Out Sick, Back Online In A Few Days

Taking it easy for the next few days. Be back with some posts hopefully later in the week.

Two-Way Media Files Patent Suit Against Akamai, Limelight, AT&T

On April 11th, Colorado based Two-Way Media filed suit against Akamai, Limelight Networks and AT&T over a series of patents entitled "multicasting method and apparatus". (patent description below) While this is just one of many patent suits taking place in the content delivery sector, there are a few unique details about this one to watch. For starters, Two-Way Media first filed suit against AOL and after a successful Markman ruling in their favor, AOL settled out of court for an undisclosed amount. That by itself does not mean anything as it may have been easier for AOL to settle rather than pay legal costs, but the fact they settled after a ruling is a bad sign.

Even more interesting in my eyes is that the main patent, number 5778187 was filed in 1996 and was licensed by Two-Way Media to Cable & Wireless in the early days of the content delivery market. For those that remember, Sandpiper and Digital Island were some of the original CDNs that were acquired by Cable & Wireless. There is no way to know if Cable & Wireless licensed the patents because they felt they were valid or not, but the fact another CDN even licensed it makes this suit even more interesting.

Some may wonder why other CDNs are not mentioned in the suit and my guess is that it's the same reason most suits like this only name those showing a lot of revenue. Until a company is doing a certain level of revenue, there is no reason to really go after them. But you can expect that as more CDNs see revenue growth and the content delivery industry turns into a multi-billion dollar market over the years, CDNs are going to be inundated with patent suits. It's also interesting to note that once again, Level 3 seems to have a very clear strategy with regards to CDN patents and has no exposure to this patent either. Level 3 is covered under the original Cable & Wireless licensing deal with Two-Way Media through Level 3's acquisition of the SAVVIS content delivery business, which included their intellectual property.

Other CDNs aside from Level 3 could be in the cross hairs of companies like Two-Way Media, but at this time it's too early to know exactly who Two-Way Media and other patent holders may go after. And for those who say that some CDNs have no concern as they have made public statements saying they are not worried, what do you think they are going to say? No CDN is going to come out and tell Wall Street or investors, yes, this patent worries us. So unless a company comes out and address a specific patent and provides details as to why they feel they are not infringing, you really can't believe the corporate line of "we're not worried", unless of course you are Level 3.

Patent Abstract
A scalable architecture is disclosed for delivery of real-time information over a communications network. Embedded into the architecture is a control mechanism that provides for the management and administration of users who are to receive the real-time information. In the preferred embodiment, the information being delivered is high-quality audio. However, it could also be video, graphics, text or any other type of information that can be transmitted over a digital network. Preferably, there are multiple channels of information available simultaneously to be delivered to users, each channel consisting of an independent stream of information. A user chooses to tune in or tune out a particular channel, but does not choose the time at which the channel distributes its information. Advantageously, interactive (two-way) information can be incorporated into the system, multiple streams of information can be integrated for delivery to a user, and certain portions of the information being delivered can be tailored to the individual user.

Latest Update On Akamai/Limelight Patent Suit and Potential Limelight Sale

I have been getting a lot of requests for an update on the Akamai and Limelight patent suit, so here are the latest details I have. Last week, April 17th, Akamai filed a motion for permanent injunction against Limelight Networks. It's expected that a ruling on the injunction will come in the next few weeks and there is a pretty good chance that the motion will be granted. If that happens, Limelight is expected to file for and be granted a stay of that motion. Once that happens, it basically means that this suit will go on for at least another year, if not more, unless both parties come to an agreement, which I don't see happening.

While none of this is really news as this outcome has been expected since the jury ruling, I think that once all of the motions relating to the injunction are done, the two companies most interested in purchasing Limelight, AT&T and BT, could once again resume negotiations. In my eyes, it is just a matter of when Limelight will be acquired by a telco and not if. Shortly after the jury ruling, Limelight was offered a buyout for about $8 a share by a telco, which is a pretty good offering in my eyes. (I don't own any shares in Limelight or any other public company) Even at that price, Goldman, which owns just over 35 million shares last I checked, would still walk away with well over $100 million.

Limelight needs the resources of a larger company to really take their business to the next level and to accelerate revenue growth. They can still grow and maintain business as a stand alone company, but the resources of a larger company would give them a better shot in the market for the long run. Limelight is facing at least three patent suits by Akamai, Level 3 and Two-Way Media (more on Two-way later in the week) and at this rate, the lawsuits will take their toll on the company in terms of resources and focus, in addition to cash.

I hope for their sake and for the industry that Goldman isn't going to be too greedy and a deal can be worked out sooner rather than later. There is a huge gap between Akamai, Limelight and the number three CDN in the market in terms of revenue, and I think it's best for the industry to have as many top players as possible.

Amazon Slowly Turning Into A CDN For Video

About a year ago, I wrote a post about how content owners who wanted to deliver Flash streaming could use Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service (S3) along with a CDN to deliver streaming media based content. In the past few months, Amazon has made some new product announcements that over time, lead me to believe that more content owners are going to look to Amazon for video delivery needs, particularly those who are only delivering video via progressive download.

Last month, Amazon announced some new features with their cloud computing product including new functionality for Elastic IP Addresses and EC2 Availability Zones. Simply put, Elastic IP allows you to associate static IP addresses with a unique EC2 and Availability Zones lets you deploy your apps into different regions. Amazon is effectively allowing content owners to replicate apps in different data centers and in different regions, thereby also protecting them from outages. While only a limited number of U.S. based locations are available today, more locations, including those outside the U.S. will be added in the months ahead.

