Same CDN Major Players Getting All Live Business

Unlike the Olympics where Limelight (LLNW) is the exclusive provider for video, the NFL games will be streamed by both Limelight AND Akamai (AKAM).

Starting September 4th, the NFL in conjunction with NBC will stream 17 Sunday Night Football games on nfl.com and nbcsports.com. While Limelight had no comment when asked about the recent announcement, I have learned that Limelight and Akamai will be the back end streaming providers working with NBC and the NFL.

By my count, this makes at least five major wins or expanded contracts for Limelight in the past few months.Disney, (DIS) Microsoft (MSFT), Netflix (NFLX), Amazon (AMZN) and now the NFL/NBC. While I don't know the terms of the deal and whether the NFL or NBC will be the paying customer, Limelight is already closely working with NBC for the Olympics. The NFL content is new business for Limelight but for Akamai, falls under an existing contract it already has with NBC.

Many of the newer CDNs on the market have been talking for some time now about how they are only focusing on live delivery and how their "next generation" networks are so much better for live streaming than an Akamai or Limelight. But to date, I have yet to see any recently launched CDN win any of the big contracts for all of the live events that have happened or will soon take place. The Olympics, NCAA March Madness, Presidential Debates, Operation MySpace, Oprah's Online Classes, Democratic National Convention, US Open for golf and tennis and the NFL Sunday Night Games amongst others. Akamai, Limelight and Level 3 (LVLT) combined are responsible for doing the delivery for all of these events.

This reinforces the fact that building out a global CDN to truly scale for large live events and have the required capacity and support pieces in place to handle such events is not as easy as some think it is. Live events are unique in that you get one chance and one chance only to get it right. You can't add capacity after the fact like you can with on-demand delivery. The CDN has to be able to route traffic in real time, monitor and report back on the network to the customer in real time and deal with things like content ingestion, splitting streams across the network and working very closely with those who are capturing and encoding all the signals.

Successfully delivering large scale live events it still not easy and it takes a very focused and disciplined approach to that specific segment of the market to be successful. The idea that any CDN can come along and simply add capacity and be able to handle large scale live events is just not accurate. 

Disclosure: None

Comments

[Ludolf:]

Dan, I think you need to learn that the world and the CDN industry is not only limited to the US. There are various CDN players who also have large-scale streaming events, outside the US. CDNetworks is one in Korea, JStream in Japan, etc.
It's a bit weak to continuously read your comments about the "CDN industry" and it's in fact nothing more than some stuff going below your horizon.

2008 Jul 31 05:07 AM

[Dan Rayburn:]

I think you need to learn your facts.

JStream is not doing any large events on the scale that Limelight or Akamai is doing. JStream does not have any global reach, no global network and says on their website they can only support 30,000 live streams at once. They are based only in Japan. Akamai's network is global and is supporting well over a million live streams in any given month. Your opinion may be one thing, but facts are facts.

You say there are "large scale streaming events outside the U.S.". Ok, then list them. Don't just say they are events, name them. There are a few, but show me a list of events in Asia that are as big as the ones we have in the U.S. and happen as often.

I think it's a bit weak to continue to read comments by people who champion for a particular vendor, without saying if they work for that vendor or even including their real name. Each comment always seems to include a reference to CDNetworks. I wonder why.

2008 Jul 31 11:27 AM

[B.M.:]

What about Soccer, internationally. Who streams that?
Cricket? Australian sports? Hulu? ABC programming? HBO on iTunes?

What is the point of this article anyway? Are you recommending buying shares of AKAM, Limelight, LVLT?

How big is the small to medium event market? Competing for the obvious contracts isn't always a recipe for success in business. Big contracts come with extremely low margins.

2008 Jul 31 12:56 PM

[Dan Rayburn:]

A lot of live European events are streamed by Level 3. Not all, but many of them. That's part of the reason they acquired European based Servecast.

This article is talking specifically to events that are streamed live. So Hulu, ABC and HBO would not be fair comparisons as that content is all on-demand.

The point of the article is that while many new CDNs have entered the market and many of them are focusing on live, saying that can do it cheaper and scale better than Akamai or Limelight, to date, they are not winning any of that business. Trying to point out the fact that it's not as easy to scale a network for live content as some think it is. Don't now the size of the market for medium events. Have not seen any data on that.

I am not recommending stock of any company. I have never bought, sold or traded stock in any public company ever. I have no vested interest in any public company's stock.

2008 Jul 31 01:13 PM

[Ludolf:]

Dan,

1) Why does it matter if I would work for any CDN provider? Why do you think my name is not real?

2) Events in Asia...hm....how about Estars in Korea/China/Japan? Do you know these events at all? How about the presidential election and various live sports evens in Korea with millions of viewers? Do you know whether JStream or CDNetworks or also Chinese companies will stream Olympics? Do you know anyone in these companies at all? Have you ever been to Korea, China, Japan?

My point is not that you are making wrong conclusions, and basically I like reading your blog.
However, my point is that you need to be a bit more careful when speaking about "the CDN industry", because there are various other players outside the US, too (yeah, yeah, nobody is as global as Akamai...). Listening to Akamai's stumbling revenue forecasts and their newly announced international importance, I think it's time to really consider Asia and Europe.

3) Generally, I don't see any detailed analyses on Europe NOR Asia. There is nobody looking into the European market, neither you nor any other opinionate person. If you check any Tier1 Research paper, their numbers area amazingly small, while at the same time the general internet/broadband networks are much more advanced than in the US. I am speculating that these numbers are way below what's actually out there.

You know it's easy to say you know an industry when there is two US players dominating it. But it's much more trustworth if you can prove you can go outside your comfort-zone.

2008 Aug 01 04:23 AM

[Dan Rayburn:]

Next month Frost & Sullivan is releasing their CDN World Markets report where we spoke to each CDN provider in the U.S., Europe and Asia. We will be breaking out revenue numbers by region and growth projections by region. After speaking to the CDNs in Europe and Asia, all of them combined are not even doing the CDN revenue that Akamai is doing. And this is data directly from the CDNs in Europe and Asia themselves. That's reality. The market is just a lot smaller in Europe and Asia. There is less business, less providers, fewer CDNs and less data from those regions for a reason. Which is why we are aiming to include the entire market, global, for the CDN report.

I've covered many of the CDNs in Europe and Asia on my blog. Two weeks ago I did two posts just on European based CDN Velocix. I cover more than just the US market, but the US market is still where the majority of the CDN business is.

Yes, I know about events outside the U.S. like e-stars, Eurovision, Rock am Ring and others, but those events are all small and don't even reach 20,000 users at once. My post was very specifically asking about large scale live events that have hundreds of thousands of simultaneous users.

2008 Aug 01 10:29 AM

[Dan Rayburn:]

The numbers I am going on are the numbers the providers give me. I have yet to hear from any distribution provider of any live event this year, other than sports, that did over 50,000 simultaneous streams. They may be out there, and if so are very few, but so far, none of the numbers I am getting back from those delivering the content are very big as compared to the events in the U.S.

2008 Aug 01 03:53 PM