In today’s economic climate, everyone is being asked to do more with less. Online video publishers are no exception, and they face the dual challenge of having to increase their traffic while at the same time reducing their costs. Rather than pulling back on the amount of video that they publish, content owners need to continue to publish as much as possible and do everything in their power to generate revenue faster.

Of course, content owners have to pay for the encoding, hosting, and delivery of every piece of content that goes online, on top of video creation and acquisition costs. And while traditional broadcasters incur no additional cost for each viewer, online video doesn’t scale in the same manner. Adding more videos and more viewers for online content only increases your costs and, in some cases, that cost means the difference between content owners publishing their entire catalogs versus only a portion. While these fundamental challenges have always existed for publishers, recent budget cuts make cost savings more crucial than ever. Publishers need to look at the entire video ecosystem and find ways to reduce their costs while they increase both the quantity of content and the overall quality of the online viewing experience.

Since the vast majority of content owners use a third-party content delivery network (CDN) to deliver their videos, most publishers are well aware that they can quickly reduce their costs by simply cutting their bandwidth bill. While that may work for content owners that previously signed long-term contracts at a higher rate or for a publisher whose contract is about to expire—and who can therefore shop around for a lower price—many content owners are already locked into a contract. Contract issues aside, most publishers can’t simply cut their bandwidth bills since they push more bits when they increase their traffic and deliver more bits when they encode their content at higher quality.

Content owners that know their traffic spikes can make the decision to commit to less traffic per month, use a second CDN for overflow traffic to avoid overages, or commit to bandwidth on a quarterly or yearly basis instead of a monthly one. But for the vast majority of content owners whose online video business is new or for publishers that have varying and unpredictable levels of traffic, it’s not that easy to save money on the delivery of video. That’s not to say that publishers can’t get the best of both worlds—cutting costs while still growing traffic—from a CDN. To do so, content owners have to look beyond bandwidth and consider other services CDNs provide that can reduce their costs while they increase both the quantity of content and the overall quality of the online viewing experience.

Since the vast majority of content owners use a third-party content delivery bandwidth bills since they push more bits when they increase their traffic and deliver more bits when they encode their content at higher quality. Content owners that know their traffic spikes can make the decision to commit to less traffic per month, use a second CDN for overflow traffic to avoid overages, or commit to bandwidth on a quarterly or yearly basis instead of a reduce overall video costs. While all content owners should look at ways they might be able to save on bandwidth, they really need to examine where they are spending money on the entire video ecosystem, from content creation to delivery and everything in between. For many content owners, CDNs can help reduce overall video costs by doing more than just offering a lower price per gigabyte delivered or megabyte sustained. And they can do it without publishers having to sacrifice the volume of content they put online or the quality of the video they’re making available.

You can read the rest of this article from StreamingMedia.com's Think Series, sponsored by Internap, for free here.

About two weeks ago I got a bunch of e-mails from MLB.TV users who came across my recent post on MLB.TV's video offering telling me that they and others like them are still experiencing major problems getting MLB's HD stream to work. A quick check of the MLB support boards shows that a limited number of users are still having problems nearly two months into the season. Some of the users are also complaining that a few of the features that MLB.TV advertised as being available in the new player were not yet offered.

Around the same time I got these e-mail I had experienced some of the same issues with MLB's HD video stream when I was traveling and using the service. To find out what's really going I had a quick chat last week with Bob Bowman, President and CEO of MLB Advanced Media who filled me in on the problem and how many users it's really affecting.

Bob said some users are still experiencing problems getting MLB's NextDef HD stream to work but said the number of users affected is under one tenth of one percent. He said the problem lies in the Swarmcast plugin and only seems to occur when MLB has a lot of games starting and finishing at the same time. He said they still see this problem on occasion and that it is much better than it was but that it does fail once or twice a week. As of last week, MLB changed the way the streams worked so that when a viewer can't get the HD stream, they are automatically falling over to the SD version. Bob said that they think they have identified the issue that is causing the problem and have a patch internally that should fix the problem. He said they don't plan to roll out any new version of the player specifically to address the Swarmcast issue.

In regards to the problems some people have experienced, Bob said it is way down from last year and so far, the number of refunds or cancellations is only in the "hundreds". As of last week, MLB.TV had 600,000 total subscribers across the desktop and wireless and MLB.TV has had over a 40% growth rate from last year. Not surprisingly, Bob said the number one complaint and reason for users calling MLB.TV support comes from something pertaining to the blackout restrictions.

