Akamai: We're Ready for HD Internet Video

Now that Internet video is an everyday part of Web life, what's the next frontier? Content delivery network market leader Akamai Technologies (AKAM) issued a release yesterday touting its readiness for high-definition Internet video delivery. Akamai's says data from its existing users demonstrates that "a consistent, high-definition video experience is now possible" using its CDN network.

"The capacity to deliver high throughput files already exists at the 'edge' - leveraging the massive build-outs occurring in hundreds of individual networks," said Mike Afergan, chief technology officer of Akamai. "For example, on our distributed platform, we serve more than half of all the files, 500 MB or greater, at more than 1.4 Mbps, and this is only increasing. This demonstrates that, by leveraging the right architecture, there are already a large number of end-users capable of downloading higher quality content. We are just at the beginning of a very exciting market opportunity for delivering premium HD content."

A 2-hour feature-length HD movie would need to be encoded at a bit rate of at least 6-8 Mbps, according to Akamai, which would result in the file being a size of 5-8 GB. Delivering that file to an audience equivalent to one Nielsen ratings point (1.1 million households) would require 6.6 Terabits of sustained bandwidth, the company said.

Why issue a press release about a capability in a future market? There's been a lot of attention lately to the fact that Akamai has more competition these days, and the company is working harder to differentiate itself from competitors. While some bloggers and analysts have focused on competition from Limelight (LLNW) and startups like Edgecast, Akamai's focus on its network architecture in its PR efforts may also be a response to the entry of Level 3 into the CDN market.

Level 3 (LVLT), which is best known as an Internet backbone and transit provider, entered the content delivery market by buying Savvis' CDN network earlier this year. Level 3 already has business relationships with many of Akamai's customers, and believes it can grow its CDN business within its existing customer base - which includes the major networks and studios that are likely to be early adopters of HD Internet video.

In readying its CDN network, Level 3 has followed a more centralized approach, focusing on fewer, larger clusters in strategic locations. That's among the reasons that Akamai is emphasizing its strong presence at the network's edge, with servers distributed in over 750 cities.

What will the eventual growth of HD Internet video mean for data center demand? If Akamai is correct about the HD opportunity and the advantages of its edge delivery model, other CDNs hoping to compete with Akamai for this business may eventually need to invest in additional colo sites to store content closer to the end-users.