Video Reigns, Corporate Pains and Akamai Gains

March Madness on the Network: We are shocked, SHOCKED to discover employees watching NCAA games at work. What the tournament means for corporate networks and Akamai (AKAM).

March Madness calls to mind passionate fans and office pools on the brackets. The San Jose Business Journal has an article that reveals another angle to the games for IT staff - employees watching games at work.  Instead of a TV in the break room, sites like and are being visited from company computers, with those sites seeing increases of 10,000 percent during the tournament.

ScanSafe (acquired by Cisco in December 2009) warns that the corporate network can not only be impacted by increased bandwidth demands, but expose companies to malware. Spencer Parker, director of product management at ScanSafe warns that "most employers don't know the bandwidth impact of these streaming sessions and are unaware of any financial implications."  Both CBS and NCAA sites, according to network zone records, are served off of the Akamai network.

Further proving that adoption of video on the Internet continues to accelerate, Akamai (AKAM) had two big video-related announcements Tuesday. The first was that they have been selected as the primary content delivery network for movies and TV episodes streamed instantly over the Internet by Netflix (NFLX).  In 2009 Netflix reports that almost half of their 12.3 million members had instantly watched a movie or TV episode on either a computer or TV via a Netflix ready device.  "Akamai's solutions are a perfect fit to support Netflix as it undergoes a strategic business model shift from traditional DVD shipment to streaming," said Robert Hughes, Executive Vice President of Global Sales, Services and Marketing at Akamai.  Last September Akamai unveiled the Akamai HD Network, a platform to deliver high-definition online video using Adobe Flash technology, Microsoft Silverlight, and the iPhone.

The second announcement came from the SXSW Festival taking place in Austin.  Akamai announced that leading movie distribution companies rely on Akamai's global EdgePlatform to ensure high quality movie delivery experiences online. HD quality movies being delivered come from Akamai customers EPIX, Netflix and Roxio CinemaNow. It was also reported that traffic across Akamai's network associated with the delivery of full-length feature films has seen triple digit growth since November 2009, which Akamai attributes to more content being migrated onto its platform.  As the number of movies being delivered digitally rises, a number challenges emerge, including smooth playback, highest bitrates (geography-based delivery), and offering interactive content.  "We strive to provide a digital distribution channel that allows distribution companies to experiment with new services and promotions, fully capitalize on unplanned growth and grow their business, without high up-front capital costs. This technical capability, coupled with consumer demand, is exciting for the industry," said Steven Chester, Vice President, Film at Akamai., a joint venture between major movie studios has subscribed to the full suite of Akamai services and delivers more than 200 full-length HD movie experiences online with the quality, speed and convenience demanded by today's consumers of digital media.  Customer Sonic Solutions reports that Akamai supported a 93% increase in movie downloads by Sonic since November.

Akamai notes that a critical factor to enable high bit rate delivery of very large (5-8GB) files is the proximity of the end-user to the server sending the file.  As an example, the only way to achieve 10 to 20 Mbps throughput for typical PC end-users is if the server is less than 20 milliseconds away.  The consumer side of the pipe is getting some help as well -- on Tuesday the FCC delivered the National Broadband Plan to Congress, setting an ambitious agenda for connecting all corners of the nation.  Between that and the hundreds (if not thousands) of cities submitting to receive Google fiber, the consumer bandwidth bump should aid plans (and revenue) for Akamai and the Studios.

TAGS: Akamai
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