"Streaming Content to Generate $70 Billion By 2013" - An Unrealistic Claim

Insight Research is forcasting that streaming content will generate almost $70 billion in the U.S. by 2013. I don't know how they come up with that number as I have not seen the full report, but $70 billion? They say the revenue prediction comes from audio and video files transmitted over the Internet, via an IPTV network or to mobile phones. They say that advertising revenue will fuel this growth and that "Questions surrounding consumers’ willingness to pay for content have been dispelled by the popularity of satellite radio and iTunes." I would disagree. Customers are willing to pay for music via iTunes, but so far, not videos on a mass-market scale. Over time, yes, more video specific content via iTunes will be purchased but you have to  back up the $70 billion number with more than just iTunes as an example. And what does satellite radio have to do with streaming?

They also say that if pre-stream costs drop faster than expected, or IPTV or 3G takes off faster than expected "it could blow the doors off of our forecasts, propelling this industry into explosive growth." I am all up for reports that show growth and make predication based on accurate data, but $70 billion is just so far away from reality. If someone has a copy of the full report, I'd love to see how the $70 billion number is calculated.

Join LinkedIn Groups For CDN, Webcasting, P2P and Adobe FMS

I've been asked to spread the word about groups on LinkedIn for professionals in the content delivery industry, webcasting sales professionals and Flash Media Server developers. While the focus of each group is a bit different, all of them are using LinkedIn with the purpose of exchanging knowledge, experience and contacts.

I have not joined any of the groups myself as of yet, but will be doing so shortly. To sign up for any of these groups, follow these links: CDN Industry Group, Flash Media Server Developers Group, Webcasting Sales Professionals.

Added Group: Legitimate P2P

If you know of other LinkedIn groups that are relevant to the online video industry, please post them in the comments section and I will add them to the list.

Visiting Akamai's HQ Tomorrow: What Questions Would You Ask Them?

Tomorrow, I will be spending the day at Akamai's HQ in Cambridge where they are nicely giving me access to sit down with management and others in the company to answers my questions, talk about their product road map, discuss the media and entertainment vertical and in particular, talk about their CDN business. Some of what we discuss I will blog about at a later time, other things I'm sure will be off the record.

I already have a list of questions lined up pertaining to their CDN business and am looking forward to getting some details on where their CDN business in particular is headed. I get a lot of questions about Akamai from customers, analysts and those on Wall Street and Akamai is open to me collecting questions for potential discussion. If you were visiting Akamai, what questions would you ask them? Put your questions in the comments section and I will ask and report back on as many of them as they are willing to answer.

Note: I have never bought, sold or traded any stock in Akamai or any other public content delivery network ever.

CDNs Getting Ready To Benefit From Higher Bitrate Content

Of all the calls I do with analysts, money managers and others tracking the content delivery market, rarely do those I speak with ask about video birates. For me, the growth of the content delivery market and the very success of the CDNs relies heavily on the trend we see developing for increased bitrates. Most think CDNs can only grow their business by signing new customers or growing their existing customer base. But increased video birates has a huge affect on any CDNs bottom line and 2008 is the year that the bitrates of old finally turn the corner.

Five years ago, the average broadband video stream was encoded at 300Kbps. Last year, 300Kbps was still the norm but we saw many moving to higher quality. Within the last six months, the average broadband video is now at least 500Kbps. We have all seen bigger window sizes, better frame rates and all of that comes from increasing the bitrate. In just the past few days or weeks alone, MLB.com, MTV.com, Yahoo!, YouTube, and Daily Motion amongst many others have all increased the quality of their video.

Gone are the 300Kbps streams and small window sizes. Many content owners are now doing 750Kbps streams and come this year they are going to be delivering many more bits than last year. And with most content owners using some form of a CDN to deliver their content, the CDNs are poised for some explosive traffic growth this year. The average content owner I speak to says they expect to grow traffic 2-4x times this year, without the increased bitrate. Factor in moving from 300Kbps to 750Kbps and content owners could push 4-8x more bits this year than last. Of the over 1,000 content owners who took our CDN survey, 68.9% of them said they would increase their bitrates this year above 300Kbps.

