Akamai's HD Announcement: Lots Of Buzz Words, No Details On Price

This morning, Akamai announced what they are calling the "Akamai HD Network", and will, as expected, now be able to support Flash via a new HTTP based video platform. While Akamai also mentions Silverlight technology and the iPhone platform in the release, delivering that content via HTTP is something they were previously able to do.

While there is a live webcast today at 1pm ET to showcase the new offering, if Akamai does not lower their pricing for this new platform, it won't do anything to help their business grow. Watching video in HD quality is nice, but most content owners are not putting their content in HD today due to the added cost, not because of any technology limitation. The problem is cost, not scale, distribution or the CDNs not being able to support it.

Lets say a content owner is spending $5k a month right now to deliver their content in non-HD quality, encoding their content at around 500Kbps. Now they want to go to HD quality and have to start encoding their content at 1500Kbps. Overnight, the content owner has just tripled their bandwidth bill, without doing any additional traffic. While some might say that tripling the number of bits being delivered would get the customer a lower price per GB delivered due to more volume, for a $5k a month customer they might see a savings of 10-15% at most. Yet that's not going to make up for the 300% increase they just saw in their monthly bill.

Akamai knows this will be the number one question of content owners, yet there is no mention of it at all in the release. Instead we've got lots of marketing hype like "first platform to deliver HD video online to viewers using Adobe Flash technology, Microsoft Silverlight, and to the iPhone, at broadcast-level audience scale." Really? Defined how? Both Limelight and Level 3 support this, in fact, Level 3 has been supporting HTTP based Flash video delivery via a plugin their wrote for their caching network that ties into FMS 3.5 for some time now. They have been doing this before Akamai. So if Akamai is saying they are the "first" to have this, that's just not accurate. Now they may be saying they are first to have this at "broadcast-level audience scale", but don't define what that means.

The release then says they have the "only solution" and that they have a "first-of-its-kind streaming platform" that "enables content providers to deliver more HD content than previously possible." More marketing buzz words with no definition. And based on Akamai's release, I'm confused as to how they are comparing the experience. Early in the release they say the solution supports an "online experience that matches and complements HD television, " but later in the release Paul Sagan's quote says, "HDTV-like experience". Well what is is? Does it match HD television or not? Honestly, it does not matter. That's all marketing non-sense.

What will be interesting to find out is just how much Akamai is moving away from using Adobe FMS 3.5 servers. While Akamai may have done something like Level 3 did, coming up with a way to deliver Flash video via HTTP in conjunction with FMS 3.5, they also might have totally abandoned Adobe servers for the vast majority of this solution, which would not be good news for Adobe. While Adobe has a quote in the release, it's very generic since today, the Adobe server does not support HTTP streaming. Adobe's own server platform is basically getting passed over by CDNs who are developing and deploying their own technology to make up for what FMS is lacking, which is not a good thing for Adobe.

Whenever I read a release of any new product offering in the market, I try to think of it like a customer would. The release should tell me why I need the offering, what the value is, how it impacts my business and what it's going to cost me. While most releases don't include pricing, I'm willing to bet that during Akamai's 1pm webcast, they won't give out any pricing details at all on the new service. And with customers already knowing that Akamai's CDN is expensive, without them getting out in front of the pricing question, this release will mostly fall on deaf ears.

Comments

[Tim Hart]

Dan, Who talks price specifics in a press release? Who else is putting a dedicated package together? Akamai is not abandoning Adobe,they will benefit. Limelight and Brightcove are still trying to figure out Flash 3.5- no HTTP. What about multimedia fingerprinting? EPIX,etc. How will this impact Netflix?

[Tim Hart]

Dan, Why don't you ever talk Akamai's value and their cutting edge research? They know that not everyone values their positives but most of the highly successful companies do.

[Dan Rayburn]

Who talks pricing in press releases? Smart companies who know that will be the number one question for this service. Akamai does not have to give numbers, but could say that they will lower the price since their internal cost will go down. That's a great story to highlight, something customers would understand.

Dedicated package? What does that mean? Please define.

