I've recently spoken to quite a few ISPs about their practice of letting CDNs place servers inside their network to reduce their costs. With video traffic starting to become a real burden on more ISP's network, many are under the impression that CDNs like Akamai and others can just place their CDN servers in the last mile anywhere they want. While this was an easy and common practice for CDNs over the past few years, this is no longer the case.

Over the past twelve months or so, many of the ISPs I have spoken with said they are denying requests from the CDNs to place servers in their network or are kicking out CDNs who previously had gear in their facilities. Many of the ISPs said they are now focusing on doing it themselves and we have seen examples of this with companies like Verizon deploying video servers on their network for FiOS customers. Over time, nothing would stop Verizon from going to a content owner like Disney and cutting a deal to deliver Disney's content directly to Verizon's customers, essentially cutting out the CDN.

It's also been interesting to hear many ISPs tell me they have allowed some of the biggest CDNs to put gear on their network, only to see much of the gear go unused. I think this is because a CDN server placed inside an ISP network needs to be filled.
The cache fill is data from the CDN’s origin (or the CDN’s customer’s
origin) and most of the time, this fill will come from outside the ISPs network. The cache fill data plus the cost to house and power the CDN’s server is typically borne by the ISP. But if video is not being served from the CDN servers within the ISP network is there a real benefit to having them there? Many of the ISPs I spoke to said no and didn't see the value in letting the CDN reach their end customer for free.

It is important to remember that the ISP owns the customer, not the CDN. The CDN's customer is the content owner, but if the CDN has not done enough deals to get their servers inside ISPs or does not have enough peering in place, content owners could start dealing directly with the ISPs. Amongst the large ISPs I am talking to, those doing billions of revenue a quarter, this trend of kicking out CDNs is one that seems to be gaining traction and I hear a lot of them purchasing their own gear or working with companies like BandCon.

That said, while this all makes sense on paper, we have to see how many content owners are actually willing to deal directly with ISPs. Any major content owner who wants to bypass or supplement a CDN would have to cut deals with a lot of ISPs since no one ISP accounts for the vast majority of eyeballs. In Europe this would be easier as a few ISPs control nearly all of the consumers, but in the U.S., content owners would have to cut a lot of deals. It would not be hard to do, but one has to wonder how much expertise content owners will have to put this in place. For the major content owners, completely doable, but you'd have to be doing a ton of traffic and have quite a large reach to make it worthwhile.

Content owners may not want to do deals with ISPs until HD video is truly adopted and many ISPs are still building out their own CDN offering, not yet selling the service. So until they make it known to content owners that they can deal directly with the ISP, it's too hard to know what impact this will have in the long run. What impact this could have directly on the CDN industry we don't yet know, but this is clearly a trend, something I am hearing more and more of and something to keep an eye on.

While the channel, defined as resellers, has always been a part of some online video vendors strategy, in the past twelve months or so, many vendors are now relying solely on resellers for the vast majority of their revenue. Whether I am talking to enterprise video vendors like IVT, Qumu or Polycom or CDNs like EdgeCast, companies in all segments of the video ecosystem are keeping their sales and marketing costs down by using resellers.

For some, this a big shift from twelve months ago where companies looked to the channel for sales, but didn't really rely on it for the bulk of their revenue each quarter. When the economy started to show signs of serious problems and the number of days it took to close contracts grew, many companies realized they needed to reduce their biggest cost, which is usually sales and marketing. For some, the channel is a great model and one that should help them get through these tough times. Solutions that are complex and require a lot of other ecosystem pieces to work, especially in the enterprise, can be sold by one vendor who helps bring all the right pieces to the table. They tend to be able to articulate to the customer who all the vendors are and how their products fit into the total solution being sold. Companies like Cisco, AT&T and others do a fairly good job of bring many smaller video vendors into the picture and helping them ramp their sales pipeline.