When the new locations are added, then this offering is something to really watch. Amazon is offering faster performance between servers in the same EC2 zones and one would expect they would then offer some level of performace guarantee across all zones. When this happens, they essentially become a content delivery network. We're already starting to see some companies like Digital Fountain build an entirely new CDN offering around Amazon Web Services, and there are more to come.

It's also interesting to see how much of the internal workings of Amazon's cloud computing service they are willing to share with developers and everyone else. Most delivery networks are so closed and Amazon has wisely taken a different approach, primarily due to the size of the customer using their service. Wired has a great article from yesterday that talks about Amazon's cloud computing service and the best line in it is the response from Amazon's CEO when asked about cloud computing becoming a commitized service. "Commodity businesses don't scare us," he says. "We're experts at them. We've never had 35 or 40 percent margins like most tech companies."

While Amazon's cloud computing service will have more of an impact over time, especially as it evolves into more of a traditional CDN offering, it still won't be a big disruptor to the major CDNs like Akamai and others. For some customers Amazon could be a viable option with reliable and cheap services. But for many content owners, and in particularly those who have video, their needs are getting more complex each year as they struggle not to deliver bits, but rather solve the entire workflow problems associated with ingestion, transcoding, authentication, meta data, content management, syndication, tracking and reporting and traffic analysis.

That being said, anyone as smart and as big as Amazon is one to watch.

Last Minute Speaking Spots Open: Streaming Media East

The program for the Streaming Media East conference in May closes today and is being shipped off to the printers. I have three speaking spots that have opened up last minute and are accepting all speaking requests. The first two sessions are panel spots, the third session is a moderator position. Please don't submit for the moderator position unless you are willing to do the work that is required of being a moderator. Originally I was going to moderate that session myself but am now looking for someone to take it over. If you are interested in any of these three spots, contact me ASAP as they will be filled today.

All submissions for any of the three spots MUST include full details of the speaker including name, title, company, full mailing address, phone number and e-mail. In addition I also need to know how the subject of the panel is relevant to the speaker as there has to be a fit subject wise. Please don't send me an e-mail simply saying, "I want the spot". That will not suffice.

Tuesday May 20, 2008 (panelist)
Effective Advertising Models For Short-form Video Marketing
Some advertisers see user-generated video sites as a free way to distribute their message, but this has rapidly evolved into a significant paid business, where sites charge based on video placement and search keywords. Learn the relative ROI of going to a major site (i.e. YouTube) vs. a smaller site (i.e. Metacafe) vs. a plethora of tiny sites. Learn what methods are successful for getting viewers and the importance of content vs. placement. This panel will discuss and show video examples of effective business models for both advertisers and publishers.

Wednesday, May 21, 2008 (panelist(
Independent Content: Creating New Revenue Streams
In the wake of the Writer’s Guild strike, what does the landscape look like for writers, content producers, and video creators who want to use the Internet as the next broadcast medium? What are the non-studio/traditional revenue streams on the Internet, and who's in the best position to profit from them? Hear from some traditional broadcast producers who have created new content companies focusing on unique web-based video and hear what types, genres, and lengths of videos are getting the most traction. Attendees will also learn what kinds of content are going to generate the most dollars online and hear where those dollars are expected to come from.

Wednesday, May 21, 2008 (moderator)
Evaluating and Choosing The Right Methods Of Video Delivery
With all the various means of distribution and protocols available for video today-CDN, P2P, streaming, progressive download-there is still no single solution that will meet all customers' needs perfectly across all platforms and devices. Learn the various methodologies for content distribution, as well as the pros and cons of each type. Speakers will also discuss which methodologies apply best to which platforms and geographic locations based on type of content, length and format of video, and target audiences. Panelists will also provide you with guidelines and formulas for determining the best single and/or hybrid solution for your online video distribution needs.

A Detailed Look At Akamai's Application Delivery Product - Part 1

In my day long meeting at Akamai's HQ a few weeks ago, one of the products we spent a great deal of time talking about is their application delivery service. Of the numerous people I speak to about Akamai, their application delivery product is the one that is least understood in terms of how it works, the type of content that is delivered and the types of customers that use it. It is also the product that I receive the most questions about in terms of the size of the market today and what Akamai's potential market growth opportunity is down the line. I'll cover all of that here in part one and give real customer examples in part two next week.

Traditionally, over the past fifteen years, I have only covered products and services that have included some form of video. But moving forward, application delivery is a product and industry I am going to start to track very closely as it is a market that is just starting out, yet over time will become very important to some of the content delivery networks in the industry. While there is no way to know how big the market is today and what the market will be next year, Akamai has publicly stated that their application delivery product had a run rate of $40 million for 2007.

Through the acquisition of Netli, Akamai is well poised to offer a product that they have been developing for at least a year and have real customers using the product today. When other companies begin to go look at and develop an app product, Akamai is already going to be ahead of them in development, real customer feedback and revenue. While I don't think application delivery is going to make a huge impact on Akamai's revenue in 2008, I do predict that come Q4 of this year and moving into next year, Akamai's application delivery product will be one the fastest growing products in the company.

