FierceOnlineVideo Leaders - Tim Napoleon, chief of strategy, digital media group, Akamai

FierceOnlineVideo spoke with Tim Napoleon, chief strategist for Akamai's digital media group, to discuss the content delivery network's online video delivery business.

FierceOV: Tim, how has 2009 been so far for Akamai, specifically as it relates to online video delivery? 

Tim Napoleon: I can't talk about company specifics, as we're in our quiet period before our earnings announcement, but I think there are some really exciting things happening in the online video industry that Akamai is following closely and participating in. I think one thing is the way Hulu has captured consumer interest with a proven content offering. Viewers are watching more video in high-quality too, taking the experience full screen. I've been impressed with the March Madness offering (from CBS) and the HD quality they've had. Offerings like this are driving the business. 

FierceOV: The CDN space has seen several upstarts lately.  How does Akamai compete with smaller companies, many of which offer lower prices?

Napoleon: Akamai has a unique value proposition, because we consider all points of view in online video in our model. We deploy at the edge and put our servers in the last mile at the ISP level. The "middle mile" of most ISP networks is not designed for video, and this affects performance, profitability and audience engagement. Akamai allows the video economic models to work for all involved, including the ISPs.

Most of the time, the smaller companies compete against themselves, not with Akamai. Our customers love our scalable service offering. 

FierceOV: Limelight Networks, the next-largest content delivery network, announced a new whole-site acceleration program last week. What do you think about Limelight entering this field, where Akamai has been the only real player until now? 

Napoleon: Well, their new offering is something we've been doing for years, we have the experience, the product roadmap and our investment is substantial. Our investment in our network is more than the total revenue of all of our competitors combined. 

FierceOV: What is Akamai's take on bandwidth caps that some ISPs are floating? 

Napoleon: I think they have a monetary incentive to attract customers, and video is the killer app right now in the consumer space. If they create an environment that is not conducive to video, they'll see consumers move elsewhere, because they have a lot of competition. I think the MSOs see the value in broadband services, and will offer them without restrictions around them in the long run. 

FierceOV: What are some of the trends you see currently in online video? 

Napoleon: I'm really excited to see the amount of premium content that is moving online, and I'm confident that Akamai will be a leader in delivering that content. We're starting to see meaningful scale and adoption on multiple platforms. Media companies like Hulu and News Corp. with MySpace are starting to get broadcast size audiences, and that's an exciting possibility. 

FierceOV: What are some roadblocks you see to the online video industry's growth? 

Napoleon: Online video advertising monetization is still an issue, and we're working with the IAB on their open video player that will set some standards for ads. This is important because the media market is currently fragmented, and advertisers have to generate new creative for almost every site they work with because they all use different standards. A standards-based player will allow for syndication ability for advertising.

We also need to continue to work to bring down the total cost of implementation, working to increase the speed and performance of online video offerings, while bringing down the technical costs. 

FierceOV: What are some of Akamai's big strategic initiatives for 2009? 

Napoleon: Our big initiative center around quality and performance. First, we want to work to deliver a true HD experience on the public Internet. Second, we want to help content owners both make and save money through better behavioral targeting, which will impact ad revenues and power that market. And third, we want to look at connected devices and how Akamai will play in that space. We see a lot of potential in this area, and think customer adoption is going to be huge, especially once prices come down.