Some say HD is going to be the biggest factor for CDN growth but HD viewing adoption in large numbers is years off. HD will have some impact this year, but most content owners are not encoding content in HD and are focusing on a bitrate around 700Kbps. But even with HD having a small impact this year, it still adds to the growth that CDNs are going to see in the next few quarters. Content owners are putting up more content, in more platforms, in higher bitrates and much of that content is longer in length. This all amounts to a huge increase in the number of bits being delivered via the CDNs.

That being said, the real question is will the CDNs be able to turn the additional traffic into additional revenue or will more traffic simply mean they will have to lower their price? As any content owner should know by now, the more traffic you do over time, the lower price you pay per GB delivered. But for most content owners, it's going to take a few quarters before they see that growth. Lower pricing is not going to come overnight and for those who aren't doing huge numbers to being with, even doubling your traffic may result in just small savings. Taking a look at contracts and pricing I see in the market, a large content owner doing say 300TB a month is only going to get about a 15% reduction in price on average for doubling their traffic to 600TB a month. Commitment levels and contract lengths play a factor in that percentage, but doubling traffic does not mean pricing then gets cut in half. For really large customers who grow their traffic quickly, they could see their price per GB cut in half. But if they are doing 4-8 times more traffic, even with the 50% price cut, the CDNs are still making more money. For some of the largest customers the CDNs have the increased traffic and lower price point could cancel each other out over time, but it will take many quarters for that to happen.

One of the best ways we could see the growth the CDNs are seeing from customers is if we knew how many streams the CDNs delivered each quarter. A few years ago, many CDNs use to give out that data each quarter or at least a few times a year. Some, like iBEAM, used it as a marketing vehicle to promote how quickly they delivered their 1 billionth stream. While the number of streams a CDN delivers does not equal a profitable company, as iBEAM found out, it would at least give us a way to see what type of growth customers and CDNs are experiencing. Today, the number of streams a CDN delivers each quarter and the growth they are seeing are one of the many data points that CDNs are scared to release to the market. Scared that if their number is lower than a competitor a customer may go with someone who did more volume. Scared because they won't be able to use some of the marketing language they use today if their numbers don't match. Scared because most CDNs in general are too focused on what customers "think" they do, as opposed to what they really offer. In the CDN landscape, they all seem to be focused on "perception" rather than reality, which keeps a lot of data from being revealed.

But the problem with this stay quiet approach is that as an industry, we need the CDNs to step up with this kind of data and show the growth. CDNs don't need to list out customers by name, but there is nothing stopping them from saying we delivered X amount of total streams last quarter. We need data points in the market that we can all rally behind to show Wall Street and others the value CDNs provide today and the role they are going to play when this becomes a billion dollar market. We need to show advertisers how many streams content owners are growing by each quarter and we need data points to show everyone how important the CDN market is. CDNs, think of the bigger picture. You hold the keys to being able to show everyone what the real growth patterns are for online video.

Looking For Experienced TypePad Designer

I am looking for an experienced TypePad designer who can handle some changes that need to be made on the layout of the blog and is familiar with TypePad's hosting platform. I don't need graphic work done but rather code work and layout and formatting. Must be familiar with advanced templates, RSS feeds, SEO for blogs etc... At most, it is a few hours worth of work and needs to be done right away but could lead to some additional work. If you are interested, or any of you fellow bloggers can recommend someone to me, please contact me.

Call For Speakers Now Open For Streaming Media West Show

The call for speakers for the Streaming Media West conference and exhibition taking place September 23-25 in San Jose is now open. Since the West show is earlier this year than last year, the call for speakers will only be open for the next 5 weeks. For the East show, we got over 800 submissions, which is 8x the number we have room for. I cannot stress enough how important it is that you get a submission in during the deadline if you wanted to be considered as a speaker. All the details of how to submit are here.

Also, I am actively looking for moderators and session organizers for the West show. I had some really great help from folks for the upcoming East show and are looking for the same help again. If interested please send me a session outline that includes the name of the session, a detailed 5-6 sentence description of what the session will cover and a list of potential company names that you think can speak to the topic. I am particularly interested in session topics that show real-world video in action with non-vendor demos.

Few Speaking Spots Remain For Streaming Media East Show

Normally I would have a bunch of spots I am looking to fill this far in advance of the Streaming Media East show in May, but this year I got so many speaking submissions and many moderators stepped in to help that I have only a few spots left. Once these are filled, the program is closed. If you are interested in any of the spots below, please contact me. Full descriptions of each panel can be see here.