One of the other issues that some users have been complaining about it why the MLB.TV player is not allowing you to do picture in picture with an audio only feed. Bob said the audio sync functionality should be coming in the next week or two and I'm going to check out some games tonight to see if the feature has already launched since Bob and I last spoke. While on the phone, I also asked Bob for more details on the business arrangement with Adobe and whether or not Adobe basically bought MLB's business. While Bob didn't get into exact details he did say that the deal with Adobe was very straight forward and was the type of standard hardware and software deal that they do with the dozen or so partners they have in their video ecosystem.

Related Posts:

– MLB.TV Expects To Do Away With Blackout Restrictions Sooner Than You Think

– MLB's Video Problems Being Overblown By The Media, Here's Why

– MLB's HD Video Using 3MB Stream, H.264, Full 720p At 1280×720

At last week's Content Delivery Summit, I moderated a panel with speakers from Deutsche Telekom, Global Crossing, Level 3 and Tata Communications who discussed how over time, they believe they can dominate the CDN market. (video archives of the panel will be online shortly)

It was a very interesting discussion to hear the telcos talk openly about their offerings today and what they envision them looking like a year from now. Global Crossing, who to date has entered the CDN market by reselling Limelight and EdgeCast, said that 18-24 months from now they will need to stop reselling third party CDNs and bring the product in-house. Deutsche Telekom also agreed that at some point, the CDN offering would become large enough that it makes sense to bring it in-house and have more hands on control with the service.

Level 3 and Tata Communications have taken a different approach and instead of reselling, Level 3 built their own CDN and Tata Communications licensed technology from BitGravity to deploy their own offering. Level 3 said that today, 70% of the traffic on their network is video and building a CDN for them was as much a defensive move as it was an offensive one. Not surprisingly, when I asked all of the CDNs where they think they could slip up, all of them stated that focus and quick reaction to the market would be essential to them being successful within the CDN sector. This should come as a major concern to all the telcos as the one thing they are not known for is reacting quickly to anything. Focus is another concern as well, but I think any company can focus if they really want to. Moving fast, that's a different story and even when some companies try to move fast, they simply don't have the mindset to be successful.

I also asked the speakers if they felt that owning the network offered any kind of cost savings or advantage in the market in regards to being able to sell CDN services at a cheaper cost. While most of them agreed that it did, none of them have yet to be able to prove that to the market since they all have only recently been offering CDN services. While owning the network may give some companies like Level 3 an advantage, until they can show the industry they are making money with CDN and have lower prices, it's pure speculation at this point in time.

While taking questions from the audience, one of the attendees asked the telcos on the panel who resell pureplay CDNs why none of them were reselling Akamai since Akamai is the leader in the space. Deutsche Telekom commented that Akamai "would not move fast enough" and was not "nimble" which is kind of scary when a telco thinks someone else is slow to react. While this is a comment I hear often from customers in regards to Akamai's slowness to respond, I also see a trend taking place. Akamai use to be the number one CDN to go to for resellers and has Verizon, BT and NTT Communications reselling their services today. But in the past eighteen months, AT&T, Deutsche Telekom, Global Crossing, NaviSite, Pacnet, Reliance Globalcom, Tata Communications and TeliaSonera have all decided to resell someone other than Akamai or build the CDN themselves. This can't be a good sign for Akamai and while they do report a large percentage of their revenue each quarter as coming from resellers, we have no idea how much of that revenue is specific to video.

While the telcos were very adamant that they think they can become the major players in the CDN market in 24 months, all of them also spoke with caution and no one was willing to guarantee that they will be disruptive. I think they all realize that they have a lot of work to do to catch up to the pureplay CDNs and the barriers to entry are very high. You can't just roll out a CDN with a bunch of boxes and have true scale, capacity and performance overnight, let alone do a few hundred million a year in revenue.

It's way too early to know what role the telcos will have on the CDN market but at some point, many of them will have to acquire some of the successful CDNs in the industry so they can get to market faster. It's only a matter of when, not if and 18 months from now I think we'll have a very good idea if the telcos can truly disrupt the CDN industry, or will still only account for a small portion of the market share.

While I still think Twitter is one of the biggest wastes of time, starting today, I am going to use Twitter to send out real-time updates about the online video industry. One of the things I realized last week at the Streaming Media East show is that I have a lot of really great conversations with people about topics and trends that never make it onto my blog. Typically there is not enough to write a whole story around or I just don't have enough time to get to it. This is where Twitter comes in.

In addition to providing links to my latest blog posts I will be using Twitter to send out quick news on trends, data, pricing and other relevant topics I hear from others in the industry. I'll also use it to notify people when last minute speaking spots open up at our shows and for when I am looking for quotes for a story I am working on. My Twitter feed is going to be all business and one thing you will not get from me is updates on my favorite sports teams, where I ate dinner or what music I am listening to as quite frankly, I don't think anyone really cares.

