Dynamic content delivery has been available for a number of years and beyond just basic caching functionality, solutions in the market now focus on route, connection and content optimization. As online commerce sites have grown more complex, they rely on every feature and function of a CDN to quickly and optimally serve users. More importantly, these sites have to cater to higher user expectations across an ever-changing set of devices.

To date, Akamai has pretty much dominated the content delivery market when it comes to offering Internet retailers a PCI compliant based platform that solves the specific challenges commerce companies face. But just like with video content delivery, a market that Akamai owned for years before Limelight, Level 3, Amazon and others stepped in and pushed pricing down in the market, EdgeCast is looking to do the same thing in the commerce market. EdgeCast is now out in the industry educating customers that in many cases, there is now a credible alternative to Akamai, that one vendor no longer owns that market and that retail customers should expect better features and pricing, as another vendor has finally stepped up with an alternative in this segment.

EdgeCast new solution, launched last month, which they call “Transact”, combines the concept of a purpose-built platform for commerce with PCI Compliance, front end optimization, more efficient caching and what they say are faster SSL connections. Leveraging their existing Application Delivery Network, EdgeCast deployed an entirely new network dedicated to their commerce customers, in a more cost-effective manner, to deliver dynamic and static content globally and securely. EdgeCast also said it will match up their code freezes with the holiday online shopping season so customers can be guaranteed that EdgeCast will not make any code changes to its platform during the most critical time of the year.

To help serve and accelerate commerce sites, a CDN must have a deployment to serve a global set of users, be highly available with excellent performance and be PCI compliant. The audience for sites has continued to change and many commerce websites now offer multiple languages, different domains based on country, international shipping and local currencies. With this diverse audience, sites must maintain availability and reliability through a CDN that can serve content and information as quickly as possible. This all has to be done in a secure and compliant environment. PCI (Payment Card Industry) Compliance is not just a nice-to-have it is a necessity. Without it, customer data such as credit card information is vulnerable.

Above and beyond site acceleration there are a number of functions that commerce sites can leverage to improve performance and internal processes. Relying on a dedicated, purpose-built platform for commerce allows sites to confidently serve traffic without the burden of sharing a network with large social media sites, videos, downloads or other types of content. Additionally, code freezes to match up with holiday schedules allow sites to handle Black Friday, Cyber Monday and the rest of the shopping season without having to worry about downtime, code rollbacks or other circumstances. Newer functionality around secure connections called OCSP stapling allows for massive performance improvements for what is generally some of the most resource-intensive, yet the most important content. OCSP stapling involves improvements around the certificate revocation process and pushing that out to the edge and closer to end users results in faster performance of SSL requests. Additionally, allowing sites to make changes more quickly and efficiently with faster, near-instant purging and more reliable configuration changes permits for better management of internal processes and faster responses to user behavior.

Leveraging their existing relationship with Google’s PageSpeed technology, EdgeCast allows customers to leverage Edge Optimizer – front end optimization – at the edge in a highly scalable and flexible manner. EdgeCast was the first CDN to have FEO built-in at the edge and Edge Optimizer gives customers the ability to manage optimizations on an individual basis while still maintaining control over content. Their rules engine gives granular control over cache control settings, mobile device enablement, content protection and more. Customers can further control that content with nearly instant content purging using the new Piranha purge functionality and configuration changes generally take less than an hour to propagate.

EdgeCast has also leveraged OCSP stapling in order to make SSL connections as fast as possible. By pushing part of the SSL process to the edge, end users will now have even faster performance for the most important content – shopping carts and checkout. This functionality allows EdgeCast to serve SSL much faster using DigiCert than other certificate authorities such as Comodo or CyberTrust. EdgeCast’s new purpose-built platform for ecommerce should help change the way people look at traditional CDN providers. Focusing on commerce with PCI Compliance, faster configuration changes and content purging, more efficient technologies and what they say are better SSL connections, should allow EdgeCast to provide retailers with a premium site acceleration service and show that there is now an alternative to Akamai.