Tuesday May 20, 2008 - 1:45 p.m. – 2:30 p.m.
Session Title: Entertainment Devices: How TiVo, Xbox, and iPhone's Are Changing Content Consumption
One panelist spots remains.

Tuesday May 20, 2008 - 1:45 p.m. – 2:30 p.m.
Session Title: P2Ps Role In Delivering Online Video
Need a really good moderator, preferably a blogger/journalist who covers P2P and the telcos. Confirmed speakers on this panel include Verizon, Comcast, Wachovia and one large M&E content owner.

Tuesday May 20, 2008 - 4:00 p.m. – 5:00 p.m.
Session Title: User-Generated Video in Education
One panelist spots remains. Must be from an educational institution.

Wednesday, May 21, 2008 - 11:45 a.m. – 12:30 p.m.
Session Title: Online Video: Should Content Creators Get a Cut?
One panelist spots remains. Ideal speaker would be from a new entertainment company that has just gotten backing from a major VC.

That's all I have open at this time, but as always, you can contact me with any other questions regarding the content of the show.

Adobe CEO Says Flash Player For iPhone In The Works

Last night, The Wall Street Journal was the first to report that Adobe's CEO Shantanu Narayen said on a conference call with investors that Adobe is working on a Flash player for the iPhone and hopes to have it ready around June. Shantanu said that Adobe has been working on the new media player since the release of the iPhone SDK by Apple last month. While this is good to hear from Adobe, I think there still are a lot of unanswered questions about how Flash video may work on the iPhone and what if anything Apple may do to prevent this if they have their own agenda.

Microsoft Licenses Adobe Flash Lite For Mobile Windows Devices

This morning, Adobe announced that Microsoft had licensed Adobe's Flash Lite software so that Flash based content will be able to be viewed within Internet Explorer on future versions of Microsoft Windows mobile phones. While Flash Lite itself does not play back video, rather the device plays the video and Flash Lite acts as the container, this is still a step forward in the right direction. With Adobe saying that half a billion mobile devices shipped with Flash Lite and Microsoft willing to license Flash Lite from Adobe to make the content experience better, the bottom line is that the consumer is the winner in this deal.

Now if only Apple and Adobe would come to some kind of arrangement and made Flash video work on the iPhone consumers would really win. My hope, Microsoft and Apple come to a deal to allow Silverlight to work on the iPhone. But after Steve Ballmer's comments earlier in the month from the MIX 08 conference, it does not appear this will be happening anytime soon.

Microsoft Releases New Features In Expression Encoder 2

A little over a week ago, Microsoft released Expression Encoder 2 beta and the new version has quite a few of the features that webcasters in particular have been asking for. One of the biggest changes is that Expression Encoder 2 is now a product in its own right rather than a feature of Expression Media. It’s part of Expression Studio 2 and also available standalone. You can read all details on the Microsoft blog. Highlights of the new version include:

Better Encoding: VC-1 advanced authoring SDK integration, New profiles, and CODECS, Improved MPEG source support, Better multi-core performance, Improved aspect ratio handling, Pre-processing enhancements

Better Silverlight Interactive experiences: New templates, Template Parameters, Gallery Templates, Template preview, Edit in Expression Blend, Partial rebuild, ASP.NET Development Server, Hooks for Silverlight 2 templates

Enhanced Content Creation tools: Brand new imaging pipeline, Burn-in of moving overlays, Cuts editing, Smart re-compression, New Timeline UI

In addition Microsoft says, "there are some really exciting new features that you've asked us for that we are not ready to announce just yet. Stay tuned for more details." In addition to the new features, what else do you want to see? I'm particularly interested in hearing what functionality webcasters are looking for.

Oprah's Second Webcast Does 200,000 Simultaneous Viewers

This past Monday, Oprah webcast her second class online and peaked at 200,000 simultaneous viewers. While that was down from the 500,000 simultaneous viewers she had for her first class, it's to be expected and is not any indication of failure.

Having done a lot of series of webcasts myself over the years, the first webcast typically gets more traffic, more promotion and has more excitement around it since it is the first one. And with eight more classes to go, Oprah still has a lot more viewers she will be picking up along the way.

