My buddy Yaron Samid who organizes the NY Video 2.0 Meetup in NYC every month has organized a session at Streaming Media West next month entitled "CDNs & P2P – Is Hybrid Content Delivery the Future or Just Hype?". He has invited and assembled speakers from some of the major CDN providers and those who have hybrid CDN/P2P offerings. Confirmed speakers are:

• Philip Kaplan, CSO, Internap
• Travis Kalanick, Senior Director, Engineering, Akamai
• John Dillon, CMO, CacheLogic
• Stephen Trainor, VP Strategy, Content Markets Group, Level 3
• Todd Johnson, SVP, Worldwide Marketing, VeriSign

Should be a good discussion amongst many of today’s leading providers on where they see P2P playing a role in the CDN business and what some of them are working on as they move to more hybrid offerings.

Register for the show before October 12th and pay only $795 for a full 3-day conference pass.

At the Streaming Media West show next month, I am moderating a session on Wednesday Nov. 7th entitled "Industry Drivers: Leading Analysts Discuss Future Trends and Business Models". We have speakers from IDC and Wainhouse confirmed so far and I am looking to add two more speakers from large research houses.

You can see more details about the show and the session on our website. If you are an analyst covering the online video industry and would like to join the panel, please contact me ASAP.

While I welcomed any vendor to send me open jobs they had for me to list on the blog, I’m getting more than I can possibly feature. Between all of the vendors who offer content delivery services, content management, enterprise webcasting solutions or software and hardware for video platforms, there is a huge void in the market of qualified people.

The biggest open positions are product managers and sales support engineers as well as experienced account managers who know the space and come with a Rolodex. Due to how many spots are open, and how many companies are trying to fill them, there is a lot of money being offered. I have not seen salaries and offers at this level in our space since the 2000 era. Vendors are still raising huge amounts of money and rapidly growing their head counts.

If you are looking for a new position, send me your resume so I can pass it along to all these companies. I’ll pass it on to as many companies as I know who have open positions. While many websites list open jobs in the market, most of them are only focused on content jobs and traditional broadcast TV spots. I see very few focusing on the online video market for vendors. I may set something up in the next few days.

Apologies if I have been slow to respond to any of your e-mails. I hope to be back online in a couple of days and have a lot of posts in the hopper.

UPDATE: On Friday, Barron’s spoke with Level 3 and updated it’s article. LightReading.com also updated their article and removed the quote in question. Good to see both sites do that to make sure the information is accurate.

I am amazed at how quickly some investors and analysts jump to conclusions based on any report on any website without checking facts. I like LightReading.com, but they quoted Level 3 wrong. Lisa Guillaume, VP of CDN Product Development for Level 3, did not say "the company will be offering CDN services at 20 to 30 percent less than its competition". She said to me that CDN services had typically been offered at a 20-30% premium over high speed Internet access. Nothing to do with the competitions pricing.

DataCenterKnowledge.com got is right by quoting Level 3 as saying that "CDN services have historically been offered at a 20 to 30 percent premium to transit." No where is any competitor even mentioned. Saying you are going to cut your pricing by 20-30% is one thing, but Light Reading is implying that Level 3 is cutting it’s pricing 20-30% lower than the competition. That is wrong.

Now Barrons.com and others are quoting LightReading.com in their reports as the reason Limelight and Akamai stock is down in the market today. Is that the reason? Maybe, I don’t know. But if it is, then it’s based on an inaccurate quote.

Yes, I expect Level 3 to come to the market with a lower price when they announce their CDN for streaming later in the year, as I stated back in August. But to date, Level 3 has not announced any pricing discount numbers or percentages.

Today, Microsoft made some major company changes in multiple divisions of their business. Some long time execs including Amir Majidimehr and others are affected and multiple divisions have been reorged. Lots of changes that will affect multiple product lines. I expect we’ll see the changes announced shortly, if not tomorrow.   

I’ve seen numerous reports lately by some in the financial community talking to “bursting” overages by CDN providers. Many of these references talk to overages incorrectly and some analysts might benefit from better understanding the two different ways CDNs charge for their services and exactly how “bursting” fees play into a CDNs bottom line.

The most recent example I read was coverage put out on Akamai where the analyst downgraded the stock based on their feeling that Akamai would not be able to get as much additional revenue for “bursting” overages as they have been getting in the past, due to the recent pricing pressure in the CDN industry. As the analyst stated, 30% of Akamai’s total company revenue comes from what he called “bursting”. That may be the case, but “bursting” and overages are not the same thing, especially when you’re talking about content delivery for video.

The first thing to realize is that no one knows exactly what Akamai products the 30% in overages comes from. Too many assume it’s from the delivery of video, but in most cases it isn’t. It comes from many of the other products and services Akamai offers like static caching, software downloads and application delivery. I asked Akamai for a breakdown of what products accounted for what percentage of overage revenue but they said it was not data they were making public.

Even without Akamai making that data public, all analysts should know the two different ways that all CDNs charge and how overages work. Every CDN charges for delivery of video, via streaming or download, based on two metrics. One is the total amount of Mbps sustained at any given time, over a 95th percentile. The second in the total GBs delivered over the network in any given month. These are two very different metrics with very different overage charges.

The majority of customers for video delivery have contracts where they are paying for the amount of GB delivered over the course of a month. With this model, there are rarely overages as typically when you push more bits then you signed up for, you get charged a lower per GB fee. For example, if you committed to push 100GB in a month and are paying $1.00 per GB, and then end up doing 150GB, typically your pricing then drops to a lower rate, say $0.95 per GB. Rarely do CDNs charge overages on a per GB delivered model and in many cases, some of them charge one flat fee per GB no matter how much you push. Years ago, CDNs use to charge overages with this model, but quickly realized that by doing so they gave customers no incentive to push more traffic on their network. This was how Speedera Networks really got traction in the market, by taking all the overflow traffic from customers who didn’t want to pay overages with their core CDN.

The other way CDNs charge for video delivery is on a per Mbps sustained model. This means that you pay for the volume of traffic you push at any one given time, and not based on the total bits pushed. Typically, this is the pricing model where you are charged for overages above the volume of Mbps sustained that you commit to. It’s also referred to by many as 95th percentile as with this model you are typically allowed to burst over your committed Mbps allotment for less than 5% of the month with no penalty.

There are a few reasons why understanding these different pricing models are important. For starters, don’t assume that you know what products the CDNs are getting overages from. Two years ago, Akamai stated that less than 10% of their contracts for the delivery of video were on a per Mbps model, the rest were per GB pricing. I don’t know what that number is today since Akamai won’t say, but too many are assuming that the 30% in revenue is from CDN for video when it isn’t. Much of what Akamai delivers is content of various types, static images, software, applications and video. When it comes to delivering the majority of content other than video, they are charged on a per Mbps sustained model where overages apply. So to assume that Akamai could take a hit in future overage revenue is to assume that they are seeing 30% of that revenue from video delivery, which they aren’t. How does Akamai compare to Limelight Networks in terms of contracts? Hard to know since we don’t know the Akamai number, but Limelight said on their road show that 40% of their customers have per Mbps sustained contracts.

So why does any of this matter and why do money managers pay so close attention to how much Akamai is making in overages? Simple. There is a fixed cost to any CDN to deliver bits of content and if you can charge two or three times that in overages, then that greatly affects your P&L. It all comes down to the bottom line.

That being said, this is not a prediction on my part of how any company’s stock price will perform now or in the future. I am not a financial analyst and have no vested interest in any company’s stock.