Why would this impact Netflix? Netflix is not a customer of Akamai for video. Netflix uses Limelight and Level 3.

[Dan Rayburn]

@ Tim: You say, "most of the highly successful companies" value Akamai. Yes, many do, but many don't, as we have seen from their recent decline in CDN revenue. There are also many "highly successful companies" who don't use Akamai at all for CDN.

If you read my blog, I have highlighted many times Akamai's real strength, that being the value add services they define as things like app delivery etc....

As for their "cutting edge research", I don't know what that means. I care about products out in the market for sale, not what is going on behind closed doors that may never make it out into the market. How many years did we hear all about the Akamai patents, and their value, yet they did not hold up in court. So I care about reality, not something that may not come to fruition in a research environment.

[Tim Hart]

May be pricing and specifics will be discussed at the press conference: Press conference to unveil the new technology and demo at 1 p.m. EST today; register at www.akamai.com/hdnetwork - will you be attending? or asking questions?

[Dan Rayburn]

Yes, I will be attending, but most content owners won't. So if Akamai is willing to address the pricing issues in the webinar, which I was told by Akamai was "press only", but not in a press release, which is what most content owners will see, then something's wrong with that strategy.

[Gad Stanislas]

More and more companies use H264 one of the reason is that it use less bandwidth ... So should be cheaper if you use a standard CDN to push HD.

[Dan Rayburn]

@ Gad: I think you are confusing storage space, with bandwidth. Yes, H.264 takes up less hard drive space than say a file encoded in VP6, but when it comes to delivering the video, it's delivered in whatever bitrate it is encoded for. So a 300Kbps file in H.264 delivers the same amount of bits as a video encoded for 300Kbps in VP6.

[Streamingguy]

Sagan constantly beat on Akamai's "last mile" advantage. I would think this is a disadvantage when it come to HD content. For all but the MOST highly demanded content it must cost a fortune to distribute and store it to those thousands of servers. Also who says that Akamai gets access to the "last mile" of most ISPs? Even if they did get to co-locate with the largest of the ISP networks getting close enough to the last mile in North America is not feasible with a couple of thousand servers. Is this just more marketing spin?

[Tim Hart]

THey did answer the question about cost and Adobe

[Dan Rayburn]

@ Tim: They did? They said, "we've made a large investment in our HD network to minimize the impact of the cost on our customers". What does that mean? No where does that answer the question on cost.

[Noam Lovinsky]

Dan,

Maybe I'm missing something, but this announcement has nothing to do with streaming over HTTP. All Akamai is showing is progressive download delivered via HTTP to a Flash Player. If you look at the activity over the wire, Akamai measures your bandwidth once and then starts sending you a giant file depending on the results. It doesn't even switch midway on Flash the way it does on Silverlight. This is very similar to what BitGravity does with live streams.

In general, delivering via HTTP to Flash is old news right? A number of companies (e.g. Move, Ooyala and Episodic) deliver an adaptive experience via HTTP and Flash and we all do so by simply chunking the files into smaller segments and switching along the way.

Now if Akamai was using FMS via HTTP instead of RTMP, we'd have something worth noting. As you've mentioned before, there are rumors that Adobe may abandon RTMP with FMS 4.0 and just go straight HTTP, but my understanding is that this is far from complete and certainly not ready for any commercial deployment.

Again, I may be completely wrong here, but that's my understanding. Would love to get your thoughts.

[Dan Rayburn]

Hi Noam, this is not just a video being delivered via progressive download, that Akamai has been doing for years.

This is delivering Flash streaming via HTTP and using adaptive bitrates which do switch during the playback. During the webcast, my bitrate switched many times and I was watching using the Flash player.

Like you point out, this chunked encoding method is what Move Networks has been doing for years, but with Move, it required their plugin to be installed as opposed to the user simply having to have the Flash plugin, which needs to be at least version 10 in order to work.

Not sure the reference to Ooyala since they use Akamai for delivery. The platform providers use third party CDNs so they don't actually do any of it themselves.

Level 3 has this function but they did it by creating a plugin to the FMS server that ties into their caching network. Akamai on the other hand create this outside of their FMS deployment.

