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.

Mark Glaser's Tweet from earlier today about Google being in talks to acquire Brightcove made its way around the web in record time thanks to Twitter. While some might say that shows the power of Twitter, which it does, that's not a good thing. Within two hours of the Tweet, more than a dozen major websites and blogs were talking about the report, all based on a 102 character sentence.

While I'm not taking aim at Mark, I don't know who his source was or what was discussed, I think this is a great example of where Twitter is dangerous. If this kind of news first came out on a blog, people would expect some analysis of the story, would expect to read the authors take on what it means and the blog would give the author enough room to give their take on the news. But with Twitter, how much can someone really explain something in 140 characters? As Mark pointed out in a follow-up Tweet, he never said Google "acquired" Brightcove, he said his source told him they were in discussions. Something that probably would have come across a lot stronger if it was a blog post, as opposed to a one sentence comment on Twitter. That said, he should not be so surprised with the amount of coverage his Tweet got as Google and Brightcove are two companies that are well respected powerhouses in their individual industries.

But the bottom line here is that Twitter is a dangerous outlet to use for reporting news that may or may not be true. Blogs provide a lot better platform for being able to give your take on something and personally, I think too many people are becoming way too comfortable with Twitter and using it thinking it replaces a blog post. You can't explain anything on Twitter, which is why any Tweet that actually needs to talk about something useful, provides a link to it on a blog or website.

For more reasons why I'm not a fan of Twitter, see my post from last month, Twitter's Down Again, I Wish It Would Stay Down For Good.

I received a call from one of the parties involved in the Google/Brightcove rumor who would not talk on record but confirmed with me that the rumor that Google is buying Brightcove is in fact false. I won't say which side, Google or Brightcove the employee is from, but it's someone I trust.

Just goes to show you how much people love rumors with all the coverage this got. While I don't know who Mark Glaser's contact was that told him of the rumor, and don't plan to ask him since he won't be able to say anyway, it's given Brightcove and Google a lot of PR today.

PBS MediaShift editor Mark Glaser says on his Twitter page that Google is in talks to buy Brightcove for $500-$700 million. If the deal were to take place it would be a smart move on Google's part and would finally give them a way to generate immediate revenue from video content, although it might not be as much revenue as some may think since a large chunk of Brightcove's revenue comes from reselling Limelight's delivery services, by my estimates, maybe as much as 25%. Also, charging a monthly fee for the Brightcove platform or for delivering content would be a completely new business model for Google, since to date, their platforms like YouTube have always been free.

If this deal went through, what does that mean Google thinks of their YouTube ecosystem? Why buy Brightcove if you already have a way to ingest, transcode, manage, store, track and deliver content? While Brightcove has a really nice roster of top name clients, is Google willing to spend half a billion dollars just to get a customer list? Maybe, but that seems like a lot to pay for just customers.

While I see the upside for Goggle and how Brightcove would enable them to get into the door with top name content owners outside of the media and entertainment vertical, I don't see the value to content owners in a Google/Brightcove combination. I already feel like Google is trying to control too much of the video market, yet still does not have a very clear strategy of who they are and what they want to become with YouTube. Acquiring Brightcove would mean content owners would now need to deal with Google and one of the reasons many of them are with Brightcove now is the fact they don't want to deal with the company behind YouTube or have their content on YouTube. A Google/Brightcove deal would not mean customers content would automatically show up on YouTube, but the kind of customers Brightcove has want to deal with a company that understands more than just video platforms.

Not to mention, how would this affect customers who stream content today via Brightcove? Google's network does not support streaming protocols and I don't see Google setting up their network to stream content in the Microsoft format. Today, most of Brightcove's customers use Limelight for delivery or use their own CDN in combination with Brightcove. Unless Google were to continue to use a third party CDN for video delivery, something they have not done in the past in any volume, I don't see how a deal like this works. I can tell you this though. If this deal does go through, look for a lot of Brightcove's competitors to pick up a large chunk of their business that would not stay at Google.

I could completely see Google doing a deal like this, but I'm not convinced it would be that great of an offering in the market for content owners or that it makes a lot of sense.

Updated post at 2:19pm ET to add the estimates on Brigthcove's revenue from reselling CDN services.