CDN Pricing Up Slightly in 2007

While bandwidth is getting cheaper, pricing for video delivery on the major content delivery networks (CDNs) is slightly higher this year, according to an analysis from Dan Rayburn at The Business of Video blog. "The big price drop in bandwidth has been on the network side of the business as opposed to the delivery side, Rayburn says, noting that in the last 6 months prices have increased two to three cents per GB delivered. Dan's data comes via contracts and RFPs he reviews for audio and video content delivery on CDNs like Akamai, CacheLogic, Internap, Limelight Networks, Mirror Image, NaviSite and VeriSign. Here's his summary of the current price scenario:

Rayburn expects pricing to be flat for the rest of the year. This is good news for competitors to Akamai, which continues to be the clear market leader. The risk in this type of market dynamic is that smaller players may lower prices to try and capture share, placing broader margins in the sector at risk. The recent consolidation has helped the leading players round out their service offerings and narrowed the playing field. Since CDN networks are significant users of data center space, the current price stability will no doubt be welcomed by their colo providers and landlords.

Dan's blog entry also offers pointers to his video presentation from Streaming Media East in May that gives an overview of CDN pricing from a buyer's perspective.