Akamai Loses Some Hulu Traffic To Level 3 and Limelight Networks

Over the past few days, I've been tracing the delivery paths for a bunch of online video sites on the web, including large and small sites. When it comes to tracing video content from Hulu, historically, everything I saw was always coming from Akamai. But lately, it's clear that Hulu has moved to a multi-vendor strategy and is now also using Level 3 and Limelight Networks for some of their video delivery.

While I don't know what percentage of video traffic has shifted away from Akamai and over to Level 3 and Limelight, it's not a small amount. When tracing content via Hulu's desktop client, 100% of the traces showed Limelight as the provider. I've also noticed that syndicated Hulu videos to other third party sites is being done by both Limelight and Level 3.

And on the main Hulu.com site, content I traced like The Simpsons and 30 Rock was all coming from Level 3's network. Why Hulu would switch from using one provider to at least three providers is not known and with Akamai getting aggressive on pricing, like we saw on the Netflix deal, my initial take is that it's not about price. Hulu is known for having some very strict internal comparison metrics for content delivery, yet we know that they will never make those details public or discuss whether or not delivery performance was a reason for them moving to multiple vendors.

Hulu has also seen a lot of traffic growth, so this could be their way of simply moving to a diversified delivery strategy or maybe an exercise to see what the other CDNs have to offer. I know Hulu had been testing with both Level 3 and Limelight as far back as mid last year, but clearly they are no longer in a testing phase and are passing some serious traffic now with all three vendors.

CDN Vendors Raising More Money, Funding Announcements Coming Shortly

In a two-year time period between 2007 and 2008, CDN vendors raised more than $400M dollars to enter or expand their offerings in the content delivery industry. Not surprisingly, last year we saw almost no funding in the CDN space since the "rate" of traffic volumes slowed and pricing declines kept most vendors from growing their delivery business. With initial projections for 2010 pointing to a better year for CDNs, some of them have taken the opportunity to raise large rounds of funding which will be announced over the coming weeks. While some on Wall Street are already talking about the deals, I'm not giving out any details on the companies or the funding amounts, but I will say that I know of three CDNs who will announce funding deals over the coming weeks.

Moderator Wanted For Streaming Media East Panel On Mobile Video

On Monday we'll be sending the final program for the Streaming Media East show in May to the printers. Normally I would have a bunch of speaking spots I would still be looking to fill last minute, but this year, I got so many speaking requests and many of my moderators did such a good job inviting speakers that right now, I only have one spot I'm looking to fill.

On Wednesday, May 12, 2010 we have a panel entitled "Going Mobile: Is Portable Media Finally Here?" with speakers from ESPN Mobile, the Symbian Foundation, Motorola and Qualcomm. I'm looking for someone who specifically covers the mobile space who wants to moderate the session and is neutral when it comes to the topic. The moderator needs to have first-hand experience with using video on mobile platforms and have a good grasp of the business and technology issues at hand. If you're interested, please send me an email ASAP. Here are the details on the session:

Wednesday, May 12, 2010 - - 11:45 a.m. - 12:30 p.m.
Going Mobile: Is Portable Media Finally Here?
With the latest iPad, iPhones, Blackberry's and Palm Pre's focusing on video applications, is portable streaming finally getting ready for prime time? How is the streaming industry developing and repurposing content for mobile streaming and what will the business models look like? What will drive the adoption of mobile internet usage, and what are consumers willing to pay? Come hear what opportunities exist today for content owners and operators, as well as how the business of mobile video will change in the future.

Language In The DMCA Limits How ISPs Can Cache Content On Their Network

While most ISPs have been slow to build and deploy their own CDNs, we all know that it's only a matter of time before many of them bring content delivery in-house, especially for video. While third party CDNs still get most of the press, there are quite a few vendors with solutions in the market that are enabling telcos and ISPs to become their own content delivery network. To date, we've seen very few ISPs and telcos in North America spend the time and money to build out their own CDN, yet in Europe and Asia, many ISPs are well on their way to having completed their initial build out.

Talking to many of the vendors who supply hardware and software solutions to the ISPs, the vast majority of their revenue comes from Europe and Asia, not North America which validates the trend that so far, ISPs in the U.S. have been slow to adopt an in-house model. While discussing these trends with a supplier yesterday, it was pointed out to me that the Digital Millennium Copyright Act (DMCA) includes language that tells service providers exactly how they can and can't cache third party content on their network, without the need to have any kind of deal with the content owner.