How quickly EdgeCast can make a dent in Akamai’s business I can’t say, it’s too early to know. But EdgeCast is on track to do more than $100M in total revenue this year, they have nearly 300 employees and they are getting to a size and scale where they are becoming a really big thorn in Akamai’s side. They already dominate the licensed/managed CDN market; a business Akamai is just now trying to get into and EdgeCast is one of the CDNs responsible for pushing down video CDN pricing in the market over the past two years. It’s not “doom and gloom” for Akamai, but to date, no one has really stepped up to pressure Akamai’s dominance in the Internet Retail market and clearly, that is about to change. The Commerce segment is a highly profitable core vertical for Akamai and one where they are totally dominant, so if EdgeCast can get traction in this segment, it can impact Akamai’s commerce business and is something that should be watched closely over the coming quarters.

Updated: Looking at EdgeCast’s website and other public information, some of EdgeCast’s current commerce customers include: Etsy, Bluefly, Overstock, Pacific Sunware, Wet Seal, Garmin, Vegas.com, Magneto, B&H Photo, ZipRealty.com, Burlington Coat Factory, CheaperThanDirt.com, Cooking.com, One Kings Lane and Ideeli, amongst others.

In addition to my role at StreamingMedia.com, I’m also a Principal Analyst at Frost & Sullivan. Most of our work consists of private research for customers looking to enter a new market, but we also produce quite a few reports each year that focus on the size of different products and services in the digital video ecosystem.

I’ve just released my latest report on the size of the “Global Transparent Caching Market“, which also details the market drivers, restraints to market growth, product and pricing trends, competitive landscape, and market forecasts and trend analysis broken out by region of the world for the next four years.

Many telcos, multiple system operators (MSOs), and mobile operators are actively looking at transparent caching as a required element in their network to control over-the-top (OTT) video content consumption and to provide the best possible end-to-end user experience. It is a unique technology that simultaneously benefits a content owner, a network operator, and, most importantly, a broadband or wireless subscriber.

Copies of the report are available to any customer who has a subscription to Frost’s Digital Media research service and anyone interested in getting a subscription can contact me for more details. Also, while many research analysts at other firms won’t talk to someone unless they are a customer of that firm, I have and always will talk to any company who is interested in getting more details on any aspect of the video, streaming and content delivery ecosystem. You don’t have to be a customer of Frost & Sullivan for me to take your call and do a briefing with you, so call anytime.

Rory Maher, a Managing Director over at HillsidePartners, an institutional equity boutique focused on the technology and media industries, has issued his latest report on the state of YouTube’s business. In it, he details why he believes that 2013 gross revenue will likely be $3.7B for YouTube, versus his previous $5B estimate in his last report. Based on recent statistics provided by Google, he estimates video ad sellout on YouTube to be just 14% and that their channel revenue is likely at a $20M run rate. Some other highlights from his report:

• YouTube Mobile Likely Generating $800M In Annual Revenue. We estimate YouTube’s mobile business will generate just under $800M in 2013. We determine our YouTube mobile revenue figure by taking the amount of mobile videos viewed (1B per day) and apply reasonable pre-roll sellout and CPM assumptions of 10% and $20, respectively.
• Video Ad Sellout On YouTube Likely 14%. We estimate sellout of video advertising (pre-roll, truView, interstitial, and any ad appearing within the framed video) to be 14% of videos played on YouTube given updated viewing figures provided by the Company. We calculate our estimates by taking information provided by Google on the number of hours watched annually, the length of the average video, and the number of YouTube videos with some form of monetization on them.
• Original Channels Continue To Grow Double-Digits Monthly. We estimate subscribers of the original channels grew 14% monthly from launch until March 2013 and have grown 11% per month since then. In our opinion, recent viewership has likely been negatively impacted by competition from the new channels for eyeballs, but international expansion starting in October 2012 has likely enabled the original channels to maintain double-digit monthly subscriber growth, attractive growth in our view.
• Strong Ad Sellout During Daytime/Primetime. We surveyed videos on some of the top rated channels during a weekday afternoon and found nearly 90% sellout in pre-roll or Truview video ad inventory on the videos we viewed.
• Lower Sellout During The Weekend Indicates Advertisers Buying Inventory By Daypart. We found lower sellout during the weekend, highlighting how YouTube sells much of its video inventory by daypart. For example, we found 20% video ad inventory sellout during weekend mornings.
• Channel Revenue Likely At $20M Run Rate. Advertisers we speak with indicate YouTube is receiving $20 CPMs for pre-roll and Truview packages on its original channels launched in 10/11 with new channels being added 10/12. Assuming 4 videos viewed per sub per month and 50% video ad sellout we estimate the original channels are likely driving revenue at a $20M annual run rate.
• New Channels Have Outperformed Since Launch Vs Original Channels. We estimate the new channels launched in 10/11 have already outperformed the first YouTube channels due primarily to international distribution. For example, we estimate the new YouTube channels have accumulated 11.3M subscribers in the first 8 months since launch vs 7.6M for the first channels over the same period following launch.

