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, StreamingMedia (231 clicks)
Research analyst, streaming and online video
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While I've heard some folks say that one of the reasons Akamai (NASDAQ:AKAM) is showing signs of their M&E business picking back up is as a result of the adoption of HD quality content, that's not what's driving revenue today. Yes, Akamai and all of the other CDNs are seeing more content owners use HD quality video, but it's not yet happening in large volumes or at mass scale to impact revenue.

Based on a recent StreamingMedia.com survey we conducted in September and October, we asked content owners what bitrates they were encoding their content in. Of the 812 content owners who responded only 11.4% said they were encoding video for at least 2Mbps or more. Compare that to the same survey in 2008 when 8.9% of over 1,000 content owners said they were encoding over 2Mbps. That's not a lot of growth.

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Some might say that the M&E vertical probably has better adoption of HD video than, say, the enterprise or advertising market and they'd be right. But of the 812 content owners who took our survey, nearly 45% of them classified themselves as being in the M&E vertical. HD quality video will drive additional revenue and growth for the CDNs, but it won't be in the next few quarters.

Disclosure: no positions

Source: Latest Data Shows HD Video Adoption Growing, But at a Very Slow Rate