While this strategy is working well for some, others are not having as much success. These days it seems that just about every vendor has a "partnership" with every company in the industry. These "partnerships" are nothing more than referral deals and are not done with a true resellers mentality, which is selling and integrating multiple products to the client as one combined solution. The biggest problem with these type of deals is that most vendors are only good at selling their own offerings, and not a third party. They don't have the time or expertise to really be able to sell something they don't control and sales resources are already stretched thinner than ever. While many of these "partnerships" look good on paper and make noise with a press release, the vast majority of them never produce any revenue.

While the enterprise segment of the market really has the channel strategy locked down and the CDN market as a whole is starting to make it work, many of the other segments of the industry have yet to be able to get any tangible revenue from resellers. While this will change over time, many are only looking at resellers now as they want to simply reduce headcount and keep their costs down because of the economy. This may work in the short term as you see an immediate cost savings on the books, but unless they can ramp revenue quickly, the cost savings are short lived.

The channel strategy has always been an interesting model to watch in our industry as it tends to only lead to success for specific verticals or specific products. The good news is that more are making it work and seeing the value in terms of additional revenue. What companies do you see in the industry that are doing a good job via resellers and are showing real customers or revenue from their channel approach?

Joe Ambeault, Director of Product Development and Management for Video Services at Verizon has been added as our final keynote at next month's Streaming Media East conference. Over the last 3 years Verizon has been employing a spiral development approach in close collaboration with a wide cross section of consumer segments to progressively deliver more of the Internet to the television in a mass market friendly manner. In Joe's keynote, attendees will learn about Verizon's first Internet applications for FiOS TV's approach for bringing Internet video to the set top box and Verizon's vision for the future of Internet TV.

Joe joins other keynote speakers Paul Sagan, CEO of Akamai, Gregg Moss, SVP of Enterprise Streaming at Media Bank of America and Avner Ronen, CEO and Founder of boxee.

The early registration deadline ends this Friday and readers of this blog can register with a special discount code of DRF1

Two weeks ago, Limelight Networks launched their new whole site delivery product, branded LimelightSITE, directly targeting the enterprise, finance, retail and government verticals. With this announcement, everyone is asking if this will have any affect on Akamai, who to date, has always dominated the enterprise and retail markets with their dynamic site solutions.

In my post about Limelight's new offering, I mentioned that I was going to follow it up with another article that would compare the services from the two companies on a technical level. Not a performance comparison, as that can only be done by customers, but rather an overview of how each service works and what the differences are. After spending a lot of time in the past week with both companies, I've come to the realization that's comparing the two services is nearly impossible for multiple reasons.

For starters, the solutions are very different and while there is some overlap, they appear to be targeting different customers with a different feature set. With commerce, Akamai is looking at more than just the transaction and personalization of the site and is also overlaying purchasing data from advertisers' websites to present the most relevant ad to shoppers, hence their Acerno acquisition. And unlike video, whole site delivery and accelerating apps comes with a host of complex tasks that is a lot harder to compare from one vendor to another. Retail sites are using a lot of RIA apps, dynamic HTML, javascript and components that can't be cached, not to mention the security requirements, specific page loads times demanded by customers and professional services work performed around commerce and enterprise solutions.

While delivering video has its own host of ecosystem pieces, it's a whole lot easier to compare one vendor to another for the delivery of video versus whole site delivery and application acceleration. The only true way to compare both of these service would be for a customer to take part of their site and create a sub domain so that both Akamai and Limelight could deliver similar content from the same site. But even that may be hard to do as Akamai and Limelight really do seem to be targeting different sized customers and more importantly, customers with different needs. When Limelight launched their product they said they were not expecting to compete with Akamai head on but rather with their customers own IT department. While some overlap between the two companies is expected, having spent time with both companies in the past week, their solutions really are quite different. After getting lots of product specific details from both companies, I've come to the realization that doing a fair, apples to apples technical comparison would be nearly impossible.

