I’ve been taking a look at some of the preliminary data that we have been collecting from our CDN survey and we’ve already got some great data points. While I expect a few thousand respondents over the course of a month, after a few days we already have over five hundred customers who have filled it out.

As Akamai’s Q4 earnings from last night showed, much of the "pricing war" talk in the industry by analysts is overblown. Yes, there is some competition, especially when it comes to the largest customers, but for the most part, the "price war" is not as bad as analysts make it out to be and this data point below seems to reinforce that idea.

One of the questions in the survey is: How would you assess the pricing of your current CDN contract(s) versus your last CDN contract?

62% of those who have been surveyed stated their pricing was flat year over year. That point by itself is not enough as you really need to know what kind of volume those who fill out the survey are doing, but we’re collecting that data as well and nearly half of those surveyed are doing over 50TB of transfer a month, so it’s good sized customers.

The point is that not every customer is getting rock-bottom pricing and not every customer knows what price they should be asking for. If they did, we’d be seeing lower prices in the market more than we are, but in many cases, customers who already think they are getting a good price aren’t trying to get the CDNs to lower pricing even more, unless the customer is willing to commit to more traffic, more revenue, or more services.

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This evening, UK based content delivery network CacheLogic re-launched their company website and changed their name to Velocix. Some may be familiar with the Velocix name already as it was previously used by the company as part of their product offering branding. This comes hot on the heels of the company closing $25 million last month.

While I don’t have all the details yet, within the past hour, the court has issued a preliminary ruling throwing out two of the three patents named in the Akamai suit. I’m being told that only the 703 patent will be going to court. I’ll post more details as I get them. I expect we’ll see an announcement tonight.

Limelight put out a press release a few hours after this post. You can read it here.

In October of last year, Level 3 announced that it would offer their content delivery services for video for the same price that it was charging for transit. Many in the industry incorrectly saw this as Level 3 saying they were undercutting other CDNs in the market and entering the industry as the low-cost leader, which is not the case.

If I remember correctly, Level 3 has over 2,000 customers for its IP transit services. It’s only natural for them to roll out a pricing plan that they can use to target current customers buying other products like transit. But instead of many seeing it for just that, too many in the industry took it as a sign that Level 3 started a "price war" amongst the CDNs. For all those who have written about Level 3’s pricing and a price war, why is it that none of them that I have seen have ever mentioned any real numbers of what Level 3 charges? Where is the data behind this Level 3 "price war" that so many talk about? How come no one will give an example of what Level 3 is actually charging? And if you aren’t a Level 3 customer for IP transit services, their new pricing model gives you no indication of what they charge for CDN services without transit. Too many people want to make this more complicated than it is and want to talk to the "perception" of a Level 3 price war instead of finding out what they are actually charging for content delivery.

I’ve seen a bunch of Level 3 quotes and RFP responses and Level 3 is not undercutting the other CDNs in the industry just to win business. They are not the most expensive in the industry, nor are they the cheapest. From what I have seen, on large volume deals (over 50TB), Level 3 is a few cents more per GB delivered on average. But of the deals I hear Level 3 winning, like the one they announced yesterday with the Democratic National Convention, Level 3 is winning business where it involves more than just content delivery. In many cases it involves back-haul, transit, VYVX services, co-location and other products. Level 3’s approach to the market is that they will gladly take on the customers who need high-volume delivery and commoditized CDN but they are really targeting the more complex business that involves more than just the CDN product. It’s the same marketing angle and approach to the market that Internap is using and Level 3 and Internap are more similar in their services offered than Level 3 is to Limelight or Akamai.

I expect we will see more announcements about customer wins by Level 3 like the one from yesterday that involve multiple products and services outside of CDN. Is that to say that companies like Level 3 and Internap are eating into the market share of Limelight, Akamai and others? In most cases no, as they are all going after a core group of different customers with different needs. There is no CDN on the market today that is a perfect fit for every customers needs. Yes, all the CDNs are competing on some of the very commoditized business, but most of them are now distinguishing themselves by going after different sized customers, in different verticals, with different solutions. They have all become a lot more focused in knowing who they should target and who they shouldn’t. A few years back, CDNs tried to be everything to every customer. Today, the majority of them are very good as knowing what business not to go after.

