While there's been a lot of hype about peer-assisted technology (P2P) over the past few years, in reality, the technology has gotten very little adoption when it comes to being used to distribute video, let alone streaming. Today, most of the content being delivered via P2P is for software and gaming downloads and so far we haven't seen any of the major CDNs offer a real peer-assisted solution on their network. Later this year, that is going to change.

Within the next two quarters, both Akamai and Limelight are going to bring to the market peer-assisted delivery services on their network. And unlike previous deals where some of the CDNs were simply reselling a third party P2P platform, these solutions are going to be their own, deeply deployed and integrated directly into their networks.

(Correction: In the case of Limelight, they will work with other existing P2P companies who want
to use the Limelight Network for peer-assisted delivery.)

While some might think the reason Akamai and Limelight need peer-assisted solutions is to reduce their costs, or offer a cheaper level of delivery in the market, they would be wrong. This is not going to be about reducing a customer's bandwidth bill as many P2P providers pitch in the market today, but rather the ability for Akamai and Limelight to guarantee a certain level of quality. For all the talk in the market about HD video and the word "quality", the fact of the matter is that the CDNs don't control the last mile and have no way to ensure truly HD quality video.

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This morning, Abacast announced the availability of Adobe Flash support for their live peer-assisted (P2P) delivery platform and now supports both live and on-demand peer-assisted Flash video delivery across their network. While P2P has gained almost no traction amongst the major CDNs whom have thought about peer-assisted technology after their networks were already built out, Abacast's network was built on peer-assisted technology from the start and they have had some good success in the market.

While Abacast is not the size or scale of the major CDNs and focuses on targeting small and medium sized businesses, one of the things they have going for them is the fact they are profitable and focused. Before long, I would expect to see Abacast acquired for their peer-assisted technology by an MSO or potentially, larger CDN. From the Abacast customers I speak to, their peer-assisted technology actually works and is not a bunch of smoke and mirrors like some of the other P2P solutions on the market. There are a lot of P2P companies out there claiming to have a robust solution in the market, but most customers who have used them say otherwise.

Speaking of CDNs, some very interesting things are taking place regarding the major CDNs adopting peer-assisted technology on their networks, later this year, to deliver a higher level of video quality. I'll have more on that story shortly.

CDNetworks has confirmed that Steve Liddell resigned today and has been replaced by long time CDNetworks board member John Milburn. Steve held the title of President of CDNetworks International and was opointed to that position after the company he was CEO at, Panther Express, was acquired by CDNetworks in February of this year.

John is a member of the CDNetworks Board of Directors, representing Oak Investment Partners, and was instrumental in organizing the syndicate of investors that provided $96.5 million in funding to CDNetworks in December 2007.

CDNetworks says John has served as an advisor or board member for many ISPs and Telcos in Asia and several Silicon Valley based companies, including Juniper Networks, AboveNet and Aleton Websystems. John recently served as the chief negotiator for the sale of GMarket to eBay for $US 1.2 billion dollars. 

This move comes at an interesting time as I was just saying to someone the other day that it seems like CDNetworks has been really quiet in the U.S. lately and has not made much noise since the Panther acquisition. Of the contracts I have seen in the market for CDN services it seems like CDNetworks name isn't showing up as often. Not sure what to attribute this to, but I'll be speaking with John before too long to hear his strategy on how CDNetworks plans to try and really crack the U.S. market.

Updated 2:14pm – When reached by phone, Steve Liddell said his main goal after the Panther acquisition was for him to stay on board and make sure the integration between the two companies went smoothly. He says with the integration now done and completed about 90 days later, it was time for him to move on to a yet undetermined new opportunity.

While going through some of my old files, I came across a bunch of my pricing data from 2005. This was around the time I started collecting CDN pricing a couple of times a year and the charts below show pricing from the market in 2005 based on per MB sustained, per GB delivered and includes pricing on storage as well.

While no one who follows the space will be shocked to see just how far pricing has dropped over the past five years, it's also funny to look at the buckets of volume that were being priced back then and what was considered to be a large volume customer, compared to today.

But if you think these prices are crazy, just look at what the going rate was in the industry in 1999 for a live webcast. Below is what InterVU's list price was at the time for a webcast at 56Kbps. To put these numbers in perspective, the $95K cost to do a 4 hour webcast to 25,000 simultaneous users today would cost on average about $1,500.

In a conversation late yesterday with Jeremy Allaire, CEO of Brightcove, Jeremy went on-record to tell me that the company is now officially profitable and cash flow positive. While this is a big deal for Brigthcove, it's an even bigger deal for the industry and is validation that companies in this market can in fact create scalable, profitable businesses.

Nearly twelve months ago to the day, I interviewed Jeremy for a story where he commented that he expected Brightcove to be profitable within a year. While some wanted to argue that Brightcove burns too much money and could never grow their revenue fast enough, the sheer number of customers for Brightcove's premium service says otherwise. Brightcove now has over 700 premium customers, almost double what they had at this time last year, and while Jeremy would not give out any revenue details, he did say that the company will see 50% revenue growth in 09'. From my estimates, I expect Brightcove is probably on track to do about $80M this year.

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Based on numerous sources I have spoken to, I can now confirm that Akamai has been selected to stream the 2010 Winter Olympics for the NBC Olympics website. While Akamai and Microsoft did not provide any comments for this story, Akamai is already in the planning stages to handle the broadcast. (Updated: Akamai says they can now confirm that "they are involved in streaming the event next year.")

While it may seem surprising to some that Akamai was selected considering Limelight Networks successfully streamed the Olympics last year, there are some key factors that helped Akamai get this business. The Olympics will be using Silverlight and Microsoft's new Smooth Streaming technology, a technology that Microsoft worked with Akamai on and that Akamai paid to have the exclusive license to for a couple of months, before other CDNs were given access to it. Smooth Streaming is going to play such a big role in the Olympics and will dictate the quality that the user will get that it's really no surprise that Akamai would be selected, since they have the most experience working with the technology.

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One of the most common questions I get asked from those who track public CDNs in the industry is what the barriers to entry are for new CDNs who enter the space. With so many new content delivery networks popping up in the last 24 months and the technology having evolved quite a bit over the past ten years, it's a fair question.

Today, the online video platforms and the necessary hardware that is required to run a CDN are completely commoditized and delivering video on the web is not as hard as many CDNs make it out to be. That said, it's pretty easy to enter the CDN market with an investment of tens of millions of dollars and offer a solution in the market that gets some decent customers. But that alone is not enough to seriously compete with any of the major CDNs in terms of scale or revenue. While many of the newer CDNs coming to the market always want to say they are going to "challenge Akamai", the fact of the matter is they won't challenge Akamai's revenue, scale or market share, ever. Sure, if you are Level 3 and you put hundreds of millions of dollars into building out a CDN offering, you have a chance over many years to compete with Akamai. But most CDNs aren't raising and spending that kind of money.

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