Last Friday, Akamai announced via an email to members of the media that the company will "Announce a New Strategic Company Direction for Video Delivery", via a live webcast on Tuesday. Over the weekend, I got a lot of calls and inquiries asking me for more details on the announcement. While I don't know what Akamai plans to announce, a lot of industry folks are speculating that the new Akamai offering would be something around P2P-assisted delivery, but I have no evidence to show that's accurate. Guess we'll have to wait until Tuesday to find out and I'll blog the details of the announcement as soon as they come out.

It's been seven months since CDNetworks acquired Panther Express and in that time, we've not heard anything from the company on how the integration is going, what their bigger plans are for the U.S. market and how all the recent management changes will affect the direction of the company. So last week, John Milburn, President of CDNetworks International, spend some time with me to answer my questions about their business and gave me an update on their balance sheet, projected revenue and their plans to take the company private.

While CDNetworks was starting to get some traction in the U.S. last year, over the past few quarters, the company has been pretty quiet and I've seen them lose some momentum as the look to continue to try and expand from their home base in Asia into the U.S. market. John explained that one of the major things that CDNetworks has working on over the past few quarters is finalizing their management structure with new hires and promotions. The company has hired a new VP of sales, Cameron Lorentz, hired a new VP of marketing, Jim Campbell, promoted Ian Van Hoven to VP of operations and named current board member John Milburn as the president of CDNetworks International, which includes operations in the Americas as well as Europe/Middle East/Africa (EMEA).

John said that the efforts in the U.S. are still a relatively recent development for the company even though they started to crack the U.S. market with a fairly low-level entry about three years ago. He said the recent Panther acquisition was an indication that the company was going to put a new focus on business in the U.S. and that their goal is to become a significant player in the U.S. market. John said that the real value they saw from the Panther acquisition was the self provision and caching platform as well as their mentality on how they built out their infrastructure. John admitted that Panther had some execution issues and said that part of the reason CDNetworks has been quiet in the market since announcing the acquisition was to "clean up" some of those problems, problems that were widely known by anyone who covers the CDN market.

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Today, at 2pm ET I’ll be hosting a free webinar over at TelephonyOnline.com on the topic of “How CDN Services Are Evolving“. I’ll be covering some of the latest trends in the CDN market and reviewing the role carriers and telcos might possibly play in the future. You can register for this free webinar here and I’ll be taking questions at the end of the webinar. You can also send me questions via email in advance if you like.

Some CDNs don't want to admit it, but today, delivering video bits over the Internet is commoditized. While the performance and scale that comes with delivery is not commoditized across the board, Akamai, Limelight and Level 3 all have very similar performance when it comes to delivering video. Of course, they would probably all disagree with that statement, but the simply fact that so many content owners use two out of the three of them, to deliver the same content, proves the point.

Not to mention, when was the last time you saw any of those three CDNs put out any release talking to increased performance of their network? Their releases have been about adding new functionality, moving up the stack, ecosystem solutions, value add services and the like. Not performance. The fact is, the performance of Akamai, Limelight and Level 3 are considered by most to be very identical to one another for video delivery. This notion is only reinforced by the fact that all three of them are at the top of the list in the market in terms of CDN revenue.

While some CDNs may be able to show customers slight performance or network coverage differences between one another, for the most part, customers are not willing to pay a premium for that difference with regards to video delivery. In the app delivery, commerce and ad delivery business, fractions of a second can and do impact the customer's business. But when it comes to delivering video, having a video start up on one CDN two tenths of a second faster than another CDN has no real impact on the customer's business. So why should any CDN think the customer is going to be willing to pay a premium for that service? Some may, but most won't when the performance difference between the networks are so similar, not to mention, very difficult to measure. Of course, if one network is starting streaming seconds faster than another, that's a different story, but today, that's not the norm between Akamai, Limelight and Level 3.

Neither myself nor the vendors dictate anything in the market, rather, customers decide what they will and will not pay for and what the value is worth to them. While CDN vendors and others in the industry may not like this, it's reality. In general, CDNs have been very good over the past year to work on adding value added services and continue to try and solve many pieces of the video ecosystem. While they are moving in the right direction, they need to once again look at the commoditized video delivery piece and how they charge for it. Most CDNs don't distinguish between what is commoditized and what isn't and they need to start offering different tiered performance and pricing services to the market. This is not an option for them, but rather something that they will be forced to do and should start to embrace it now. This is where the industry is moving and what customers are starting to demand in the market. The smart move by CDNs would be to get in front of it now.

Many times I have customers tell me that they are willing to pay less to have good performance, but not the best performance known to mankind. Other times, customers say they don't need any reporting, self provisioning tools or other ecosystem pieces and as a result, should not have to pay a high per GB price to help the CDNs build out a platform they are not using. Other times, content owners will tell me that the vast majority of their traffic is passed over the CDNs during off peak hours and wonder why they aren't getting a lower rate. 

In all of these instances, customers are looking for a tiered pricing plan based on different levels of performance. Like it or not, before too long, CDNs are gong to be forced to offer tiered performance pricing. While some may say we already have this in the market today, we don't. Don't be confused by tiered pricing which simply changes based on the different level of bits you push, but not at a different rate based upon varying performance.

