A new contender in Web content delivery

A new contender in Web content delivery

EdgeCast goes up against Akamai in the booming business of pushing rich
media through broadband pipes as fast as possible.

By James S. Granelli, Los Angeles Times Staff Writer
August 6, 2007

In a tiny, two-room
office on Los Angeles’ Westside, a small start-up called EdgeCast
Networks Inc. is seeking a better way to send movies, video clips,
games and software updates over the Internet to your computer.

The so-called content delivery business isn’t glamorous, but it’s
growing fast. Dozens of small companies are vying for a piece of the
action and challenging Akamai Technologies Inc., which controls about
60% of the $800-million global market.

torrid growth of video, music and other data-heavy media is straining
the Internet’s infrastructure — no surprise to anyone who has suffered
through "buffering" messages while trying to watch something online.

getting online content to customers quicker and cheaper has become
crucial for studios, gaming companies, advertisers and even such
software companies as Microsoft Corp. that need to get updates and
security patches to customers.

"I’ve watched the need for
content delivery explode for the past seven years," said EdgeCast
investor Mark Amin, vice chairman of Lions Gate Entertainment and head
of its CinemaNow online film distributor.

Like DVD duplicators
in the movie sales and rental business, Amin said, content delivery
companies are "the one common denominator everybody needs" to get their
online products to customers.

Akamai, based in Cambridge, Mass.,
was an early player in content delivery, launching its first service in
1999. But many competitors have sprung up recently, trying to cash in
on a market that research firm IDC predicts will soar nearly threefold
in the next four years to $3 billion in sales.

"It’s largely
driven by huge demand for high-speed Internet connections and huge
consumer demand for a lot of content, especially rich-media content,"
said Mukul Krishna, an analyst at consulting firm Frost & Sullivan.

closest competitors are Limelight Networks Inc. with nearly 10% of the
worldwide market and CDNetworks Inc. with 8%, according to a Frost
& Sullivan study.

But that doesn’t faze Alex Kazerani, EdgeCast’s chief executive.

"We want to be in the top three," he said.

is getting quick recognition from one of its new customers, Imax Corp.
The Canadian company whose technology powers the huge-screen experience
used EdgeCast computer servers to deliver trailers of "Harry Potter and
the Order of the Phoenix" on Imax.com in the weeks leading up to the
hit movie’s premiere last month.

Imax previously had stored
trailers on its own computer servers in Los Angeles. But the digital
files became too large, and thousands of customers hitting the site at
one time made downloading and viewing slow.

So Greg Foster,
president of Imax Filmed Entertainment, was ready to get help when
family friend James Segil, EdgeCast’s president, pitched the new
company’s capabilities.

"Traffic to our site was the highest it ever was, and the technical glitches were zero," Foster said.

delivery networks are somewhat similar to peer-to-peer technology,
which borrows bits of data stored on your neighbors’ computers to help
deliver the same video or song to you.

EdgeCast set up its own
servers in a dozen key locations around the world where numerous phone
and cable TV providers — the companies controlling the last mile of
broadband to homes — have facilities.

Then it sent the "Harry
Potter" trailer, for instance, to those servers. So when people went to
the Imax site to see the trailer, they got the video from the EdgeCast
location closest to them, giving them a faster and better view, Segil

Foster is sold. He said he planned to use EdgeCast for all future trailers and other online video.

What he and industry analysts also like is the pricing. Instead of
long-term contracts with fixed payments for both network services and
bandwidth, the new company charges for actual bandwidth costs, even as
they change.

The more bandwidth the company needs, the lower the price per megabyte, Kazerani said.

"That’s a new thing," said Melanie Posey, a research director at IDC.
"Akamai is the market leader and the premium price leader. So the first
step in differentiating yourself is to charge less."

concept behind content delivery networks is essentially the same, but
companies use customer service, reports, monitoring and other features,
as well as pricing, to attract customers.

"EdgeCast emphasizes
giving more usability and more control to the customer," said Lydia
Leong, research director at Gartner Inc.

Perhaps more important,
Leong said, EdgeCast has an experienced management team with financing,
a good business plan and some of its own technology.

"They’re among the ones with a better chance of success," she said.

and Kazerani and three other co-founders have built and sold Internet
businesses previously, but they said they had no near-term plans to
offer shares publicly or build up EdgeCast for an eventual sale.

"We wouldn’t mind being buyers this time," Segil said. 

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