One of the interesting metrics of the webcast is that the average user stayed on for almost the full 90 minutes. Most webcasts don't have an average viewing time that long and you see a lot of people dropping in and out of the webcast along the way. Considering the nature of the content Oprah is talking about, I think you have to be pretty into it to begin with, so it didn't surprise me that the average viewing time was so long.

Some in the industry have criticized Oprah for not making it a pay-per-view event or for doing more advertising during the webcast. They are almost seeing it as being a failure since Oprah didn't monetize it the way they think she should have and some even went on to say how she didn't leverage the traffic properly. I think they are all missing the point.

For starters, Oprah did have three sponsors for the event; Chevy, Post-It and Skype. I saw commercials run just before the webcast started for Chevy and Post-It and those ads are still running where you to go to watch the archives. But the biggest point I think people are missing is that Oprah does not need to make it a pay-per-view event. Not every piece of video on the web needs to be monetized or charged for. As an industry, we need to stop being in the mindset that if we don't somehow charge for every piece of content or show enough ads with the content that it is a failure. Many companies use webcasting and on-demand video all the time as marketing and promotional platforms and are quite happy with the results.

These webcasts give Oprah a way to reach an audience outside of the one hour a day she is on TV. In many cases, she is reaching a different audience in parts of the world who can't get her show on TV. It enables Oprah to further expand her reach, get more awareness and increase her brand. She's taken her content and made it available on demand and portable via iTunes. She is using many different platforms to reach the widest possible audience on many devices. She's doing what any smart content owner would do who already has a huge audience they can tap into and easily grow.

I expect once all of her webcasts are over you are going to see her talk about just how well this platform worked for her, how many total views she got from the content and she will make a commitment to do more events on a regular basis. I think Oprah will very quickly become one of the biggest advocates of webcasting on the Internet and will become a regular webcaster.

P2P Company Pando Networks Raises $8 Million

New York based Pando Networks, a P2P content delivery network has raised $8 million dollars in new money from existing investors. Reports that Pando is looking to raise $20 million are incorrect. Combined with the previous funding, Pando has raised $20 million dollars to date but it not looking to raise $20 million in new funding.

Pando Networks plans to use the money to build out its sales and marketing force. Back in November I profiled Pando Networks win of the NBC Direct contract with should be going live in the next few weeks.

Read Streaming Media Magazine, Win A Vespa LX50 Scooter

Yes, you read that right. Thanks to Ignite Technologies, Streaming Media magazine is giving our readers the chance to win a brand new Vespa LX50 scooter. There are two ways to enter. Subscribe for free to Streaming Media magazine or for current readers, just re-new your free subscription. You can also enter in person at the NAB show, booth #SL14510 or #C1548.

All entries from now until 4/25/08 will be entered into the random drawing and the winner will be contacted by email or phone on or after 4/25/08. Drawing is open to U.S. residents.

CDN Highwinds Raises $55 Million, Targeting Resellers

This morning, Highwinds announced it had raised $55 million from General Catalyst Partners and Alta Communications. Highwinds plans to use the capital to do additional build out of their network named "RollingThunder" which includes a CDN offering.

While most CDNs are all going after the same customers, Highwinds is taking a different approach by going after those who want to resell content delivery services to their own clients. To date, most CDNs either don't have a reseller program at all or their tool sets don't support resellers properly. Resellers need products that allow for sub accounts, reporting based on multiple directories, self provisioning and many times custom branding. To date, most CDNs don't deal with resellers well, don't have the proper customer support for resellers or don't have the tools to allow for a lot of the specifics resellers need.

For me, the real question is whether or not there are enough resellers out there to really scale a business past $30-$40 million a year in revenue. I know some are going to point to Akamai's 2007 revenue of $636.4 million and say that about 20% of it came from resellers and hence the market is there, but we don't know how much of that nearly 20% in reseller revenue came directly from Akamai's content delivery services.

With Panther Express and Velocix (CacheLogic) having announced their funding a few weeks ago and now Highwinds, that pretty much leaves only Pando Networks, BitGravity and Voxel.net as the remaining CDNs from the list of 30 who have not raised money in the past 12-18 months or are public companies.

