This morning Verizon announced an agreement to acquire privately held CDN provider EdgeCast Networks in a deal that is expected to close early next year. I’ve spoken to both companies about the deal and while neither side can comment on the value placed on EdgeCast, I hear it is close to $400M. EdgeCast was on track to end this year with $100M in revenue and was projected to do $140M in revenue next year. To date, the company had raised $74M in capital and has about 300 employees. (For my thoughts on how this deal impacts Akamai, see this post: Verizon’s Acquisition Of EdgeCast Isn’t Good For Akamai, Here’s Why)

EdgeCast was a profitable company and at a $400M valuation, the company got 4x this year’s revenue. Not bad for a company that had only raised $20M in funding, up until five months ago when they raised $54M more. Verizon didn’t overpay on this deal but at the same time, EdgeCast got fair market value for what they have built.

EdgeCast will now be part of Verizon’s Digital Media Services group (VDMS) but will still operate out of Santa Monica and all of their employees, including 100% of EdgeCast’s management, will stay on with Verizon. This is important as a lot of companies who have acquired CDNs in the past thought they knew best how to integrate it or operate it and as a result, screwed up the integration and ruined the value of the acquisition. For this very reason, Verizon said they plan to let EdgeCast continue to run, operate and grow the CDN like they are now, and EdgeCast will be the CDN experts inside Verizon. EdgeCast’s CDN isn’t being moved into the network group or some other division inside Verizon, which is good to hear.

Verizon has been working on digital media services for many years, but before this deal, hadn’t really gotten any traction in the market. About 18 months ago, the company refocused, changed their business plan and go to market strategy and realized they would need to acquire multiple pieces of the online video ecosystem instead of trying to build it all. Acquiring EdgeCast not only gives them CDN services, video and non-video, that they can sell but also helps build out their video ecosystem platform for broadcasters, which I will discuss later. While Verizon currently has their own CDN they have built, the company confirmed that EdgeCast’s CDN will now replace that and will become the default CDN for Verizon.

While many will look at this announcement as Verizon simply getting into the CDN business, it’s is much, much more than that. Verizon not only gets a CDN product portfolio they can sell on it’s own, but they also get the licensed and managed CDN business from EdgeCast as well. This is huge for Verizon as it now extends their network by allowing them to connect with the other major carriers already using EdgeCast’s CDN software. It also makes the idea of CDN federation more like to finally happen in the market and it also gives Verizon the final missing piece to their broadcast video ecosystem platform.

Both companies can’t yet comment on other aspects of the integration until the deal is approved, but it’s clear to me this news is not good for Akamai. EdgeCast was already competing with Akamai for CDN services and now, will have even more resources to do so. Plus, Verizon currently resells Akamai’s enterprise services, not M&E CDN, and there is no doubt in my mind that Verizon won’t continue to resell Akamai once they own EdgeCast. I’ll have more on what I think this means for Akamai in a separate post.

This is the largest private CDN deal in the industry in the past ten plus years and has major implications for the industry and a host of other things. I’ll be blogging all week about the impact this deal has on the market, on competitors, what it may do to pricing and what Verizon’s ecosystem strategy will be, so stay tuned for more.

Note: I am getting a lot of emails with questions about the deal and will answer them as quickly as I can. If you need an answer on something right away, call me at 917-523-4562.

On Thursday December 5th, at 2pm ET, I’ll be moderating another StreamingMedia.com webinar, this time on the topic of, “MPEG-DASH & HTTP Adaptive Streaming.” Today we have a multitude of protocols that are optimized for the delivery of video to specific viewing environments including broadcast TV, Desktop PCs, and mobile/tablets. While solutions like HLS by Apple, HDS by Adobe and Microsoft’s Smooth Streaming, have paved the initial way, a universal deployment approach is gaining a lot of attention. HTTP streaming is now the most dominant approach to streaming for premium content owners and enterprise class deployments.

The DASH-IF recently published the DASH-AVC/264 Implementation Guidelines and launched interoperability tests amongst its members. DASH has the promise to harmonize across the viewing environments and make it easier to publish content to all of these devices, without having distinct sets of infrastructure to support them. So what does this mean for you…today? In this Q&A session join the MPEG-DASH IF and key industry panelists as they share experiences and address your questions and concerns relating to:

• Ad insertion
• Multichannel audio
• HEVC
• 4K/UHD Video Streaming
• DRM
• Legacy systems, installations

Attendees will benefit from first hand experiences of the MPEG-DASH experts and learn what’s up next. We’ll have a full Q&A session and as always, all StreamingMedia.com webinars are free too attend.

