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I’ve recently completed my bi-annual survey of customers taking media delivery services from third-party CDNs and the data shows pricing on very large deals is now down to an all-time low of $0.001 per GB delivered. That’s one tenth of one penny and is the lowest pricing I have ever seen in the market. [If you are interested in purchasing all of the raw data including pricing, traffic growth, contract terms, CDN(s) used etc. – minus customer names, please contact me.]

That’s not to suggest that all customers for media delivery services involving video streaming and software downloads are paying one tenth of a penny per GB delivered, some are still in the $0.003-$0.005 price range per GB delivered. But for the largest customers, $0.001 per GB delivered is now the lowest price in contracts. With customers having so many different CDNs to choose from, both regionally and globally, and the ease of use of switching between multi-CDN vendors, media delivery simply isn’t a sticky product. Customers have a lot of choice and flexibility when it comes to video streaming and other media services and all of the mid-tier and larger customers have been using multiple CDNs for some time, with that trend growing.

Amongst all the major CDN providers, pricing for media delivery services is pretty on-par with one another, especially on new deals, and some CDNs, in particular Fastly, are passing on deals where the price is too low. Amazon Web Services is still very aggressive on price and loves to keep pushing pricing down, but customers need to be wary of Amazon’s egress charges which sometimes, can be larger than the CDN bill itself. [See my post here on that topic]

At the $0.001 per GB delivered price point it leaves almost no room for any CDNs to be profitable purely based on that traffic alone, so CDNs are finding other ways to squeeze out some profits. For example additional fees around low-latency, HTTPS, and live events. In most cases, for large one-off live events, customers also have to pay an RSVP fee for capacity, even if they don’t use it and they are charged based on a per Tbps sustained model. That’s not to say live events are a big revenue driver for CDNs, they aren’t, not even the Olympics or the Super Bowl.

Most large scale one-day live events are worth at most, a low six figures to any one CDN for the video delivery and don’t really move the needle from a revenue growth standpoint. But the point is that CDNs bundle media delivery in with other services and in some cases can charge certain customers for other pro-services help. The largest CDN customers don’t buy based on per GB delivered but rather on a per Mbps sustained model and many times, that is bundled in with other non-media services all wrapped up into one price per Mbps, across all of the vendor’s services.

Of course at the $0.001 per GB delivered price, many are going to suggest doom and gloom for the CDN vendors in the market, since pricing is still falling and Amazon Web Services continues to be so aggressive overall. While CDN vendors are still needed in the market and will continue to grow, it will be slow when it comes to OTT video delivery in particular. The largest growth of video on the Internet is being done by companies like Netflix, Facebook, Google, Microsoft and others who do all or most of the delivery themselves. Yes, we do have quarters where someone like Apple or Microsoft will give third-party CDNs more traffic, but it’s short lived. 

And even with new services coming out from Disney, Apple, AT&T and others, much of that will be delivered from the customer themselves. And the portion of traffic for new OTT services that does go to third-party CDNs will be split amongst multiple vendors. So if you think new OTT traffic is going to drive a big upswing in revenue to any CDN vendor quickly, you’ll be disappointed. Video traffic on CDNs is growing, but organically and it’s the product with the least amount of margin and the highest portion of CAPEX.

You also have some OTT services LOSING subscribers, as is the case with AT&T’s DIRECT NOW service, which lost 350,000 streaming subscribers in the last six months, which means less traffic to multiple CDNs, for that specific customer. AT&T is also currently in the stages of building out their own CDN for their WarnerMedia OTT product for those on AT&T’s network and I would expect that over time, some other new big OTT players might go the DIY route as well.

It’s also important to note that when CDN vendors say the gaming vertical is one showing good growth, it’s simply downloads of gaming content. No traditional CDN is doing the actual live streaming of multi-player gaming. That’s not something the CDNs offer and if you want to know all the details on how multi-player gaming video streaming is done, game companies like Riot and others have tons of technical details on their blog.  CDNs do help the gaming companies primarily with large software downloads and that’s still a great segment of the market for all CDN vendors, but third-party CDNs will not be “streaming” any video for Google’s Stadia cloud gaming service or the like.

Adobe Media Server (AMS), formerly Flash Media Server (FMS), and RTMP were always a bit ahead of their time.  Initially designed as a development platform for interactive, real-time communication (think Zoom or Webex circa 2003), the product ended up taking hold in low latency video streaming and helped birth the web video streaming industry. Today with interactive video and communication the core part of services such as Twitch, eSports and online betting, Adobe Media Server and RTMP may be headed for another day in the sun.

