Today, at The Wall Street Journal’s All Things Digital conference, Amazon’s CEO Jeff Bezos made reference to a new streaming video service Amazon will be launching in the next few weeks. While details were not discussed and very little info was given out, it’s not surprising to see Amazon launch a streaming service based offering to go along side Amazon’s Unbox service.

While I think it is great that companies like Amazon are experimenting with streaming media based offerings, there is no demand in the market for such a service today. I love Amazon and I love my TiVo, but to date, Amazon’s Unbox service has had no real success in the market and consumers are not asking for more video based services to stream what is expected to be movies to their PC. The whole movies to the PC business has been tried for years, in all forms, and with every kind of business model. Lets face it. Consumers decide what gets adopted, not technology and content owners and my fear is that with the name Amazon has in the industry, expectations will be set way too high by many of what they think Amazon’s streaming media based offering should turn into.

I hope Amazon launches it quietly and uses it as a test for how content is consumed, how the technology works and to basically get their feet wet with streaming. If the service is hyped and expectations run wild, it will hurt the entire industry when the service does not get as much adoption as some may think.

But for me, the bigger thing to watch from this service is how the content will be delivered? Is Amazon planning to stream the video from their network? To date, I don’t know of Amazon having any kind of content delivery footprint using Flash Media Servers to be able to stream video. Could be they won’t use Flash or that while Jeff called it "streaming" it might actually be progressive download. But the infrastructure side of this offering is really what we need to watch. As Amazon slowly turns into a CDN for video, it will be interesting if this new service now as acts the catalyst for Amazon to build out their network to support streaming or if they plan to use a third party CDN.

With the Streaming Media East show ending yesterday, I was hoping to spend today trying to catch up on all my e-mails but I’m already getting lots of calls this morning about Goldman’s downgrade on Akamai. While I am not a financial analyst and don’t look at the numbers like those on the street do, I can say that I disagree with the reasons why Goldman downgraded Akamai this morning. The reasons given were large network operators entering the space, acquisition by smaller vendors by network operators and the potential entry of P2P offerings.

That all sounds scary on paper, but that’s where it ends. Right now, there are only two network operators in the CDN space. Level 3, who I have been saying all along is a real threat to Akamai and AT&T. Based on my briefing with AT&T and the details I gave out about the scale of their build-out, if they end this year with the 400Gbps they are aiming for, across all of their CDN service, video, software downloads, app delivery etc… that would give them a fraction of what Akamai has. Not to mention no transcoding service, content management, DRM and all the other functionality that Akamai’s Stream OS product has. Level 3, yes, they will challenge Akamai but we have know that for months now, so that’s not new news.

The second reason Goldman gave was that some network operators may acquire some of the smaller CDNs and then compete with Akamai on that level. Again, sounds good on paper, but who are they going to acquire? After Limelight, no other CDN has even half of the revenue Limelight does. Most will do anywhere between $10-$40 million this year. At $40 million, that is about 10% of Akamai’s CDN revenue. Not a big threat. And even if they acquired two or three CDNs and bundled them all together, none of them sell into the government market, offer application delivery or have the tools and APIs Akamai has.

And as for P2P, right now, P2P is not getting traction. It will get some traction down the road, but P2P is NOT a replacement for CDN, it is a compliment. Just like Amazon’s web services are not a replacement for CDN, they are used in conjunction with a CDN. Kontiki who is one of the longest running P2P solutions on the market did $6 million last year when they were owned by VeriSign. Is that a revenue number that’s got Akamai worried?

If Akamai was getting downgraded due to issues with ARPU, CAPEX or other issues like that that I don’t track very closely, then I’d have no comments. But to downgrade Akamai for the reasons mentioned today, when the data does not back it up, I have to disagree.   

Note: I have never bought, sold or traded any stock in Akamai or any other public company ever.

(Note: My latest pricing data can always be foiund at www.cdnpricing.com) At the Streaming Media East show on Tuesday, I published my CDN pricing for Q1 in a session entitled "CDN Pricing: The Going Rate For Video Delivery". You can download the slides from the presentation here.