Webcasting's Big Day: MySpace Going On Now, Oprah Later Tonight

I can't remember a previous time when two webcasts of such large scale took place on the same day. I'm watching the Operation MySpace webcast now and the video looks great. I have the high stream going at 1.5 Mbps 1.3 Mbps and am not getting any distortion. Full screen looks pretty good but has some pixelation on a 15" monitor, which is to be expected. KulaByte is encoding the stream at low, medium and high bitrates and Akamai is delivering the video, being played back with Flash 9. Will be interesting to hear what the simultaneous stream count is for this when it is over, what the average bitrate was and how many could get the HD stream.

And later tonight, Oprah will be doing another class on Oprah.com and says that all previous technical issues have been worked out and that they expect an even larger audience than the 500,000 simultaneous they had last time. The Oprah site says that so far they have over 800,000 people pre-registered. Limelight Networks will be delivering that webcast and it will require Move Networks client.

Update 4:41PM EST: For the past 10 minutes, the My Space video is really stuttering and the audio is a few seconds behind the video. The video has dropped to about 12 frames per second from the 30+ I was getting before. Moving down from the high to the medium stream is not solving the quality issues. Lots of stuttering and the low stream is doing 8.2 frames per second for me.

Update: Akamai has informed me they will not be giving out traffic stats from the MySpace webcast. For more technical details surrounding the encoding of the event you can read this article on StreamingMedia.com

Entriq Acquires Dayport, Rumored To Be Around $45 Million

Entriq, a provider of digital rights management based solutions announced today that it has acquired video workflow company DayPort. While terms of the deal were not disclosed, various sources say Entriq valued DayPort at around $45 million, which seems about right.

This is one of those deals where the synergy between the two companies seems dead on. Entriq provides content owners with the ability to add digital rights management and commerce solutions for video and DayPort provides much of the content workflow including transcoding, publishing and syndication. By combining both company's platforms, Entriq says they will enable customers to "publish, approve, control, syndicate, monetize and analyze their digital media business reaching mobile, broadband, streaming, podcasting and IPTV environments."

More deals like this should be coming in the industry. Right now, there are a lot of small players in the space, in many product verticals, who would benefit from combing products and services and operations to better compete in the market.

Content Owners Struggling To Compare One CDN To Another

I've blogged before about how most CDNs don't give out data points in the market or to customers for them to try and fairly compare one CDN to another. It's impossible to measure performance, capacity and many other aspects of a content delivery service offering from one provider to another. I got an e-mail this morning from a content owner who summed up what I hear all the time from customers:

"How do you think we should proceed looking for a new CDN and how do we get any data that will help us determine who we choose? All the CDN sales reps are blaming the other one in terms of network size, service quality, etc. and we can’t see the difference between many CDNs. Do you have research in terms of how much bandwidth, capacity, scalability, performance, etc?"

I know many of the CDNs hate these questions and say it is not fair for them to have to answer them since their capacity constantly changes and they are all making upgrades to their network footprint all the time. But why can't CDNs give some sort of metrics on capacity per format in each region of the world? Look how many CDNs say they are global when they truly aren't. Many CDNs that are in the Adobe partner program and listed on the Adobe site as supporting live Flash video don't support live. And how is it that every CDN, large and small, global and regional, has gotten an A+ ranking from Keynote on their network quality?

I am not the only one who notices this stuff. If any content delivery network thinks I am pointing out things customers don't already know, I'm not. I hear these kinds of points from customers all the time. And with more CDNs in the industry and more competition it is harder than ever for content owners to try and figure out who really does what in the space and what any one company's limitations are.

While I would propose some suggestions to the CDNs of the type of data they should talk about to fix this, it's pointless as it would then clearly show the differences between the networks. And too many of the CDNs want to be compared to all the CDNs as being on the same level playing field when in fact, they know that many times they aren't. I don't think there is anything wrong with not being as big as someone else or having as much capacity as someone else. Why would you want to tell a customer you are global, sign them up, and then have them find out the hard way that you really aren't? Why start off the relationship on the wrong foot? This happens much_too_often with customers.