Under agreement with Adobe, a company called Veriskope plans to sell, support, upgrade, and enhance the Adobe Media Server (AMS), the RTMP SDK and several related video products worldwide. The company has entered into a global licensing agreement with Adobe to manage all aspects of Adobe Media Server business including global distribution, support, product development and operations. Veriskope is made of former Adobe and Macromedia alumni including Sarah Allen, Craig Barberich and Robert Pierce, whom worked on or led the development of Adobe Shockwave Multiuser Server, Adobe Flash Media Server, Flash video and Adobe Media Player.  

Thousands of education, government, enterprise and media companies continue to use the Adobe Media Server and the RTMP SDK for online learning, real-time communication, live sports content ingest, live event streaming and online corporate training. The partnership between Adobe and Veriskope will provide these customers assurance they can continue to use Adobe Media Server and RTMP into the future. Veriskope will also provide services to help existing customers modernize and migrate from legacy Flash experiences to new web native HTML experiences.  

Veriskope ‘s service offering for AMS customers includes software licenses, upgrades, support plans, and product enhancements for Adobe Media Server, RTMP SDK, Flash Media Live Encoder and the Adobe Media Gateway.  In addition, the company is offering professional services support including migration services to help customers quickly move from Flash UI experiences to native web HTML, engineering services to design and architect new solutions, and training to help companies more effectively utilize the products.

Veriskope says their immediate plan is to focus on supporting existing AMS and RTMP SDK customers with the short term goal of providing a low risk, cost effective solution that allows thousands of AMS customers to transition from a Flash user experience to web native HTML experience.  

So does this mean that Adobe Flash will continue? The exciting part about AMS and the RTMP SDK is that it does not require Flash. RTMP was designed to be open and support different types of client software. Today AMS supports HLS and in the near future, Veriskope hopes to make announcements about supporting other web native formats.  The company will continue to support customers who use Flash and AIR for on-device experiences in cars, on boats, on industrial devices and more. AMS is not Flash. RTMP is not Flash. AMS and the RTMP SDK provide scalable, interactive video infrastructure that works across the web, the cloud, the edge and more.

As you look a few years into the future there are many standard features of the AMS and the RTMP SDK products that are more relevant today than when they were introduced — time synchronizing video, messaging and data for gaming, eSports and betting; proven low-latency ingest and contribution for live events, elearning and user-generated content; video and AI merged on the smart edge in IOT, manufacturing and retail and last but not least, the future of interactive communications.

Going into YouTube’s presentation at Radio City Music Hall on Thursday night as part of the NewFronts, one would think that the main focus would be Google’s desire to convince advertisers to move their ad dollars to YouTube and YouTube TV. But you’d be wrong. The event was a star studded music event and barely touched on their TV business at all.

The only data YouTube gave out was commissioned by the company via Nielsen, or their own Google/MediaScience Lab, and they didn’t disclose how many subscribers they have to YouTube TV, which content users consume most, or what any of the trends are when it comes to live TV or on-demand content. They gave out a metric on reach, saying the YouTube platform reaches more 18-49 year olds in an average week than all cable TV networks combined, but actual data on engagement would have been much more valuable.

Only one advertiser, Johnson & Johnson, co-presented with YouTube talking a few numbers, but the rest of the time was mostly taken up by live performances by eight singers/bands. YouTube said watch time of YouTube on television screens tops 250 million hours per day, but didn’t break the number down past that or say how many of those hours consisted of ad based content.

The tag line for the event was “Prime Time Is Personal”, with no focus on TV at all, and nothing about the performers tied into the “personal” theme in any way. Overall, it was a very odd event with a big focus on music, original shows, new music specials and new learning series. The real only piece of news from the event was YouTube announcing that all of their original shows will stream for free, with ads.

Overall, the presentation and experience felt more like an event for fans, as opposed to a night of information targeting brands and advertisers.

While OTT viewership is on the rise, the number of streaming providers is also skyrocketing with Disney, Apple, WarnerMedia and many others launching platforms later this year. With competition as fierce as ever, and costs for content creation and licensing so high, OTT providers can’t afford to leave any monetization stone unturned.

To thrive in such a competitive environment, streaming companies need to ensure that they are providing a user experience that not only meets, but exceeds viewers’ expectations. With so many streaming apps in the market, users will have no problem ditching one service that plagues them with annoyances like buffering for one that offers a seamless experience. It’s impossible that every service will survive the long haul, and users will decide which video providers continue to reap the benefits of the growing OTT market.