After talking to customers and seeing how content will need to be delivered down the road, my personal opinion is that Akamai's application delivery product is one of the most underestimated products in their portfolio in terms of revenue growth, for multiple reasons. For starters, the market for these services is just starting out and already, Akamai is considered the only game in town for this service based on an outsourced model. I don't know of any other CDN who offers application delivery today and while some vendors offer hardware based application delivery or acceleration products, I'll cover later why those are not a real threat to Akamai's service. And as the only CDN currently offering the service that I know of, application delivery is a fundamental building block that lets Akamai service their current customer’s needs, while exploring new markets.

So how exactly does application delivery work and what types of content is delivered through the service? For starters, there are a lot of similar terms used to describe these products and the market and the two most commonly used are application delivery, and application acceleration. While the terms are pretty much interchangeable, what is very different, however, is the approach to application acceleration. For example, a network managed service approach such as Akamai's in-contrast to an appliance-based approach such as Cisco's.

From a high level, the problem that application acceleration solves is around content that cannot be cached at the edge, and therefore must be accessed at the content owners’ origin. This type of content can be as simple as a base page that calls media or personalized content that cannot be cached, or enterprise data coming from an SAP application and an associated database. In the case of consumer applications, application acceleration drives more page views and video views, and in the case of enterprise applications it enables application adoption and usage.  Because the content cannot be cached, the delivery of that content must be accelerated due to Internet protocol inefficiencies.

For example, users type in www.danrayburn.com and are sent to an Akamai edge server 5-10 milliseconds away, where their request is accelerated across the Internet to an Akamai edge server close to the origin, where the request is past on. The origin fulfills the request and responds to the Akamai server closest to it and it is again accelerated back over the Internet to the user through the local Akamai server for delivery. To accomplish application acceleration you must control both ends of the network connection, the one close to end users and the one close to the application/content owner's origin.

In order for Akamai to accomplish this, there are three main network components to their application acceleration architecture. An Akamai edge server region close to the end user and an Akamai edge server region close to their customer’s origin infrastructure. In both cases, the goal is to get within 5 to 10 milliseconds away from both the origin and user, thereby essentially creating a bi-nodal overlay network over the public Internet. In addition, application traffic is bi-directional opposed to uni-directional like most traditional CDN traffic so optimizations need to happen both ways. From what Akamai tells me, this also illustrates the importance of a large distributed network for application acceleration and to them, highlights why CDN vendors with a large data center approach will have a fundamentally difficult time entering this space.

So exactly what kind of content can take advantage of application delivery? For enterprise employees, they come into contact with many of types of web applications on a daily basis including expense management systems such as Oracle, contact management systems like Siebel or Salesforce.com, learning management systems and even web-based e-mail. For industry specific applications you can look at things like ad campaign management tools such as DoubleClick DART for online publishers and advertising agencies, supplier/distributor inventory management apps, and project management software like Autodesk.

On the consumer side, they are also heavy users of web apps including online commerce, doing your taxes through an online site like H&R Block, booking online travel with expedia.com and facilitating user generated media for online photo sharing and video sharing. An example of this would be Adobe's recently launched online version of Photoshop (Express). Akamai’s application acceleration technology also works with a wide range of application architectures such as service oriented architecture (SOA) applications where the communication is machine to machine with no browser rendering and Web 2.0 AJAX/FLEX class applications.

Another question people constantly ask me is how Akamai's application delivery service is priced and what it costs. I'm not sure yet of the cost as I need to collect more data from customers before I can talk real numbers. But I do know that the service is charged as a monthly subscription per functional application and that Akamai stated that most of their application delivery contracts are 24 months in length and include performance SLAs.

Some will say that hardware and software based application delivery products like those offered by Cisco, Citrix and Juniper will compete with Akamai for those who want to deploy it themselves. For a small percentage of customers, that is true, just like it is for those who may want to do their own video hosting or content delivery. But for the majority of customers who need application delivery, it isn't practical or in most cases even possible to put an appliance close to everywhere an employee, business partner and customer can access a web browser. By controlling both ends of the network (both near the data-center AND near application users), the optimizations Akamai provides to improve application availability and response times extend far beyond those which are limited to a footprint within the data-center.

Next week in part two, I will give examples of who some of Akamai's application delivery customers are and talk about the different types of content and applications they are delivering. Please add my RSS feed to your reader to get the new post as soon as it is up.

Note: As I have said before, I have never bought, sold or traded any stock in ANY public company, ever.

Akamai Confirms No Outage Of Their Web Acceleration Network

I've been getting a lot of calls all day regarding the coverage put out by Jefferies & Company this morning which stated among others things that Akamai's web acceleration outage "was down for a significant amount of time in Q1." Akamai has confirmed to me that this is not the case and the web app network has not been down at any time in Q1.

Move Networks Rasies C Round Totaling $67.9, Not $91.3 Million

Move Networks announced today that it has raised $46 million in a Series C round led by Benchmark Capital which includes Cisco and Comcast and Televisa, as well as previous investors Steamboat Ventures and Hummer Winblad Venture Partners.

While many sites, including TechCrunch, are reporting that Move Networks has raised $91.3 million to date, some bloggers are doing the wrong math. Move raised $11.3 million in 06', $10.0 million in 07' and $46 million in 08'. While many announced that Move had raised $34 million back in Q4 of 2007, this was not the case. Move raised no money in Q4 of last year.

The $67.9 million is still a large number, but a lot less than over $90 million. Move is an interesting company to watch. Last month I had the opportunity to sit down with Move's CEO John Edwards and was able to get a really great insight into their current business and details on what Move is working on with Microsoft. There are some really interesting things that Move is thinking about in terms of where content delivery is going, how to scale it and what the broadcasters are going to require. We should see some very interesting announcements from Move later in the year.

