Hot on the heels of funding by 3Crowd Technologies and EdgeCast Networks, content delivery network Cotendo announced it has raised $12M in a Series C round led by Tenaya Capital and joined by its current investors Sequoia Capital and Benchmark Capital.

While California based Cotendo is not as widely known as some of the other CDNs in the market, that's primarily due to the fact that they are not in the video delivery business. Many of the current CDNs you hear about today have been focused on delivering video content from day one. Cotendo on the other hand launched to the market a year ago with a focus on offering dynamic site acceleration (DSA) and application acceleration, two services that have a lot more complexity than video distribution and much higher margins.

While these services are not as widely known as video delivery and not talked about by the media, they are the exact services that nearly all of the other CDNs are now trying to roll-out to help diversify their revenue. Typically these offerings are referred to as "value add services" and are not subject to the pricing pressure we've seen from the video contracts in the market. With pricing on video delivery dropping and vanilla flavored CDN services becoming commotizied, nearly every other CDN outside of Akamai, who already has these services, is trying to get into the business.

In a call with the company yesterday they revealed that they now have 120 customers which is pretty good considering they didn't have any just over year ago. The company plans to use the money raised to market their services and expand into some international markets and recently opened new offices in France and Germany.

As I mentioned in a post last month, dynamic site acceleration (DSA) and application acceleration are going to become the next big thing in the content delivery industry. Video services have had their time in the spotlight for many years but the real revenue growth potential for the CDNs and their best shot at becoming profitable is going to come from all of the other CDN services outside of video delivery. Delivering video for a customer in the media vertical or the broadcast vertical is very similar and the offering pretty much looks the same. But when it comes to offering DSA and app acceleration services to finance, retail, enterprise and media markets, the solution can change quite a bit depending on the vertical.

Offering dynamic site acceleration (DSA), application acceleration and small object delivery is very different than delivering video and large objects and I'll be writing more about those services next month. In the mean time, if you want to learn more about these services I will be moderating a panel at the Content Delivery Summit on Monday entitled, "Moving Beyond Video: Application Delivery and Dynamic Site Acceleration". Speakers include executives from Akamai, CDNetworks and Cotendo.

At the Streaming Media East show on May 11th and 12th, make sure you stop by the StreamingMedia.com booth for your chance to win our "Ultimate Tech Geek Giveaway". One lucky winner will receive an iPad 3G, iPod Touch, Apple TV and a $100 iTunes gift card. The drawing is open to any attendee who stops by the StreamingMedia.com booth and renews their free subscription to Streaming Media magazine or signs up for a new subscription. Make sure you don't miss out on your chance at winning all of this Apple gear.

With the number of new broadband-enabled TVs and Blu-ray players expected to be sold, along with devices such as the Xbox, Roku, TiVo, and PS3, consumers now have many ways to get their video fix. So what are the new business models that will be created from these new devices? What hurdles need to be overcome so that content can be monetized for multiple platforms?

At the Streaming Media East show on May 11th and 12th, we've got Peter Kafka, Senior Editor at All Things Digital moderating a panel on "The Impact Of Broadband-Enabled TVs, Gaming Consoles And Devices". The session will explore the role of current consumer entertainment
devices in this new convergent world and how these devices will play
together to offer a superior video experience.

• Moderator: Peter Kafka, Senior Editor, All Things Digital
• Tara Maitra, VP, GM, Content Services, TiVo
• Dave Habiger, CEO, Sonic Solutions
• Avner Ronen, CEO, Boxee
• Alex Limberis, COO, Popbox

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 DRF1, which gets you $200 off the ticket price.

Over the weekend I read another few dozen articles on the whole Apple and Adobe debate and probably read through a thousand comments. Some of the posts I read were really good, but far too many people are comparing codecs (H.264, VP8), platforms (Flash) and languages (HTML5) as if they are all the same thing.

There are lots of posts talking about open standards and making statements on how H.264 is going to kill off Flash. The problem with these statements is that H.264 is a video codec. That's it. It's not a platform of any kind like Flash is. H.264 video has to be played back in a wrapper or by a web browser. The Flash player supports playback of H.264 as long as it has the proper wrapper, which most people either don't know, or simply aren't mentioning. H.264 is not going to put Flash out of business because it can't. It's not a substitute for Flash and is not a platform like Flash. The Flash video platform includes an entire ecosystem for video that includes a player, server and technology for things like content protection (DRM).

If we want to debate the relevance of H.264 to Adobe, then the debate should only be about what H.264 is, a codec. The codec discussion involves H.264, VP6, VP8 and Ogg Theora, the four main video codecs that exist today. Based on what we have seen from content owners over the past eighteen months, there is no question that H.264 is getting a lot of traction and content owners are moving away from VP6 in favor of H.264. That's been clear for some time, which is why Adobe's player has supported the playback of H.264 encoded video since August of 2007.

Another misconception about H.264 is that it does everything all the older codecs do, yet that's not true. Because Flash and Silverlight are platforms and not a codec, their ecosystems include the ability to do things like protect content. Encoding content in H.264 doesn't provide content owners with the ability to take advantage of DRM and H.264 does not support the ability to do adaptive streaming like the Flash and Silverlight platforms provide.

While we're seeing a lot of traction with H.264, it's still not the one codec to rule the world. In fact, we will never have just one codec for a multitude of reasons. While H.264 is great for high-quality video, it's a poor choice for content that's encoded at a lower bitrate with the intention of reaching a wider audience. There is a lot of legacy content that's already been encoded in VP6 that content owners are not willing to re-encode into H.264.

