Of the 1000+ customers who took our CDN survey and were asked "What value added services are you willing to pay a premium price for", over 75% of them said something having to do with better reporting and analytics with the most common answer being something along the lines of "Better reporting – and did I mention better reporting!!!"

So it will come as no surprise that analytics and reporting was also the number one answer when we asked "In your opinion, what is the one thing your CDN needs to improve on". While most CDNs I speak to know how big of a deal reporting is, very few seem to be taking the issue seriously. Much of what customers are getting today in terms of data is very basic and is at most, raw data that is presented to look pretty but with no analytics to tell them what the data means. I know that some CDNs will say that reporting and analytics is hard as the log files they are dealing with are so big and that many customers have custom reporting needs. That is true, but there should be some base line minimums, and when many CDNs reporting interface can’t even tell a customer during a live event how many simultaneous streams they are doing, the basics are missing.

Looking over the survey data, here were some of the most common comments from customers:

• real-time reporting for live events
• analytics reporting is technical only, not enough marketing oriented
• reporting based on geographic region
• reporting based on sub-accounts
• monitoring/analytics APIs
• self service reporting tools have a terrible interface
• access to geographical based reporting, such as the map in Google analytics to determine local advertising impact
• analytics for Flash content
• providing metrics in a timely fashion
• looking at how long each video is played on average, are people dropping half way through?
• Analytics a little bit limited, e.g. can’t choose custom time frame (3 day for instance), also the reporting does not translate UTC to our local time
• Reporting over longer periods of time (currently only 6 months)
• detailed user analysis (who watched what for how long from where)
• an API for accessing and displaying the tracking data, so that I could create my own "dashboard" to show real time stats
• I would like an API where I can get raw metrics to feed into our internal report structure. We use several CDN’s and each has their own reports. We spend too much time translating data to produce a single comprehensive report.
• reporting and analytics and the ability to parse it out by stream/customer
• push default reports I want to me, rather than me have go get them
• views per day, views per geographic location, length of each view then an aggregate % per day

From all the customers I speak to, the feedback I have heard is that Akamai and EdgeCast have the best reporting products in the market. That’s not to say that others may not also have a good functioning products, but those two are the ones I hear the most compliments about from customers. I think every CDN in the business should have a real reporting account on their homepage that anyone can log right into so that you can see first hand what their reporting and analytics package looks like. Too many times customers tell me that when they ask about reporting, most CDNs send them a product sheet with some screen grabs of the interface.

Reporting, and more importantly analytics, needs to get better a lot faster. Customers have to be able to show the value in these services, measure their success and justify why they should spend more money to deliver more content. While I see many of the CDNs all going to the market with the same message about performance, reliability, high-quality etc…. most of which don’t really mean anything to a customer anymore anyway, why not create a really good analytics package and use that as your go to market message? It would stand out from the rest of the commodity marketing terms CDNs use, would resonate well with customers and is a functionality of the service all customers need.

VeriSign is expected to sell its Kontiki P2P division this month to a group that has been previously involved in the company. Barring any last minute problems, the deal should be closed and announced in the next few weeks. Whether or not they will keep the Kontiki branding remains to be seen but they are expected to re-focus their offering to target the enterprise market. While VeriSign won’t comment on the sale, the "rumored" buy back price people are circulating in the industry is around $40 million, which would be about 3x revenue.

In the past two weeks, I have received over 100 job openings from many companies in the online video industry. In particular, the CDN vendors have many openings which really comes as no surprise considering that nearly all of them are flush with recent capital and are expanding their sales and engineering groups. Since I can’t possibly highlight all of the open positions, I have decided to highlight a few of the ones below and provide links to where all the openings are listed. In the order they were sent to me:

Akamai: Has multiple job openings in San Diego, Cambridge, San Mateo and New York for Senior Software Engineers, Technical Project Managers, Senior Solutions Engineers, Major Account Executives, Systems Administrators, and Quality Assurance Engineers. You can see all the details on Akamai’s job openings on their website.