CDNs should highlight what they do well, what their core strength is and what type of customers they should and more importantly should not be going after. If MLB.com were to put out an RFP tomorrow for all of their video delivery needs, I bet nearly every CDN would want to bid on that business, even though those of us in the industry know there are realistically probably only 2-3 CDNs today that could handle that level of traffic all at once.

The CDN facet of this industry has to get smarter and providers have to start evolving much faster in terms of the message they are delivering to customers. The service is already starting to be seen by many as a commodity. Now is the time to make it clear to the market and content owners what your real strength is. Looking at almost all of the CDNs websites, it is nearly impossible to find out what verticals they specialize in, what format(s) they support, what regions of the world they have delivery in (network maps don't count), what type of reporting they have, (put up a demo account on your home page), what your message is to the market, (speed, reliability and global reach don't cut it anymore), who your customers are, (case studies please) what your products are in detail (where are your product sheets?!) and for those that say they help content owners "monetize" their content, show examples of exactly what that means.

A CDN that delivers bits and who sells content delivery only with no tools or applications, that delivery service is not a monetization service. Pushing bits is not enabling content owners to monetize their content. Giving them tools or providing services to do targeted delivery, advertising, DRM and very granular reporting - those are monetization services. Simply shipping bits is not.

Too many of the CDNs are so focused on only using networking language right now that they are not delivering any real marketing message to customers. Go to the websites of the CDNs and look at the message on their home page. The majority of them, but not all, are not delivering any clear concise message with any real identity.

In my eyes, the content delivery market is going into the next big stage as we will see more growth in the next 2-3 years than we have seen in the past five years. Now is the time for CDN vendors to deliver a very clear and concise message to the industry and to customers of exactly what it is they offer and what the differences are between their company and others.

Oprah Webcast Draws 500,000 Simultaneous Viewers

Last night, Oprah did a special 90 minute webcast live on the Oprah.com website and just released details on the traffic numbers. They had more than 500,000 simultaneous users viewing the stream and peaked at 242Gbps of traffic. The stream was encoded into the Move Networks platform and viewers could have gotten a stream at 150Kbps or as high as 750Kbps all depending on their connection.

The announcement on the Oprah site today which is on behalf of Harpo, Move Networks and Limelight Networks also says that, "Unfortunately, some of our users experienced delays in viewing the webcast." That comes as no surprise there considering the number of people trying to view the webcast, let alone at a high bitrate. But I give the Oprah site credit for setting expectations before the webcast started.

When you went to the site last night, the webcast page said something to the effect that the webcast would have a huge demand and that potentially some people just would not be able to log on to see it. They made that very clear and also said where and when the archives would be made available.

Half a million simultaneous streams at a high bitrate easily puts this at the top of the list when it comes to large webcast numbers. Is it larger than the MSN webcast last year of LiveEarth? No one knows as MSN only said their event had the "Most Simultaneous Viewers of Any Online Concert Ever" but didn't say what that number was.

In all, it really does not matter which was the biggest. The big take away from this webcast is that it shows proof that the Internet is not built to handle TV like distribution and those who think that live TV shows will be broadcast on the Internet with millions and millions of people watching, it's just not going to happen.

Oprah will be doing more of these webcasts over the coming weeks and it will be interesting to compare all the numbers.

CDN Survey Data: Price and Customer Service Ranked Most Important

The StreamingMedia.com survey on CDN pricing is nearing its end and to date we've had 1,041 respondents. We're starting to compile all the raw data for the final report and will be giving away the iPhone this week.

When it comes to the factors that are most important to customers when selecting a CDN vendor, price and customer service came in number one and two. We asked respondents to rank multiple factors on a scale of 1-5 with 5 being most important.

• Price: was given a number five by 55%
• Customer Service: was given a number five by 52.7%
• Geographic Reach of Network: was given a number five by 44.7%
• Flexibility of Contract Terms: was given a number five by 33.4%
• Number of Formats Supported: was given a number five by 28.7%
• Technology and Product Road Map: was given a number five by 28.1%
• Value Added Services: was given a number five by 20.2%

While CDN customers are not buying on price alone, it comes as no surprise that pricing and customer service, followed closely by geographic reach of the network are the most important factors overall.

Exactly 50% of the respondents came from the media, entertainment and broadcast verticals. Enterprise and education made up another 30% and pharma and government made up the remaining 20%.