One feature that promises to solve the most pressing issues faced by users, while also giving streaming providers new revenue opportunities, is mobile video downloads. Many of the common problems encountered by viewers are the result of connectivity issues, especially on mobile. Globally, many viewers are plagued by problematic cellular connections that can’t support their on-demand video needs. Studies show that viewers are increasingly impatient, and the lag or buffering that results from insufficient connectivity can create an intolerable user experience.

Some companies believe that 5G cellular technology will be a solution to these types of viewership issues. Just like 4G before it, 5G promises to be the holy grail of the mobile experience that solves users connectivity problems. However, 5G won’t be a solution in all situations. Not only will its eventual rollout be slow, especially in many places around the world, but it won’t be able to solve for simultaneous advances being made in video quality. Even when 5G ultimately comes about, there will still be an increased load on networks, especially as higher bitrates come about. Download, though, actually solves many QoE viewership issues by allowing users to download videos to their device when they have a great connection, so they can watch when connectivity is poor or nonexistent.

Yet download is more than just a way to make video viewing less frustrating for end users. It also presents an enormous revenue opportunity for providers. Of course, for SVOD providers, a feature like download increases engagement and reduces churn, which is a huge business win. But for AVOD providers, there’s an even more direct benefit of download: the monetization of downloads. Attaching dynamic ads to downloaded video gives ad-supported video providers a new way to reach viewers who otherwise couldn’t engage with content—and that means an increase of ad dollars.

When offline, AVOD viewers lose the ability to watch ad-supported content, which currently requires a wifi or cellular connection to view. That means millions of viewers can’t engage with AVOD companies at times when they would otherwise be watching video in high volume: on planes, commuting, on vacation, and other areas that have poor Internet service. With download, though, viewers can anticipate these moments and have content ready to view seamlessly when they’re on the go. And that means video providers can catch extra ad dollars that were previously unavailable.

Hypothetically speaking, if an AVOD service has 10M subscribers and 25% of them download one 30 minute video per month, with an average ad load of five ads per show, at a CPM rate of $20, that’s an additional $250,000 in ad revenue per month. And that’s with only 25% of the users utilizing the download option, and I think it would be much higher than that. In fact If you increased the usage of download activity to 1 hour per week, the revenue opportunity would be $2 million per month or $25 mil per year.

The business benefits of download can’t be overstated. Every downloaded video is new engagement earned, loyalty gained, and dollars won. Hulu has teased a potential rollout of ad-supported download feature in the past, but so far the AVOD industry has failed to prioritize this lucrative solution to lost viewership. Without ad-supported download, AVOD providers are leaving money on the table every day. And this holds true across the entire video streaming industry. Without features like download, providers risk losing views and subscribers to the services who allow viewers to watch whenever and wherever they want. 

Gone are the days where H.264 covered all devices and platforms. Today, 1080p is required for mobile devices, with 4K HDR content increasing to the TV, and not far over the horizon for even advanced phones with OLED displays. This means video distributors must deliver the same quality and experience across all devices which requires them to navigate multiple codecs and video standards.

At the Streaming Summit, taking place April 8-9, at the NAB Show, this panel will discuss how an OTT service can maximize their technology investment while providing the best consumer experience possible when it comes to the video codecs they support. Considerations such as playback support on the most popular consumer devices, transcoder integration, operational performance, and codec efficiency, will be covered. Confirmed speakers include:

• Moderator: Rob Malnati, Sr. Director, Strategic Business Development, Citrix
• Rob Tomkins, Senior Director, Software Innovations, Ciena
• Wolgang Zeller, Head of Video, Consumer Product & Services, Vodafone
• Jeff Gilbert, VP, Strategy and Business Development, Qwilt
• Jacques Le Mancq, CEO, President, Broadpeak

Check out the entire two-day Streaming Summit lineup, with over 75 speakers, and register for only $695 to learn about The Business and Technology of OTT Video. #streamingsummit

Advanced TV presents new opportunities to streamline and enhance multiple areas of a broadcaster’s business, across content development, distribution, monetization, and more. Whether it’s the ability to reach viewers across screens with new direct-to-consumer apps or engage viewers with more personalized content and ads, the opportunities are endless.

At the Streaming Summit, taking place April 8-9, at the NAB Show, Dave Healy, Head of Broadcast & Cable Partnerships at Google and Domenic DiMeglio, EVP of Distribution, Marketing, and Operations at CBS, will discuss the trends and opportunities that are impacting the media and entertainment industry and talk about best practices for delivering a great viewing experience everywhere, today and in the future.