That said, I think both companies can grow their solutions in the market. Unlike video which was only a $400M market last year, the total content delivery market for all kinds of content is well over a billion dollars and growing rapidly. With Limelight already having over 160 customers for their new offering, it proves that there is room in the market for both Akamai and Limelight with different offerings.

When it comes to the subject of Akamai and their enterprise and commerce customers, I get a lot of questions. Many hear Akamai use terms like "value add services" or "retail solutions" but don't know exactly what that means, what the offering looks like and how it all works. No where on Akamai's website can you even find a product sheet on commerce because as I learned this week, to Akamai, commerce is a market, not a product line. Commerce falls under their dynamic site solutions product line. Since we all know that Akamai's margins on services outside of video delivery are quite healthy and are the products that make Akamai unique in the market, Wall Street always always has a lot of questions.

This is very similar to Akamai's application delivery product which is a term that everyone knows, but rarely do I find anyone who can explain what that means or how it works. That was my reasoning for publishing two articles on Akamai's app delivery offering last year that outline how it works and what it is used for. Taking that same approach, I am already working on doing the same for Akamai's commerce related business detailing how it all works, what the offering looks like and how it is used. I hope to have that follow up post ready sometime next week.

Related:

– A Detailed Look At Akamai's Application Delivery Product – Part 1

– Overview Of Akamai's Application Delivery Customers – Part 2

– Limelight To Challenge Akamai With E-Commerce, Whole Site Delivery Product

– Cisco Buying Colo Space In Third Party Data Centers, Says It's For New CDN Offering

Thanks to all the readers and many industry vendors who bought copies of my books as giveaways, my publisher Focal Press has recently sold over 20,000 copies of all the books in my series since the first one was published four years ago.

While some may think that writing books is a great way to make a lot of money, it's not. For me, the incentive was to try and get as much information on our industry out to as many people as possible and make it easy for others in the industry to get published. Many thanks to all of the authors who made the "Hands On Guide Series" possible including Steve Mack, Joe Follansbee, Lionel Felix, Damien Stolarz, Stefan Richter, Jan Ozer, and Jason Fincanon.

I've learned a lot about an industry that four years ago, I knew nothing about. If we think the online video industry is crazy, just try working in the publishing space. For me, it's also been very interesting to see how the dissemination of information has changed over the past four years. Today, writing a book about this industry seems like a waste of time since you could just blog about it in real time. Things change so fast and by the time you write a book, get it printed and published, six months has already gone by. Blogs are clearly making an impact in the publishing space replacing print and except for technical books, many business books have since being replaced by blogs about the subject. Even for me, I have no new books in the works and don't plan to as the reach, exposure and syndication I get from the blog far surpasses anything I can do in print. On a small scale, I have seen first hand the shift that has taking place from print to online.

As a thank you to everyone who has made the books a success, I'll be giving away all of my personal remaining inventory for free. Simply leave a comment in this post telling me which book you want (see the list to choose from here) and I'll pick a bunch of folks at random and mail out copies until they are gone.

The Streaming Media East conference is only a month away and we've now finalized all of our keynotes and speakers. On day two, Avner Ronen, the CEO and Founder of boxee will be one of the two keynotes in the morning. If you haven't already registered for the show, readers of my blog can register with the special discount code of DRF1 and attend both days of the show for only $695.

For full program details, visits the conference page or check out the list of speakers.

Over the past week, and in particular today, various news outlets are talking about the problems that some MLB.TV subscribers are having with MLB video. While many are quick to want to say it's an Adobe Flash problem, or an issue specifically related to HD video quality, many don't understand all the different technology pieces involved. While I do think MLB has done a poor job of telling users what exactly is going on and what they are doing for those affected, most of the problems we are reading about today, took place from when the player was still in beta just a few days ago. No one seems to be writing about this in real time.