Open Letter To LinkedIn CEO Dan Nye, LinkedIn's Support Stinks

I hate to call out your company like this in a public forum, but enough is enough. It has been almost three weeks now that I have been trying to get access to my LinkedIn account, yet no one from LinkedIn's support department has been able to give me access. I've left messages twice in the past week for the media relations person listed on your website and have gotten no call back. I've traded nearly ten e-mails with your support staff with no luck. And to make matters worse, your support team tried to get me to change the password of someone else who has a linked in account with the same name, even after I told them I was not that individual.

All I want is to be able to login to my account. Support tells me that you don't have one on record for me and are telling to make a new one. They say you can't find my e-mail in the system and that I should make a new account. Ok, fine, if I have to make a new one I will, but when I try to create a new account I get an  error of:

There is a problem with the email address mail@danrayburn.com. Please contact Customer Service at customer_service@linkedin.com if you are the owner of this email address.

I've contacted your customer service who tells me that e-mail is not in your system and I should be able to create a new account with it, yet I can't. So Instead I try the e-mail of dan@streamingmedia.com and I get the same error message. When I tell support this, their response is "You could also try to join in as a new member." Didn't I just explain to you that is what I am trying to do? Ten e-mails later and still they are not listening to the problem I am having and it has been 19 days now since I sent in the first e-mail asking for help.

Why am I promoting LinkedIn on my blog by letting readers know about certain LinkedIn groups when this is the kind of support that is being provided? It took LinkedIn TEN days to contact me from the first e-mail I sent in asking for help and 19 days later, still nothing is solved. And why do you have a media relations person when they don't call back someone from the media who leaves them voice mail? I even said on the voice mail what the problem was and that I was going to blog about it if that is what it took but that I wanted to give them a chance to solve the problem first.  Still no call back.

So Dan I will ask you to please get involved and solve this. I would like to use my LinkedIn account, or if you can't find it, I would like to create a new one. That's all I am trying to do.

UPDATE: LinkedIn's media relations folks have contacted me and resolved the problem. Thank you.

Limelight Launches New Website, Includes New Focus On Enterprise and Government

Cruising some websites on Sunday I noticed that Limelight Networks launched a new website over the weekend. The new site contains a lot of video and has a lot more defined message around Limelight's core product offerings as well as their new slogan "deliver brilliance". The biggest piece of new content is the focus Limelight is placing on the ecosystem. A new section on their site talks to all of their partners for web development, transcoding, content management, ad insertion and various other solutions in the stack.

I've mentioned before that to me, Limelight was not previously doing a good job of really letting customers and the market know that they deliver more than just video. The new website address this by giving details on the types of content they deliver and how it applies to specific business problems for specific verticals. They also talk a lot more to object delivery, website acceleration, document distribution, online software fulfillment and online game distribution.

Additionally, Limelight has added new verticals on their site including corporate (enterprise) and government. Previously, Limelight had only focused on the media and entertainment market so the addition of enterprise and government is a new focus and potentially a new revenue stream for the company, if they can show some traction with customers in those new industries. It will be interesting to hear if Limelight has newly dedicated account managers to focus solely on government business, a segment of the market that Akamai has ruled to date, and whether or not Limelight is currently or will soon be a certified GSA vendor.

It's good to see Limelight begin to deliver a lot more messaging to the industry and I expect they will soon follow this up with specific messaging and new data for Wall Street. They know it is desperately needed and I expect they will address the need shortly. With most of the trial motions expected to be over within the next few weeks, I think we'll begin to hear a lot more from the company in regards to customers and product announcements. In addition, it makes the acquisition talks that are talking place more relevant since some of the questions around Limelight's appeal will be clearer. While I'd still like to see Level 3 make the acquisition, if Limelight gets acquired at all it's going to come from a telco like AT&T or BT. I'd be willing to bet anyone a steak dinner it won't be Akamai or Microsoft.

Disclaimer: Content delivery networks Limelight, Akamai, Internap, Level 3, EdgeCast, Ignite Technologies and NaviSite have all sponsored the blog or are current sponsors.

Level 3 Adds IBM's CDN Patents to Its Portfolio

I originally wrote this article last month which appeared on the GigaOm.com website.

Over the past few weeks, an ongoing patent dispute has meant most of the focus in the content delivery market has been on Akamai and Limelight. In the meantime, however, Level 3 has been quietly expanding its CDN services, adding capacity to its network and signing up one large customer after another. In fact, when it comes to CDN patents, Level 3 is the one to watch. In addition to the 50 patents pertaining to content delivery it has pending, Level 3 owns over 80 patents pertaining to content delivery and streaming media technology — including 20 it recently bought from IBM.

Level 3 and IBM last month said they’d signed a long-term patent cross-licensing deal whereby Level 3 gets licenses to 42,000 pending and issued patents from IBM and IBM gets licenses for more than 850 pending and issues patents from Level 3. What was not disclosed was that Level 3 also purchased 20 patents pertaining specifically to content delivery and streaming technology.

I’m about to put the finishing touches on a story detailing why Level 3 is not affected by Akamai’s 703 patent, so I’ve been doing a lot of research on CDN patents lately. Sifting through prior court rulings and patent filings, I noticed that the USPTO web site lists IBM as the owner of 20 patents pertaining to CDN and streaming. It also claims they’re in the process of being transferred over to Level 3. I contacted Level 3 and they confirmed this was indeed true.

