There has been a long standing and little reported lawsuite going on between Akamai and Mirror Image and other CDNs - Limelight being the primary one, over a patent infringement on their respective CDN technologies.
Today Akamai (AKAM) claimed victory, and it sent Limelight (LLNW) shares plunging.
I don't know enough about the patent to comment in detail, but edge caching has long been around and this is a marginal call in my opinion. Moreover, it's really bad news for Internet TV operators.
Already, the charges being asked by CDNs are unworkable for any advertising driven Internet TV service. At around $1 per GB, it means a delivery charge of around 2c per viewer for a five minute 500Kbps slot (or 4c for 1Mbps).
If you're earning $40 net CPM, then this is revenue of 4c. Before setup and storage charges from the CDNs, before platform fees, before content and marketing and distribution fees. Oh, and your overheads.
At over $0.20c per GB any business model online is unworkable, and it's cheaper to buy your own servers and non-CDN bandwidth.
So, less competition in the CDN marketplace is a bad thing. Is this is an opportunity for new players like Velocix or Panther Express to jump in ?
Whatever, the marketplace needs sensible pricing that enables, not disables commercial models.
Today Akamai (AKAM) claimed victory, and it sent Limelight (LLNW) shares plunging.
I don't know enough about the patent to comment in detail, but edge caching has long been around and this is a marginal call in my opinion. Moreover, it's really bad news for Internet TV operators.
Already, the charges being asked by CDNs are unworkable for any advertising driven Internet TV service. At around $1 per GB, it means a delivery charge of around 2c per viewer for a five minute 500Kbps slot (or 4c for 1Mbps).
If you're earning $40 net CPM, then this is revenue of 4c. Before setup and storage charges from the CDNs, before platform fees, before content and marketing and distribution fees. Oh, and your overheads.
At over $0.20c per GB any business model online is unworkable, and it's cheaper to buy your own servers and non-CDN bandwidth.
So, less competition in the CDN marketplace is a bad thing. Is this is an opportunity for new players like Velocix or Panther Express to jump in ?
Whatever, the marketplace needs sensible pricing that enables, not disables commercial models.
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