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

StreamingMedia.com is looking to hire someone who is interested in being the conference chair for the Streaming Media Europe show taking place October 15-17th in London. With all of the other shows I am working on in the U.S. and the growth of our business overall, I won’t be able to chair the European show this year.

We are looking for a part-time person who is willing to work with me on the program but will primarily take the lead in organizing the session topics, selecting speakers and being the conference chair on-site during the three days of the show. You must be located in or near the UK and must have experience in planning conferences and/or have a good working knowledge of the online video industry.

This is part-time work that can be done over many months and other than a few specific deadlines, is the kind of work someone who is organized could accomplish quickly. This is also a tremendous opportunity for the right person who wants to have a real impact on the European online video market and wants to use this event to help establish themselves as a thought leader in the industry. You get to decide how the industry is educated and brand yourself as someone who is tied directly into the space.

If you are interested, please contact me ASAP with your resume and an outline of your experience in the industry as it pertains to conference planning. We will be scheduling some in-person meetings next month in London to talk to those who may be interested. 

Back in September, I posted a list of CDN providers for video delivery and since that post, more providers continue to enter the market. Today, I am tracking over 30 providers for online video delivery (which can now easily be found at www.cdnlist.com) be it via streaming, progressive download, P2P or hybrid solutions.

The last time I made a list like this I got all sorts of angry comments
from many of the companies on the list about me unfairly comparing
their company to another company. No where in this post am I comparing
any company, product, revenue, size, geographic reach, formats
supported etc…. This is simply a list of the providers I am tracking
in the market who offer video delivery services.

Every provider has
different strengths and weakness all based on many different needs of a
specific customer. And before I get a million questions about why
Amazon is not on this list, Amazon’s S3 offering does not count as a CDN in my eyes. Also, this list is based on my interpretation of what a "CDN" is. Many people have different takes and opinions on what makes a CDN and these days, the term "CDN" is very broad.

Maybe you think differently than I do on what classifies a CDN and would have a different list than I do. But based on what I think a CDN for video is, in alphabetical order these are the delivery networks I track in the industry

• Advection.NET (stream, download)
• Akamai (stream, download)
• AT&T (stream, download)
• BitGravity (stream, download)
• BitTorrent (P2P)
• CacheFly (download)
• CacheLogic Changed name to Velocix (stream, download, P2P)
• ChinaCache (stream, download)
• CDNetworks (stream, download)
• Digital Fountain (stream – launching Q1 2008)
• EdgeCast (stream, download)
• Grid Networks (P2P)
• Highwinds (stream, download)
• Ignite Technologies (P2P, download)
• Internap (stream, download)
• Itiva (P2P)
• Level 3 (stream, download)
• Limelight Networks (stream, download)
• Mirror Image (stream, download)
• Move Networks (streaming via HTTP)
• NaviSite (stream, download)
• Octoshape (P2P)
• Pando Networks (P2P)
• Panther Express (download)
• PEER1 (download)
• Rawflow (P2P)
• Rinera (don’t know)
• Solid State Networks (P2P)
• Swarmcast (streaming via HTTP)
• VeriSign (stream, P2P)
• Voxel.net (stream, download)

A quick round-up of some of the latest hiring’s in the online video industry:

• DeWayne Nelon, former CEO at Ortiva Wireless is now the CEO at Avot Media.

• Paul Alfieri, formerly from Motorola is now the head of Worldwide Corporate Communications for Limelight Networks.

• Rick Holtman, formerly from the ROO Group, is now the VP of sales for NeuLion.

• G Gooder, formerly from The FeedRoom is now the Director of Business Development at Brightcove.

• Duane Sulo, formerly from Mirror Image is now the Director of East Coast sales for EdgeCast.

• Steve Chung, former VP of Business Development at CDNetworks, has now been promoted to the CSO and EVP of Global Markets.

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.