Comcast has quietly entered the CDN market with a commercial content delivery service primarily targeting medium and large size content owners. The service is live and the company has a few paying customers already delivering their content on Comcast’s CDN. This new offering allows content owners to go directly to the ISP and have their content stored and delivered via the last mile, thereby displacing some traffic currently delivered by third-party CDNs like Akamai and Limelight Networks. While this is the same type of CDN service that other commercial CDNs like Akamai already offer, Comcast can offer a very good SLA and pricing, since they own the network. This is similar to what Level 3 did, when in 2010, they came to the market with a CDN service that was priced lower than others.

[Updated 4:06pm: Just in case it wasn’t clear to some readers, Comcast’s CDN service is not providing any kind of “fast lane” for content or any type of “prioritization” of content. A well operated third-party CDN will have similar performance to Comcast’s CDN and user experience will mostly be imperceivable by the average consumer. The service also has nothing to do with net-neutrality or interconnect agreements. Those who want to imply or suggest otherwise are doing so incorrectly.]

Because Comcast owns the last mile, and commercial CDNs don’t, content owners who go direct to Comcast will be able to get a cheaper price for CDN services. While contract variables like volume and length of contract will dictate price, I expect some content owners to be able to pay 20%-40% less than what they pay now. Since Comcast owns the network and has a lower cost, they can offer a lower price in the market. Right now, Comcast’s CDN service is primarily targeting large and mid-sized content owners for large file downloads and streaming of video, both live and on demand. While Comcast can also deliver content for smaller content owners, it does not make sense for the majority of small content owners to go direct to an ISP for content delivery. Comcast isn’t offering what the CDN industry calls value add services, so CDNs like Akamai that get a large percentage of their revenue from services like dynamic site acceleration won’t see that portion of their business affected.

Comcast’s new service is considered an on-net CDN offering as Comcast is primarily delivering content via their last mile. While they can also support off-net delivery outside of their network footprint, that’s not the business they are targeting. For content owners that have a large percentage of their content going to Comcast subscribers, it would make sense for some of them to take that portion of their traffic off a third party CDN and move it over to Comcast. While Comcast’s offering will be attractive to large content owners, this does not mean ever large content owner will use it. Many will find it as an attractive option in the market as a large portion of major content owners already use a multi-CDN approach to delivering their content. So if they can have Comcast pull content from their origin storage and deliver it locally for Comcast subscribers, and at a discounted price, many will the see the value considering that Comcast subs probably account for about 30% of their overall traffic.

As the news of Comcast’s commercial CDN offering gets out, I’m sure some are going to suggest that Comcast is doing this to counter the arguments that paid interconnect deals, like the one they have with Netflix, is bad for the little guy. By Comcast now offering content owners the ability to deliver their content directly inside Comcast’s network, this now opens up the service for smaller content owners. The problem with that argument is that it is dead wrong. No small content owner builds their own CDN, so small content owners don’t need to go direct to any ISP for CDNs services or interconnect deals. Small content owners will always use third party commercial CDNs as it’s cheap and they can get good quality delivery from a single provider. That’s why the only companies doing interconnect deals are content owners like Microsoft, Google, Netflix, Apple, Yahoo! etc. because they have built their own CDNs. The reason Comcast is doing this is to open up another commercial option for any content owner who wants to deliver content.

Comcast’s new CDN offering has absolutely nothing to do with interconnect relationships and Comcast isn’t targeting small content owners or those who have already built their own CDN. Their ideal customer for the new service would be broadcasters, gaming companies, software companies, large publishers and those in the media and entertainment vertical. What Comcast is doing with their commercial CDN offering may sound like a new idea to many, but it’s not. In 2010, Verizon did a deal with HBO to deliver their content inside Verizon’s last mile for FiOS subscribers. This was due to the fact that Verizon had built out their own CDN, using the technology from Velocix, which was acquired by Alcatel Lucent. Verizon didn’t do many deals with content owners and ended up changing their CDN plans a few years back, but I do expect Verizon to once again enter the market and offer a similar service to Comcast’s, due to Verizon’s recent purchase of EdgeCast.

Since the commercial CDN market for any ISP is small when compared to their core business, some will ask why Comcast or any ISP even wants to be in the commercial CDN business to being with. The key thing to remember about commercial CDNs is that many times they make cost trade offs around performance. Adding a disk drive to a cache to improve hit rate or a new server in a location does not have the same financial drivers as it does for any ISP. Typically a CDN pays the same $/Mbps to serve a city whether it is sourced locally or from across the country. An ISP’s network costs to serve from long distance drives financial incentives to both add local storage and server capacity to keep traffic local. Some CDNs deliver a large portion of their traffic from  sub-optimal locations to save on server and storage costs.

Right now, Comcast is the only ISP in the U.S. to offer a commercial CDN service directly to content owners via their own in-house solution, as opposed to licesing a platform from a third party. While some might suggest that ISPs offering commercial CDN services will be a trend moving forward, it isn’t. The only three ISPs this kind of service would even make sense for would be Comcast, Verizon and AT&T, and AT&T has already given up on their own internal CDN and simply resells Akamai.

Todd Spangler at Variety is reporting that YouTube has agreed to buy Twitch for over $1B in an all cash deal. While I have no insight into the deal, I would not be surprised to see Google acquire the company. Last week, Twitch was the keynote at our Streaming Media East show in NYC and they gave out some impressive data not only on their business, but also on the size of the eSports market they are in. Below are some of the slides from Twitch’s keynote and some highlights on their business.

