Yesterday, Intercall, which brands itself as "the world's largest conferencing and collaboration services provider" announced that it had acquired privately held Stream57. The company, founded by Ben Chodor in 2001 and headquartered in NYC, specialized in providing customizable web events with their webcasting platform and provided live event services. Terms of the deal were not disclosed but I will update this post if I get some details.

Related:

– Thomson Reuters Acquires Webcasting Platform Provider Streamlogics

Last month, on December 29th, Akamai was granted a patent (number 7,640,303) relating to a "Method of, and system for, webcasting with just-in-time resource provisioning, automated telephone signal acquisition and streaming, and fully-automated event archival."

Reading over the details of the patent, the focus appears to be on a system that allows for the real-time provisioning of a live meeting and the automated process to be able to handle things like audio signal acquisition, encoding, monitoring, archiving, reporting and billing.

While the patent filing makes reference to prior art and systems that already do this today, the basis for the patent seems to be the claims that all of these other systems have deficiencies, which the Akamai patent supposedly overcomes. Some of these deficiencies include:

• "traditional Internet conferencing casting systems have several
  deficiencies. These applications typically use databases to generate
  reservation information, to initiate events, and to authenticate a host
  or the attendees. The database dependency creates a potential single
  point of failure because if the database is unavailable, events cannot
  be run."

• "a typical application runs the event streams from a single server,
  which again represents a single point of failure and limits
  scalability, i.e., the number of attendees that can attend the
  conference."

• "prior art conference casting systems also do not have the capability to
  archive the event in an automated manner and/or to manage when
  particular streams get interrupted before the event is terminated."

• "the prior art systems require advanced setup for the streams, which
  dictates a blackout period between the time that an event is reserved
  and the occurrence of the event itself. Thus, once an event is
  scheduled, a service provider typically must provision or allocate in
  advance various system and other resources. Such resources include,
  without limitation, media encoders, storage, network connectivity,
  streaming server ports or publishing points, and the like."

• "prior art conference casting systems do not have the capability of
  reserving and then immediately executing the event, with the resulting
  stream being immediately available to an audience member. In prior art
  systems, stream redundancy typically requires special handling and
  raises costs."

What seems broad to me is Akamai's assertion that all other systems reserve physical resources ahead of time. They are implying that no events based webcasting system on the market today can generate a live stream, or provision any audio resources on the fly, or what they call "just-in-time", when requested. The patent also mentions multiple times that the Akamai patent "provides significant flexibility and reduced costs as compared to prior systems", which sounds like marketing speak to me. They also say that, "In addition, the system is able to handle large numbers of simultaneous events and massive total audience sizes." Again, lots of marketing words, but no definition of what "large numbers", "massive" or how many "simultaneous" streams they are talking about.

Clearly this patent is aimed at the business side of webcasting since
typically, those are the events that have registration databases
involved and audio conferencing bridges. Most of your one-off media and
entertainment events, sports and concerts, don't involve that kind of
functionality.

I'm very curious to see if Akamai does anything with this patent and if they try to go out to the market to enforce it in any way. That may not be their intention, or they may view it as something they want to try and enforce, we just don't know. Since Akamai has a company policy of not commenting on anything patent related, I didn't ask them what they plan to do with it.

For a couple of quarters now, Akamai has been talking about being more aggressive with their CDN pricing. But historically, those pricing reductions have only been with a limited number of customers that Akamai defined as "strategic". After the Streaming Media West show in November, I wrote that Akamai had begun to get a lot more aggressive across the board and they have only accelerated this trend last month and into January.

Over the past four weeks I have seen bids where Akamai has matched pricing from Limelight, Level 3 and EdgeCast or in some cases, undercut their pricing all together. I have seen fewer video contracts steer away from Akamai in December and January and it's clear the company is taking a serious pricing reduction strategy and applying it to a wide portion of their video business. I estimate that by the third quarter of this year, Akamai will have re-priced roughly 75% of their contracts that include video.

