No Turning Back: The State of the European Content Delivery Market
Given Dan Rayburn’s comments at Streaming Media East recently that in 2001 he was tracking 40 global CDNs but by 2006 he was tracking six, and now he is tracking nearly 40 again, I wonder if the dot-com bubble burst too late to stop the swath of U.S. CDN startups but soon enough to stop them expanding heavily into Europe. Certainly between 2002 and 2006 the CDNs that were being used over here in the U.K. that I was aware of were limited to about two or three.
In 2004 I was involved in assessing the viability of providing live IP distribution services for BT Group’s Vision (IPTV) services. Rather than sort out its own networks (!) BT asked me to address delivery options using Akamai (no surprise there) and RBN (Real Broadcast Networks). Tiscali was the only other serious game in town at that point, but BT didn’t want to work with another network operator. (This is a risk that network operators face when entering the CDN space—I’m thinking of recent moves by Level 3 Communications, Inc. and AT&T—since selling network services to other network operators is a complex proposition.) So Akamai and RBN, as overlay CDNs, were then the key contenders.
Both were easy to deal with at a commercial level, but whenever we tried live events with them the time differences to their U.S.-based network operations centres made them excruciatingly difficult to work with. Even when we did get all the dots joined up, the services were not stable enough to scale to the size BT needed—failing dismally at even a few hundred simultaneous live stream users. In the end BT dropped live IP delivery to their IPTV offering and opted to integrate a “Freeview” over-the-air digital TV card instead. I always thought that was a big a setback for the U.K. IP video sector, given BT’s huge influence on the broadband structure at a residential level here.
One of the problems for CDNs in Europe has been this general architecture of the incumbent telecoms and the legislative frameworks in place. This has often made it difficult for CDNs to enter the market, and it’s daunting for VCs to take risks. As the legislative playing fields settle down, activity is without a doubt increasing. However, it still moves more slowly than in the U.S., often because it waits for the U.S. to decide its views on things such as Net Neutrality, electronic copyright, and graduated response before defining its own strategy.
I think this says a lot about what was going on in the “dark years” after the bubble: CDNs were struggling to justify the costs they needed to charge to either compete with Akamai or pay their underlying service providers. And they were competing with telecoms cutting their costs at a rate of knots to find any revenue they could to avoid bankruptcy. I remember SkyCache and Enfocast (satellite CDNs) coming and going—and in SkyCache’s case its acquirer, Cidera, folding too. I remember Intel and others starting CDNs and promoting them at Streaming Media Europe and Internet World, but again these strategies either folded or were assimilated into other strategies within a few months.
It’s fair to say it has been a very volatile space so far!
Survey Says …
Moving on, let me broaden the perspective by bringing in some analysis of quotes and comments from various CDNs whom the editor and I have contacted to for the purposes of this article.
To keep some objectivity, I decided to use a structured set of questions as much as possible (more of a survey, really) and then compiled these into a spreadsheet. I then looked at all the answers I had collected and tried to find key themes that would give me some interesting charts. So, for example, nearly all the companies said they had had no legal issues with their rollout, and about one-fifth said they had encountered manageable issues: I created a chart with three categories: “No issues”, “Managed Issues”, and “Severe”.
Schumacher-Rasmussen put out a post on the advanced Streaming Media listserv, and we put a copy out on the European Internet Webcasters Association list server (www.iwaeurope.org) too, asking for CDNs interested in commenting for an article on European CDNs to get in touch.
The total number of respondents to the survey was very small, so please take this information as a “guide” or “indicative” only! It’s all to be taken as my response to a small chunk of data from the PR angle of some of these companies.