Most of the patents date back to ‘97 or ‘98 and concern the way video, multimedia or digital content is delivered. Some of the patents have to do with encoding and processing, encryption, load balancing and methods for caching. There are also numerous references peppered throughout the patents regarding the best methods for routing traffic, how the media servers load balance the traffic and the effect that has on the end user experience.

While I still need to read the fine print of all 20 patents before I will truly understand the effect they may have on others in the industry, it’s already clear that Akamai isn’t the CDN its competitors should be worried about. Level 3 when they entered the market made no bones about the fact that for them or any other CDN to be successful over the long term, they’d have to have the intellectual property necessary to protect their investment in the CDN market. And with the acquisition of the SAVVIS assets — including the Sandpiper patent, which predates Akamai’s 703 patent — Level 3 is clearly in the driver’s seat.

Level 3 seems to be taking the same tactic as Akamai, to date filing suit against the only company they view as a competitor — also Limelight. And while some of the other existing CDNs could one day become competitors too, right now none of them are turning in more than 20 percent of Limelight’s total 2007 U.S. revenue. There is a huge revenue gap between the No. 2 CDN, Limelight (Akamai is No. 1), and No. 3. That gap needs to shrink and these smaller players need to start posting CDN-based revenue to the tune of $50 million a year before they will become worthy of concern.

Some don’t give Level 3 a chance. They say Level 3 has too much debt, is having problems integrating some of its acquisitions, or simply maintain that since it’s a telco, it won’t understand content delivery, anyway. But looking past the debt (which most companies have), and the mistakes other telcos made in the past (Qwest and MCI tried and failed to operate their own CDNs), Level 3 has a real shot at dominating the content delivery market for years to come. And given their massive portfolio of content delivery patents, if I was another CDN whose goal it was to give Limelight a run for their money, I’d be most worried about Level 3.

The numbers of the patents being transferred to Level 3 are: 5996025, 6189039, 6195680, 6226618, 6263313, 6272566, 6398245, 6418421, 6460082, 6463454, 6463508, 6587837, 6763377, 6859791, 6963910, 7103564, 7110984, 7117259, 7188085 and 7206748.

Majority Of Independent Content Producers Will Never Make Money

With all the talk of online video advertising and the projections people are making, one of the biggest downsides to it is that just about every independent content producer thinks they should be making money. But the reality it, most of them are not making any money today and never will, even year's from now when there are more eyeballs online.

Monetization is now the word that seems to be used in every discussion and in every article, yet rarely do we hear or read about any content producers who are making money from their content. We know of the success that some major broadcasters and those with very unique brands and content like MLB are having, but aside from those, there are very few content creators making any money.

One of the biggest reasons for this is that much of the content on the web today stinks. Not all content, but much of it is really bad, poorly produced and quite frankly, will never make any money no matter how much this industry grows. Content creators think that just because they can create content it must be worth something. When I speak to content creators I use the analogy of TV content. Lots and lots of shows are produced for TV yet many never make it. Only a small fraction of content on TV lasts and makes the networks any money. Now I know many will say that does not apply since the costs for TV style production is so much different than content produced for online, but the principle is still the same. Not all content is something people want to watch, let alone pay for.

Having a discussion with a content producer earlier in the week they said, "Media reviews of our site and customer feedback is very positive. Everyone thinks the idea is wonderful and they love the quality of the videos. We give website visitors two free views of the videos of their choice and then prompt them to sign up for a subscription. However, when it comes time to haul out the credit card to purchase a subscription the enthusiasm wanes."

The questions we need to be addressing are is the subscription-based approach working for anyone, or is sponsorship/ad-supported the only potential option for generating a reasonable ROI? Is the ad-supported model generating revenue for small producers who don't have tens of thousands of viewers per month? Does this revenue amount to anything more than pocket change? Must the small producer partner with a platform provider, e.g., Brightcove, in order to have a chance of success, or is it feasible to "roll your own" website realizing that most small players don't have ad sales staffs and experience in selling ads?

In the long run, the small content producer is still going to struggle to make any money from their content. Viral marketing, syndication and other forms of promotion can help, but not for the majority of those making video. Putting all of the business models aside I still think the biggest problem facing the industry is that there is not enough quality content on the web today.

The comments section is open and I'm sure many have their own take on the subject, so feel free to get the conversation going.

How To Monetize And Aggregate Niche Video Content

Over the next six weeks leading up to the Streaming Media East show in May I will be highlighting some of the speakers and sessions we have confirmed for the show. This year we have a lot of content producers, aggregators, new independent content studios and lots and lots of content demos.

One of the sessions I am personally interested in seeing is entitled "Monetizing And Aggregating Niche Video Content". The bottom line is that content creation is important but if the content is not promoted and does not generate revenue of some kind then this whole business model is broken. This session will show examples of ways to develop niche vertical sites without having to hire tons of new personnel and will discuss how to reach audiences on social networking sites like Facebook and others. Confirmed presenters are:

• Moderator: Steve Safran, Senior VP, Media 2.0, Audience Research & Development, AR&D
• Jim Louderback, CEO, Revision3
• Alex Blum, CEO, KickApps
• Herb Scannell, CEO, Co-Founder, Next New Networks

Six years since we took over the StreamingMedia.com business and we've still managed to keep the conference very affordable for everyone to attend. Registering before April 25th gets you a full two-day conference ticket for only $795.

