There are a lot of choices in the market when it comes to devices that stream video to the living room. Dedicated streaming media boxes, broadband enabled TVs and Blu-ray players and tons and tons of tablets. Even for those of us in the industry, it really is a full time job trying to keep track of what content is offered on each device, the business model offered and the quality of the platforms that power the content experience. (see www.StreamingMediaDevices.com for help)

So just imagine what it is like for a consumer who doesn't write about these technologies and platforms every day. The fragmentation in the market continues to increase and it won't get better any time soon, only worse. While stores like Best Buy and Costco should be educating consumers, they really aren't. When was the last time you walked into a big box retailer and tried out an Apple TV or got hands on with Boxee's platform before you purchased it? Broadband enabled TVs on display are rarely hooked up to the Internet and you can't sample any of the content choices available on the device.

Even Costco, a store I really love for devices, has the Samsung Galaxy Tab on display, but inside a lucite case, locked down to a shelf, that keeps anyone from being able to touch the screen or device in any way. You can't see the ports, thickness of the device or what the backside looks like. TVs on display don't call out which content platforms are bundled with the sets and those that are broadband enabled, list those specs in small lettering alongside tons of other info. None of them are actually connected to the Internet. Go to any Costco and spend a few hours in the TV aisle and you'll hear the kinds of questions consumers are asking as they try and make their choice. Most will even let you help them pick the right device, even if you don't work there, as the Costco employees typically have never used Google TV or a Roku.

Retailers are missing a huge opportunity to sell more devices and as a result, are hurting the growth of our industry. I can't tell you how many times I have personally helped someone buy a device at Costco who said they would have not bought anything had I not happened to be in the aisle to help them. This is a service that these stores should be offering and having even one employee who knows the device space well would pay off big time for someone like Costco. I guarantee they would sell a lot more merchandise as I literally help sell something every time I go to their store, and I don't even work there.

All retailers should also have a few computers connected to the Internet so that any shopper can read reviews of the devices from websites and decide which model is best. I know retailers don't want you doing comparison shopping online in their store, but a retailer like Costo almost always has the lowest price on any electronic device they carry and they double the manufacturer's warranty when you buy from them. There are more positives of helping to educate the customer with reviews than negative ones.

My friend was recently down south and said the Tiger Direct store he was at had rows of devices, all connected and ready for any consumer to try out before they buy them, so it sounds like they are doing a good job. Are you listening BestBuy and Costco? If there was a Tiger Direct around here, you'd be getting your butts kicked on electronics.

I don't plan to open up a retail store any time soon, but what I would like to do is open up a small location in NYC that would be stocked with all these devices and any member of the media or person from the industry could come by and use any device, free of charge. These days, so many members of the media are writing stories about devices and platforms they have never used or even seen in person and it shows. I think it would really help our industry to have one place where the media could get hands-on help, do side-by-side comparisons and better understand what they are writing about.

I could stock the place with devices, get support from the manufactures and probably get Verizon to install a FiOS connection. The real issue would be the space, which is not easy to come by in NYC, but I think this would be something a lot of people could benefit from and I'm game to try it if anyone wants to help. We've had Bloomberg, FOX Business News and other TV stations come to our Streaming Media shows just to be able to film some of these devices in action, so I could also see this location being used for a lot of on-air interviews. Not to mention, a lot of device companies come to NYC to do road shows and demo their devices and this location could be used by any company in the industry and would have the kind of private setup they need.

Maybe I am thinking too big here, but I think setting up something like this is completely doable and I see tons of upside potential for the industry, the media and all of the content, platform and device companies in the space that would benefit from it. If you think you can help or know of a better way to do this, I'd love to hear from you.

The drawing is now closed. Congrats to Joey Cossack from Corona, CA who won the device. On Sunday, the price of Logitech's Revue box with Google TV, officially dropped to $99. But I'd got an even better deal for you – FREE! One lucky reader of my blog is going to win a brand new Logitech Revue, still sealed in the box. To enter the drawing, all you have to do is leave one comment on this post and make sure you submit the comment with a valid email. The drawing is open to anyone with a mailing address in the U.S. and I will select one winner at random in two weeks. 

And keep an eye out on my blog as August is going to be the month of giveaways with some new Roku's up for grabs, a Western Digital WD TV Live box as well as a Netgear Roku.

Limelight Networks will launch a new version of their website tomorrow and one of the biggest changes the company is making is re-aligning all of their products, which will now be broken out based on services and verticals. You can see a screen shot of the new site below.