Akamai's 703 Patent Should Not Affect Microsoft, Does Not Apply To All Content

One point I think many are missing with regards to the 703 patent is that it only applies to part of Limelight's service offering. While the patent is very broad and potentially could mean more than just CDNs are infringing, think ad networks, web hosting companies etc... the patent only has to do with cached content that is delivered to a browser, which is the key point.

Live streaming, software downloads, application acceleration, delivery to a device etc... are not infringing as they are either not cached or not delivered to a browser. So not everything on Limelight's network is in violation of the 703 patent. I don't know what percentage of Limelight's traffic or revenue is outside of the 703 patent but that would be interesting to know.

As for Microsoft, many are thinking that Microsoft may now be worried since they licensed Limelight's technology. But what exactly did they license? Neither company has ever said. And since the 703 patent is very specific in what it covers, is Microsoft really worried that Akamai is going to come after them for licensing Limelight's technology? Of course not. And based on what exactly Microsoft licensed, it is very possible that it has nothing to do with anything pertaining to the Akamai and Limelight suit. It's all speculation at this point until someone says exactly what Microsoft licensed.

Why Level 3 Should Acquire Limelight Networks

While many seem to think I am crazy for thinking anyone would acquire Limelight, it would make sense for a company like Level 3. Yes, we all know Level 3 has had some problems with the integration of all the acquisitions it has made as of late. But putting that one hurdle aside, there are many reasons why this would make sense in particular for Level 3.

For starters, everyone seems to think that anyone acquiring Limelight would continue to operate their network. But for someone like Level 3 they don't need the Limelight network in operation. They need their sales reps, their customers, their revenue and their hardware. Transition as many customers as possible over to the Level 3 network and shut down the Limelight network. When Akamai acquired Speedera and Nine Systems they didn't keep those networks functioning. They took the customers and terminated the networks. Same thing happened when Internap bought VitalStream.

I don't think anyone would argue that you could do all of that overnight. It does take time and requires a great deal of work, but it's not difficult considering the product Limelight is selling to customers is very straight forward without a lot of customization. And any company that acquires Limelight would probably lose 20-25% of the customer base anyway so you'd be talking about having to migrate roughly 750 customers. That's not rocket science.

Would a company that buys Limelight have to pay some sort of royalty to Akamai while they transition the customers over and shut down the Limelight network? Maybe. But they might also use the appeal process to do all of that by the time the appeal goes to court and then show that they have terminated the product that was in question.  If that were to happen, I would expect Akamai would then file suit against Level 3 for the same 703 patent, which in my eyes they have not done to date as Level 3 has not been a serious threat to Akamai yet.

Some also say that Level 3 could not do this as they are not a real player in the CDN space and don't have the network to transition the customers to. That's incorrect. They have more customers for CDN than most realize, are continuing to add capacity each quarter and will become the number three CDN this year based on CDN revenue in the U.S. They are very quickly becoming a real option in the space and with the integration of the Vyvx products and the applications they acquired when they bought Servecast, they are laying the ground work for a true eco-system offering of more than just shipping bits.

Most would say that by Level 3 buying Limelight it would make them a target for a suit by Akamai. But they are missing the bigger picture. Level 3 is already lining itself us for a patent suit by Akamai. Based on the broad interpretation of the 703 patent, every CDN is already in violation. So why hasn't Akamai gone after Level 3 or any of the others? Simple. Even for Akamai a lawsuit is a lot of work and costs money. They are not going to go after any CDN until the CDN is a real threat to them in the market and doing enough revenue to make it worth their time. Cable and Wireless was around for years before Akamai went after them. Speedera was too. It wasn't until Speedera was getting traction in the market and revenue before the suit was filed.

And look at Limelight. Limelight was founded in 2001, yet Akamai didn't file the suit until five years later, when they were doing some real revenue and had become a real competitor to Akamai. Level 3 acquiring Limelight does not make them more of a target as they are already in the cross hairs and Level 3 knows it.

When Level 3 bought the SAVVIS/Cable & Wireless CDN assets they were buying a large patent portfolio to go along with the 800+ other patents in their portfolio. Clearly Level 3 knew what they were buying, knew the outcome of the Cable & Wireless and Akamai lawsuit and they would have spent a lot of time examining what their legal exposure may be with the patents before the acquisition. Based on Level 3 buying going through with buying the assets, they clearly feel they are prepared to defend whatever comes their way.