Adobe Releases Flash Player For Downloadable Video

Today, Adobe announced the immediate availability of version 1.0 of their new Adobe Media Player specifically for content owners looking to make Flash video content playable offline. For Adobe, this is a major move to finally take the Flash video platform offline to allow viewers to consume downloadable Flash based content. As usual with an announcement like this, Adobe also announced a bunch of broadcasters and major content publishers including CBS, MTV Networks, PBS, CondeNet, and Scripps Networks amongst others.

One of the biggest things that Adobe is promoting about the new player is the ability for you to be able search within the player for free content you can to subscribe to and the new features for monetization and branding options. Content owners now have the ability to take downloadable Flash content and include offline advertising, customize the look of the player and collect measurement data of offline content consumption.

I just downloaded the player and have begun to check out some of the content available and so far, the player works as advertised. The one thing I have noticed however is that the quality of the videos are not what I expected. Many of them seem to be encoded at low a low bitrate with a small window size. Since they are not encoded with the same specs it makes the experience very inconsistent in terms of the quality. Not sure if this is the case just because it launched or not but I would think Adobe would want to set some quality standards that content owners would be forced to follow.

Adobe also announced the launch of a new portal called Adobe TV that provides instructional videos for many of the Adobe line of products and contains over 200 videos.

Highlights Of My Day In Cambridge With Akamai

About two weeks ago, Akamai invited me to spend the day with them in Cambridge to allow me to get an better insight into their business and give me the opportunity to ask management and others more about the market, pricing, application delivery and a host of various other topics. They nicely gave me access to over a dozen individuals including senior management in sales, marketing, engineering, product development, investor relations and their CTO.

Added Tuesday April 8th: Since I am being asked so many of the same questions I should put it on record that Akamai did not pay for my trip to Cambridge, I paid for my own plane ticket. And no, Akamai did not see this blog post before it went live and have to "approve it" as some are asking. And as I have said before, I have never bought, sold or traded any stock in ANY public company, ever.

While some of what we discussed was off the record, there is a lot that I can talk about relating to some new product functionality, sales and marketing topics and a lot about the market dynamics, trends and my take on what the opportunity is for Akamai in the market. With so much to cover in detail, I won't be able to cover it all in one post. I will give a run down of the highlights here and then over the next two weeks I will follow up with specific posts about their application delivery product, their StreamOS content management system, customer service, analytics, some details about the network and I will post their answers to some of the questions that readers sent in. Akamai is nicely working with me on the future posts to give me customer names, specific examples of how they are using the services and examples we can see in action. There will be more to come on that later this week.

After spending the day with Akamai, there were a couple of really key high-level feelings I walked away with. For starters, Akamai has a very_clear understanding of what customers want in the market across all of their product lines. When I was getting new product demos and talking about new functionality for their services, at no time was Akamai guessing on what they think customers wanted. It was very clear that they spend a lot of time talking with their customers, getting feedback, going through review sessions and finding out what they can do to help their customers grow. For every new product or feature they showed me, they also included examples of real customers using the service and talked about how it allowed the content owner to grow their business or gave them more control applying business rules around their content. Many companies I speak to in the CDN space talk about new products and services they are working on but many times I get the sense that they don't know exactly what their current customers future needs are. While Akamai is clearly working on what customers need today, announcements they will make throughout the year will showcase that they are also deploying products and services customers will need two and three quarters from now. The biggest thing I saw from Akamai was that they have a very clear understanding of the market they are in.

Another key takeaway for me was that Akamai realizes that as the leader in the space, they need to do a better job of communication data to Wall Street and to investors and need to spend more time to educate customers. That being said, Akamai's is not saying that they are now going to provide every piece of data a financial analyst wants, but I gave them some examples of how they could put out more specific data to the market while at the same time protecting their customers, and they are open to the idea. They know as the leader in the space they need to step forward and do a better job of showing the entire industry how this market is growing.

They understand that analysts are saying that they want to buy more stock in the company but need more data to be able to do that and they said they would provide more breakout on their business at their next analyst day. While I don't deal with Akamai on a day to day basis as it pertains to their P&L, I do deal with many money managers daily and hear the kinds of questions they want answered. I think that over time you will see Akamai be more open to disclosing more data on their business.

Tied closely into the data discussions is the subject of Akamai's pricing and the pricing trends in general which we covered in detail. I gave Akamai my feedback on their pricing, what I am seeing in the market and how they compare to other vendors specifically for video delivery. This was an interesting discussion as I learned that in many cases, Akamai may not be the right fit for customers who want commoditized services. When I gave Akamai examples of deals I have seen in the market and showed them that they were two or three times higher than competitors, they were not surprised. They made it clear that if a customer does not care about being able to use multiple services, doe not care about good analytics (not just reporting), does not require a good SLA, not concerned with geographic reach etc... then that customer is probably not a good fit for Akamai and they should go somewhere else at a lower price.

If there was one thing I walked away from after this meeting it is that Akamai is laser focused on customers who have business problems, need to apply their own business rules around their content, need very detailed analytics, need geographic reach, need multiple services and are trying to solve the entire ecosystem problem from creation to distribution. While they will gladly take customers who want the simple task of pushing bits, that's not who they are going after. For the most part, that is why the whole "pricing war" people talked about last year was completely overrated. Yes, Akamai may have to compete harder on price for those specific deals where the customer just wants to just push a lot of bits. But for customers who are looking for much more than that and also need additional services like application delivery, pricing is not the problem.

