Accustream Research
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March 30, 2004

ACCUSTREAM RESEARCH: CDN PROVIDERS DOUBLE STREAMING DISTRIBUTION IN ’03, REVENUE UP BY 60%, SERVICES EXPAND

Monterey, CA Content delivery networks (CDNs) individually delivered double or triple the streaming content in ’03 compared to ’02, but falling prices at the wholesale level lead to more aggressive pricing for retail contracts.

Bandwidth prices stabilized during the year, and while streaming more than doubled in terms of gigabytes delivered, CDN distribution revenues only grew by 60+% in ’03, according to the CDN Market Share Report ’03, a comprehensive analysis published by AccuStream Research.

CDN services for both streaming video and Internet radio is estimated at between $90 million and $115 million dollars in 2003, with provisioning or backhaul capacity worth another $50-$65 million, for a total bandwidth services market of $150 million to deliver news, film, sports, music and entertainment streaming media.

Value added services such as monitoring, reporting, stream quality guarantees, hosting, co-location, security, custom integration fees and storage attached another $200-$250 million to CDN businesses associated with that streaming media.

The average cost per gigabyte of streaming video transferred in 2003 was $2.15, for the full year. The average cost to deliver a gigabyte of streaming Internet radio was $1.31 for full year 2003.

AOL, Real Networks and Yahoo are the largest content distributors, and the largest consumer of bandwidth services, and typically contract directly with carrier suppliers for their capacity.

Independent CDNs such as Akamai, Speedera, LimeLight Networks, Chaincast Networks and others have either a focus on Internet Radio or broadband video, and maintain distribution contracts with some of the largest streaming media brands online.

“In 2003, CDNs diversified their business models and kept their focus on customer support and grinding costs down,” commented Paul A. Palumbo, director of research at AccuStream. “CDNs are not competing solely on price any more.”

Akamai remained a market leader in streaming contracts and revenue, and Cable & Wireless was a major player, but smaller CDNs also proved nimble, responded quickly to changing market conditions and client needs, and have been steering a track toward creating profitable businesses.

AccuStream Research publishes the monthly reports iBroadcast Stream Report, iBroadcast Avails Report, iBroadcast Wireless and Mobile Content Report, plus other annual and semi-annual streaming media reports with extensive data and analysis.

Contact: Paul A. Palumbo, ppalumbo@accustreamresearch.com
(831) 393-1953

Accustream Research
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