Akamai: Why Charge More for Streaming Video Delivery vs. HTTP Delivery?

| About: Akamai Technologies, (AKAM)

Over the last few weeks, I am getting more and more customers asking me why Akamai (NASDAQ:AKAM) is quoting one price for streaming delivery and another price for HTTP based video delivery. And I'm not talking about Flash streaming where some CDNs still charge an Adobe license fee. Even with Windows Media, Akamai is charging a higher price to deliver content via a streaming media protocol as opposed to delivering content via HTTP.

I don't know of any other CDN in the market that is pricing video delivery this way and as a result, I see Akamai not winning a lot of new deals in the market as customers don't understand why they should be "penalized" for doing streaming over downloads. Why would Akamai care what protocol a customer is using?

Does it cost Akamai more to deliver streaming on their network versus downloads? It shouldn't. If this was simply about Akamai charging more for its services, no problem. It's a free economy and if you can get more for your services, more power to you. But that is not what this is about. This is about Akamai charging more for one protocol over another and not explaining to customers why it is the only CDN in the market doing this.

I asked Akamai for more details on this so that when customers call me I can educated them on Akamai's pricing strategy. Unfortunately, all Akamai wanted to say on the subject was "we don't discuss pricing specifics publicly." I can understand if you don't want to "publicly" discuss it, but clearly Akamai is not even discussing it with potential new customers or I wouldn't have so many content owners asking me for an explanation.

This is a bad practice on Akamai's part not only because of the effect it has on them winning new deals, but also because of the impact is has on the industry. As an industry, we need to move away from the idea that content owners need to make decisions based on protocols. Should a customer really care and have to decide on what protocol their CDN is using? Absolutely not. All they want to do is use the best combination of technology and protocols based on the type of content they have for the device it is being played back on.

The pricing and bundling of content delivery services should be made as simple and easy as possible for customers. Every other CDN other than Akamai has already done this in the market and charges one rate for streaming or downloading video content.

Disclosure: None