The big takeaway from the report is the idea that Google will likely continue to gain share of online video, especially as viewing transitions to mobile. I think anyone would be hard-pressed not to agree with that statement. Google will continue to steal share of online video as usage moves to mobile where, as the report states, its app is superior to other online video apps and has the advantage of preferred placement in the Android OS. The transition to mobile and growth of Android has driven industry-leading growth in online video ads on YouTube especially as advertisers have significantly increased spend on mobile video ads. For example, according to Comscore in January 2012 Google wasn’t even in the top 10 online video properties in terms of ads viewed, but accounted for 13% of all video ads viewed in April 2012 and 18% by April 2013.

Even with all of this data it’s still interesting to see how a huge percentage of streams served by Google every day, via YouTube, still aren’t being monetized in any capacity. At some point, it would be nice if Google could just stop hosting UGC content that has zero chance of making them any money. Of course, the problem with that idea is that Google gets so much of its traffic from users visiting the website to see their own clips, that traffic would drop dramatically, even to the premium content, if they did away with the free video hosting. It’s a necessary evil of being in their business, thanks to their size and scale. Free video hosting is something they probably will never be able to move away from – even though it would reduce their costs and allow them to focus on premium content that they can monetize.

About two weeks ago, Amazon announced that custom SSL domain names and root domain hosting support features had been enabled for content owners looking to deliver static and dynamic content via Amazon’s CloudFront delivery service. After the announcement, I got many inquiries from content owners asking why Amazon is charging $600 per month for each custom SSL certificate associated with one or more CloudFront distributions. Even though this monthly fee is pro-rated by the hour, and in many cases would be cheaper than $600 a month, customers who use other CDNs say most Amazon competitors only charge $200 a month.

But like a lot of content delivery services and cloud solutions in the market today, many aren’t fairly comparing one service to the other. In this case, many customers aren’t making an apples to apples comparison between shared certificates (what most CDNs offer at a lower price) and dedicated certificates (which is what Amazon offers).  To use Amazon’s “dedicated certificate” feature today, customers upload their own dedicated SSL certificate to AWS, associate their certificate with a CloudFront distribution, and have the certificate propagated to the entire global network of CloudFront edge servers to be served in response to end user requests for that distribution. Amazon allocates a set of IP addresses to each cert, and scales this set of IP addresses as the customer’s traffic warrants. A distinct set of IP addresses is needed because each CloudFront IP address handed out for HTTPS must map to exactly one SSL certificate.

What some CDNs offer is a “shared certificate” model, where they will add multiple customers (i.e. multiple domains names) on a single shared SAN (Subject Alternate Name) SSL certificate.  This helps those CDNs lower their cost per customer (because one cert is shared by many customers), therefore they are able to offer this functionality to their customers for a lower price. Amazon says when they talked to their customers, they told them that “dedicated certificates” is their preferred option as it gives them the security, performance and availability they expect. In addition, to use Amazon’s Custom SSL feature, there are no fees for professional services, no set up fees and no extra charges for the SSL bytes transferred (something some other CDNs charge). Plus, Amazon isn’t charging anything extra for dynamic content delivery, which makes it a great choice for customers who want to deliver an entire website (both static and dynamic content) in a secure manner.

When looking at any kind of content delivery offering or feature in the market today, it’s important to fairly compare one service to the other, as accurately as possible. You can’t compare companies, as a whole to one another, only the specific functionality of each product they offer that is the same. In this case, what Amazon is selling with their SSL service is different from what most other CDNs sell as their normal SSL offering. That’s not to say other CDNs can’t offer “dedicated certificates” like Amazon is, but then their pricing is no longer $200.