While I have always covered content delivery for video very closely, application delivery is now something that I am going to also focus on. In my eyes the biggest market opportunity for Akamai going forward is their application delivery product. While it is a market that is just starting out, I think that in two or three quarters it will become a very big opportunity and I think it is the most under-estimated product in Akamai's portfolio. I'll have more on that later in the week along with details on Akamai's StreamOS product, the content management system that was acquired in the Nine System acquisition. From the product I saw in action, which Akamai has been working on for the past year since the acquisition, and will have announcements about shortly, I have not seen another CDN that has a solution that can do even 25% of what StreamOS does. And as more content owners start to become more sophisticated in regards to the kind of transcoding, tracking, analyzing and monetizing they are going to need, StreamOS will quickly become a revenue center for Akamai.

Overall, I didn't see or hear anything from Akamai that gives me any indication that they are currently losing market share. Yes, for video delivery they have some competition in the market, but most of those competitors are still very small and don't have a wide product portfolio. And when it comes to doing more than just pushing video bits, Akamai clearly has a handle on the market today and more importantly the solutions that will be needed by these customers a few quarters from now.

I'll have more posts about my visit with Akamai shortly, so please add my RSS feed to your reader to get the new posts as soon as they are updated.

Apple's Latest Safari Browser First To Support New Video And Audio Tags In HTML 5

I'm not a designer or someone who deals with code, but since Apple released version 3.1 of their Safari browser, some are asking me if Safari's support for HTML 5 audio and video tags will change video experiences on the web. The new HTML 5 standard, which was released in January, is said to allow for built-in support of media without proprietary technology.

I honestly don't know enough about it to be able to say one way or another the impact that the HTML 5 standard may or may not have so I am interested to hear from others in the comments section who know more about this than I do.

P2P Vendors Struggling, CDNs Not Interested In Adopting

About six months ago, I was really convinced that P2P might start to get some traction in the new year and that we would see some content owners commit to the technology. But aside from the Pando Networks and NBC deal, as we enter Q2 not much has transpired from the end of last year. P2P networks are still talking up a storm in every interview I read about how much cheaper their pricing is as compared to CDNs and leading with price as the major value proposition. Most P2P companies are still missing the point that cost is not the only thing customers care about and if it was, then P2P networks would have a ton of business by now, which they don't.

Some are going to say that the announcements we have seen between P2P providers and the likes of Comcast and Verizon are a big deal, but those announcements are more for press than anything else. They are not creating any revenue for the P2P providers in the market, customers are testing the waters with P2P but not committing and most P2P providers are still all using the same marketing message and not distinguishing themselves from one provider to another.

Last year, I thought the biggest push that P2P might get would be from the content delivery networks. As much as some P2P providers think they compete with them, the fact is that P2P providers can't survive on their own. Around Q3 of last year, many of the major CDNs were investigating the purchase of P2P networks, white labeling a P2P based service, or re-selling one of the many existing P2P solutions on the market. Since that time however, the major CDNs have changed their minds and have done almost nothing with P2P. Limelight, Level 3, and Akamai all have no real interest in delivering a P2P based offering to the market at this time. They don't need the product today, the market opportunity is not big enough and even for a company like Akamai who acquired a P2P based company, you wont see a P2P based product from them anytime soon. Internap announced a deal to integrate Pando Networks P2P solution into their CDN, which was the first non-hybrid CDN to do such a deal, but since that announcement five months ago we have not heard of any customer deployments.

From what I can tell in the market, P2P is not as big of a story as it was at the end of last year. The topic has cooled off a bit except when its being discussed as it pertains to carriers blocking or filtering of P2P based traffic on their networks. Aside from that, customers are not asking me about P2P and 55.2% of those we surveyed about their content delivery needs said they did not plan to even look at P2P as a delivery solution for 2008. I hate to see how hard it is for P2P vendors in the market as I believe that the technology really does provide value to certain customers and with certain kinds of content. But until the CDNs start to offer P2P as just another one of the many ways they can deliver content, I don't see P2P getting any real traction anytime soon.

Digital Fountain Launches Beta Site For New CDN Offering

Digital Fountain's new streaming video CDN is now live with the recent launch of its DF Splash Beta website. The new website gives an overview of their CDN offering, provides live demos of their solution and is open for visitors to join their beta program to add streaming video capabilities to their own web sites. One temporary draw back right now is that the demo requires you to download a plugin that only works with XP but I'm being told that will only be for a few weeks longer. Since I'm on a Mac, I can't say what the quality looks like so I hope others will take a look and post what they think about it in the comments section.

Details On My Trip To Akamai Coming Soon

I appreciate all of the calls and e-mails I am getting from those who want to know how my trip to Akamai week last went. Spending a whole day in Cambridge gave me a great insight into Akamai's business and they were really open and helpful in showing me many of the things I wanted to see. I have quite a lot to write about and hope to have my first post up later today or tomorrow.

Give Feedback On Your Reporting Needs: Earn A $100 Amazon Gift Certificate

Following up on my post about customers needing better reporting and analytics, Skytide, a sponsor of this blog, is interested in doing 30 minute calls with customers to get their feedback on what additional metrics and features content owners want to see in the market. They would like to hear the pain points customers are having today and they are offering a $100 Amazon gift certificate as compensation for your time.

If you are interested in giving some feedback about your reporting needs and what is missing from the market today, they'd love to speak to you. Those interested can contact Lynn Anderson directly at Skytide.