I had not looked at the DMCA in many years, but sure, enough, section 512b entitled "Limitation for System Caching" outlines the rules ISPs must follow. The limitation applies to acts of intermediate and temporary storage, when carried out through an automatic technical process for the purpose of making the material available to subscribers who subsequently request it. It is subject to the following conditions:

• The content of the retained material must not be modified.
• The provider must comply with rules about “refreshing” material— replacing retained copies of material with material from the original location— when specified in accordance with a generally accepted industry standard data communication protocol.
• The provider must not interfere with technology that returns “hit” information to the person who posted the material, where such technology meets certain requirements.
• The provider must limit users’ access to the material in accordance with conditions on access (e.g., password protection) imposed by the person who posted the material.
• Any material that was posted without the copyright owner’s authorization must be removed or blocked promptly once the service provider has been notified that it has been removed, blocked, or ordered to be removed or blocked, at the originating site.

In a conversation I had with two ISPs this morning, both of them stated that the language in the DMCA does not deter them from building their own CDN, but does create an additional headache for them when they do decide the market is big enough for them to bring video delivery in-house. While every company has their own interpretation of what is considered a "big" market and the right time to enter it, one has to think most ISPs won't be able to wait too much longer.

Outside of the U.S., European based ISPs also have to follow a set of rules as set forth in the EU European E-Commerce Directive which also lists specific rules pertaining to caching systems.

While I don't think the DMCA is stopping ISPs from building and deploying their own CDNs, some of them clearly see it as another headache to bringing content delivery in-house and putting the systems in place that are necessary to comply with the DCMA. As more ISPs build and deploy CDN systems, it's going to be interesting to watch what impact the DMCA could have since the ISPs will be taking content from third parties, without their permission, and caching it on their network.

Bandwidth Isn't Free, Distribution Isn't Free, So Why Should Content Be Free?

As the cost of delivering video continues to get cheaper every year and video syndication to devices and platforms continues to grow, it seems more and more people are under the impression that access to premium video content should be free. Frankly, I don't see where this idea of "free" comes from. Video content costs money to produce, to distribute and to consume. Yet even with those costs, many seem hell-bent on the idea that business models can somehow survive based on the consumption of free video content supported solely by an ad model. But in reality, that simply can't happen.

If people are not willing to pay a content owner for their content, then it's not worth anything. That's the bottom line. Non premium content and some niche focused video might be able to survive on an ad only model, but even that would be rare. YouTube is a great example of this. While there's been a lot of talk over the past 24 hours surrounding the details being released from their lawsuit with Viacom, we've always known that since the beginning, YouTube built a large portion of their business from displaying premium content from third parties, without permission. But years later, even with all the insane amount of eyeballs YouTube has, the business is not profitable based solely on an ad model. Not to mention, YouTube is only monetizing about 20% of all their video views. It's no wonder that they along with Hulu are trying to move to a model where consumers pay for access to premium content.

Another topic that seems to be confusing some folks is the price of bandwidth and the rapid pricing declines we're seeing each year. While it's true that the cost of distributing video over the web is getting cheaper by the day, it will never be free. I'm now hearing some people in the industry saying that one day soon, delivering video will be so cheap that content owners won't even think about the costs. What world are these people living in? It cannot be debated or even argued that there are no fixed distribution costs when it comes to online video. Cable and satellite distribution methods have fixed delivery costs, video over the Internet never will. Any video business model that relies on generating revenue only from ads is fooling themselves if they think they can sell enough ads to keep up with their skyrocketing distribution costs every time their traffic grows. That's simply not the way distributing video outside a closed network works.

Why so many in the industry are so quick to bash subscription based video models makes no sense to me. When HBO came out with their HBOGO service, too many folks were quick to point out that it was behind a walled garden and that as a non-HBO subscriber, they would not be able to get it. That's exactly the point. Why should HBO simply give away their content for free, knowing that ad revenue alone won't make it a profitable business? HBO is smart not to offer a service that they know will lose money yet some chide them for it. Why do so many people seem to think they have the right to get all of their video content for free simply because the Internet is an open platform?

Of course many times, the argument that comes up is that people won't pay for something once it's been given away for free. That may be true, but if we look at some of the most successful content models on the web today, like MLB.com, they are from companies that never gave away their content to begin with. And why should they? Their content is worth money, the experience they provide is compelling and as we have seen for years, consumers think the content is worth paying for. While it's good that the Internet has opened up video distribution to anyone, it's also created the false assumption that all content is worth something and that all content owners will one day make money simply by running some ads with the content. For most content owners, even the big ones, that day simply won't come.

Free Product Giveaway: Six Slingbox PRO-HD Units Up For Grabs

While the industry argues over what TV Everywhere should look like, consumers like me who have a Slingbox already have a true TV Everywhere solution. With Slingbox, you can access your full linear TV lineup wherever you go from your computer or mobile device. Simply put, for TV Everywhere, nothing beats a Slingbox.