There’s more to getting a live event online than just being there with a camera and a box. What efficiencies are you overlooking, and how can you ensure the best experience for the widest possible audience at the best price? What’s missing from your toolbox? Wednesday June 19th, at 2pm ET, I’ll be moderating another StreamingMedia.com webinar, this time on the topic of, “Best Practices for Live Video Encoding.”

Join Ustream, Brightcove and Haivision for this event and learn how to:

• Choose the right technologies and delivery platform for live streaming video.
• Build lasting value into your seminars, product launches and training sessions combining Live, on-demand, and “as-live” linear video.
• Plan and execute your live event workflow to ensure flawless delivery to every screen and maximize your audience reach.
• Incorporate social media and audience participation for an engaging and interactive event.

We’ll have a full Q&A session in which your questions will be answered and as always, all StreamingMedia.com webinars are free. So register here and save the date for this instructional webinar.

Frost & Sullivan recently released a new white paper that discusses the security challenges operators face as they embrace multi-network, or hybrid, architectures to implement next-generation TV Everywhere content services.

Entitled, “Cardless Content Security: The Smarter choice for Hybrid Networks,” we examine how challenges like fragmentation of devices and networks and the need to deliver consistent user experiences across all screens can be more effectively overcome. We discuss industry-proven best practices in architecting security solutions for the next-generation ecosystem of multiple transmission networks and devices in a way that minimizes head-end complexity and ensures a future-proof investment. The paper outlines:

• Key challenges of extending a branded, compelling pay-TV experience to every subscriber on every device and screen in a revenue-enhancing manner
• How the power of the Internet can be harnessed to facilitate content protection and secure revenue
• Advantages of cardless security over smart cards, including overcoming a weakness in DVB standards and its unique ability to leverage two-way networks
• Why content security solutions are moving away from managing silos for digital rights management (DRM), CA systems and watermarking to a complete revenue security platform
• Scenarios on how a unified multi-network security architecture if preferable over managing separate cardless and smart card-based systems

Monetization of video is a particularly interesting challenge, since business models in the OTT and TV Everywhere space remain experimental and online revenues have yet to become significant contributors to MVPD businesses. That said, our recently released Frost & Sullivan study on consumer video devices shows that the devices industry is already in the throes of realizing the lucrative potential of ubiquitous video.

Examining segments including set-top boxes, smart phones, tablets, game consoles, smart TVs, IP streaming devices and more, we found that total unit shipments in 2012 were well past the 1 billion mark, with total revenues exceeding $350 billion. With device shipments on track to triple by 2017, operators across the globe are grappling to bring their ubiquitous video offerings to this critical new ecosystem of unmanaged devices in a scalable, secure fashion.  Unmanaged is the key word here – managed set-top boxes only account for under 1/5 of all video-enabled devices shipped in 2012. At the same time, network traffic studies are consistently showing continued growth in long form content consumption on unmanaged devices.

Piracy of course is always a top of mind consideration for content owners and operators when deploying OTT/TVE services. The issue gets more critical as live linear content and premium VOD content are delivered equivalently to managed and unmanaged devices in HD resolution.

It’s not news to operators that, in contrast to the tightly controlled execution environment of set-top boxes, consumer owned and managed (COAM) devices are far more challenging platforms on which to secure content. Operators are cognizant of the need to support these myriad devices with compelling content offerings despite these challenges in order to minimize churn and remain competitive. The problem is, with revenues still small and business models yet unproven, operators are incurring this complexity and cost with limited upside ROI, particularly when they attempt to extend their traditional conditional access (CA) infrastructure to meet far more dynamic multi-screen needs.

The future of the devices market and the security market are both promising to be interesting. Those at NAB couldn’t have missed the HEVC and 4K demonstrations that were running at nearly every booth. Widespread initiatives to deliver HD+ and 4K content to unmanaged devices raise a whole new set of content protection questions.

For example, screen captures of 4K content can easily yield very high quality SD content (perhaps even HD content) for recompression and subsequent piracy, and the incentive for professional hackers to pirate 4K content is thus much higher. Studios and content owners will almost certainly require stronger security standards in terms of encryption and usage enforcement for 4K content. At the same time, as we discuss in this same paper, it will also be important to rely on traitor tracing and piracy tracking technologies, such as watermarking and fingerprinting, to holistically manage this inevitable problem.

We will continue to track these developments in our research coverage of the encoding, transcoding and content protection markets and you can join the Frost & Sullivan group on LinkedIn and further discuss the topic with us.