BitGravity: Has openings for Director of Engineering, Live Broadcast Engineer, Flash Developer, Director of Operations, System and Support Engineers, Director and Manager of Product Marketing, Inside and Outside Sales Reps, and Sales Engineers. You can see all the details on BitGravity’s job openings on their website.

Limelight Networks: Has job openings in Arizona for Strategic Account Managers, Account Executive and Operations Technician. They also have one opening for a Account Executive in London. You can see all the details on Limelight Networks job openings on their website.

EdgeStream: Has job openings for Senior Sales Executives in Los Angeles, San Francisco and New York. For more details contact Rajeev.

Panther Express: Has job openings for Sales Executives, Sales Engineers, Senior Software Engineers, Quality Assurance Engineers and Customer Support Engineers. You can see all the details on Panther Express job openings on their website.

Level 3: Has many job openings which you can see on their website including a Streaming Product Manager based in Denver and several Operations positions. They also have an immediate need for  Account Directors and anyone interested in that position should contact Mary at Level 3 directly.

WorldNow: Is looking to fill two openings. A Vice President of Video Technology and Senior Director of Video Technology. Anyone interested in the positions should contact Su Ming.

If you are looking for a new position, have taken a new job or are a company that has a job opening, let me know. In many cases I will highlight it here on the blog – free of charge.

Insight Research is forcasting that streaming content will generate almost $70 billion in the U.S. by 2013. I don’t know how they come up with that number as I have not seen the full report, but $70 billion? They say the revenue prediction comes from audio and video files transmitted over the Internet, via an IPTV network or to mobile phones. They say that advertising revenue will fuel this growth and that "Questions surrounding consumers’ willingness to pay for content have been dispelled by the popularity of satellite radio and iTunes." I would disagree. Customers are willing to pay for music via iTunes, but so far, not videos on a mass-market scale. Over time, yes, more video specific content via iTunes will be purchased but you have to  back up the $70 billion number with more than just iTunes as an example. And what does satellite radio have to do with streaming?

They also say that if pre-stream costs drop faster than expected, or IPTV or 3G takes off faster than expected "it could blow the doors off of our forecasts, propelling this industry into explosive growth." I am all up for reports that show growth and make predication based on accurate data, but $70 billion is just so far away from reality. If someone has a copy of the full report, I’d love to see how the $70 billion number is calculated.

I’ve been asked to spread the word about groups on LinkedIn for professionals in the content delivery industry, webcasting sales professionals and Flash Media Server developers. While the focus of each group is a bit different, all of them are using LinkedIn with the purpose of exchanging knowledge, experience and contacts.

I have not joined any of the groups myself as of yet, but will be doing so shortly. To sign up for any of these groups, follow these links: CDN Industry Group, Flash Media Server Developers Group, Webcasting Sales Professionals.

Added Group: Legitimate P2P

If you know of other LinkedIn groups that are relevant to the online video industry, please post them in the comments section and I will add them to the list.

Tomorrow, I will be spending the day at Akamai’s HQ in Cambridge where they are nicely giving me access to sit down with management and others in the company to answers my questions, talk about their product road map, discuss the media and entertainment vertical and in particular, talk about their CDN business. Some of what we discuss I will blog about at a later time, other things I’m sure will be off the record.

I already have a list of questions lined up pertaining to their CDN business and am looking forward to getting some details on where their CDN business in particular is headed. I get a lot of questions about Akamai from customers, analysts and those on Wall Street and Akamai is open to me collecting questions for potential discussion. If you were visiting Akamai, what questions would you ask them? Put your questions in the comments section and I will ask and report back on as many of them as they are willing to answer.

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

Of all the calls I do with analysts, money managers and others tracking the content delivery market, rarely do those I speak with ask about video birates. For me, the growth of the content delivery market and the very success of the CDNs relies heavily on the trend we see developing for increased bitrates. Most think CDNs can only grow their business by signing new customers or growing their existing customer base. But increased video birates has a huge affect on any CDNs bottom line and 2008 is the year that the bitrates of old finally turn the corner.

