Analysts Data On The Size Of The Content Delivery Market Is Completely Flawed
When it comes to many facets of this industry, there are many data points missing, the biggest of which is reliable metrics and analysis that is backed up by real data. I am constantly getting copies of research reports from analysts and research houses that give size of market numbers for a particular product or service which is based on no data or completely wrong data. Yes, I know much of it is a guessing game when it comes to predicting numbers based on growth and trends, but there is enough hard data out there today when it comes to content delivery that would allow you to see the size of the market today and estimate the size of the market for 2008.
One of the questions I am always asked is what is the size of the content delivery market for outsourced hosting and delivery as it pertains to audio and video, both downloading and streaming. The answer is simple – no one knows exactly as the majority of the delivery networks do not give revenue numbers or break out their revenue based on their product line. Yet, research houses continue to put out reports that they want you to spend thousands of dollars on that are complete junk.
While reading a story on TVover.net about "Content Delivery Networks Gear Up for the Online Content Surge" there is a reference to a report from Frost & Sullivan that says, "New analysis from Frost & Sullivan, World Content Delivery Networks Market reveals that revenues in this market totaled $0.50 billion in 2007 and is likely to reach $2.50 billion in 2013." Am I the only one that finds something wrong with the idea that the report says how much revenue was done in 2007 when the year is not even half way over yet? Mind you, this from a report that costs $6,000 for a single user license and does not say what the $0.50 billion number is comprised of or like others, does not spell RealNetworks correctly.
Then I go and read a story on Forbes that says "Limelight and competitors like Akamai Technologies, Level 3 Communications and Internap Network Services collectively generated about $600 million in revenue last year from their content delivery services, according to Accustream Research."
Say what? Level 3 did not provide any content delivery services at all in 2006. Level 3 didn’t complete the acquisition of the SAVVIS CDN assets until January 23rd of this year. So how is Level 3 even included in the list? And Internap didn’t complete the acquisition of VitalStream until February 20th of this year. So that should say VitalStream, not Internap. Internap did not have any revenue associated with content delivery for 2006.
Later in the week The Week of the 21st, I am going to detail in a blog post what the real size of the content delivery market was last year and share with you the data I use to achieve the numbers. I’ll also show how the industry can realistically estimate what the market will be for this year and 2008 for content delivery, and it won’t cost you $6,000 to read.