This is a smart move for the company and one that should have been done sooner. Customers don't buy products, they buy services and solutions and showcasing what business challenges can be solved by solutions, specific to a vertical, makes a lot of sense. It's how Akamai has been selling their services for years, by targeting specific verticals with specific solutions. In addition, Limelight Networks will also be dropping the work networks from their name marketing, and going forward will simply be known branding themselves as Limelight, a clear sign that the company is trying to move away from being thought of as just a CDN.

Here's how Limelight's services are now broken out:

The company also announced today that their Q2 earnings call will take place on Monday August 8th.

I didn’t have a chance to cover this when it happened, but on July 1st, Amazon announced they were lowering the pricing of their CloudFront CDN delivery service. By my count, this is now the fifth time Amazon has lowered their pricing since launching CloudFront in November of 2008. If you need any more evidence of just how quickly CDN pricing has declined, when Amazon’s service launched, the lowest pricing they offered on their rate card was nine cents ($0.09) per GB delivered. Today, their lowest rate card pricing is two and half cents ($0.025) per GB delivered and I’ve seen Amazon quote a penny ($0.01) per GB delivered for large volume deals. Here’s a chart of their new pricing and data tiers compared to their previous pricing.

Amazon also announced that customers no longer have to pay for any inbound data transfer and they introduced new pricing tiers for their high volume users for what they call “Reserved Capacity Pricing, classified as customers doing more than 5PB of delivery per month. While Amazon does not yet have the suite of services labeled as “value add” by other CDN vendors in the market, it’s pretty hard to argue with the fact that Amazon has helped commoditize the basics of storing and delivering video over the Web.

While Amazon does not break out their revenue for their suite of Amazon Web Services, including their CloudFront offering, based on my estimates and from having talked to others in the CDN space who know Amazon’s customers and traffic, I estimate that CloudFront will contribute about $75M in revenue to Amazon this year. If that number is accurate, it makes Amazon close to being the third largest CDN in the market based on revenue.

One thing Amazon’s revenue shows is that it takes any new vendor in the CDN space a long time, meaning more than 2-3 years, to get revenue into the $100M+ range. If Amazon grows their CDN business by 25% next year, which is a lot, it would have taken them 4 years to reach the $100M number. The same could be said for Level 3, based on their current growth. It took Limelight Networks five years to grow revenue from $20M to about $150M. Entering the CDN space takes a really long time, lots of money and is not as easy as some suggest. Back in 2009, Microsoft said it cost them “several hundred million dollars” to build out their CDN and bring about 70% of their traffic in-house by the end of last year.

While some are quick to say that Amazon is only competing for the commodity portion of the market and won’t compete with any value add services, think again. Amazon has some pretty ambitious plans for their AWS platform and a lot more services are on the way, including ones the market would classify as value add.

Two weeks ago, during a StreamingMedia.com webinar I moderated on the topic of Adaptive Streaming & HTTP Delivery, Cisco gave out some great details on managing adaptive bitrate resolution and encoding profiles. While I've included three of their slides below, the first slide really gives a great visual on what the aspect ratio or size of the video window should be based on the encoding bitrate and bits per pixel.

You can download all of Cisco's slides from the webinar as well as the slides from all the other presenters here.

Also check out these posts on the subject, "Comparing Adaptive HTTP Streaming Technology From Apple, Microsoft and Adobe" and "New Data Released On The Performance Of Akamai's HTTP-Based Adaptive Streaming Technology."

Over the last few weeks, numerous signs in the market point to Limelight Networks trying to finalize a deal to be acquired, or raise a large round of funding. While I don't have all the specifics, over the weekend I was able to confirm via a third party that Goldman Sachs, the largest shareholder in Limelight Networks, is working on a deal with Limelight that will drastically change the company and I expect it is an acquisition.

Within the past 2-3 weeks, Limelight has basically stopped talking to Wall Street and the company has yet to say when they plan to announce earnings. The company must put out earnings by August 9th, but as of now, still has not said when they plan to release. Limelight has been stalling as long as they can and while I'm hearing that a deal for the company is not done and no letter of intent has been signed, it sounds as if Limelight is close to a deal.

There is speculation that the company may raise another round of funding instead of being acquired, but my bet is on an acquisition. If Limelight reports good second quarter earnings and increases the percentage of their revenue that comes from value add services, it would not be a stretch for them to be able to get a high evaluation on that revenue. Companies in the industry that offer SaaS based platforms, like SalesForce.com, are currently valued at about 10x revenue. Last quarter, Limelight said 38% of their revenue was from value add, so if that number continues to grow, they could raise another large round based on that segment of their business.

