Last week, JumpTV announced that it was looking to sell its content delivery network and would be "refining its strategic focus toward
high-value sports and Hispanic broadcast content." This is a great example of where trying to own and operate your own network specifically for the delivery of video does not makes sense. In the release, JumpTV said "The content delivery network is currently a significant cost center
for the company, and the Company believes its sale will enable it to lower its
ongoing operating costs."

When asked by investors who their biggest competitors are in the
market, some CDNs choose to say "companies who do it themselves". That
may be the case when it comes to the static caching of images and HTML,
but for video, nearly no content owner builds out their own CDN. Yes,
Google and MySpace deliver the majority of their video content
themselves, and AOL does a lot, but how many companies are truly like those three? Certainly not JumpTV.

Delivering video to a mass scale, like JumpTV was doing for over 5,500 live events in the last quarter alone, takes a lot of money, a lot of effort and more resources than most realize. Yes, it is not rocket science anymore, but it is very capital and man-power intensive. For all the investors that think any company with some money can enter the market and easily give the top CDN players a run for their money, it’s not that easy. And when any content delivery network says that "customers doing it themselves" is the bigger competition they face, ask them for what service they are talking about. It’s not for video.

Think about some of the biggest users of video on the web today; MLB, NBA, CNN, MSNBC, FOX, ABC, CBS etc… none of them are building out their own CDNs for video delivery. The CDNs have no major threat from content owners building out their own distribution networks for video delivery.

Limelight put out earnings this week and once again, many analysts are unfairly comparing Limelight and Akamai numbers and data. Why is it that so many analysts and reporters are willing to make very specific statements about CDN providers, but do so using general terms? Sounds confusing just saying it but I’ll prove my point in a second.

Yes, there is no question that Limelight did not show revenue growth from quarter to quarter and its yearly revenue guidance of ($136M) is a lot less than the pre IPO revenue guidance they gave ($179.2) for 2008. Investors want to see revenue growth quarter to quarter, but to me, who has no vested interest in either Limelight or Akamai’s stock, the number of net new customers by Limelight each quarter continues to grow very well. Continued, long term, steady growth of customers is a good benchmark. Yes, being profitable is important, I get that, but this is not a dash to the finish line. This market is only just getting started and for Limelight, they are in this for the long term. And even without revenue growth quarter to quarter, the next closest competitor to Limelight in terms of CDN revenue for the U.S. has less than 25% of Limelight’s revenue, so its not like anyone is bumping them from the number two spot.

I find it interesting that no one is saying Akamai only had 19 net new customer for the quarter and Limelight had 170? Why is no one comparing that and saying look how good Limelight is doing over Akamai? Because it is not a fair comparison. But that does not stop analysts and others from comparing Limelight’s 15% decrease in the monthly average customer revenue, versus 20% increase by Akamai. That’s suppose to be a fair comparison? What percentage of Akamai’s revenue came from CDN services last quarter? How many new CDN customers did Akamai sign up? We don’t know as Akamai won’t break out those numbers. But did anyone stop to think that Akamai’s CDN business could of been flat for the quarter as well but all of the other higher grossing products they have made up for it?

Limelight lives or dies by two things. It’s CDN product, specifically for video delivery and the media and entertainment customers, which is its core vertical. Akamai offers multiple products not related to video and targets other verticals like enterprise and government. So when reporting numbers, we know exactly what product or service customers are buying. With Akamai, we don’t.

Now some will say that Akamai stated on their call that a) the writers strike did not affect their business and b) they saw significant seasonal strength in media and entertainment. I agree with both of those statements, BUT, they are general statements. Did the writers strike affect Akamai. Absolutely. Doesn’t Akamai have just as many if not more major broadcasters on their network than Limelight? While it did affect them, Akamai answered the question correctly when they said that it did not affect their business. Since Akamai is diversified in their product line, the writers strike had little impact on their revenue overall. But is that then fair to compare that to Limelight since they don’t offer those other products? No.

And as for Akamai’s statement that they, "saw significant seasonal strength in media and entertainment…" I don’t doubt that. But for what product? Why does everyone assume that just because it is a media and entertainment customer that means they are doing video? Media and entertainment customers need other services Akamai offers as well. Why doesn’t anyone question the general statements many companies put out and ask for the data behind it?

And before anyone writes in and says I am taking sides or am defending Limelight, I’m not. Yes, Limelight is a sponsor of the blog but Akamai has also nicely been a sponsor of the blog on multiple occasions. If the roles were reversed, I would still be making the point. It does not matter who the company is to me, it’s the principle of how data is reported and conveyed to the industry and the market.

