Amazon just announced that in "early 2009" they will enable more than 40,000 commercial-free movies and television shows to be viewed with the Roku player. This marks the first new content partner for the Roku device which to date, was only capable of playing content from Netflix.

While the release states that all content will be encoded with H.264 and streamed up to 1.2Mbps, it sounds like HD quality content from Amazon won't yet be offered on the Roku, even though the Roku box is capable of getting HD quality streams.

While it's good to see Roku start to add more content partners, I think they need to add a lot of video content that you can't already get on your TiVo, Xbox 360 or PS3. While most seem to be focusing on the mainstream content offered by Netflix and Amazon, I think that much of the content outside of the mainstream movies is really what would make the Roku box even more interesting. Especially since that for only $100 more than a Roku, you can now get an Xbox 360 and do more than just stream movies.

Today, Malaysia based Aflexi is pre-launching a new CDN platform targeting web hosting providers and small ISPs who want to enable CDN services across their network. The service is very similar in theory to Velocix's Metro service that was launched last month, but without much of the scale, functionality and support that Velocix is offering.

While the idea of trying to build a network of networks for video delivery is not new, the execution is very difficult and the service only has a shot at making it if enough ISPs and hosting providers sign up to use the platform. Aflexi is selling their platform for $150 a month to hosting providers which enables them to deploy unlimited copies of Aflexi's server software and will be charging ISPs a higher, yet disclosed rate. Clearly Aflexi is not going to make any revenue with that type of pricing model and instead charges hosters and ISPs a "royalty" of just under one cent per GB delivered, based on the volume of traffic they push.

While the concept is an interesting one, the Aflexi platform is missing a lot of functionality and the company is just a handful of folks with no marketing or sales force. Aflexi's strategy is to leverage the co-location and hosting providers resources to sell the service to content owners. The platform does not support Flash, does not come with a SLA and has no ecosystem tools, amongst a host of other much needed functionality. Aflexi is targeting to sign up 20 small ISPs and hosting providers by the end of the year.

While I don't see Aflexi making any major impact on the market anytime soon, CDNs are going to need to develop a software layer to handle the many different pieces of the video ecosystem. And with the number of CDNs that continue to flood into the market, it's only a matter of time before someone starts developing software overlays for CDNs.

During the holidays, on December 29th, the Judge denied Limelight's motion for a summary judgment in their patent suit with Level 3 and stated the case will still go to trial. If you want to get a good overview of the patents in dispute, without too much legal mumbo jumbo, the summary judgment document details what's being argued by both sides.

In other patent suit news, while it was expected that the Judge in the Akamai and Limelight case would issue a ruling before the New Year, no ruling has yet to come out. When it does, I will post it as soon as I get a copy of it.

As expected, this morning Roku announced that the Roku player is now capable of playing hundreds of HD quality movies from Netflix. While my Roku player got the software update over the weekend, Roku says all players will be updated over the next few weeks. In addition to the new 720p HD support, the new Roku software upgrade also allows for up
scaling of SD titles to 720p and enables Roku's switch to the new VC-1 AP
streams, which previously used to be VC1-MP. The switch to the new encoding gives similar or
better quality for lower bit rates. Roku's HD quality videos are now encoded at 2.7Mbps and 3.8Mbps.

While it is great to see HD quality content from Roku, I have to worry about the impact that HD quality video is going to have on Netflix's operating costs. Between the Xbox 360, TiVo, Roku and other devices capable of streaming HD quality video, Netflix is spending more money each month to deliver all of this content. And as more content is made available in HD, that delivery cost to Netflix only continues to grow each month. Even with the economics of scale kicking in and Netflix getting a lower price due to increased traffic, their overall cost continues to go up as the business scales.

While Netflix is betting that in the future they will be able to show revenue from delivering movies online, they don't have an unlimited window of time to prove this. I think sometime next year they are going to have to outline what their online video business model could potentially look like going forward, how they plan to generate revenue or how this offering might help offset other costs associated with their traditional DVD business.

Over the weekend I got to read through the Markman order that was issued on December 10th in the Level 3 and Limelight Networks patent suit. While a Markman hearing typically does not bring a lot of surprises, there were some interesting details about the suit that came to light from the ruling.

The case was reassigned to a new Judge on September 17th of this year
and it is interesting, but not surprising, that the Judge was not
familiar with the technology being discussed. In fact, he even thanked
both parties saying that the materials they submitted and the technical
explanations provided "were all extremely helpful in
educating the Court about the nature of the technology at issue in this
case." While the lack of technical knowledge by the Judge probably surprises no one, you'd think the court would try to assign the case to someone that has some previous experience with what is being discussed.

Level 3 and Limelight were originally in dispute over twenty two terms but came to agreement on four terms (Subscriber, Resource, URL, Default Path) leaving the court to rule on eighteen terms. The rest of the claim constructions in dispute were in reference to Level 3's 807 and 935 patents, which combined have 66 claims and make for some long reading. So if you want the details on each patent, hit the links for the filings.

The eighteen terms in dispute were Origin Server, Repeater Server, Repeater Server Network, Name, Rejecting the Client Request, Client Request for a Resource, Appropriate Repeater Server, Repeater Selector Mechanism, Subscriber Verifying Mechanism, Embedded, Handled, Obtaining a Client Request, Determining, Alternative/Alternate Path, Destination, Overlay Node, Dynamic Router and Real-time Traffic Information. 

