Current State of CDN Market

Introduction

• Speaker: Dan Rurn, Conference Chairman; Tomas from cdn77
• Topic: State of the current CDN market
• Key Themes: architecture, deployment, customer strategies, multi CDN strategies, edge computing

Focus on cdn77

• Disclosure: Uncommon for private companies to disclose financials; cdn77 agreed to share
• 2023 Revenue: $145 million
• Financial Health: Cash flow positive for the last 10 years
• Market Position: A small, focused company primarily involved in video delivery

Industry Trends and Insights

Multi CDN Strategy

• Customer Strategy: Increasing use of multi-CDN strategies, even among mid-tier customers
• Market Changes: Exit of StackPath and Lumen from the CDN market
• New Opportunities: cdn77 acquiring new customers due to market exits

Financial Transparency

• Client Concerns: Customers concerned about business continuity and financial stability
• Market Perception: Size and stability of cdn77 previously under-recognized
• Trend: Increased demand for transparency among CDN vendors

Key Industry Data

• 4K Content: Contrary to market buzz, 4K content delivery is relatively small
  • Library Size: 12-15% of libraries in 4K
  • Requests: 8-10% of initial requests for 4K
  • Playout Time: Less than 4% in 4K

Pricing and Commit Levels

• Pricing Variability: Lower willingness to commit to long-term contracts among customers
• Changing Market: COVID-19 has influenced pricing structures and contract terms

Technological Developments

Adaptive Bit Rate (ABR)

• Trade-offs: Quality, storage costs, compute costs, bandwidth costs
• Customer Strategies: Bitrate adjustments based on user consumption

Ultra-Low Latency

• Reality Check: Few customers actually requiring sub-second latencies
• Major Events: Large events like the Super Bowl do not utilize ultra-low latency due to cost and complexity
• Use Cases: Specialized scenarios like surveillance, security, and military applications

Consolidation and Competition

Market Consolidation

• Historical Data: Over 66 CDN companies have exited the market
• Current Landscape: Few global players and regional service providers remain
• Future Outlook: Likely further consolidation, especially among so-called 'legacy' CDNs

Regional and ISP Trends

• Regional Growth: ISPs and regional CDNs are becoming more competitive
• Federated CDN Models: Historically unsuccessful but some current endeavors like Quilt with Cisco showing promise

Conclusion

• Business Focus: Importance of focus and specialization in the CDN market
• Bright Future: Despite changes, the future remains strong for well-structured CDN services

Q&A Session

• No public questions: Audience invited to ask during lunch break