I probably saw over two dozen articles yesterday alone about Limelight’s earnings. One said, "…it’s
at least as likely that customers are pulling away from Limelight
because of the costly patent lawsuits brought by Akamai and Level 3…" Really? That’s a very specific statement, yet made in a general term with no details. Likely based on what? Customers you spoke to? Something Limelight said? Something you can point to? None of the above. If anything, Limelight’s continued growth of net new customers each quarter says the opposite.

No, I don’t own any shares of Akamai or Limelight. I have never bought, sold or traded their stock ever. And I know some investors are going to say that I am not a financial analyst so what do I know. That may be. But don’t you think that is exactly what is needed in today’s market? People who don’t have any vested interest in public companies questioning what they say and asking for details on the products that make up the numbers? Anyone can look at a spreadsheet and P&L and all of that. But all of those numbers come from the products and every time I listen to a earnings call, nearly all of the questions are about ARPU and lots of financial data. That data comes from the products and services being sold. Why not ask more about them so you can see how the numbers evolved into what they are?

I’m sure some will say, why the hell do I care about this so much? Why am I always ranting about apples to apples comparison when I have no vested interest in the stock of any of these companies? The answer is simple. I want this industry to grow. I have been in this market for almost 15 years and I want to see it grow for another 15. In order to do this education, data, metrics and examples are the_best way that is going to happen. Maybe I am a fool for wanting companies and Wall Street to be more straight forward with info, ask the right questions and provide real data. I know when it comes down to it it’s all about politics and the companies decide what data they put out in the market and what "perception" they want the industry to have.

My relative Sam Rayburn, former Speaker of the House said it best with the quote of "you can never remove politics from politics". That’s what this industry feels like to me sometimes, politics.

I can’t figure out why we still have to read an article every few months talking about how online video is clogging the Internet. Last week the AP published an article titled "How Internet Video Is Clogging the Pipes". It’s basis for the argument is that ISPs like Comcast and Time Warner Cable are shaping traffic due to file sharing. Ok, but what does that have to do with online video? Sharing files that may or may not contain video content is not "online video". Sharing a file via a download from one user to another does not involve the playback of any video online, it’s played back locally from the users computer.

Yet, after saying that file sharing is the problem, the article then says that "Internet use keeps climbing, with video being the big driver in recent years. Google Inc.’s YouTube, which started up in 2005, already accounts for about 10 percent of Internet traffic." First, is there anyone out there besides the company who produced that report that believes that YouTube accounts for 10% of all traffic passed on the Internet? And second, how can you compare file sharing to YouTube? They are two different types of traffic. File sharing is usually very large files and most times at very high quality. YouTube is short form content at very low quality.

My point is that we keep having to read articles every few months about how online video is supposedly breaking, clogging, or filling the pipes to the point that the Internet is going to come to a halt. There is no data anywhere to back this up. Yes, video traffic has grown and continues to each year, but it has been doing that for the past 10+ years. Online video is not clogging the Internet and I have yet to see anyone with any real data to back up the theory that online video is going to fill up all of the capacity the Internet has to offer.

With over 30 CDN and P2P providers in the market today (www.cdnlist.com), you’d think the VC money would stop flowing to content distribution networks, but it’s not. Over the first half of this I expect we’ll see at least three more companies who are expected to announce funding. Looking at my list of 30+ providers, there is almost no company left on the list that hasn’t raised money. I can’t remember a time in the CDN market, even dating back to 1999, when nearly every company in the CDN industry all raised capital within nearly 12 months of each other.

We’ve seen Limelight Networks go public and EdgeCast, CacheLogic, CDNetworks, Grid Networks, BitTorrent, ChinaCache, Move Networks, Itivia, Rawflow and Rinera Networks all raise money within about the past 12 months. I expect the next round of funding announcements this year to come from Panther Express, Pando Networks and BitGravity and if that happens, nearly every company on the list will have raised money or is a publicly traded company.

This worries me. While it is great for the industry right now, over time, the market can’t sustain 30+ providers. I fear that 18-24 months from now we’re going to see quite a consolidation in the CDN market and only about half the providers will be left standing. The CDN market keeps going in the same cycle every couple of years. In 1998 there were about half a dozen CDNs. In 2001 that number surged to a few dozen. Then in 2004 we were back down to about six providers, and three years later, back up to a few dozen. It’s a roller coaster ride for the CDN market and I really hope that the CDN and P2P providers are taking note of why companies failed in the past, where they went wrong and are aware of how not to repeat the same mistakes made in the market in years past.

The advance program for the Streaming Media East conference and exhibition taking place May 19-21st in NYC is now available for download.

We’ll have over 100 speakers and 30 sessions, many of which will be interactive with live demos, presentations and how-to sessions. Many shows put six or seven speakers on a session or fill the agenda with vendor sales pitches. At Streaming Media East, nearly 75% of our speakers are customers who are buying and deploying these services and products today.

