Microsoft & Akamai Announce “Smooth Streaming”, New HD Video Delivery Via HTTP

This morning, Microsoft and Akamai announced a future new video delivery service dubbed “smooth streaming”, designed to deliver HD video quality over the HTTP protocol. Using chunked encoding, the new technology will adapt the quality of the video stream in real time based upon the viewer’s connectivity speed, also called “adaptive streaming”. The service, which will run off of Microsoft’s newly announced Web server technology called Internet Information Services 7.0 (IIS7.0), will utilize Silverlight for playback.

Currently in beta with a few Akamai customers, Akamai has also launched a new website at smoothhd.com to showcase the technology. The new Akamai service, dubbed “Akamai AdaptiveEdge Streaming for Microsoft Silverlight” will be available to select Akamai customers in a beta release in early 2009. While smooth streaming will be an upcoming feature of IIS7 Media Pack
and technically available to other content delivery networks over time, Akamai is the first content delivery network to work with Microsoft to enable the functionality.

While it is too early to know what other CDNs will support the technology down the road, Microsoft made it clear that Akamai has worked with them to help develop the technology and enable the workflow to make this happen. When asked if this technology would be exclusive to Akamai, Microsoft would only comment to say, “Akamai is the first CDN to roll out this service”. How long Akamai will be the only CDN in the market with this new service is unknown, especially since there is no word as to when in 2009 this will come out of beta. But Microsoft is a platform company so you can bet that over time, other CDNs will also adopt the service.

When launched, the new service will not have support for live streaming and won’t work for videos that are downloaded to the desktop and played back at a later time. In addition, content owners who want to take advantage of the new service will have to re-encode their entire video library to utilize the new technology.

While the new service will enable content owners to deliver HD bits across Akamai’s HTTP based servers, which is a lot more scalable than their streaming infrastructure, the real question that remains is how Akamai will charge for this new service. Delivering HD quality bits has always been more expensive and Akamai did acknowledge that the price was going to play a key factor in being able to sell the service. Since video will be delivered from Akamai’s HTTP based infrastructure, the cost to deliver video should be much cheaper and more scalable than delivering video from their streaming media servers. As a result, Akamai should be able to pass that cost savings on to customers to encourage them to use the new service . But without knowing how they will charge for the offering, that remains to be seen. Akamai also stated that this new service is primarily directed towards major content owners and broadcasters with long form content and is not expected to appeal to the masses just yet.

In addition to the new service, Akamai is also working with Microsoft to make the HD workflow easier for content creators by enabling them to encode and ingest their video directly to Akamai from Microsoft’s Expression Studio Encoder. This new functionality of the Expression Studio Encoder 2 SP1, will be ready early 2009 and will enable direct publishing to the Akamai network from within the encoder.

While the service sounds like it has the potential to provide better quality video, there is still no proof, that I have seen, that HD quality video allows for “greater engagement” and “improved monetization opportunities” like the press release states. While many in the industry want to say that HD quality video means viewers will watch content for longer periods of time, it also means that it costs more to deliver those bits. As viewers watch more content, at higher bitrates, the costs go up, not down. Until someone comes forward with a real example showing how a content owner delivered more ads in an HD stream, due to longer viewing times and as a result offset the additional cost required to deliver all the extra bits, it’s all speculation. And if someone views a video for an extra 10 or 15 minutes longer, how exactly does that enable more monetization when most long-form videos don’t even do in-stream ads? Most ads are still pre or post roll.

As an industry it sounds nice to say HD quality video means longer viewing times and more monetization, but the fact so few content owners are doing anything in HD, really says the opposite. If this new service from Akamai, using Microsoft’s smooth streaming technology, can greatly reduce the cost to deliver HD quality video, then it has a shot. But until we know the pricing model for the new service, it’s going to be hard to guess what impact it can have on the market anytime soon.