I've seen some argue that these content owners should get with the times and just move to H.264, but not every content owner is targeting an audience capable of getting HD quality video. And while I read one article that said, "no one is really going to go digging very far back into your files if it’s more than six months old", for many content owners, that could not be further from the truth. I've seen a lot of people commenting that content owners should always use the best and most "open" video technology on the market, but with that argument, then these same customers should also drop support for H.264 in three weeks when Google makes VP8 available. Let's be realistic.

The real topic to discuss is what will happen when Google open sources VP8 and then tries to challenge the H.264 codec. While VP8 was never made public when it was under the domain of On2, if the claims that On2 made are accurate, VP8 produces better video quality than H.264 "with data savings of more than 40%". If that is the case, it's going to be very interesting to watch the battle between H.264, which Microsoft and Apple are promoting versus VP8, which Google will be promoting. But all of this debate about codecs really has nothing to do with Adobe. Adobe does not have a codec at stake. Personally, I think Adobe should have purchased On2 back in 2008 when On2 was really struggling and their stock was at a five year low. Doing so would of given Adobe control of VP8 instead of Google, but Adobe chose not to get into the codec business.

So the real debate with H.264 has nothing to do with Flash, but rather with the browsers that support and play back video. Microsoft has said they will only support H.264 in IE9, but we have to remember that IE6 still has close to 10% market share and the browser is nine years old. Looking at my own traffic stats for my blog, nearly 15% of my traffic each month comes from viewers using IE6. Like it or not, that's reality. So the idea that H.264 video playback in a browser that supports HTML5 is somehow going to work for all viewers overnight is simply not the case. How many Internet viewers will have an HTML5 compatible browser in the next two years? Not as many as some seem to think.

In addition, many of the companies that make the browsers do not agree on which video codec should be supported within the HTML5 framework. There is no standard video codec that has been agreed upon when it comes to playing video back in a HTML5 supported browser.

Of course, consumers don't care about any of this. They simply want video to work, for the quality to be good and for things to be simple. But that's not the way the online video industry has ever worked. With all the back room fighting that's taking place between Apple, Adobe and soon to be Google, it appears evident that the real battle amongst these companies is only just starting.

With all the recent talk of H.264 video, I thought I'd let people know that at the Streaming Media East show on Monday May 10th, we have a three hour workshop entitled "Encoding H.264 Video for Streaming and Progressive Download". Led by Jan Ozer, this seminar focuses on producing H.264 video for streaming or progressive download.

It will start with a deep look at key H.264 encoding parameters like B-frames, profiles, and levels, and how to customize encoding parameters for distributing via QuickTime and Flash. After detailing how to operate the H.264-related encoding parameters in tools from Adobe, Apple, Microsoft, Sorenson, and Telestream, it will then provide a brief overview of the respective quality output of these tools. You'll learn how your encoding tool compares in terms of quality and configurability, as well as how to configure your encoding tool for maximum H.264 quality. 

You can still register to attend this seminar and using the promo the code of DRF1 will let you attend both a morning and afternoon workshop for only $245.

It's been just over three years since I started this blog and frankly, I never thought it would take on the life that it has. While I'm not the greatest writer when it comes to sentence structure and as readers have rightly pointed out, I could desperately use an editor, I'm just a one-man operation. Even as a part-time gig, the success of the blog comes from loyal readers, other bloggers who link to me and many sponsors who have supported my efforts with the blog.

I'd like to take a moment to thank my current long-time sponsors of the blog including EdgeCast, Internap, Limelight Networks, Microsoft, Sorenson Media and Twistage as well as previous sponsors including Ignite Technologies, Kontiki, Level 3, Skytide, Tremor Media, China Cache and Akamai.

And as some readers may have noticed over the past few days, a bunch of new sponsor banners have appeared on the website with more on the way. I'd like to thank and welcome my newest sponsors to the blog including 3Crowd Technologies, Brightcove, CDNetworks, Encoding.com, KIT Digital, Panvidea, and Adobe.

I've had a lot of fun over the past three years, have written 1065 posts and received over 5,000 comments. Thanks to everyone who has contributed to the conversations taking place on the blog and I look forward to continuing to hopefully write about topics that are of interest to readers and the industry.

Also, just a reminder that while I know it's not the norm for most bloggers to do, anyone can call me at anytime if they have a question. My cell phone is listed at the top of my blog and I answer all calls 24 hours a day, seven days a week. I don't know everything about this industry and I may not always be able to answer your question, but I'll try to help you find someone who can. Most call me crazy for doing this, taking calls at all hours of the night, from all over the world, but I think it's the least I can do for all of the loyal readers and companies for the support they have given me. Thank you.

A few weeks back I mentioned that three CDNs would soon announce new funding deals and on April 13th, San Mateo based 3Crowd Technologies was the first to announce an investment of $6.62M by Canaan Partners and Storm Ventures.

The startup, co-founded by Barrett Lyon, who also co-founded BitGravity, is offering their first product they call CrowdDirector. The idea is to give content owners greater control over content delivery and other cloud services. Their system essentially acts as a virtual load balancer, providing load balancing capabilities across multiple CDNs, web servers, origins and elastic clouds. It's an interesting idea and one that clearly relies on content owners having a multi-vendor strategy, which many large companies have.

I haven't been able to see it yet in person, but on Monday May 10th, Barrett will demo the solution at the Content Delivery Summit in NYC. It's not too late to register and you can attend the CDN Summit for only $395 using the discount code of DRF1.