If they raised enough money, they could acquired a leading company in the Data Management Platforms (DMP) market or a company that offers an end-to-end platform for managing data-driven digital advertising, which is essentially a targeting audience management platform. There are a handful of companies in the space doing this (Turn, Collective Media, eXelate, BlueKai) and some are on track to do more than $100M in revenue this year.  A platform like this would fit nicely into Limelight's offering and would add a lot of top line revenue to the company overnight.

While it's not unreasonable to think the company could raise another round, my bet is on Limelight getting acquired. Of course there have been rumors for years that both Limelight Networks and Akamai would be acquired by Google, Facebook, IBM and a whole host of other players, but most of the companies like those mentioned don't make any sense. What does make sense is for Verizon, Microsoft or AT&T to acquire Limelight for the following reasons.

Verizon recently launched their new Verizon Digital Media Services (VDMS) business and is focusing on the entire ecosystem for creating, ingesting, storing, managing, protecting, monetizing, delivering and tracking of content. The company recently said they don't plan to have the delivery component of their offering ready to go until Q2 of 2012, so acquiring Limelight would bring them to market much faster, not to mention give them access to a large library of content owners. Verizon would also get a whole host of technology around advertising and content management that their solution is currently missing. They could also take some of Limelight's service based platforms and re-position them within multiple segments of Verizon's business from wireless to enterprise. On many levels, Verizon would be one of the best fits for Limelight's current product offering.

While I don't think AT&T is involved in the discussions, the company could decide to stop spending the time and money to build up their offerings and instead, acquire Limelight and have what they need overnight. I don't think this will happen, but it's always possible. The company has changed their go-to-market strategy as of late and it's always possible they could take an even bigger approach. As for Microsoft, I'm limited in what I can say as I know some details that can't be made public, but I can reveal that Microsoft has been in discussions recently with Limelight about possibly licensing a newer version of the technology that Microsoft licensed from Limelight many years ago. And based on some other stuff Microsoft is working on, it might just make more sense for them to spend the money to acquire Limelight if they are going to have to pay for a license any way.

Of course some are going to suggest that these companies should just acquire Akamai instead since Akamai's has five times the revenue Limelight has. While that is always possible, Limelight could probably be acquired for around $700M and even with Akamai's share price being at about an 18-month low, anyone acquiring Akamai would have to pay in the billions for Akamai who currently has a $4.5B market cap. Limelight is much, much cheaper to acquire and their share price is also getting close to their 52-week low, so it's a good time for any potential acquirer. Many years ago AT&T offered $8 a share to acquire Limelight, but I was told Goldman turned it down. I get the sense that in today's market, Goldman would be more open to selling the company.

Last Tuesday was the biggest day for the acquisition rumor and Limelight's stock closed up $0.56 to $5 a share on more than 4M shares traded. Limelight has not had more than 4M shares traded in the company in more than three months. That alone is not evidence that something is about to take place, but clearly I'm not the only one hearing some details. I don't expect to hear Limelight announce anything relating to this on their Q2 earnings call, but I do think news will break in the next few weeks and we'll know for sure what they are up to.

Note: Even though I know Limelight would not comment, I did ask them for a response and was told, "Limelight does not comment on rumors or speculation."

Updated Aug. 2nd: Limelight says they will report earnings on August 8th

Content delivery network company EdgeCast announced yesterday that they are now powering more than 3,000 customers, serving more than 1.5 billion objects per hour and carry approximately 4% of all worldwide Internet traffic. I'm not sure how exactly these percentages are measured, but the last time I heard Akamai use the same metrics, Akamai said they were serving about 25% of the total Internet traffic.

Of course comparing Akamai to EdgeCast is not really fair since Akamai is doing over $1B in annual revenue and EdgeCast is slated to do between $50-$100M this year. However, EdgeCast is doing very well in the market when it comes to targeting mid-sized customers and carriers who license their CDN software. The company has grown very nicely in exactly three years and to date, and has only raised under $20M in funding. EdgeCast became cash flow positive in 2009 and confirmed for me today that they are still profitable.

I like to think of EdgeCast as the current "Speedera" of the industry and those of you who remember Speedera from many years ago will recall how the company was known for having great performance, great support and really affordable pricing.

Related Posts:

– AT&T Building Out Their Content Delivery Network Using EdgeCast's Software

– Telus Enters CDN Space With An Exclusive Reseller Deal With EdgeCast

– EdgeCast On A Roll, Launches In Latin America With Samba Tech

– Deutsche Telekom Enters The CDN Market, Partners With EdgeCast

– NaviSite To Resell CDN Services From EdgeCast