Five years ago, the average broadband video stream was encoded at 300Kbps. Last year, 300Kbps was still the norm but we saw many moving to higher quality. Within the last six months, the average broadband video is now at least 500Kbps. We have all seen bigger window sizes, better frame rates and all of that comes from increasing the bitrate. In just the past few days or weeks alone, MLB.com, MTV.com, Yahoo!, YouTube, and Daily Motion amongst many others have all increased the quality of their video.

Gone are the 300Kbps streams and small window sizes. Many content owners are now doing 750Kbps streams and come this year they are going to be delivering many more bits than last year. And with most content owners using some form of a CDN to deliver their content, the CDNs are poised for some explosive traffic growth this year. The average content owner I speak to says they expect to grow traffic 2-4x times this year, without the increased bitrate. Factor in moving from 300Kbps to 750Kbps and content owners could push 4-8x more bits this year than last. Of the over 1,000 content owners who took our CDN survey, 68.9% of them said they would increase their bitrates this year above 300Kbps.

Some say HD is going to be the biggest factor for CDN growth but HD viewing adoption in large numbers is years off. HD will have some impact this year, but most content owners are not encoding content in HD and are focusing on a bitrate around 700Kbps. But even with HD having a small impact this year, it still adds to the growth that CDNs are going to see in the next few quarters. Content owners are putting up more content, in more platforms, in higher bitrates and much of that content is longer in length. This all amounts to a huge increase in the number of bits being delivered via the CDNs.

That being said, the real question is will the CDNs be able to turn the additional traffic into additional revenue or will more traffic simply mean they will have to lower their price? As any content owner should know by now, the more traffic you do over time, the lower price you pay per GB delivered. But for most content owners, it’s going to take a few quarters before they see that growth. Lower pricing is not going to come overnight and for those who aren’t doing huge numbers to being with, even doubling your traffic may result in just small savings. Taking a look at contracts and pricing I see in the market, a large content owner doing say 300TB a month is only going to get about a 15% reduction in price on average for doubling their traffic to 600TB a month. Commitment levels and contract lengths play a factor in that percentage, but doubling traffic does not mean pricing then gets cut in half. For really large customers who grow their traffic quickly, they could see their price per GB cut in half. But if they are doing 4-8 times more traffic, even with the 50% price cut, the CDNs are still making more money. For some of the largest customers the CDNs have the increased traffic and lower price point could cancel each other out over time, but it will take many quarters for that to happen.

One of the best ways we could see the growth the CDNs are seeing from customers is if we knew how many streams the CDNs delivered each quarter. A few years ago, many CDNs use to give out that data each quarter or at least a few times a year. Some, like iBEAM, used it as a marketing vehicle to promote how quickly they delivered their 1 billionth stream. While the number of streams a CDN delivers does not equal a profitable company, as iBEAM found out, it would at least give us a way to see what type of growth customers and CDNs are experiencing. Today, the number of streams a CDN delivers each quarter and the growth they are seeing are one of the many data points that CDNs are scared to release to the market. Scared that if their number is lower than a competitor a customer may go with someone who did more volume. Scared because they won’t be able to use some of the marketing language they use today if their numbers don’t match. Scared because most CDNs in general are too focused on what customers "think" they do, as opposed to what they really offer. In the CDN landscape, they all seem to be focused on "perception" rather than reality, which keeps a lot of data from being revealed.

But the problem with this stay quiet approach is that as an industry, we need the CDNs to step up with this kind of data and show the growth. CDNs don’t need to list out customers by name, but there is nothing stopping them from saying we delivered X amount of total streams last quarter. We need data points in the market that we can all rally behind to show Wall Street and others the value CDNs provide today and the role they are going to play when this becomes a billion dollar market. We need to show advertisers how many streams content owners are growing by each quarter and we need data points to show everyone how important the CDN market is. CDNs, think of the bigger picture. You hold the keys to being able to show everyone what the real growth patterns are for online video.