I’ll be putting out more CDN pricing data over the next 30 days as we are collecting CDN data from customers via this survey. We’ve already had a few hundred CDN customers fill it out and I expect a few thousand over the next couple weeks.

StreamingMedia.com is conducting primary research in the area of content delivery network pricing and trends. This survey should take no more than two minutes to complete and all respondents will be entered into a drawing for a free Apple iPhone.

Highlights of the survey results will be available for free to anyone who completes the survey. The survey will include information on the cost of video delivery services, format and bitrate trends, P2P adoption and other content delivery specifics.

I talk to a lot of content owners large and small and no matter what subject we are discussing, I always ask them for their predictions on their traffic growth for 2008. While many of them share their numbers with me but don’t allow me to make them public, the vast majority of content owners are telling me that they expect to deliver 2-4x more bits this year when compared with 2007. For most of them, that does not take into account the fact that this year, many content owners are bumping up their encoding bitrates from 300Kbps to 500-750Kbps. Taking that into consideration, with increased bitrates they could see their traffic growing from 4-8x over last year.

In most cases, nearly 100% of this content is being delivered via content delivery networks, so it’s the CDNs who really make out from this growth. But the real question is while the number of bits goes up, does the price per GB delivered come down to the point of where the volume really does not make up for the reduced price? From what I can tell, even if a content owner increases their traffic by 4x over last year, the typical price break they are going to receive is somewhere around 35%. On a 200TB a month commit, a customer who is paying say $0.20 per GB delivered now, is going to be paying on average around $0.13 per GB delivered for 1000TB a month. Now that’s not what ever content owner is paying, some pay more, some less, but if we use that as an average, CDNs should still see higher overall revenue based on increased volume.

Now for larger deals, that may not be the case. For a content owner who does 500TB a month today and grows to 2000TB a month this year, I expect they will see close to a 50% reduction in price based on the additional volume. So for some of the really large customers, increased bits delivered may not equate to more revenue for CDNs. For larger customers it may cancel it out. Bottom line, content owners are expecting to deliver a lot more bits this year and don’t see the recession cutting back on their growth or spending.

In the April/May issue of Streaming Media magazine, we’ll be announcing the first annual Streaming Media All-Stars—the 25 people who’ve done the most to advance, evangelize, and expand online video and audio—and we want you to help us pick the team. StreamingMedia.com’s Editor Eric Schumacher-Rasmussen is leading the awards program and needs your help.

We’re looking for both familiar faces and unsung heroes. We’re looking for visionaries and tough-minded realists, for industry veterans and recent disruptors. However you describe them, they’re the people who’ve made this industry what it is, whether their contribution has come in the way of new technology, innovative delivery, or a whole new way of looking at online video and audio.

Because this is the inaugural Streaming Media All-Star team, we’ll be honoring 25 people who’ve had the most impact on streaming media over the last 10 years. We know there are more than 25 individuals, so in the future, we’ll focus primarily on current movers and shakers, but now is the time to acknowledge the people who are of true historic importance. While I am not leading the awards program, it is my hope that we will acknowledge those who don’t normally get a lot of credit or who’s credit usually goes to the CEO or executive in the company, even when it was the person in the trenches who really did the work. This is not about giving out an award to whomever has the best title or the most well known, but rather those who have made a real impact on the industry and have helped move our industry forward.

The Streaming Media editorial staff will put together the final All-Star team roster in time for NAB and Streaming Media East 2008. But we can’t do it alone, so we’re looking for nominations from you.

Just click here and enter the name of your All-Star nominee and a short description of why you think he or she deserves recognition.

The cutoff date for nominations will be February 11. No nominations will be accepted after 11:59 p.m., February 11, 2008. If you have any questions, don’t hesitate to email Eric at awards@streamingmedia.com