For eleven of the terms, the Judge ruled in favor of Level 3's definition and for the other seven terms, the Judge used a combination of Level 3 and Limelight's definition and/or suggestions from the Court expert, Dr. Zegura, to create his own definition. The fact Limelight did not win any of the claims outright is really not surprising since typically the Plaintiff tries to assert very wide claims while the Defendant tries to narrow down the scope of the meaning. Some of Limelight's proposed definitions were too over reaching and some of Level 3's definitions were too broad and "technically correct but insufficiently descriptive."

There was one instance where Level 3 suggested to the Court that it should adopt its ruling on the definition of "Alternative/Alternate Path" because it was the agreed upon construction in the Cable & Wireless and Akamai suit. The Court didn't agree with the argument saying that "Akamai Technologies is a competitor of both Plaintiff and Defendant and a non-party to the instance case."

Overall, I think both sides got some of their definitions well established and while most would probably say that Level 3 did better, I don't think anyone truly knows if that is true until the case goes to court and we see what phrases and definitions are most important in the case. We can expect that to happen sometime next year.

Note: While I have worked as an expert on multiple patent suits, I have never worked on any patent suit involving any content delivery network.

Whenever StreamingMedia.com publishes an article on the subject of H.264, I get a lot of e-mails from readers saying that the licensing costs of H.264 are too expensive or are just too complex to even figure out. Those who sell proprietary codecs use the perception of H.264 licensing
as a labyrinthian ordeal as an ideal marketing tool to complement the
proprietary technology's "simple" license.

So what does H.264 cost to license? And is the licensing cost as complex to figure out as competitors make it out to be? To help clear up a lot of the confusion, StreamingMedia.com has just published an article by Tim Siglin about H.264 licensing costs breaking out the real numbers and how the different licenses are calculated. If you've always wanted to know the costs and licensing terms, this is a great article to read.

Anyone who has read my blog long enough knows that I am always saying that content delivery networks need to offer a lot more functionality in their reporting and analytic packages. Earlier in the year, in a StreamingMedia.com survey of over 1,000 customers, more than 75% of them said reporting and analytics was the number one complaint they had with their current CDN. In April of this year, I posted the top twenty customer requests on ways content delivery networks could improve their offering.

Seeing a real demand in the market, content delivery network Highwinds has been working for the past year on improving their web based reporting product and offering all of the functionality that customers asked for in the survey. In that time, I've had the ability to watch Highwinds product continue to evolve and have been able to get a few in-person demos along the way. To date, their reporting package is one of the best solutions I have seen from any of the CDNs in the market.

Highwinds reporting system, called StrikeTracker, enables customers to get real-time analytics, self-service live event provisioning and enable policy-based content-access protection, all via a web based dashboard. They currently offer multiple metrics for live events, something many CDNs don't have, and soon will give customers the ability to watch individual viewers signing on/dropping off of live events. All customer data is updated typically in 30 seconds or less so it provides actionable information during a promotion or campaign, not just after it has ended. While other CDNs offer near real-time reporting, typically it is at intervals of ten minutes or more.

One of the great things you notice right away when using StrikeTracker is that it was built in Adobe Flex, with a major focus placed on usability and providing a graphically-rich, yet streamlined interface that quickly highlights key statistical information. And because to date, Highwinds has primarily gone after resellers, they have spent a lot of time making sure the system provides reporting for sub-accounts and is viewable through APIs in the StrikeTracker console. Their sub-account reporting and billing data is also rolled up through a hierarchy of parent accounts and can be viewed by sub-account or as an aggregate for all levels.

Another really nice feature of StrikeTracker is that the system will go out to 24 months at the monthly roll-up level today. Many CDNs tell their customers that they don't hold onto raw logs for longer than six or twelve months and I hear from many customers all the time who are forced to have to download and save their raw logs every few months or risk them being deleted.

One thing I am always telling CDNs is that they should have a login to their reporting system, on their home page that anyone can demo at any time. It's not enough for a vendor to send a customer a PDF with a screen shot of their system or a document that gives a high-level overview. If you stand behind your reporting, then let any potential customer login and see the real functionality, without saying you can't because you don't wan your competitors to know what you are doing. To date, I don't know of any CDN that does this, yet it's the number one request of customers. Even when a CDN is pitching a customer on their services, many times they still don't give the potential customer a login to get hands on with the system which should make any potential customer wary.

While I asked Highwinds to give me a user name and password that anyone could use to login and see the system themselves, they said only one person can use the same user name and password at a time. So
while Highwinds is not able to provide an account that can be shared by a large group of people, they are willing to provide a unique login and user ID to anyone who is interested so they can see all the functionality in real-time. You can contact Mark at Highwinds directly and he'll be happy to set you up with an account. Highwinds also has a seven minute demo video of their StrikeTracker system which gives you a really overview of all the functionality.

While I took a few dozen screen shots of the system, it's easier for you to get an account to see it in person or watch the demo video for an overview. I think it's great to see Highwinds addressing a major concern of customers in today's market and it is really important for CDNs to remember that customers won't spend more money on services if they aren't provided with the tools they need to measure their success.