Over the past few days, I’ve been watching and personally using a lot of the major online e-commerce sites and so far, it seems most have done a good job of having their infrastructure ready for this year’s online shopping crush. I haven’t seen anyone on Twitter or Facebook complaining about any website problems with any of the big guys and I’ve used Amazon, Target, Walmart, Zappos, Columbia, REI and North Face with no problems. I have noticed it taking Amazon and Zappos longer than usual to send me confirmation emails of my order, but the websites themselves have been fast to load with no problems.

One website that isn’t doing well is BlueNile.com. Every time I try to checkout, the website crashes the browser be it Firefox, Chrome or Safari. When I called the company they confirmed that “a lot” of people are complaining about the same thing, yet nearly six hours later, I’m still having the same problem. You would think the company would be more pro-active, but they haven’t responded via their Twitter feed or via email as to when it will be fixed or with any updates. During a second call I placed to the company one sales person told me the website has recently gone an “upgrade” which has caused the problem, but they didn’t know what the exact problem was. During checkout, each time the website tried to load content from “seal.stellaservice.com” and “secure.footprint.net” is when it would crash my browser so it looks to be more of a code/platform problem for Blue Nile rather than a capacity issue. I don’t understand how an online only company like Blue Nile isn’t prepared and ready for the busiest shopping week of the year. They lost my sale, so they must have lost others as well.

Adobe just released numbers showing how big mobile platforms were this year for shopping purchases saying more than 24% of online sales occurred on smartphones and tablets, a record increase of 118% year-over-year. They said iOS devices drove more than $543M and Android $148M in online. Have you had any problems shopping online? If so, let me know which website(s) in the comments section.

Last week the inventors of a new device called Airtame contacted me to let me know they were about to launch funding for their device on Indiegogo. In the past five days, they have raised nearly $95,000 of their $160,000 goal, (as of Nov. 30th they are now at $144,000) for a device that allows you to display your computer screen and sound (Mac, Windows, Linux) on a TV, projector or monitor wirelessly. But what I really like about this device is that you can mirror your screen to multiple screens at the same time, something Chromecast can’t do. (see the video)

The inventors of the device say that the protocol being used is their own custom binary one, using UDP as a transport, and data exchange similar to Google’s protobuf. It supports a number of different channels, both for low latency ‘unreliable’ video/audio data, and for ‘reliable’ inputs and data transmission. The communication is encrypted with AES for security and the protocol was designed future-proof, so it is IPv6 ready, cloud ready, and advanced tricks such as UDP NAT piercing is also possible to allow for connections behind firewalls. The latency for the video being mirrored is around 25-150ms in ideal conditions.

The device looks pretty neat, I know I’d use them. Check out the video to see it in action.

Thanks to everyone who helped made this week’s Streaming Media West show such a success. The feedback we got on the new venue and location was awesome and it really helped make the show much more enjoyable. I got a lot of positive feedback on our speakers, the topics discussed and all of the data that was given out. Tons of really good information was shared helping to educate the market, which was the whole purpose of the event. All of the presentations from the event are now available for download in PDF form, on the program page.

Video on demand archives are being worked on right now and we expect to have those up in about a week. If there is any follow-up you need from the show or introductions to others, please contact me at any time. If you want to get involved in our next show, Streaming Media East, taking place May 13-14 in NYC, the call for speakers is now open. Have a safe and enjoyable Thanksgiving holiday next week.

I’ve just opened the call for speakers for the 2014 Streaming Media East Conference, taking place May 13-14 in NYC. The deadline for submissions is about six weeks, so get your submission in early. Those willing to play an active role as panel moderators who want to participate in creating the contents of a panel, should contact me immediately. Please see the website for full details on the speaking submission process. The call for speakers for the Content Delivery Summit, taking place in conjunction with the Streaming Media East show will open in January.

On Tuesday and Wednesday, we’ll be webcasting some of the sessions from the Streaming Media West show and the stream has just gone live on the home page of the streamingmedia.com website. Both keynotes will be webcast as well as all sessions from track A on the program, over both days, and also the Reader’s Choice Awards.