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While not announced, webcasting platform provider IVT has confirmed that CEO Phillip Whalen has stepped down and been replaced by company founder Greg Pulier, who will act as the interim CEO. Greg takes over for Phillip who joined IVT two years ago. No details were given on when a new CEO would be hired. The company plans to make some news announcements in the coming weeks.

The vast majority of companies in the online video space are private and as a result, don't publish any details on their revenue, profit loss or rate of growth in the market. Many times, vendors will tell me off-the-record what their financials look like but don't allow me to give out any of those details in any public forum.

So it was great to have a call with Ignite Technologies last week where the company was willing to go on-record with numbers, drill down into their revenue and provided me with a list of new clients wins from 2009. While everyone is talking about content delivery over the public Internet, companies like Ignite are focused on providing a platform that enables enterprise corporations to deliver video and digital assets inside their firewall, across the customers own network.

Ignite signed up more than ten new customers last year including BP, FlowServe, Sepracor, Altria and Hyatt and ended the year with revenue over $10M. While that number is small when compared to CDNs in the market, those CDNs are in the service business, while companies like Ignite are in the software business.

While the topic of enterprise CDN does not get a lot of coverage in the media, it's crucial to the way enterprise corporations communicate with employees, customers, partners, suppliers and others in their value chain. The market for enterprise video delivery platforms is still small, under $100M last year, but it's a fast growing segment of the market and one that does not require any type of monetization model, like we see in the consumer entertainment market. Corporations understand the value of video and their challenges are things like managing content, scaling their network and integrating with CMS platforms, as opposed to ad insertion or content licensing models.

The enterprise CDN market does not get written about a lot because most of the work being done is not talked about, many customers don't want their name used and the nature of the content being delivered can't compete with exciting content like movies and entertainment. But there is a quiet revolution going on in the enterprise CDN space and if you speak to a lot of Fortune 500 corporations, the will tell you that their use of video delivery inside their firewall tends to double each year.

Related:

– Enterprise Video Still Growing, Ignite Technologies Reaches Profitability

– In These Economic Times, More Video Vendors Relying On The Channel

Yesterday, after sixteen years as CEO of RealNetworks, the company announced that Rob Glaser would step down as the CEO and the day-to-day operations of the company. Rob will still maintain his chairman of the board duties and is still the largest single shareholder in RealNetworks.

When the news broke, it was very interesting to watch how many bloggers jumped on the story and published a post without really knowing anything about Rob, what he accomplished with RealNetworks and the role he played in starting the entire online video revolution. Many were quick to say he should have stepped down long ago, wanted to imply that RealNetworks business is in trouble or wrote about the "format wars" from nearly ten years ago.

The reason for this is that none of the bloggers I read are actually in, or from, the online video industry. They weren't around in 1995 webcasting with RealAudio 2.0 software, weren't encoding video two years later when Progressive Networks introduced RealVideo and they never had to negotiate a contract for a RealNetworks license. They simply don't know how important of a role Rob and Real have played and the groundwork they laid for the technology we have today. Half of them, including sites like USAToday.com, don't even know how to spell the name of the company or the word RealPlayer correctly. They are both one word, not two.

That's not to say I think Rob and Real did everything right and Rob and I have disagreed on many things over the years. Probably the biggest thing was in 1998, while at Globix, I negotiated a $200K Real license to be able to deliver content on our network, only to then find out that Real also planned to compete with us for the same business with their own network called RBN. That was a really bad move on Real's part and was one of the reasons Microsoft was able to get their foot in the door since so many delivery networks were upset with Real's licensing practice.

I also remember bashing Real in an article for Streaming Magazine in 1998 when Real decided to limit their support for the Mac client and I also didn't agree with many of the bets Real made over the last few years with regards to the iPod. But disagreements like those aside, while they don't deserve all of the credit, Rob and Progressive Networks started this industry, which can't be debated. Even former Microsoft employees who don't like Rob won't deny the fact that he deserves credit for what he's accomplished.

Today, many talk about multi-bitrate video delivery probably without even knowing that Real invented the technology ten years ago when they launched their G2 system and called the technology SureStream. Real was also responsible for the wide adoption of the RTSP protocol, the first video platform to support SMIL and a whole host of other firsts. Today, most don't know how the online video industry started, what companies were around back then, how the technology evolved or who was responsible for it. The media is so quick to judge companies with the what have you done for me
today mentality, as opposed to looking at what they have accomplished over many years.