I've been testing MLB's new Flash Video player since day one when it went into beta, fifteen days ago. In that time I have traded a dozen or so e-mails with MLB giving them my feedback, providing my system settings and judging their video quality. For the most part, I have experienced very few issues and many of the posts I have been reading on the MLB support website come from users who are dealing with the beta version of the player. When MLB made the beta version of their video player available on March 26th, the whole reason for doing so was to test their offering with real traffic, see what needed to be fixed and then roll out a new version of the player and the Next-Def plugin in time for opening day. That's exactly what happened. The day before opening day, anyone using the beta version of the player was asked to download an updated Next-Def plugin and MLB took the Flash Video player out of beta. Since that happened, the issues users are having has dropped and looking at the posts on MLB support site shows the volume has dropped dramatically over the past few days. Yes, this all happened around opening day, but that was four days ago. Most of the articles I have seen today about MLB video problems are reporting on issues from four days ago and not in real time.

In addition to having to download the Flash Video plugin to get MLB, users who want to get HD video quality also have to download what MLB calls the Next-Def plugin. This additional plugin is from Swarmcast, not Adobe, and it enables much of the new functionality you see in the MLB player like the ability to have DVR like functionality. It also enables the HD video stream to be delivered via HTTP and pulled from multiple content delivery networks, instead of the video coming from just one CDN as is the case with a non-HD video stream. While some writers are calling this an Adobe Flash plugin, it's not.

Many of the complaints on the MLB support website were around the HD video feed and around the Next-Def plugin. But since MLB has fixed the majority of user's issues from a few days ago, it's interesting to note that no new update to the Next-Def plugin has been made since opening day. So whatever issues viewers were having, it clearly was not as a result of the plugin itself. Many of the other issues I see on the MLB support website are around issues not even pertaining to video, like experiencing login issues. I also saw a bunch of angry folks on the boards complaining that when MLB launched the player in beta for the Yankees game, they could see the video but not get the audio. That's because the main audio feed from MSG was down and something MLB had no control over, which I detailed on my blog that day.

What many folks don't understand is all the different pieces that go into the MLB.TV offering. The moment there is an issue it's easy to blame the player. But what about the feed coming from the stadiums? Or the encoding? The delivery of the stream from the CDN(s)? There are a lot of moving pieces to any live event let alone so many events all taking place at once. While some may think that the main reason for MLB making the player available in beta two weeks before the season was to drive subscriptions, it wasn't. The main reason was to test the player and all of the other pieces with real traffic to see how it all works. That's not something you can test in a lab and you need real world scale to see how it works. In most cases, MLB has no ability to test the feeds from the stadiums until open day. This is live and for an offering like this, you need a day or two to make it rock solid. Especially considering that last year, MLB was not using more than one CDN and this year, with the HD offering delivered via HTTP, are using multiple CDNs.

Some of the debate seems to be around MLB using Flash this year and moving away from Silverlight, with some implying that Flash is to blame. While the Silverlight plugin automatically supports HD video without the need of an additional plugin, like Adobe needs for the MLB service, we would have seen many of the same problems if MLB was switching from Adobe to Silverlight. The plugin plays a role in the offering, but it is only one of many pieces in the entire ecosystem for live video capture, ingestion and delivery. The video plugin alone does not make or break such a service.

No one is debating that having any issues with a live video feed, especially one that you are paying for, is really frustrating. But this is not TV and should not be treated as such. It's taken MLB at most two days to solve the vast majority of the issues and we don't know how many of the issues that users are still having are as a result of the user. While I would like to see the video quality improved on the 3MB HD stream being offered by MLB, I think overall MLB's offering is really solid. And if you take the time to look at hundreds of comments on the MLB support board, many of the users are not having any problems. As of today, there are 2,742 posts on the MLB support site about HD video problems, and many of those are from duplicate users. Putting that into perspective, that not a large base of MLB.TV customers.

If you are experiencing issues with MLB.TV, please leave them in the comments section.