April 22, 2009 - Video Publishers Turning to HD Online Video to Boost Competitive Edge and Increase Revenues

Contacts:
 
Jennifer Donovan
Industry Public Relations
Akamai Technologies, Inc.
650-627-5395
jdonovan@akamai.com

  • HD online video revenue in the U.S. estimated to reach $2.2 billion annually by 2012
  • Smooth play and resolution among most important considerations for more than 80% of online video audiences
  • 37% of U.S. online video users are already watching HD video online

CAMBRIDGE, MA - APRIL 22, 2009 - Akamai Technologies, Inc. (NASDAQ: AKAM), the leader in powering rich media, dynamic transactions and enterprise applications online, today announced insight it has gained into current market opportunities and revenue potential for publishers and content owners offering High Definition (HD) video content online. HD video has emerged as a strategic front for online video publishers in their battle for consumer interest according to a new IDC whitepaper sponsored by Akamai.* IDC's research found that that consumers will gravitate to the highest possible online video quality they can reliably stream because better quality video improves their overall viewing experience, especially when it comes to entertainment.

The three key conclusions in the whitepaper are: publishers realize that offering HD video is crucial to remain competitive; smooth play and video quality are important for almost all online viewers; and HD quality video translates to improved user retention, longer viewing times and more monetization opportunities.

"HD video brings results," said Tim Napoleon, Chief Strategist for Digital Media, at Akamai. "The more time users spent on the site, the better content owners can monetize those users. Some publishers already see as much as 20% of their online audience watching videos in HD quality, and when they make videos available at higher bit rates, they tend to see spikes in terms of user retention and time spent per user on the site."

IDC indicates in the whitepaper that it expects total HD-related online video revenue in the United States to be at $2.2 billion per year by 2012. Consequently, offering HD video is expected to be of crucial importance for publishers in order to remain competitive by driving audience reach and traffic, as well as advertising revenue and content sales. It is believed that consumers and advertisers will only adopt HD video if a high level of quality can be maintained, both with regard to the video image and to the reliable streaming of that video.

To support the demand for smooth, consistent playback, Akamai has introduced industry-leading next-generation variable bitrate streaming solutions, including AdaptiveEdge Streaming for Microsoft Silverlight and Adobe® Flash® 3.5 Dynamic Streaming. The latest versions of both Flash and Silverlight support streaming at variable bit rates. With variable bit rates, video players are able to dynamically swap between pre-encoded streams based on the available bandwidth at any given point in time, dramatically improving the user experience. Effectively, variable bit rates are designed to enable custom video experiences that allow publishers to reach the widest possible audience with HD without degrading delivery quality for users who access the Internet through slower broadband connections.

"IDC expects online HD video-related revenues to rapidly increase, for two reasons," according Karsten Weide, IDC Program Director, Digital Media and Entertainment. "One, because overall online video revenue will grow as the number of U.S. online video viewers continues to expand, and two, because the share of those users who watch HD video expands as well, which will increase HD-related revenue. As the share of consumers' time spent on watching online video rises, marketers will follow the eyeballs and spend more on video advertising, while consumers will also spend more money on buying and renting online video. But, as online video becomes more ubiquitous, and its usage more natural, consumers will demand higher quality video."

Distribution to the living room is also seen as a major factor for publishers to increase revenue and ROI. According to the whitepaper, more than a third of U.S. online video users already want to watch online video on their television set. Early viewing metrics from services that distribute to the television set indicate that consumers may spend significantly more time on viewing online video on the TV set than on the PC screen. Therefore, data in the whitepaper indicates that device-based distribution is expected to be one of the key drivers of the growth of HD market share. Network-enabled video devices, such as connected DVDs, Game Consoles and networked DVRs, are forecasted by IDC to be used in more than 80 million homes by 2012 and will drive Internet video consumption in the living room.

The Akamai Difference
Akamai® provides market-leading managed services for powering rich media, dynamic transactions, and enterprise applications online. Having pioneered the content delivery market one decade ago, Akamai's services have been adopted by the world's most recognized brands across diverse industries. The alternative to centralized Web infrastructure, Akamai's global network of tens of thousands of distributed servers provides the scale, reliability, insight and performance for businesses to succeed online. Akamai has transformed the Internet into a more viable place to inform, entertain, interact, and collaborate. To experience The Akamai Difference, visit www.akamai.com.
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