Reporting And Analytics Number One Complaint Of CDN Customers

Of the 1000+ customers who took our CDN survey and were asked "What value added services are you willing to pay a premium price for", over 75% of them said something having to do with better reporting and analytics with the most common answer being something along the lines of "Better reporting - and did I mention better reporting!!!"

So it will come as no surprise that analytics and reporting was also the number one answer when we asked "In your opinion, what is the one thing your CDN needs to improve on". While most CDNs I speak to know how big of a deal reporting is, very few seem to be taking the issue seriously. Much of what customers are getting today in terms of data is very basic and is at most, raw data that is presented to look pretty but with no analytics to tell them what the data means. I know that some CDNs will say that reporting and analytics is hard as the log files they are dealing with are so big and that many customers have custom reporting needs. That is true, but there should be some base line minimums, and when many CDNs reporting interface can't even tell a customer during a live event how many simultaneous streams they are doing, the basics are missing.

Looking over the survey data, here were some of the most common comments from customers:

• real-time reporting for live events
• analytics reporting is technical only, not enough marketing oriented
• reporting based on geographic region
• reporting based on sub-accounts
• monitoring/analytics APIs
• self service reporting tools have a terrible interface
• access to geographical based reporting, such as the map in Google analytics to determine local advertising impact
• analytics for Flash content
• providing metrics in a timely fashion
• looking at how long each video is played on average, are people dropping half way through?
• Analytics a little bit limited, e.g. can't choose custom time frame (3 day for instance), also the reporting does not translate UTC to our local time
• Reporting over longer periods of time (currently only 6 months)
• detailed user analysis (who watched what for how long from where)
• an API for accessing and displaying the tracking data, so that I could create my own "dashboard" to show real time stats
• I would like an API where I can get raw metrics to feed into our internal report structure. We use several CDN's and each has their own reports. We spend too much time translating data to produce a single comprehensive report.
• reporting and analytics and the ability to parse it out by stream/customer
• push default reports I want to me, rather than me have go get them
• views per day, views per geographic location, length of each view then an aggregate % per day

From all the customers I speak to, the feedback I have heard is that Akamai and EdgeCast have the best reporting products in the market. That's not to say that others may not also have a good functioning products, but those two are the ones I hear the most compliments about from customers. I think every CDN in the business should have a real reporting account on their homepage that anyone can log right into so that you can see first hand what their reporting and analytics package looks like. Too many times customers tell me that when they ask about reporting, most CDNs send them a product sheet with some screen grabs of the interface.

Reporting, and more importantly analytics, needs to get better a lot faster. Customers have to be able to show the value in these services, measure their success and justify why they should spend more money to deliver more content. While I see many of the CDNs all going to the market with the same message about performance, reliability, high-quality etc.... most of which don't really mean anything to a customer anymore anyway, why not create a really good analytics package and use that as your go to market message? It would stand out from the rest of the commodity marketing terms CDNs use, would resonate well with customers and is a functionality of the service all customers need.

VeriSign To Sell Kontiki P2P Division: Rumored Price Around $40 Million

VeriSign is expected to sell its Kontiki P2P division this month to a group that has been previously involved in the company. Barring any last minute problems, the deal should be closed and announced in the next few weeks. Whether or not they will keep the Kontiki branding remains to be seen but they are expected to re-focus their offering to target the enterprise market. While VeriSign won't comment on the sale, the "rumored" buy back price people are circulating in the industry is around $40 million, which would be about 3x revenue.

Job Openings: Akamai, Level 3, BitGravity, Panther Express, EdgeStream, Limelight, WorldNow

In the past two weeks, I have received over 100 job openings from many companies in the online video industry. In particular, the CDN vendors have many openings which really comes as no surprise considering that nearly all of them are flush with recent capital and are expanding their sales and engineering groups. Since I can't possibly highlight all of the open positions, I have decided to highlight a few of the ones below and provide links to where all the openings are listed. In the order they were sent to me:

Akamai: Has multiple job openings in San Diego, Cambridge, San Mateo and New York for Senior Software Engineers, Technical Project Managers, Senior Solutions Engineers, Major Account Executives, Systems Administrators, and Quality Assurance Engineers. You can see all the details on Akamai's job openings on their website.

BitGravity: Has openings for Director of Engineering, Live Broadcast Engineer, Flash Developer, Director of Operations, System and Support Engineers, Director and Manager of Product Marketing, Inside and Outside Sales Reps, and Sales Engineers. You can see all the details on BitGravity's job openings on their website.

Limelight Networks: Has job openings in Arizona for Strategic Account Managers, Account Executive and Operations Technician. They also have one opening for a Account Executive in London. You can see all the details on Limelight Networks job openings on their website.

EdgeStream: Has job openings for Senior Sales Executives in Los Angeles, San Francisco and New York. For more details contact Rajeev.

Panther Express: Has job openings for Sales Executives, Sales Engineers, Senior Software Engineers, Quality Assurance Engineers and Customer Support Engineers. You can see all the details on Panther Express job openings on their website.

Level 3: Has many job openings which you can see on their website including a Streaming Product Manager based in Denver and several Operations positions. They also have an immediate need for  Account Directors and anyone interested in that position should contact Mary at Level 3 directly.

WorldNow: Is looking to fill two openings. A Vice President of Video Technology and Senior Director of Video Technology. Anyone interested in the positions should contact Su Ming.

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.