The U.S. market made up an estimated 57% of the global tally; combined geographies are forecast to grow at 19% in 2009.
Revenue attached to audiovisual verticals including professional video, video advertising, video advertising networks, CMS platforms, online music spins, UGV and podcasting totaled $550 million, or 47.3% of total billings, according to CDN Account Verticals and Revenue Performance 2006 – 2010, a rigorous analytics report published by Big Market Research.
Professional video (including advertising) remains the most penetrated and lucrative audiovisual vertical, with 76.2% of views delivered through CDN contracts.
Going the other way, 20.4% of lower margin UGV volume was handled by CDNs, plus another 31.7% of online music radio spins and track plays.
Large media combines such as Google’s YouTube, AOL, Real Networks, Amazon, Yahoo and Comcast approach bandwidth provisioning as a core infrastructure precondition, taking that potential revenue base off the table.
Commercial market (retail and transit) value attending the delivery of audiovisual content (including self-hosted networks and CDN) was equivalent to $886 million in 2008, with bandwidth making up 60% of billable costs.
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Bandwidth fees as a percentage of CDN contract value are forecast to tack downward through 2010. The report analyzes historical and current pricing and pricing models by contract type, including volume and rate alternatives.
Total media servers in deployment rose by 56.7% in 2008. Year end ’08 accounts under contract grew by 25% to 8,496.
Monthly recurring revenue (MRR) for the CDN group rose 1.8% in 2008 to $6,735, as the market pivots toward revenue growth linked more tightly to ROI-driven, value-added applications, reducing exposure to bandwidth commoditization.
Akamai (MRR up 21.4%) and Limelight Networks (MRR up 18.7%) significantly exceeded the CDN group MRR average.
“CDN content verticals and markets of opportunity are expanding as online experiences are transformed through a broadband medium powered by reach, scale and accountability,” commented research director Paul A. Palumbo.
“The infrastructure and application sophistication necessary to deliver broadband media continues to return healthy 50% - 65+% gross margins,” he added.
Experts have studied this market on the backdrop of providing detailed information on the market’s trend, revenue share, and growth prospects from 2006 to 2010.
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