CDN Survey Data: 52% Have No Commit Contracts, 63% Use One CDN Vendor

The StreamingMedia.com survey on CDN pricing and trends has now been filled out almost 1,000 times. I'll be keeping it open for another week or so and then we'll start to compile all the data and give away the free iPhone. Taking a look at some of the preliminary data that has been collected reveals some great data points which I will be showcasing all this week on the blog.

When it comes to the length of CDN contracts, customer commit levels and dual-vendor strategy, there has a been a lot of speculation in the market on what the trends are. Here is the data we collected from nearly 1,000 respondents, 25%+ of which are doing over 25TB of delivery per month.

• 60.8% of respondents said they had a 12 month contract with their CDN. Only 12.9% had a two year deal.

• 73.5% said that when they renegotiate their contract, they don't plan to change the length. Only 12.4% said they planed to sign a longer term contract.

• 52.3% of respondents said their CDN contract had no revenue or bandwidth commitment at all. 25.3% have a monthly commit, 6.7% a quarterly commit and 11.4% have a yearly commit.

• 63.3% of respondents said they used only one CDN vendor for the delivery of video and static content. 26.% use two CDNs and 10.3% use three or more.

You can download the pie chart data for the questions here:(Download CDN-Contract-Data.jpg)

Comments

[John]

Dan - thanks for sharing. I sincerely doubt the accuracy of the answers in this survey. As with ANY service, competition or not, you can only get the best price if you commit to a volume OR are so large that CDN's want your traffic regardless. If you are so large, you probably won't have time to fill in your survey.

I am not sure where your blogs are taking this industry but its not very constructive. You are single handedly killing the entire industry with your rediculous statements. Your credibility is completely gone.

[John S]

I find the information to be quite accurate based on our current CDN relationship. To dispute your claim, we currently don't have a contract with our CDN nor do they require one of anyone. It is an option if you want it though. Additionally, we do not have a monthly commitment level. We are on a floating scale based on our usage. Use more, price per gig drops. Use less, price per gig goes up. The reason that we chose them was first for no contract, second for price and third for level of service.

Their service is excellent, their price is better than average based on the quotes that we received from other CDNs and again NO CONTRACT. This was the reason we chose them. We did not want to be locked in to a situation that we were stuck with for a year or more.

More CDNs should actually learn something from this survey. Customers are not interested in long term agreements. We want the flexibility to change if we are not happy with their service, customer service, etc. They will learn that one day. Even if we had the budget for some of the name brand services, their contract terms would keep us away. The level of customer service that we received while trying to get bids was HORRIBLE. Why would I let you treat me like garbage and pay you for it.

One day customer service will become important to companies of all types, but until then, I will vote with my wallet.

Now I can understand if you don't like the guy running this blog, but I don't think he is single handedly ruining the industry. All he is doing is presenting the information from his survey. If it is that big of a crisis for you, stop coming around.

I for one have found some interesting articles and learned from this blog. Now I can't say as I agree with everything, but give the guy a break, he is working to help people and trying to make a living just like you and me.

[Steve Rubel]

I work for a large media and entertainment company and we don't have any commit either with our contract. John, you can think what you like, but our company spends six figures a year just on video delivery - and I filled out the survey.

[Dan Rayburn]

John, you are welcome to have whatever opinion you want, but it's not based on real facts, which is all I care about. Speak to a few hundred companies a year and you will see just how many have no commits.

And as far as companies being too big to fill out a survey, looking through the submissions some of them are from companies like: CBS, KPMG, ABC, ESPN, Turner, Comcast, Disney, Kaiser Permanente, Chevron, TV Land Online, Xerox, GlaxoSmithKline, NBA, Bank Of America, GE, eBay, AOL, Nokia, BBC, ShopNBC, Home Depot and Charles Schwab. The facts don't back up your claims.

[Dantek]

Great survey.

Would be even greater to see a list of CDN's that offer "no contract" as well as a list that offer "no commit". I believe these options are deal-breakers for many, even if it costs them a little more.

[grinsandfun]

Good survey - but I'm concerned on the value of CDN's to invest into (from a financial perspective). Without contracts & the ease to transition between vendors - does this play not force the CDN's to start become valued as a commodity play? The end user does not have any financial tie & it will become more difficult to keep customers around, unless you are the "low cost provider". Which CDN wants to be known as the Cogent of CDN?

[Luke]

I have a quick question: How can companies sign annual contracts without any commits?

If there is no commit why is there a need for an annual contract? This sounds like a month to month agreement.

[Dan Rayburn]

Contracts cover more than just a commit or no commit language. It also includes pricing, description of services, payment terms, SLA etc.... even if you don't commit to bandwidth each month, you still need to have a contract in place for the services.