Here is the list of all the session names and full descriptions of each session can be found in the PDF:

• How Old Media Is Embracing Online Video and New Media
• Reinventing The Ad Model Through Discovery And Targeting
• Using Adobe Media Server To Deliver Live And On-Demand Video
• Mergers and Acquisitions: Wall Street’s View
• Monetizing And Aggregating Niche Video Content
• Live Broadcasting Over Mobile And Wi-Fi Networks
• The H.264 Convergence
• Comparing and Using Online Video Codecs
• Online Video: Should Content Creators Get a Cut?
• Effective Advertising Models For Short-form Video Marketing
• Codec Comparison: VP6, H.264, And Windows Media
• CDN Pricing: The Going Rate For Video Delivery
• Lifecasting: The New Broadcasting Platform
• Planning, Building, and Launching a Successful Podcast
• P2Ps Role In Delivering Online Video
• New Advertising Platforms and Networks
• Creating And Promoting Amateur And Viral Videos
• Best Practices in Enterprise Streaming for Communications and Learning
• Ad Networks Vs. Branded Video Sites
• Deploying On-Demand and Live Media Experiences with Microsoft Silverlight
• Entertainment Devices: How TiVo, Xbox, and iPhone’s Are Changing Content Consumption
• Adobe Media Player: Creating, Delivering, and Monetizing Branded Video
• User-Generated Video in Education
• Delivering Media For Microsoft Silverlight With Windows Server 2008
• Tools And Best Practices For The Enterprise Streaming Media Department
• Beyond The Classroom: Reaching A Global And Mobile Audience With Elearning
• Independent Content: Creating New Revenue Streams
• Planning & Executing Successful Webcasts
• Evaluating and Choosing The Right Methods Of Video Delivery

Nearly 65% of the speakers have already been confirmed and will begin going on the website next week. While the call for speakers closed last month, over the coming weeks I will be posting some open speaking spots I have for some very specific sessions. Your best way to stay up to date is to sign up to the blog in your RSS reader so you don’t miss out on potential speaking opportunities.

As I’m sure you’ve read by now, Yahoo! announced earlier in the week it had acquired Maven Networks for approximately $160 million. While I see some of the synergy of the deal, I think Yahoo! paid too much. Based on the price tag, Yahoo! paid about 11x the sales revenue that Maven had in 2007. It’s a good deal for Maven shareholders, but for Yahoo!, that’s a high evaluation in my eyes in today’s market.

Clearly, Yahoo! bought Maven for their technology platform and IP, but at some point, you have to also look at the buy vs. build numbers. Acquiring Maven gives Yahoo! a platform today, as opposed to them having to build one themselves, but at what cost? Considering the state of the rest of Yahoo! business, selling a software video platform is very different than the way Yahoo! has sold everything else for years. And not really knowing what Yahoo! strategy is as a whole moving forward casts doubt on what will truly become of a Maven/Yahoo! integration.

While it sounds like the product will still be branded under the Maven name, Yahoo! should re-brand this immediately and bring it under the Yahoo! brand. With the sate of flux that Yahoo! is in as a company, I think it needs to do everything it can to put forth one clear brand, strategy and core set of products. I think over time the Maven platform could be a good core product for Yahoo!, but only time will tell how successful the integration will be and whether or not Yahoo! sticks to the set of current products offerings they have in the market today. In my eyes, it’s hard to for Yahoo! to say to the market that it is dedicated to any product platform, while at the same time laying off 1,000 employees. How much will Yahoo! truly support the Maven platform with additional dev work and new products features and functionality?

It’s been one year to the day since I started this blog and put up my first post. Nearly 400 posts later it’s amazing how many topics the industry is talking about, what the hot topics are today and how much of what we were taking about a year ago, or eight years ago, is once again coming full-circle.

My thanks to the loyal readers and subscribers of the blog and all the sponsors who enable me to be able to sit down and write something nearly everyday. Support from sponsors has been overwhelming and I hope that in their eyes I am providing some good thought-provoking content via the blog for discussion.

My thanks to some of the newest blog sponsors: EdgeCast, Skytide, Microsoft, Internap, Adobe and to my long running sponsors of Limelight Networks, Tremor Media, Ignite Technologies, Ortiva Wireless and many of the other companies who have sponsored the blog.

Next month, I’ll be doing some re-design of the blog layout to make things a bit easier to read, less clutter, and will be moving over to standard ad sizes.

Thanks again for everyone’s support and as always, if you have ideas for the blog, if there are topics you want me to write more about, I am always open to feedback, good or bad.