The last few days has been a bit of a transmogrification for me. It has also taught me a lesson.

Here is the original post:
About Face

The news that Google is selling NBC/Universal TV ad inventory is hugely significant.
First of all, NBC are a bit better than Google at selling TV inventory after fifty years in the business, I suspect, but NBC has decided to be the bravest TV co in the market (and largely been vindicated to date).

So, why are they giving away a whole part of their business to Google?

On the one hand you could argue that they’ve seen the future and have decided not to fight against the inevitable, but rather to embrace it. On the other hand it could point to a bad upfront this year which has left them with more unsold inventory than in previous years.
Google have struggled with audio and video advertising – YouTube is far from being the money spinner it should be – so this is a real breakthrough.

The trouble is, NBC is damned if it does and damned if it doesn’t. But I have a niggly feeling that they have just given away the farm. A broadcast network exists to build and sell audiences. What happens when they give the selling part to someone else, even if it’s a small part of the inventory ?

The rest is here:
Giving Away The Farm

The pre-Olympic viewing figures for Internet TV and video in the US shows unrelenting growth.

According to Comscore, 142 million Americans watched an average of 80 videos each in July, with YouTube/Goggle taking almost half of all viewing (44.1%) of the 11 billion videos watched. Fox Interactive has a 3.9% market share with a reach of 54.9 million viewers, with Microsoft, Yahoo and Viacom each with just above 2% market share.

The other top ten video destinations included Disney, Turner, Hulu, AOL and CBS.

It’s salient to note that there’s not a single new service provider (unless you count Hulu, which is owned by media companies) in the list.

Audiences beget audiences and breaking into this market is going to be a tough ask as Joost, Babblegum, Zattoo and many others, have found.

Source:
No Change

Sitting at a coffee shop and bloging on my phone (as you do in this digital age), my table – and the rest of the cafe – is festooned with ads for Lipstick Jungle, which plays on Living TV in the UK.

If you take the road downtown from JFK, the Queens skyline is littered with ads for TV shows and channels.

Equally, if you run a website, the most effective way to drive traffic is advertising.

Essentially, modern media economics is based on buying an audience and then seeing if you can monetize it better than the person who referred the user/viewer to you.

It’s a hellishly precarious way to make a living, and is, of course, what drives the Google model.

This is perhaps why the EPG is seen as the next frontier and why video search seems so attractive to those who participated in the Blinkx IPO.

But for most Internet TV moguls acquisition cost v. revenue per head is a hugely important metric.

Excerpted from:
Pay For One, Get One

The party may just be over for CDNs, as more and more companies raise more and more money: Panther Express, Conviva, BitGravity, CD Networks, EdgeCast, Grid Networks, Highwinds, Velocix, Itiva, Pando, Rawflow, the list goes on…

The trouble is there are only a few factors that can differentiate you in the CDN world. These are:

Network Size – how big is your network (and there are any number of ways of measuring this, from nodes, to peering nodes, to number of servers)

Network Reach – how far does it reliably reach (serving 500,000 viewers in the Netherlands is a very different proposition to servicing 500,000 viewers globally due to the pressure on local infrastructure)

Technology used – fundamentally, it’s all pretty similar, using variations on two themes – replication or caching; however, services like multicasting can bring some cost benefits into the equation

Service – such an imponderable and something companies like Akamai have a lifetime’s worth of experience with

Added Value Services – what above and beyond do you offer, especially when clients are looking for a one stop solution

Price – which is what it often comes down to at the end of the day, especially for the smaller players and the smaller clients

It’s estimated that the video CDN market is worth $400m and three companies have the vast majority of this – Akamai, Limelight and Internap. With AT&T and Level3 investing heavily into this market, what’s left for the new and smaller players ? Not an awful lot it would seem. The major trade buyers will find it much easier and cheaper to build than buy; associated companies like broadcasters and studios are unlikely to want to buy at a premium as they lack any economy of scale and the markets have been overly harsh on all companies involved in the Internet TV business.

On top of all this is the introduction of Edgeware’s new Reflex2 box, which can serve tens of thousands of streams, significantly reducing the cost of self-build for smaller users of CDNs (although it clearly does not help sort out peering bottlenecks).

All of this said, however, I do believe that there remain some good niches:

CDNs with heavyweight tools and added value services – ironically being this didn’t do much good for Narrowstep, but they sold themselves much more as a technology provider not CDN.

Multicast based services – companies like GlobalMix have cut a profitable niche for themselves by beginning to establish multicast delivery, and this is likely to make them an attractive acquisition proposition in the future.

Market local CDNs – who can plug gaps in local delivery that the larger player might struggle with.

The reality is that the CDN market is beginning to mature into different sub-markets such as live v. on demand, streamed v. download and, most important of all, small customers v. big customers. The only strategy left for the companies without any real market advantage is to target the smaller players who can’t get time of day from the big networks, but who are likely to achieve rapid growth.

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Niche Offerings