Netflix and Akamai both say that the company’s relationship status — reportedly on the downswing — has nothing to do with Akamai’s network quality.Is pricing the bigger issue? Or is this a face-saving spin move?
Streaming media analyst Dan Rayburn reported earlier that Netflix will move its streaming video traffic away from Akamai, giving it to rivals Limelight Networks and Level 3, “due to poor performance issues that Netflix has experienced with the Akamai network.”
But Netflix rep Steve Swasey tells us, “We have been satisfied with Akamai’s performance,” and that “Netflix will continue to engage Akamai as part of our multi-vendor strategy.”
Swasey wouldn’t specifically confirm that Netflix is moving most of its traffic away from Akamai. But he says via email, “Netflix is always looking to reduce expenses and increase efficiency to keep costs low and service levels high for our members.”
Akamai spokesman Jeff Young also wouldn’t say anything about the specifics of Netflix’s business with Akamai, and wouldn’t say anything specific about the claim that Netflix would move its video streaming traffic away from Akamai.
But he says that the notion that Netflix’s decisions are based on poor performance by the Akamai network are “simply false” and “just not true.”
However, Young wouldn’t offer any other potential explanations for why Netflix might be moving its traffic away. Young says that the companies have an “ongoing relationship” and he expects them to continue to have one.
But that doesn’t mean much — Netflix could easily keep Akamai around on retainer as a backup, without pushing any significant traffic through its network. While Akamai may offer many services to Netflix, pushing video traffic is the most fundamental part of their relationship.
Netflix’s supposed move has Limelight investors excited: LLNW shares are up more than 30% on the news. Akamai shares are down 5%, though Netflix’s business — about $15 million a year — is immaterial to Akamai, according a note from Jefferies analyst Katherine Egbert.
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