There are a lot of different types of content delivery services in the market, pushing content over various types of networks and across many different devices. While the market is crowded with CDN vendors focusing on the delivery of video, fewer solutions exist in the market for delivering web applications, especially over wireless networks. This morning, a new CDN named Instart Logic launched in the market looking to solve the problem of delivering web applications, with good performance, over mobile networks.

For many of you tracking the web performance world closely, you know it’s been some time since we have seen any really new innovative technology come along. Most of the “new” offerings have generally been improvements to existing established technologies such as content and application delivery networks (caching and network acceleration) or front-end-optimization (rewriting web code to implement performance best practices).

Instart Logic has released a new type of web performance service promising to speed up delivery of websites beyond what traditional approaches like a CDN or FEO solution can provide. The team behind Instart Logic comes from a diverse set of backgrounds including Big Data (Aster Data), virtualization (XenSource, VMWare) and, logically, the web performance world (Netli, Cotendo, Akamai). The original founding engineering team actually had no direct experience with the web performance world and as a result took a fresh look, and built a very different way to deliver web sites to browsers. (the company has a white paper with lots of tech details here)

The team was looking to specifically address new challenges with delivering visually rich and personalized web sites and apps to users accessing them on congested wireless networks. The approach moves beyond operating at a network level like traditional CDN/ADN approaches (caching and network acceleration) to working at the application level. They claim the product was built by thinking “mobile-first” and designed with the mobile world in mind from the start, not as an afterthought. Because of this approach, Instart Logic says their new system is able to provide much higher levels of performance by having a detailed understanding of the component parts of web sites and applications and how they load in modern web browsers. It works by sending a smaller amount of data up front to a browser to get the web page loaded and then bringing the other data down in the background.

The key to pulling this off is a new type of web delivery architecture that includes an active client side component that runs in the end user’s browser, along with a cloud service that has a detailed understanding of how web sites and applications actually load and execute in modern browsers.

On the client side it uses a thin JavaScript based virtualization layer they call the “HTML5 NanoVisor” that is added to a web site or application automatically by the service. Using this client, the Instart Logic system can learn how a web site or application loads and executes in different browsers. The NanoVisor then works with a cloud service they call the “Personalized AppSequencer” which has a detailed understanding of the component parts of a web application. For example, it understands how visual information is encoded in image formats like JPG and PNG and how to divide up those files into smaller fragments for streaming at different points in the page load process. It can also determine which parts of dynamically-generated HTML are actually the same across a broad set of users and send it up front to a browser while the dynamic portions are created on the backend.

Once the service determines the minimal set of data to allow a web page to display and become interactive, it uses the NanoVisor to allow streaming of this information to standard web browsers. After the initial display the NanoVisor then brings down the rest of the data that makes up the page and stitches everything together in the end user’s browser. By doing this, it allows for fast initial display and interactivity, while still being able to provide the full quality experience as designed by the web publisher a few moments later.

Web publishers can quickly integrate with the system by updating a few DNS entries to flow all or a portion of their traffic through the service. It is designed to replace the use of a CDN and as a result the company has set up a global footprint of 30 delivery locations worldwide and they have a similar technology to dynamic site acceleration they call Global Network Acceleration.

Instart Logic’s system is an intriguing new entry into the web performance and delivery space. When they demoed the product for me, it was easy to see noticeable differences in Web page load performance, particularly for pages with lots of scrolling image tiles and graphics-rich HTML5 games. They have been running customers with production traffic since last summer and have been winning over converts from some of the traditional CDN vendors. The new service looks promising and most of the recent vendors that have come to the market with focused solutions, looking to solve a specific problem, have tended to do well. Strangeloop Networks, Blaze, Cotendo and others have all been acquired in a short period of time – mostly due to their focus and lack of desire to be a all-encompassing CDN.

Of course any new service like Instart Logic’s has to be validated by customers, at scale, while still improving performance, so it will be some time before we know just how scalable their solution is and how well the company can do. But they are a promising new entry into the market and one I will be keeping an eye on.

Instart Logic is funded by Andreessen Horowitz, Greylock Partners, Sutter Hill Ventures, Tenaya Capital, and several notable Silicon Valley angel investors and received $17M in Series B funding in April.