CDN Pricing War – All About The Money?

According to a brief about Frost & Sullivan’s upcoming webinar, Content Development Network Market Improving, But Latest Pricing Data Shows Challenges Still Lie Ahead
it is clear that the CDN market will start showing growth again in the New Year. This is based on discussions they had with content owners and content delivery networks. But the problem is that where there is growth, there are new players coming aboard and that is creating difficult challenges for competing companies. The pricing pressure continues to dominate this emerging sector. Especially with the industry consolidating and carriers entering the market, vendors will have to learn some new tricks to retain their piece of the pie.

As explained in the brief, “as video content delivery services face commoditization, providers are quickly evolving to move up the value chain and provide more video ecosystem pieces. But with change come challenges from carriers and the pricing pressure being exerted in the market. How can content development network (CDN) providers – carriers, standalones and combinations of the two – position themselves to succeed, as the CDN sector continues to evolve?”

So the real defining issue is not necessarily about the pricing, but how they will position themselves to succeed. Of course money issues are very significant today but we believe that savvy users will make their decision by taking a much closer look at the features they are getting. The streaming media industry is no longer just about giving a company some bandwidth. It has evolved to really serve the unique needs of customers and it is actually newcomers who have the best handle on providing highly sophisticated features being the new technology is simply more advanced.

But hold on a second. Savvy customers may not be the issue at all in the next wave. We may be looking at an entirely new generation of service providers or marketeers who do not want to have to involve IT departments, engineers or third parties in every decision they make. They want to have the freedom to set up their business by themselves and reap the benefits. They want to have an online management system for streaming media that they simply log into and define in real time.

Granted pricing is a big issue but no matter how far we evolve there is still a very basic thing called service and that never goes out of style. The best guide about what CDN players should be focused on is outlined very clearly in Stef van der Ziel’s Modern CDN Requirements, which demonstrates how their vision evolved over the years to serve customers better.

So what it all comes down to really in a nutshell is our ability to evolve and change with the times. Foresee what’s coming to prepare and adapt ourselves to a new reality. Once you’ve mastered that a little thing like a pricing war will not really affect you, right?