And thanks to the very generous folks at Sling Media I have six Slingbox PRO-HD units to give away to some lucky readers of my blog. I'm going to raffle off the units one at a time over the next few months so here's your chance to win the first one. Just leave one comment on this post with a valid email address saying how you will use it and I'll pick one lucky winner at random on April 1st. You must have a U.S. postal address as I will not ship these overseas. HUGE thanks to Sling Media for the boxes!

Adobe Preparing To Launch Multicasting Support For Flash

Back in October, Abobe announced a really long list of new functionality that would be supported in Flash Player 10.1, due out sometime this year. One of those features would be the long awaited support for multicasting that is essential to the way many enterprise organizations deliver video. While music, movies and game content delivered over CDNs in a unicast model still gets all the press, many Fortune 500 corporations delivering video inside their firewall have been relying on multicasting for years to support really large audiences.

One of the main reasons Microsoft still dominates the enterprise and government markets is due to their long history of having multicasting functionality. Two years ago I wrote a post talking about how I was seeing Adobe trying to push into the enterprise market to displace Microsoft, but without multicasting support in Flash, their success in the enterprise market has been limited.

Last week, I had the chance to speak to a few content owners who have been testing the multicasting capabilities in Flash and from other industry people I have spoken to, Adobe pretty much has it ready to go. The exact date Adobe plans to announce multicasting support is still unknown, but since Flash Player 10.1 is expected to be out in the first half of this year, we should expect to see multicasting support available sometime in the next three months.

Once that happens, it will be interesting to see how Adobe targets the enterprise vertical and if they can take any share away from Microsoft. Multicasting support will be a big step for Adobe, but their success is also going to come to down to their server licensing model and whether or not they make it cheap enough for a company to deploy. If Adobe thinks they can keep the licensing costs high just because they are selling into a "enterprise" company, that would be a big mistake since all Fortune 500 corporations are trying to do more with less. Functionality and features are important, but Flash will only just be catching up to Microsoft, no surpassing them with multicasting, so customers won't pay more for functionality they have already had.

Save The Date: Online Video Networking Event In NYC, May 10th

On Monday May 10th, we'll be teaming up with the NY Video Meetup group to once again host their monthly event at the Hilton Hotel in midtown, the night before the Streaming Media East show opens. Last year we had over 500 attendees watch six promising local online video startups demo their products followed by networking at the Bridges Bar in the lobby of the Hilton hotel. This will be a packed event and we'll open up the website for RSVP and give out more details closer to the event.

Test Results Published Show Flash Is Not a "CPU Hog" Like Apple Claims

There's been a lot of discussion on the blogsphere over the last few weeks due to Steve Jobs being quoted as saying one of the reasons Apple won't support Flash video on the upcoming iPad was due to Flash being a "CPU Hog". Apple's workaround to Flash video is to use HTML5 and that encouraged some to even suggest that HTML5 would kill off Flash, which couldn't be further from the truth.

But rather than debate this topic, Jan Ozer, a technical writer for StreamingMedia.com and encoding guru, decided to spend the time to actually test Flash versus HTML5 and published all of his testing methodology and results on his blog. While you should check out his entire post to see all the details, here are some of the highlights of what he says.

When it comes to efficient video playback, the ability to access hardware acceleration is the single most important factor in the overall CPU load. On Windows, where Flash can access hardware acceleration, the CPU requirements drop to negligible levels. It seems reasonable to assume that if the Flash Player could access GPU-based hardware acceleration on the Mac (or iPod/iPhone/iPad), the difference between the CPU required for HTML5 playback and Flash playback would be very much narrowed, if not eliminated.

Overall, it's inaccurate to conclude that Flash is inherently inefficient. Rather, Flash is efficient on platforms where it can access hardware acceleration and less efficient where it can't. With Flash Player 10.1, Flash has the opportunity for a true leap in video playback performance on all platforms that enable hardware acceleration.

Apple complaining about Flash being a CPU Hog while not exposing "the appropriate hooks" to enable Adobe to access hardware acceleration seems disingenuous at best. To be fair to Apple, though, the iPad related timing was unfortunate, with the bulk of the development work done under the shadow of Flash Player 10.0, which didn't offer hardware acceleration other than full screen on any platform and was clearly less efficient than the HTML5-based approach Apple adopted. Now that Adobe has proven the concept on Windows, perhaps Apple will cooperate with Adobe to make hardware acceleration on the Mac, iPad and future devices happen. If they choose not to, however, they should quit pointing fingers at Flash.

You can see all of the testing results and numbers on Jan's blog here.

Cisco Preparing To Launch New Flip Cameras

Last week someone sent me specs for new Flip cameras Cisco is preparing to launch around the NAB time frame. While I've been able to confirm that new cameras are in fact on the way, I have not been able to verify that the specs I have been sent are completely accurate, so I'm not going to publish them. But keep an eye out on my blog over the coming weeks as I'll make sure to do a review of the new units as soon as I can get my hands on them.