The first thing that some of you may notice when comparing 2008 Q1 pricing with Q4 of lat year is that it looks like pricing went up. However, for Q1, I changed some of the metrics on how I am reporting pricing as well as who those numbers are from. In the past, I started pricing at 1TB of data transfer per month. As you can see from all the comments on my blog in Q3, pricing is all over the map at low levels and my pricing at 1TB was inaccurate for a lot of customers. Today, anything under 50TB is considered small and CDNs don't think of a customer being large until they are doing about 500TB per month. So moving forward, I am going to give out pricing starting at 50TB a month of transfer. Anything under 50TB a month is now really impossible to give out an "average" number for.

Also, pricing for Q1 is now only from CDN players who are focused on going after large companies. In the past, I included data from those who go after large companies as well as those we go after small and medium sized customers. Those who go after small and medium sized customers are what I call regional service providers. There are probably over a 100 of those companies and they all do pricing differently, including packaged pricing where you get certain levels of storage and transfer all for one price. They tend to price very differently than those CDN going after large business.

The only place I saw pricing go down in Q1 is with a very small percentage of the largest customers who continue to push a lot more traffic each month. Those doing over a petabyte. The lowest price I heard for 2PB a month was two and a half cents per GB delivered.

That being said, here are the numbers for Q1. I will post the video archive of my session as soon as it is available.

In addition to the many sites who are producing video on-demand content from the Streaming Media East show, we’ve also got a few folks broadcasting live from the show today and tomorrow.

– Beet.TV will be broadcasting live from the show floor on Tuesday from noon-2pm EST on their Mogulus channel.

– TVWorldwide will be broadcasting live from the show floor and from some of the conference sessions on Tuesday and Wednesday from 11am-3:30pm EST.

ScribeMedia.org will be filming and recording every session on both days and we’ll be making all of the content available on-demand after the event.

Tonight, the Streaming Media East show is teaming up with the NY Video 2.0 Meetup group to host a pre-show networking and reception event at the Hilton hotel in NYC. Each month, NY Video 2.0 selects and gives six promising local startups the big stage for 5 minute product demos. After the presentations, join us in the lobby (Bridges Bar) of the Hilton hotel for some drinks.

NY Video 2.0 Presenters:

• EkkoTV – Andrew Sternthal, Co-Founder & CEO
• Vusion – Grover Righter, VP Marketing
• BestTV – Oded Felled, Founder & VP BD
• Magnify.net – Steven Rosenbaum, Founder & CEO
• Adotube – Joshua Winograd, Chief Revenue Officer

Presentations start at 6:30pm and will be in the Murray Hill Room of the Hilton hotel on the second floor. The hotel is located at 6th Avenue between West 53rd and West 54th Streets.

This networking event is free, open to everyone and we invite you to spread the word. At this time, we already have over 600 people pre-registered. If you have not already registered, make sure you show up extra early if you want to get in. The room seats close to 600 so we expect a packed house.

Do to a last minute softball injury to one of our moderators, I am looking for a new moderator for a session at the Streaming Media East show in NYC. The session entitled "Monetizing And Aggregating Niche Video Content" takes place Tuesday at 11:45am. Speakers include Jim Louderback, CEO, Revision3, Alex Blum, CEO, KickApps and Herb Scannell, CEO, Co-Founder, Next New Networks.

If interested, please send me an e-mail ASAP and include details on your expertise with this subject, your prior speaking/moderating experience and a list of the types of questions/topics you think are relevant to this session. Please also be sure to include your full contact details including your phone number as we will have to chat Sunday night or Monday if you are selected.

For the August/September issue of Streaming Media magazine, the focus is going to be on "The Changing Video Delivery Space. New content delivery networks are challenging the old guard CDNs. Peer-to-peer and hybrid networks are changing the rules of the game. Who are the players, how big is the market and what’s your best content delivery strategy for video?"

I will be writing the feature article for the magazine and will be covering some of the new players in the market, the recent acquisitions and VC funding, the size of the market opportunity in the U.S., the push by telcos into the business and the role P2P and hybrid networks may play. I’ll also be discussing what some of the growth drivers are in the market and address some of the barriers that exist today.

Streaming Media magazine publishes bi-monthly and a subscription is FREE for those in the U.S who qualify. Digital versions are also made available for those outside the U.S. Sign up now, get on the list and get the issue mailed to you the moment it’s ready.

Note to CDN vendors: I appreciate all of the inquiries, but at this time I am not looking to speak to CDNs about the article. I do not plan to include quotes from CDNs for this particular article and if I need more information, I will reach out to you.