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December 13, 2011

ACCUSTREAM RESEARCH: CDNs EMBRACE DYNAMIC PRODUCT AND BUSINESS TRANSFORMATION; NEW SERVICES ESSENTIAL TO DOUBLE- DIGIT GROWTH IN REVENUE AND CUSTOMER ADDITIONS

Seaside, Calif. U.S.-based CDNs (Content Delivery Networks) are tenaciously adapting their technologies, services, account and business strategies to address new markets of opportunity, concurrently improving top line revenue by 17.7% in 2011 to $1.86 billion, an estimated 65% of the global total.

In response to, and in anticipation of, the market’s rapid evolution and appetite for delivery efficiency, reach and scale, CDNs have channeled R & D investments and global sales initiatives into value added services (i.e. site and application acceleration, content transformation, cloud, analytics, mobile and workflow).

Moreover, CDNs are actively licensing technology appliances and software into carrier class networks globally, and cutting more reseller deals to maximize infrastructure IP and the bit expertise inherent in their distributed networks, according to a sector report by AccuStream Research.

The report, CDN Business Transformation and Market Analytics 2012 - 2014, reveals 49.7% of sector revenue was generated from media and entertainment accounts, including professional video, UGC video, streaming music, video advertising and mobile video, along with movie, TV, music and podcast downloads.

Each category is analyzed utilizing AccuStream’s media consumption databases, calculated against byte/bit pricing, yielding percent of contract value made up of core bandwidth services.

As bandwidth prices continue to decline, revenue growth (forecast at 20% through 2014) is predicated on CDNs selling more solutions per unique account, and reflected in improved sector MRR for 2011.

CDN direct and indirect accounts combined reached 20,045 (up 19.2%), averaging $9,210 in MRR for the year, a 17.6% increase over 2010, and the first uptick since the sector squeezed out a 5.6% gain in 2008.

CDNs analyzed include Akamai Technologies, Limelight Networks, BitGravity, CDNetworks, EdgeCast, Mirror Image, Level 3, Internap, Highwinds, Cachefly, Cotendo, new disruptive pricing entrant 3Crowd Technologies, among others.

The report includes detailed analyses of server infrastructure, gigabytes delivered by content category, cap ex, transit and retail pricing, billing models, account share by content vertical, plus extensive Q & A’s with the sector’s leading management, technology and sales talent.

AccuStream Research produces sector reports spanning digital video, audio, subscription stores, video advertising, video advertising networks and exchanges, mobile advertising networks, video platforms, CDN and integrated media optimization solutions.

Contact: Paul A. Palumbo, ppalumbo@accustreamresearch.com
(831) 394-1490

Accustream Research
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