The program and speakers for the Streaming Summit at the NAB Show are now going online and I’m pleased to announce that Andrew Gallatin from Netflix will be presenting a case study on how Netflix does such a great job delivering video at scale. You can expect to see nearly all speakers and sessions online by mid-week. #netflix #nabshow #streamingsummit #streamingmedia
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Podcast Episode 14 is live! This week we preview some of the speakers and content that will be at the NAB Show Streaming Summit, taking place April 25-26 in Las Vegas. Hear what companies like Netflix, HBO Max, Paramount+, Disney, Fire TV, FOX, MotorTrend, La Liga, DAZN and others will be discussing and some of the main topics that will be covered in the program. We also discuss how industry conferences have changed since the pandemic, the role of hybrid events, what show organizers are doing well and what others need to improve on.
Companies, and services mentioned: Netflix, HBO Max, Paramount+, Disney, DAZN, fuboTV, Oracle, Red Bull Racing, AWS, Salesforce, Korea Content Platform, Adobe, Dolby, Samsung, LG, Demuxed, Roku, Fire TV, Vizio.
Podcast Episode 13 is live! This week we discuss the Apple and MLB deal and debate the importance of sports streaming to the content strategy of Apple TV+ going forward. We also highlight what the deal might mean for other sports streaming companies like Sinclair’s DTC service, which will have go-fenced games from some MLB teams and we talk about the difficulty consumers are having in finding sports content from one league on a single platform. The discussion also breaks down the news by Verizon of a new platform called +play, which will allow consumers to purchase and manage some of their favorite subscriptions across entertainment, audio, gaming, fitness, music, all with a single point of billing.
Companies, and services mentioned: Apple, MLB, Sinclair, Apple TV+, MLB.TV, Netflix, Hulu, Verizon, Roku, Vizio, LG, Samsung, CNN+, Verizon Fios, Disney, NBCU, Peacock TV, YouTube TV, Amazon Prime Video, Antenna, FOX Nation, Sony.
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If you are going to the NAB Show, on Monday April 25th we’re having a streaming mixer after the first day of the Streaming Summit, starting at 5pm on the Level 3 Terrace in the West Hall. No RSVPs are needed and all are welcome as long as you have any type of NAB badge. Thanks to our first round of happy hour sponsors including Agora, Amazon Web Services, Firstlight Media, Oracle, Smart AdServer and NTTVC, with more on the way! #streamingsummit
Podcast Episode 12 is live! This week we highlight HBO Max entering the live sports market with the news that they will broadcast more than twenty Women’s and Men’s National U.S. Soccer matches each year. We also discuss what Disney’s new ad-supported subscription for Disney+ might look like, when the option launches in late 2022. We also break down AppLovin’s acquisition of CTV platform Wurl for $430 million, based on projected 2023 revenue of $75 million and the challenges and opportunities for the entire CTV market going forward.
Companies, and services mentioned: HBO Max, WarnerMedia, Netflix, Turner Sports, Disney+, Paramount+, Netflix, Vizio, Pluto TV, AppLovin, Wurl, Human, fuboTV, Roku, Samsung, LG, NBC Sports.
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Limelight Networks has announced their plans to acquire Yahoo’s Edgecast from Apollo Funds in an all stock deal valued at approximately $300 million, or 1x Edgecast’s 2021 total revenue of $285 million. (Listen to my podcast here with Limelight’s CEO Bob Lyons on the deal)
Following the approval of the deal, which is expected this summer, the combined companies will rebrand under the new name of Edgio. Limelight is also getting $30 million in cash from Apollo Funds and Apollo Funds has the potential to earn an additional $100 million if Limelight’s stock hits certain targets within a 3-year period. Yahoo will retain a minority stake in the newly combined company.
During Q4 2021 earnings, Limelight projected 11% year-over-year revenue growth in 2022, but now with the combined companies, Limelight has established a long-term strategic target with a revenue growth rate of 20-25% and 60%+ gross margins. In my interview with Limelight’s CEO, he said he expects the integration of both companies to be done by late 2023.
I had been hearing of Apollo Funds shopping Edgecast since last summer, originally asking for a 3-4x sales multiple, which just wasn’t realistic. Verizon originally bought Edgecast for $400M in January of 2014 and at the time, Edgecast had $100M in revenue. It took eight years for Edgecast’s CDN revenue to double, if you strip out the revenue from Uplynk, which Verizon acquired in November of 2013. While other CDN vendors talked to Apollo Funds about Edgecast and looked at the business, there was too big of an overlap in their customer base.
Customers like having a multi-CDN strategy and where a lot of overlapping customer accounts exist, much of the revenue acquired in an acquisition would go away as customers would re-shift their traffic to another CDN. But in Limelight’s case, there is very little overlap with Edgecast’s customers and when you combine the two companies, Limelight’s top 20 customers will go from making up 74% of their revenue, down to 59% of revenue, with no one customer being larger than 12%. Previously, Amazon Prime Video made up 29% of Limelight’s total revenue in 2021.
By combining the two companies, Limelight also gets to expand their product strategy to focus more of their efforts on cloud security services, mostly with DDoS and WAF. All CDNs have followed the blueprint Akamai set forth many, many years ago, when they started diversifying revenue from just CDN services and moved into high-margin product offerings around performance and cloud security. Being less dependent on revenue from CDN services around video streaming, software downloads and small object delivery is crucial to CDNs surviving in the market. On a combined basis, Limelight says their security and applications business will represent approximately $100 million of revenue in 2022 with greater than 70% gross margins.
When the integration between both companies is done, Limelight says they will have a global network capacity of more than 200 Tbps with more than 300 PoPs and expects annual run-rate cost synergies of $50 million including approximately $30-35 million from reduced colocation and internet peering expenses. Once the deal goes through, I’ll have some more blog posts on what Limelight’s product strategy looks like going forward.
If you are a member of Wall Street looking for my thoughts on the deal, please reach out to me or contact one of the expert networks (I no longer work with GLG) to setup a call.
Disclaimer: I have never bought, sold or traded a single share of stock in any CDN and they are also excluded from my managed portfolios.
Podcast Episode 10 is live! This week we breakdown the 70,000 subscriber losses from Sling TV in Q4, the injection of $4.3B into DAZN and the upcoming soft launch of Bally Sports RSN streaming service. We also cover the key numbers you need to know from FuboTV, who ended 2021 with 1.13M subs and Discovery, who wrapped up 2021 with 22M D2C subs. We also discuss what’s behind so many streaming vendors slashing revenue growth projections for this year when compared to 2021.
Companies, and services mentioned: DAZN, FuboTV, Sinclair, Bally Sports, BT Sports, DISH, Sling TV, Discovery, HBO Max, Sabio, Vidillion, Haivision, AVIWEST, Kaltura, Brightcove, Fastly, Vimeo, Agora, Limelight Networks, Akamai, Qumu, Hopin.
