Akamai’s HD Announcement: Lots Of Buzz Words, No Details On Price
This morning, Akamai announced what they are calling the "Akamai HD Network", and will, as expected, now be able to support Flash via a new HTTP based video platform. While Akamai also mentions Silverlight technology and the iPhone platform in the release, delivering that content via HTTP is something they were previously able to do.
While there is a live webcast today at 1pm ET to showcase the new offering, if Akamai does not lower their pricing for this new platform, it won't do anything to help their business grow. Watching video in HD quality is nice, but most content owners are not putting their content in HD today due to the added cost, not because of any technology limitation. The problem is cost, not scale, distribution or the CDNs not being able to support it.
Lets say a content owner is spending $5k a month right now to deliver their content in non-HD quality, encoding their content at around 500Kbps. Now they want to go to HD quality and have to start encoding their content at 1500Kbps. Overnight, the content owner has just tripled their bandwidth bill, without doing any additional traffic. While some might say that tripling the number of bits being delivered would get the customer a lower price per GB delivered due to more volume, for a $5k a month customer they might see a savings of 10-15% at most. Yet that's not going to make up for the 300% increase they just saw in their monthly bill.
Akamai knows this will be the number one question of content owners, yet there is no mention of it at all in the release. Instead we've got lots of marketing hype like "first platform to deliver HD video online to viewers using Adobe Flash technology, Microsoft Silverlight, and to the iPhone, at broadcast-level audience scale." Really? Defined how? Both Limelight and Level 3 support this, in fact, Level 3 has been supporting HTTP based Flash video delivery via a plugin their wrote for their caching network that ties into FMS 3.5 for some time now. They have been doing this before Akamai. So if Akamai is saying they are the "first" to have this, that's just not accurate. Now they may be saying they are first to have this at "broadcast-level audience scale", but don't define what that means.
The release then says they have the "only solution" and that they have a "first-of-its-kind streaming platform" that "enables content providers to deliver more HD content than previously possible." More marketing buzz words with no definition. And based on Akamai's release, I'm confused as to how they are comparing the experience. Early in the release they say the solution supports an "online experience that matches and complements HD television, " but later in the release Paul Sagan's quote says, "HDTV-like experience". Well what is is? Does it match HD television or not? Honestly, it does not matter. That's all marketing non-sense.
What will be interesting to find out is just how much Akamai is moving away from using Adobe FMS 3.5 servers. While Akamai may have done something like Level 3 did, coming up with a way to deliver Flash video via HTTP in conjunction with FMS 3.5, they also might have totally abandoned Adobe servers for the vast majority of this solution, which would not be good news for Adobe. While Adobe has a quote in the release, it's very generic since today, the Adobe server does not support HTTP streaming. Adobe's own server platform is basically getting passed over by CDNs who are developing and deploying their own technology to make up for what FMS is lacking, which is not a good thing for Adobe.
Whenever I read a release of any new product offering in the market, I try to think of it like a customer would. The release should tell me why I need the offering, what the value is, how it impacts my business and what it's going to cost me. While most releases don't include pricing, I'm willing to bet that during Akamai's 1pm webcast, they won't give out any pricing details at all on the new service. And with customers already knowing that Akamai's CDN is expensive, without them getting out in front of the pricing question, this release will mostly fall on deaf ears.