Check out the entire two-day Streaming Summit lineup, with over 75 speakers, and register for only $695 to learn about The Business and Technology of OTT Video. #streamingsummit

Over the last few years, most large broadcasters and OTT services have deployed multi-CDN solutions to improve the end-user experience for video. I’ve covered many instances where a multi-CDN strategy was a key component in the overall OTT workflow, as in the case of the Super Bowl, where CBS used four CDNs in a multi-CDN arrangement. There are a lot of different ways to implement a multi-CDN strategy and much of it is dependent on how much the customer wants to manage it themselves, and the resources they have internally to do so.

In most cases, companies typically select two to four different CDN vendors and then have to decide how they want to manage the flow of traffic between all the vendors. Some use internal software to do the decisioning themselves, while many also use client-side or server-side solutions available from a variety of third-party vendors in the market. Companies also piece together multiple solutions that are looking at the QoE experience not just from an end-user standpoint, but also across the health of the Internet with pieces like transit, peering and network services. Implementing a multi-CDN solution for more than a one-off event requires a great deal of planning and most deployments all look a bit different.

I’ve seen many multi-CDN implementations that required no less than six different vendors to make the whole thing work, based on the size, scale and complexity of the customer’s video offering. You also now have turn-key multi-CDN solutions available that make everything much simpler, depending on how much video you have to deliver, the volume of traffic you have, and the region you want to deliver it in, amongst a host of other variables. As with everything, there are pros and cons on both sides of this build vs buy decision. You can either a) build your solution and have more control or b) let someone else do it for you and rely on a specialized vendor to manage delivery end to end.

The biggest OTT companies have entire teams that manage their CDNs as well as their traffic switching and analytics platforms. They take care of negotiating and contracting with all the different vendors, configuring their workflow and typically coming up with some custom tools to make it all work together. Most companies end up configuring each CDN manually, since every CDN has a different way of setting up customers on their network and that’s one of the main frustrations heard from customers. Inconsistencies amongst all the CDNs and production bugs on one CDN but not another make it time consuming to setup a multi-CDN deployment just the way the customer needs it. And even once it’s deployed, there is always more tuning and changes that need to take place, since that’s the nature of the streaming media workflow. Nothing stays consistent, new devices come out, encoding profiles change and work always needs to be done to fine-tune video delivery.

Because it’s time consuming to do, I’ve seen some companies that end up building a poor man’s multi-CDN solution where two underlying CDNs are deployed in an active-passive configuration. Some people call this a “multi-CDN” but it’s really just a CDN backup and not a lot of logic or decisioning take place. Even with a strategy consisting of three underlying CDNs, if you go global, especially in specific countries, you’ll quickly find many weak spots and areas where it’s very expensive to deliver content. The big advantage of a multi-CDN DIY approach is that you can easily swap out vendors, and you have control over your infrastructure, to a degree. I’ve seen good results from OTT providers that have successfully implemented a multi-CDN strategy, but it takes internal commitment and skilled execution to make it work well.

Instead of stitching things together yourself, you can choose one of the turn-key solutions available in the market. Companies like Brightcove, Ericsson and Peer5 already offer these solutions that provide the whole multi-CDN stack – a portfolio of CDNs, switching and analytics, all available under one contract. Brightcove supports multi-CDN set up if you ask for it and Ericsson now support all the major Asian and European CDNs out of the box. And a new player in this space Peer5, offers a portfolio of 15 global CDNs, server-and client-side switching and analytics under one API. As with Brightcove and Ericsson, they negotiate and contract with the underlying CDNs which simplifies the business model.

These companies all claim that their solution delivers better video performance, but of course, defining what “performance” means is important and varies between customers. Citrix recently started measuring some of the newer multi-CDN platforms like Peer5, which likes to leverage more exotic routes that provide advantages during peak times and in hard to reach regions. But which provider, or multiple providers, works best all depends on what KPIs the customer is using to track QoE, how much video they are delivering, the countries they have viewers in and a host of other variables.

You can build your own solution and develop the expertise to run and maintain a multi-CDN stack yourself and directly deal with multiple vendors, or you can go with a managed solution which may offer less control but can deliver better performance. There are quite a few tradeoffs. There is no one size fits all strategy when it comes to using multi-CDNs to deliver video. For anyone who says, “this is the best way to deploy a multi-CDN strategy”, they will be wrong most of the time. The deployment strategy is unique to each customer, especially if they are large, have a global audience and are doing both live and VOD video delivery. It’s a much more complex undertaking than most realize.