While I have not heard many CDNs talk about this type of model, I do know that some are already thinking about it and viewing it as something they know they will have to adopt, sooner rather than later. It's also possible that services like HTTP streaming will help drive different performance and pricing plans to the market sooner and that one day, there will be a valid reason to charge more or less for delivery, based on the protocol that's being used. Before long, I see a big shift coming in the CDN market regarding the way customers want to buy these services and the way CDNs are selling them. That's a disconnect that the CDN vendors can't bear to have. Before too long, the CDNs are going to have to change and adapt to market conditions based on what customers are demanding and I think this change is coming a lot sooner than most CDNs may realize.

This morning, Brightcove announced that they are now supporting Flash Media Server 3.5 functionality via Limelight Networks. While on the surface this may look like a basic release, you need to read between the lines on this one. For quite some time now Limelight and Brightcove have been working closely to sell into Akamai accounts as a team, and to date, have done a very good job pitching their combined solution.

While Brightcove is a neutral platform provider and will work with any CDN that the content owners uses, clearly Brightcove's preference is to use Limelight. The two companies have been working closely together for a few years now and this is the first time we've seen Brightcove go on record to announce how many customers they have running on Limelight's network (more than 700). The two companies are also working on some new functionality that has yet to be announced that will only further integrate the Brightcove platform with Limelight's delivery network. (will have more details on that later in the week)

Today's announcement gives Brightcove customers some new functionality within FMS 3.5 including RTMPE support which prevents playback in unauthorized players, DVR like controls and multibitrate support. For customers who want to take advantage of multibitrate support, they can do so immediately and in most cases, don't need to re-encode their content. When Brightcove 3 launched last year, Brightcove introduced their own dynamic delivery capability and gave their customers the ability to encode multiple renditions; four was the default, but customers could add more if they wanted. Their platform already provided an algorithm for bandwidth detection and switching between renditions to optimize the video quality. Brightcove has now introduced a new default in their encoding system that creates six renditions and customers can configure the encoding settings to add more than six renditions if they like.

With the new FMS 3.5 roll out, Brightcove customers will be able to take advantage of the enhanced rendition switching algorithm, which will work with customers' existing four renditions or new six renditions. In a conversation with Brightcove on Friday, they mentioned that they see more content owners shifting to H.264 encoding over VP6 and that trend is "definitely on the rise". We also had a discussion about the different video platforms on the market and when asked, Brightcove said that right now, they have no plans to add Microsoft's Silverlight platform anytime soon. Brightcove said that until customers start asking for the Silverlight platform, they don't have any plans to support it.

Related:

– Brightcove CEO Says Company Profitable and Cash Flow Positive

On Tuesday, News Corps. chairman Rupert Murdoch and NBC Universal CEO Jeff Zucker, speaking at a Goldman Sachs conference, indicated that one day, Hulu may indeed have a subscription based service. While Murdoch was quoted as saying "no decisions have been made yet," sources I have spoken to have confirmed for me that Hulu is already beta testing a subscription based video service internally and is working out all of the technical details for the offering.

While it does not sound like the service will coming to the market anytime this year, the fact that Hulu is already working on the technical requirements and in particular, hard at work on how the authentication piece of a subscription based service would work, is a promising sign.

From what I'm being told, Hulu has a very clear plan for the offering from a technical standpoint, but still is not completely sure how to roll it out product wise or what exactly the business terms will be. While the technical piece of such an offering would have some complexity to it, the real challenging piece of the offering would be the business terms with content owners.

Since most companies are always testing new things internally, I'm not surprised Hulu's already working on this and while it's not a sign that a subscription based service is coming out anytime soon, it does show us that Hulu is a lot further along with the idea than they may say.

As of Thursday night, Hulu had not yet responded to my requests for them to comment on this subject.

I've been contacted by quite a few companies who are currently hiring for open positions in the online video market, so many in fact that I could not even fit all of the company names into the title of my post. Here's a run down of the ones that were sent to me. I'll be doing a second post highlighting more jobs next week so send them over if you want them featured.

• Nokeena: Looking for a Director Product Management.
  Experience with products such as set-top boxes, IPTV, encoders, content
  management and media publishing related products is desirable. Contact Anshu.

• Kaltura: Looking for sales people, product managers, project managers and a few other positions, location not known. Contact Kaltura.

• EdgeCast: Three open positions for Business Development Managers – based in Los Angeles. Contact Phil.

• Sorenson Media: Hiring for at least eight positions across
  the board — marketing, sales, engineering — and for both their San
  Diego and Salt Lake City offices. Details here.

• Deutsche Telekom: CDN sales engineer. As a member of the Sales
  Support team, the Senior Sales Engineer (SE) will have responsibility
  for providing pre and post sales technical and systems support for
  DTNA, mainly for the CDN product but also for the full suite of IP,
  Transport and Innovation products. Location: New Jersey. Contact Sara.

• Encoding.com: Inside Sales Representative. As an Inside Sales
  Representative, you will be responsible for driving new customer sales
  over the phone, owning the sales cycle from end to end.Location: Bay
  Area / remote. Contact Encoding.com.

• BitGravity: Looking for mid-level and senior software engineers with an emphasis on C++, PHP, MySQL. Knowledge and experience with network topologies and protocols, Internet video, codecs, and encoding are strong pluses. Contact Jason.

• KIT Digital: Public Relations Manager, Flash Developers, Corporate Controller, Sales Managers and Sales Engineers, Technical Project Manager. Locations: New York City, Prague, Czech Republic, London, Sydney, Paris, Moscow and Hong Kong. Contact Natalie.

If your online video related company has any job openings, let me know. In most cases I will highlight them here on the blog – free of charge.