Over the past few months, I’ve been hearing more talk about Brightcove teaming up with Limelight (LLNW) to enable Limelight to move up the stack and offer more solutions in the video ecosystem. While neither company would comment on the rumour, I’ve since learned that this deal is in fact taking place and that for the past few months, the companies have been working together to put it in place. While details of what the offering will look like are not being discussed, it would make most sense for Brightcove to licence a customised white label version of their platform to Limelight, thereby enabling Limelight’s customers to have direct access to the functionality that Brightcove provides.
While some might suggest this does not provide a lot of value as anyone can just go directly to Brigthcove if they need this type of solution, a customised version of the Brightcove system running on Limelight’s network would be beneficial to many customers. It would also give Limelight immediate new offerings at scale like transcoding, professional services support for things like custom player builds and I’d like to think that working together, the data that Brightcove and Limelight already collect could be used to provide customers will a very robust reporting and analytics package. We’ll have to wait to see exactly what the deal looks like when it is announced, but there is a lot of synergy between the two companies and this is a natural progression of where CDNs are headed.
Over the past year, Limelight, like nearly every other CDN, is trying to do more than just deliver bits. With video delivery pricing declining each year and more content owners asking for solution based offerings, not just bandwidth, CDNs are trying to make the move up the stack and offer more value add services. For vendors like Limelight, this is a 180 degree reversal from 18 months ago when they said they didn’t want to move up the stack and just wanted to focus on the delivery part of the business, thereby letting partners solve the other video ecosystem pieces. But like any industry, it evolves quickly and all of the CDNs have tried to evolve with it. Level 3 is working hard to finish their ecosystem offering, Limelight recently acquired Kiptronic, and Akamai is focusing a lot of their efforts on value add services in other segments of the market.
Companies who solve some of the ecosystem problems are going to get acquired by some of the larger CDNs or will do deals to private label their services, enabling CDNs to bring the solution in-house, on their network. While this all makes sense, the one problem I see with it is that no one is willing to talk about what type of impact these deals can have on CDNs revenue. Akamai was years ahead of their competitors when it acquired NineSystems to get the Stream OS content management system, but to date we don’t know how many customers use it or what kind of revenue it adds to Akamai’s bottom line. So while a Brightcove and Limelight deal makes a lot of sense, it might be a good 24 months or more before these solutions account for even 10-15% of CDNs revenue.
While it’s too early to know what kind of impact a Brightcove and Limelight deal could have, we should expect more of these types of announcement from the CDNs over the next few quarters.
More from Dan Rayburn’s Business of Online Video blog:
Cisco Says Video Traffic Growing, But Where’s The Business Going To Come From?
Sitting On 50Mbps Verizon FiOS Connection, Looking For High-Bitrate Video
1080p Streaming On Xbox 360 Will Require 8-10Mbps Connection For Full Quality
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.