Disney Invests $6 Million in EdgeCast CDN

Walt Disney's venture arm, Steamboat Ventures, has invested $6 million in content delivery network startup EdgeCast, one of the new entrants in the growing CDN market. The deal reflects the growing interest in the content delivery sector from Hollywood companies with enormous content libraries that may soon be streamed over the Internet. Other investors in EdgeCast include CinemaNow Chairman Mark Aminas and Jon Feltheimer, CEO of Lionsgate films.

CDNs are significant users of data center services, and as more fledgling networks get funding, they will be better able to invest in data center space to expand their networks. In September EdgeCast leased data center space in Atlanta, Dallas and Seattle facilities operated by Switch and Data (SDXC). EdgeCast now has a presence in 12 Switch and Data sites.

The CDN sector is growing in both the amount of business and the number of providers chasing those delivery dollars. The content delivery market, which was once dominated by Akamai (AKAM) and Limelight Networks (LLNW), now features at least 28 providers. This has led to some discounting as new providers seek to wrest business away from the established players, but most analysts anticipate a consolidation as emerging companies are acquired or form partnerships with other providers or major customers.

At least one peer-to-peer CDN network appears to be in play. VeriSign (VRSN) is said to be shopping its Kontiki P2P CDN service.