[Gad Stanislas]

@ Dan - Agree but I was refering to customers being charged per GBs and not 95Perentile. So customers like 5mins.com are using progressive downloads and are charged in GBs. For real streaming you're right.

[grinsandfun]

Price, price, price, price... why is it always about price? Maybe since there are no differentiators between the CDN's and it is about price?

Consistency is a key to success...

BTW - I hear that Akamai has recently changed it's position on Blue Content... and signed away one of the Top 5 global CDN's customers away......(over 10 G of sustained video) wonder how many others will follow... and it sounds - especially since I have seen how the customer above negotiates - that Akamai is willing to play on price, if you can negotiate the right way...

[Noam Lovinsky]

Dan,

Perhaps this is just a bit of confusion of terms. When I say "streaming," I'm talking about RTMP, RTSP, etc. What Akamai is doing is still a progressive download from what I can tell. They're clearly not using FMS from what I can tell so we don't have FMS-type streaming happening over HTTP here as far as I can tell.

It may indeed be adaptive, but that would mean that during the live stream Akamai was either doing chunking or the variable bitrate support in the H.264 encoder in the Flash client was good enough to switch bitrates. Ignoring whether it was adaptive or not, my main point was that this isn't FMS style streaming over HTTP. That would be huge and that's not what I'm seeing here. Granted, I could be completely wrong, but I'm sure you'll let me know. ;-)

As for the comment about platform providers not doing this themselves, that's actually inaccurate. Episodic is a platform provider and when a customer wants adaptive bitrate playback over HTTP, we use any CDN and we do the chunking ourselves. This simply permits the player to request different bitrate chunks depending on the QoS reporting coming from the player. The CDN has nothing to do with this. They just host all those chunks on the edge, but those chunks are produced by Episodic and the Episodic player decides how and when to grab them. Ooyala does a somewhat similar thing. Move obviously invented this method, but as you point out both Ooyala and Episodic don't require a plugin.

Love to hear your thoughts...

[Dan Rayburn]

From what they spoke of, the way I understood it, they are doing FMS style streaming, via HTTP, without the FMS servers. If I'm not understanding it properly, I'd love for Akamai to make it clear, but so far, they aren't giving out any more details or answering questions about it.

If we are talking about the delivery of bits with Akamai, then it's not fair to compare that to what you Ooyala do as you're not delivering the bits. I do see your point that you are the ones chunking the video, but the delivery comes from the CDN. So I don't think you can compare one company that does the encoding, to another company that is doing the delivery.

[Noam Lovinsky]

Dan - Completely agree. I wasn't trying to make a comparison, but yes you're correct. Obviously none of us platform vendors do our own delivery.

If Akamai is doing FMS style streaming via HTTP without FMS, that is certainly something interesting. I'll dig deeper myself and let you know what I find.

[AnotherOne]

@Noam:

Akamai has clearly entered into your business. HTTP as the video protocol whether you call it chunks, streamlets etc. is now commodity. Specific to Ooyala; you should be more concerned about their tools than what Akamai is up to. Episodic.com is lacking a lot of valuable information that would define for any buyer "what" it is your company does. If you all are yet another CMS/ Asset Mgmt. company in what is a very crowded space targeting media good luck. I'd also keep a very close eye on thePlatform.

[Shane Beard]

Noam,

Why would my computer be trying to send my Credit Card PIN to your computer at an Akamai Technologies IP Address?

[hayvancılık]

And with customers already knowing that Akamai's CDN is expensive, without them getting out in front of the pricing question, this release will mostly fall on deaf ears.

[duşakabin]

Asset Mgmt. company in what is a very crowded space targeting media good luck. I'd also keep a very close eye on thePlatform.

[forex]

BTW - I hear that Akamai has recently changed it's position on Blue Content... and signed away one of the Top 5 global CDN's customers away......(over 10 G of sustained video) wonder how many others will follow... and it sounds - especially since I have seen how the customer above negotiates - that Akamai is willing to play on price, if you can negotiate the right way.