Report: CDNs Generated $1.16 Billion in 2008

AccuStream Research reportedly says that Content Delivery Networks registered $1.16 billion in revenue in 2008, a 30 percent increase over the previous year.

 

The research firm says CDNs – a resource for streaming and downloading media research, business analysis and forecasting – are expected to grow at 19 percent in 2009.

 

CDNs consist of servers that are distributed around the Internet within ISP infrastructures. A CDN takes content from a provider and caches it on distributed servers. It brings the content close to the end user bypassing inter-ISP peerings, making delivery faster.

 

The research firm said that the delivery market has gone through enormous changes, from both technology and assorted business standpoints, including how services are priced, packaged, "productized" and marketed. They help organizations, eliminating the need to build their own video/content delivery service. Instead, companies can rely on CDNs to do it far more economically and efficiently than a content publisher can, especially when capacity and global reach are crucial. 

 

AccuStream iMedia Research had published a report titled “CDN Account Verticals and Revenue Performance 2006 – 2010” which reveals that audiovisual verticals including professional video, video advertising, video advertising networks, CMS platforms, online music spins, UGV and podcasting’s revenue totaled $550 million. Professional video (including advertising) remains the most penetrated and lucrative audiovisual vertical, with 76.2 percent of views delivered through CDN contracts.

 

“CDN content verticals and markets of opportunity are expanding as online experiences are transformed through a broadband medium powered by reach, scale and accountability,” said research director Paul A. Palumbo. “The infrastructure and application sophistication necessary to deliver broadband media continues to return healthy 50 to 65-plus percent gross margins.”

 

The report analyses pricing variations of bandwidth fees and says that larger media organizations such as Google (News - Alert), YouTube and Amazon denote bandwidth provisioning as a core infrastructure precondition, taking that potential revenue base off the table.