Over the past few days, I've been tracing the delivery paths for a bunch of online video sites on the web, including large and small sites. When it comes to tracing video content from Hulu, historically, everything I saw was always coming from Akamai (NASDAQ:AKAM). But lately, it's clear that Hulu has moved to a multi-vendor strategy and is now also using Level 3 (NASDAQ:LVLT) and Limelight Networks (NASDAQ:LLNW) for some of their video delivery.
While I don't know what percentage of video traffic has shifted away from Akamai and over to Level 3 and Limelight, it's not a small amount. When tracing content via Hulu's desktop client, 100% of the traces showed Limelight as the provider. I've also noticed that syndicated Hulu videos to other third party sites is being done by both Limelight and Level 3.
And on the main Hulu.com site, content I traced like The Simpsons and 30 Rock was all coming from Level 3's network. Why Hulu would switch from using one provider to at least three providers is not known, and with Akamai getting aggressive on pricing, like we saw on the Netflix deal, my initial take is that it's not about price. Hulu is known for having some very strict internal comparison metrics for content delivery, yet we know that they will never make those details public or discuss whether or not delivery performance was a reason for their move to multiple vendors.
Hulu has also seen a lot of traffic growth, so this could be their way of simply moving to a diversified delivery strategy or maybe an exercise to see what the other CDNs have to offer. I know Hulu had been testing with both Level 3 and Limelight as far back as mid last year, but clearly they are no longer in a testing phase and are passing some serious traffic now with all three vendors.
Disclosure: No positions