Is it an easy deal for Level 3? No. But it's not a crazy one and with the right pieces in place, Level 3 becomes the number two CDN overnight in terms of revenue and customers. And for all the people who still want to say how successful Akamai was in the Cable & Wireless suit, remember that Akamai sued Digital Island who was then bought by Cable & Wireless even though Digital Island was being sued. And we don't know how "successful" Akamai was in that suit as Cable & Wireless went bankrupt in the U.S. before any of the rulings were appealed. The one time cash payment by Cable & Wireless to Akamai was made in the final days of them closing down operations in the U.S. and was a small enough amount that Akamai didn't even need to mention it in any of their filings. (At least not that I could find)

And even with the ruling two years after the suit started, C&W said, "The injunction is a legal technicality about a legacy part of the CDN that was abandoned some time ago". So the idea that someone like Level 3 could take what they need and shut down the Limelight network is completely possible.

The biggest hurdle I see to this is the debt that Level 3 has and the problems they have had with all the integrations in the past. Those could potentially be deal breakers that keep this from happening. But if all the right pieces fall into place, Level 3 could make out nicely acquiring Limelight and propelling itself to the number two spot in the market.

MSNBC.com Won't Say Why Their Debate Webcast Failed

Last Tuesday, MSNBC.com webcast the Clinton and Obama debate and suffered some major technical problems. Lots of users all over the country had problems like I did with the video constantly buffering making it impossible to watch the MSNBC webcast at all. Fortunately, other news sites had no problems with their webcast feed and with a little help from other frustrated viewers, the links that did work quickly got passed around.

For days I have been asking MSNBC what went wrong but they wouldn't say. A few days after the event,  MSNBC.com e-mailed me an official statement they posted on their website stating:

"On Tuesday, Feb. 26, msnbc.com's live simulcast of the Democratic debate on MSNBC was hindered by technical difficulties. Many users experienced buffering and stuttering as they attempted to watch the debate. Msnbc.com has years of success at streaming high volumes of live video, and we apologize for letting some of you down on Tuesday."

For me, simply saying they had "technical difficulties" is not sufficient. Webcasting has been around over twelve years now, and for something as important at a debate like this one, which could only be viewed on one TV station, MSNBC, with many like myself don't get if they have FiOS TV, not having a successful webcast is unacceptable. It's was only a week before the MSNBC.com webcast that CNN webcast a debate with no technical issues at all. I didn't see a single complaint by any users on the web about the CNN webcast.

While MSNBC.com states it has "years of success at streaming high volumes of live video...." I think many like me would disagree. Once again, MSNBC.com had no difficulty in delivering me a video add before the webcast stream that didn't work. This vicious cycle has been going on for some time with MSNBC.com and many like me have been complaining about it for quite a while.

It was nine year's ago that the infamous Victoria Secret webcast failure took place. This time around the topic of the MSNBC.com webcast had some real importance, broadband adoption wasn't a problem and the video streaming platforms weren't new. Yet nine year's later, we're still talking about a large event having a high failure rate. Is the Internet really ready for large scale TV like webcasts? It may be, but clearly MSNBC.com isn't.

Online Video Executives On The Move

A quick round-up of some of the latest hiring's in the online video industry:

• Brian Lehon, formerly VP of Sales at TalkPoint is now a sales director at Level 3 within
  their Content Markets Division

• Scott Baker, formerly of Boston.com is now a Strategic Account Manager at Brightcove

• Barak Bar-Cohen has been named the President and COO of Narrowstep. Barak previously served as Narrowstep's GM of European Operations

• Ross Angert, formerly the Creative Director, Global Interactive Media for World Wrestling Entertainment has left the company

• Charlie Mitchell, formerly of StreamSign Media is now the Senior Executive of Sales for Origin Digital

• Erik Perkins, CFO of Origin Digital will now also serve as the President of the company

• Jimmy Jellinek, former Editor-in-Chief for Maxium is now the VP of Entertainment and Programming for Heavy.com

If you are looking for a new position, have taken a new job or are a company that has a job opening, let me know. In many cases I will highlight it here on the blog - free of charge.