In 2013 Twitch had:

• 45 million+ Unique Viewers per Month
• 1 million+ Unique Broadcasters per Month
• 13 billion minutes watched per month
• 106 Minutes Watched per Person per Day
• 58% spend more than 20 hours/week on Twitch 540K average prime time viewers
• 68% have decreased their television consumption
• 10 million installs of the Twitch iOS/Android mobile app

Thanks to everyone who made it to this week’s Content Delivery Summit and Streaming Media East shows in NYC. Both events were successful and the Content Delivery Summit was standing room only for most of the sessions. There are a lot of blog posts I am working on and we’ll have videos from both shows up in a few weeks.

I am uploading the presentations from both shows as quickly as I am getting them. You can download the CDN presentations here and grab the Streaming Media East presentations here. If you have any post-show follow up questions or need help with anything regarding both shows, please reach out to me at anytime.

The 2015 Content Delivery Summit will take place Monday, May 11th and Streaming Media East will be Tuesday May 12th and Wednesday May 13th.

In 2007, Netflix had a humble streaming service that consisted of an Internet Explorer plugin and a couple of thousand titles. Today, there are millions of active Netflix devices including smartphones, tablets, game consoles, and connected TV’s. In addition, Netflix’s streaming library has grown to tens of thousands of titles including Emmy award winning originals. At the Streaming Media East show, taking place May 13-14, David Ronca, Manager of Encoding Tools at Netflix will discuss the key engineering decisions around video encoding at Netflix. Some of the topics that will be covered include scalability, progressive and parallel video encoding, and Netflix’s 4K video encoding pipeline.

It’s not too late to get a pass to the show and readers of my blog can register using my own personal discount code of 100DR, which gets you a two-day ticket to the show for only $695 and gives you access to 40 sessions and how-to presentations and 100+ speakers. You can also register for an exhibits only pass and get access to the show floor, both keynotes and all the networking events, at no charge. #smeast

At the Content Delivery Summit, taking place Monday May 12th in NYC, we have a session that will focus on the different types of service provider caching architectures and the pros and cons of each. The discussion will explore why an operator would choose one type of caching over the other and will cover the pros and cons of transparent caching platforms from independent vendors, Google Global Cache and Netflix Open Connect. Learn how network operators have deployed different caching strategies and what needs to be considered when evaluating the different options available in the market. Confirmed speakers include:

• Moderator: Mark Taylor, VP, Media and IP Services, Level 3
• Henri Setiawan Wyatno, VP, Innovation Management, Telin
• Bruno Beaugrand, Director of Marketing, Cloud and CDN, SFR
• Miles McWilliams, Head of Sales, Internet & Content, Deutsche Telekom North America

It’s not too late to get a pass to the show and readers of my blog can register using my own personal discount code of 100DR, which gets you a two-day ticket to the show for only $395. #cdnsummit

Everyone talks about the threats to traditional motion picture and television business models as a result of digital/technological disruption. But despite the current discomfort and pain being felt by myriad traditional players, new opportunities exist to generate revenue from premium content services. At the Streaming Media East show, taking place May 13-14, this panel of experts representing different stakeholders in the premium video ecosystem will explore not only the peril, but also the promise, of digital distribution and new opportunities to monetize video. Panelists will also discuss their views of who the long-term winners and losers will be in the premium video world. Confirmed speakers include:

• Moderator: Peter Csathy, CEO, Manatt Digital Media
• Frank Besteiro, VP, Head of Business Development & Partnerships, AOL Video
• Miguel Rojas, Director, Content Production & Technology, Viacom Media Networks, Music Group
• Tiran Dagan, Lead Partner, Strategy & Analytics, IBM Global Business Services, Media & Entertainment
• Mike Wann, CRO, Fullscreen

It’s not too late to get a pass to the show and readers of my blog can register using my own personal discount code of 100DR, which gets you a two-day ticket to the show for only $695 and gives you access to 40 sessions and how-to presentations and 100+ speakers. You can also register for an exhibits only pass and get access to the show floor, both keynotes and all the networking events, at no charge. #smeast

At the Streaming Media East show, taking place May 13-14, one panel will take an in-depth look at how premium content owners measure, analyze, and monetize their video assets. Whether the business model is subscription or ad-based, the lack of measurement standards across the industry makes determining value a very dynamic and challenging practice. The discussion will include insight into which metrics are worth capturing and analyzing, as well as best practice methodologies for analysis and thoughts on what the industry should use as a standard. Hear about the challenges content owners are facing and what changes need to take place in the industry to better measure the success of online video consumption. Confirmed speakers include:

• Moderator: Jonathan Hurd, Director, Altman Vilandrie & Company
• Domenic DiMeglio, VP, Distribution and Operations, CBS Interactive
• Campbell Foster, Director, Product Marketing, Video Solutions, Adobe
• Beth Jacobs, VP, Product Strategy, 3Pillar
• Micah Gelman, Director, Digital Video Strategy & Operations, Discovery Communications

It’s not too late to get a pass to the show and readers of my blog can register using my own personal discount code of 100DR, which gets you a two-day ticket to the show for only $695 and gives you access to 40 sessions and how-to presentations and 100+ speakers. You can also register for an exhibits only pass and get access to the show floor, both keynotes and all the networking events, at no charge. #smeast