash Media Streaming Server which is now priced at $995 for an unlimited connection license. And the newly announced Flash Media Interactive Server, which is geared towards customizable streaming solutions, multi-way social applications, content protection and allows for more server side customization is priced at $4,500. (For technical details about the functions of each server read Stefan and Ryan's blogs)

For some time now, Adobe has known that price has been the biggest hurdle for many customers to overcome in the adoption of the Flash platform. With the new pricing, Adobe has essentially removed the number one barrier to entry and while not discussed in the press release, has also reduced the cost that CDNs need to charge customers for Flash streaming delivery.

By reducing the costs that CDNs need to charge customers for Flash streaming, Adobe is making it a lot easier for customers to use CDNs  and enabling the content delivery networks to increase their margins. While the Adobe streaming license fee that most CDNs have been charging averages around $0.05 per GB delivered, the new Adobe streaming pricing is somewhere between $0.01 - $0.025 cents per GB depending on the CDN and the volume of Flash streaming they are pushing. Some CDNs have a better rate based on the volume they push and some CDNs include the price into their overall cost and reduce the price even further. The bottom line is that the average price per GB Flash streaming fee that the CDNs are now charging is at least 50% cheaper than what it was a few weeks ago. Within the past 2-3 weeks, quotes from many of the major CDNs have already shown lower license fees.

This is good news for the industry as a whole and for Adobe as the best way we can all truly benefit in the market is by having more widespread adoption, with a lower barrier to entry.

VeriSign Expected To Sell Their CDN Business

A few weeks ago, VeriSign held they annual analyst day where they unveiled new details about the company's strategic direction for 2008. Their newly announced strategy is to sell a number of businesses in the company's portfolio, such as communications, billing and commerce and focus instead on their core business and a smaller group of products and services.

While VeriSign stated that it would review its content delivery offering over the next six months and decide whether or not to keep it, the CDN business is already being shopped around to other CDNs and content companies who many want to own their own network. While all the major CDN players are looking at the assets, it's unlikely any of them will be a good match for the business. VeriSign's CDN business really only consists of the P2P offering they acquired from Kontiki and has very little in the way of any traditional CDN products, so it's really a P2P infrastructure sale. Most CDNs already have a P2P offering they have been working for some time or don't have an interest in P2P until there is more traction in the market.

There is also the possibility the CDN business could be sold along with other products and services in a larger deal or all together if VeriSign as a company is sold. A few of the telcos not yet in the CDN business are currently investigating whether or not to offer a CDN product and this could be a cheap way for them to potentially enter the market with a P2P offering to start. The real question is how much revenue the CDN business is doing and what it's assets are worth. My guess is that VerSign will probably do about $8-10M for 2007, but I don't know for sure. One thing I would be willing to bet on is that VeriSign would unload it for a lot less than the $62 million in cash they paid for it.

It will also be interesting to see how this affects a few of the major broadcasters in Europe including the BBC, Sky and Channel 4 who all currently use VeriSign's P2P solution for video delivery. Although based on a story yesterday by PaidContent.org, it sounds like Sky is abandon its P2P player and moving to a browser based system.

The biggest speculation I keep hearing is that Limelight Networks will buy the business so they can acquire a P2P offering and add some additional revenue. But the more that comes up, the more I think it's not a fit for Limelight Networks as a company and if they were to do any acquisitions, they would have to be all stock based and one would think VeriSign does not want stock. My feeling is that VeriSign will make the decision very soon and part with the business very shortly. The real question is to who.