As was evident by a lot of the bloggers who covered the news, most of them only know Real as a format that use to be around after losing the format wars to Microsoft. While that's accurate, that took place almost ten years ago and Real moved away from the online video format business nearly eight years ago. Today, they only think of Real as a gaming or music company and are quick to dismiss Real as a company that is struggling, without really knowing anything about their core business or where they get their revenue.

There is no question that Real has gone through hard times over the past eighteen months with lower revenue, layoffs and a sagging stock price. But show me a company who hasn't experienced the same thing? It's not like Rob left the company in some kind of financial turmoil, like other CEOs we could all list. As of Q3 2009, RealNetworks had $373.2M in cash and short-term investments. For the third quarter, their revenue declined 5% year over year, which considering the economy we are in, is not bad at all. Many companies would give anything to get a number that low.

While Real has not yet reported Q4 numbers, for all of 2009 the company will have generated more than half a billion dollars in revenue. That alone should get Rob some respect. In addition, Real's carrier platform is used by 85 mobile operators in more than 45 countries and in Q3, the company generated $47.4M in revenue just from their technology products and solutions alone. And for all the industry people who want to talk about the monetization of video, Real will generate close to $100M for all of 2009 from selling premium content services, syndication and player licenses. How many other companies are generating nearly $100M from content today?

While looking through a lot of the comments on other blogs about Rob stepping down, folks were quick to say how Real is losing the music battle to Apple or how five years ago they used the RealPlayer and didn't like it. I get the sense that the vast majority of people don't know what Real's business is today and it is very clear that many of the people writing about the news don't know the history of Progressive Networks and the important role they played.

Many bloggers were quick to try and get their post up first about the news that I found it sad that none of them, that I read, took the time to talk to one of the many folks who have been in the online video space since the early beginning, to ask them what Rob really meant to the industry. That alone is a good story, but many bloggers are less concerned with telling stories these days and just want to be the first to report news.

In many industries, most companies don't last sixteen years. In the Internet space, it's even more unheard of. In that time, Rob managed to not only start the online video revolution but stay the CEO of a company and grow revenue to half a billion dollars. Like it or not, it's pretty hard to argue with those facts. You don't have to agree with everything someone says or does to show them the respect they deserve for what they have accomplished.

Rob, for your efforts over the past sixteen years, and for what you have done for the industry over that time, you have my thanks.

As I reported in October, when I got access to some screenshots of Netflix streaming on the Wii, Netflix confirmed today that come this spring, Netflix members will be able to get streaming video to their Wii consoles. Similar to Netflix's offering on the PS3, users will be required to insert a DVD into the Wii console each time they want to stream something from Netflix.

While the current Wii console is not capable of displaying video in HD quality, for most Wii users, they won't care. I am willing to bet that the vast majority of content that will be consumed via the Wii is going to be content for kids and families where HD won't be a requirement. And in many cases, the content Wii users are going to consume, like cartoons, would not be impacted by the lack of any HD version.

Many have suggested that when Netflix is able to bring streaming to the Wii that it would be a big deal for Netflix since Nintendo has the most gaming consoles in the U.S. and has sold 26M Wii's to date. While it is a big deal for Netflix, the Nintendo deal won't be as successful or more widely adopted than the Xbox 360 platform, even though Microsoft has 6M fewer consoles in North America.

The biggest problem is that most Wii's are not connected to the Internet. While it is impossible to know exactly what percentage aren't connected, folks inside Nintendo have told me the figure is as high as 85%. And for anyone who wants to hook up their Wii to the Internet via a wired network to enable Netflix streaming, they have to go out and buy a $25 Wii Lan Adapter. Compare that to the Xbox 360 where Microsoft has said that roughly 80% of all 360 consoles are connected to the Internet and you get a clear picture that the Wii won't have that big of an impact on Netflix's revenue in the short or near term. It's a great deal for Netflix and for Wii users, but the impact to both companies won't be felt within the next year.