State of CDN Services Survey: A Supply and Demand Mismatch?
Last month, Akamai and Streaming Media, in conjunction with Unisphere Research, published a study highlighting media consumption behaviors by professionals in the streaming media industry.
One result that caught my attention, having crafted the survey questions and performed subsequent analysis for Akamai’s State of CDN Services, was a potential mismatch of supply and demand within the industry. More specifically, it seems that the types of content that media professionals consume is quite different from the content their companies deliver.
I’ve received some questions about this finding, based on a quote I provided for the article announcing the State of the CDN Services report. Based on those questions, and the fact that Akamai has released an infographic highlighting that and other findings from the survey, I want to detail where the potential gap appears to exist. (See the infographic at the end of this article; click on the image to display full size and to download in PDF format.)
The survey revealed that premium content accounted for 59% of all media consumption by survey respondents, which itself isn’t a surprise and is in line with general consumption trends. Far and away the dominant type of media consumption, premium content consumption trounced social media (23%) and enterprise media (13%) consumption.
Yet the content delivered by the majority of companies represented in the survey doesn't seem to follow the same trend. For instance, while a larger number of companies focus on delivering premium content than other areas, a focus on premium content delivery still only accounts for one-third of the total number of companies where survey respondents self-identified as working for a company that delivers streaming content.
Even more surprising, it seems that over a quarter of streaming media delivery companies focus on delivering enterprise content (28%), while less than 1 in 10 focus on social media delivery (8%).
In other words, social media accounted for 8 percent of content delivered from respondent’s companies—almost three times lower than those same respondents' media consumption habits for social media video content, at 23 percent.
Three potential models might explain this mismatch.
First, it’s possible that premium content delivery mimics the "80-20 rule." In other words, the actual amount of discrete premium content is actual fairly low, but is consumed by a majority of consumers. This model means that the power of content creation, and subsequent delivery, is consolidated into the hands of a few companies, and that any more companies attempting to deliver premium content would push the delivery balance past a saturation point.
Second, the questions may have been wrongly constructed. This is always a possibility, but with over two decades of crafting and analyzing market research surveys, most recently as co-founder and principal analyst of go-to-market strategy firm, Transitions, Inc., it’s the least likely scenario. In addition, several questions surrounding the key questions were designed to filter out possible false positives, and the responses appear consistent across disparate respondents in the United States and Europe.
The third model is more intriguing: Companies find social media content less attractive. This could be true for one of two reasons: Either there are so few social media clients to service, or serving social media content is plagued by the same issues faced by early user-generated content delivery.
Exploring both of those reasons, it’s certainly true that Facebook and a few other large social media clients dominate the market. But for every Facebook there are hundreds of upstart competitors that are gaining traction in specific geographies or markets of interest. Almost everyone I know that uses Facebook, whether it be in the U.S., Europe, or India, uses at least three other social media platforms. So it doesn’t appear that there’s a lack of potential market share for streaming companies interested in delivering social media content.
That leaves us with the other potential reason: It’s hard to deliver social media content. User-generated content has never really fit the encode-once-cache-everywhere model of premium content, and we only have to look back at YouTube’s early days to discover just how hard it was to put viral or trending content into the hands of everyone interested in viewing that content.
Yet just because it’s a hard technical challenge—and probably will require tweaks to delivery models to handle low-latency content delivery—doesn’t mean it shouldn’t be an attractive proposition for streaming media delivery companies looking to service a growing market.
Desktops and laptops still dominate personal online media viewing, accounting for 46% of total consumption, according to the survey’s findings, but my strong hunch is that only is true for premium content. Segment off social media content viewing, and one suspects that the tablet and smartphone are the dominant content creation and media consumption devices of choice.
Access to the full survey report is available by signing up here. Click the infographic below to display full-size and download as a PDF.
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