Twitter is not going to be a replacement for all the writing I do on my blog, it's simply going to act as a supplement to the blog. So if you'd like hear more about the online video industry in real-time, I look forward to you following me on Twitter.

At last week's Streaming Media East show, we had many of the largest content owners in attendance and I got to spend a little bit of time with many of them hearing more details about their business. One of the many things I learned was that MLB expects to be able to resolve the online blackout restrictions for their MLB.TV service sooner than people may imagine. While no timeline was given, MLB made it clear that they think they can resolve the issue and that there is enough money to go around to pay everyone to make it possible to get in market games through their online video offering, sooner rather then later.

Doing away with blackout restrictions is essential in order for MLBAM to take their business to the next level of growth. Right now, MLB.TV is missing a huge percentage of the market who would not get MLB.TV simply because they don't travel and don't need to follow their team outside of their viewing area. The moment MLBAM can open the service up to anyone who wants to follow their team outside of the TV set, the size of the market that MLB.TV can go after increases dramatically. While some may say that it's about time MLBAM finds a way around this, keep in mind they have been pushing for this for years. It's not as if MLBAM has been blind to the problem and Bob Bowman told me last week that of all calls to the support center for MLB.TV, not surprisingly, blackout restrictions are the number one complaint.

Related Posts:

– MLB's Video Problems Being Overblown By The Media, Here's Why

– MLB's HD Video Using 3MB Stream, H.264, Full 720p At 1280×720

– MLB.TV Launches, $10 Cheaper Than Last Year, HD Video, DVR Functionality

Over the last few months, CDN EdgeCast has shown a lot of success with getting companies like Deutsche Telekom, Global Crossing and NaviSite to resell their delivery network in the U.S. and Europe. Now, EdgeCast is taking that approach to the Latin American market and has signed up Samba Tech to resell their streaming, edge storage, caching, and high-speed delivery services.

Samba Tech is one of the leaders in the South American market and have essentially locked up all the major media groups in Brazil including projects with 3 of 4 largest TV Stations and some of the largest media publishers including SBT, Brazil’s second-largest television station, and Atletico-MG, one of the largest soccer teams in Brazil. Sporting events are a big business down there and EdgeCast has been delivering this content for many months now

What's interesting about delivering content in Latin America is that there is less peering between ISPs in the region than in the U.S. so many times, much of the traffic between countries like Brazil to Argentina first goes back to the U.S. and then back down instead of exchanging over peering in their region. As a result, EdgeCast and most other CDNs can deliver content faster over their networks even if the content is being served from North America than users experience currently in the Latin American market with local content. EdgeCast is serving all of their Latin American traffic today from their POPs in the southern part of North America and said that customers who tested their service against the other big CDNs found it to be just as fast if not faster than CDNs who say they have local POPs in the region.

That said, while EdgeCast does not have any POPs in Latin America yet, they will be building out locally through both direct and indirect relationships over the next 12-18 months as they feel that having local POPs will offer better performance over the long term. EdgeCast is also working with additional partnerships in other regions of Latin America as well.

EdgeCast is really on a roll right now. They continue to sign up a lot of major resellers, have over 300 customers and have only raised $10M to get where they are today. It's only a matter of time before a telco or larger player takes them out of the market and it won't be a fire sale.

With Amazon's content delivery offering now in full swing, Amazon is currently out in the market recruiting account managers and biz dev managers for a dedicated sales force that will focus on selling CloudFront services. Amazon is using the same model for CloudFront as they do for all of their other services, which are mostly self serve, but with additional small, focused teams to work with larger customers who may want more direct interaction with Amazon.

In addition, last week Amazon rolled out "CloudFront Access Logs" which gives customers details on who is consuming their content and Amazon's Elastic MapReduce team has also built a sample application, CloudFront LogAnalyzer that will analyze Amazon CloudFront access logs.

While the functionality of Amazon's delivery services are still pretty bare bones, as soon as Amazon adds streaming capabilities to CloudFront, they will very easily become the de facto standard for those who need very basic video delivery services. While not all content owners will be a fit for CloudFront, Amazon can very easily take over the commoditized portion of the market and it will be difficult for hosting providers to compete with a similar offering, at the same price point. Delivering video is not complex when you're not a major media company and you don't have huge traffic spikes and many video ecosystem pieces. And with the process of sticking a bunch of video clips on a network becoming even easier, Amazon will be in the drivers seat to own the market for small and medium sized content owners who need simple delivery, at a great price.

For Amazon, everything about this business is in their favor. Unlike other CDNs, Amazon does not need to worry about raising money, has many development resources in-house, has a global brand and does not need to rush to get anything out the door by a certain deadline. Amazon has time, money and expertise on their side and in the long run, this is going to be bad news for small regional streaming providers and hosting companies.