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IBM Showcases Video Streaming At NAB Show; More Competition For Akamai?

IBM ( IBM ) pushed further into online and cloud-based video services, unveiling streaming products at the National Association of Broadcasters show in Las Vegas on Monday. IBM downplayed possible competition with Akamai Technologies ( AKAM ), the leader in content delivery network services. IBM, though, seems to be moving onto Akamai’s turf, says Oppenheimer analyst Tim Horan. At the NAB show, IBM took the wraps off Aspera FASPStream , software that IBM says streams live broadcast video over “commodity Internet networks.”  IBM also unveiled an enterprise CDN product that lets companies broadcast live streaming video within their corporate firewalls. IBM’s initial clients for the video streaming products include AOL, part of Verizon Communications ( VZ ); the Canadian Broadcasting Co., Comic-Con and Mazda. “We’re not in the CDN business like Akamai,” Braxton Jarratt, who leads IBM’s cloud video unit, told TechCrunch . He added, though, that IBM has substantial cloud and software resources. IBM has made a few video streaming-related acquisitions. At NAB, Akamai announced the opening of a  broadcast operations control center to support customers’ over-the-top (OTT) video streaming. Cable TV firm Comcast ( CMCSA ) also looms as a new rival of Cambridge, Mass.-based Akamai. Comcast launched a commercial CDN offering in May, 2015. Akamai’s global CDN speeds up video streaming, e-commerce transactions and business software downloads over the Internet. Akamai competes with Level 3 Communications ( LVLT ) and Limelight Networks ( LLNW ) as well as startups Fastly and CloudFlare.

Akamai Web Security Bet May Help Offset Apple, Facebook Issues

Akamai Technologies ’ ( AKAM ) push into cloud and security services could offset challenges in its media business related to Apple ( AAPL ), Facebook ( FB ), Amazon.com ( AMZN ) and Microsoft ( MSFT ), says RBC Capital, which initiated coverage with a sector perform, or neutral, rating. RBC analyst Mark Mahaney set a price target of 62. Akamai stock was down a fraction, near 55, in midday trading in the stock market today . Shares have edged up about 4% in 2016 but are down 24% in the past 12 months. Cambridge, Mass.-based Akamai is the No. 1 provider of content delivery network (CDN) services to media and entertainment companies. Akamai’s CDN technology speeds up e-commerce transactions, business software downloads and video streaming to mobile devices. Akamai has expanded into higher-margin cloud infrastructure services and security, aiming to offset price cuts in the CDN business. “We believe the company can continue to see double-digit revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) growth driven primarily by cloud security and Web performance,” wrote Mahaney in a research report. “Excluding the company’s two largest media customers (presumably Apple and Facebook), we expect media delivery to remain in the very low double digits/very high single digits. “Given deceleration in revenue contribution from Akamai’s top two media customers (Apple and Facebook) in 2016, our estimates call for 9% year-over-year topline growth in 2016.  The company would need to grow 20% over the next four years to reach its $5 billion target. This would be impressive acceleration. Management has pointed to (Internet video) volumes, international revenue and strategic M&A as the key levers to support this growth inflection.” Amazon Web Services, part of the e-commerce leader, is not yet a serious rival to Akamai, while Microsoft has partnered with Akamai, noted Mahaney. Microsoft and Amazon are Akamai customers, though both also  operate commercial CDNs. “Microsoft and Akamai recently announced a partnership whereby (Microsoft’s) Azure CDN would leverage Akamai’s platform. Microsoft already uses Akamai for delivering software updates to the Xbox platform as well as updates to Office products, such as Windows 10 and Office 365,” Mahaney wrote. “Amazon’s use of Akamai is unknown, but since the company’s commercial CDN, AWS CloudFront, targets the low end of the market, we suspect Amazon leverages Akamai for large applications that have a high-performance standard and are delivered globally.” On Apple, Mahaney added: “We believe Akamai’s material OTT (over-the-top video) investments in 2015 targeted a potential Apple TV launch in Q4 2015 that never materialized. If Apple can make the economics work and moves forward with a new OTT offering, we expect Akamai will deliver a portion of this content.” IBD’s Internet-Network Solutions group ranks No. 88 out of 197 industry groups that IBD tracks. Akamai has a composite rating of 67 out of a possible 99. Image provided by Shutterstock .

Comcast, AT&T Not Always To Blame For Millennial Buffer Rage

Many millennials suffer from video buffer rage more frequently than road rage, says a survey by IneoQuest, a provider of quality monitoring and assurance services for Internet video companies. Fifty-one percent of the 1,000 consumers surveyed who watch streaming video have experienced “a state of uncontrollable fury or violent anger”  as a result of buffering problems, says IneoQuest. And more than one-third of those surveyed under age 35 have had meltdowns when video streaming stops. But the next time your Netflix ( NFLX ) movie or YouTube video streams inconsistently, don’t automatically  blame your Internet service provider such as Comcast ( CMCSA ), AT&T ( T ) or Verizon Communications ( VZ ), says Kurt Michel, senior marketing director at Mansfield, Mass.-based IneoQuest. The problem could be with the content itself and the server that is providing it;  the mobile device or PC; or there could be an issue with the CDN (content delivery network) that Internet video companies such as Netflix or Hulu use. CDN providers include Akamai Technologies ( AKAM ), Limelight Networks ( LLNW ) and Level 3 Communications ( LVLT ). According to IneoQuest’s study, in many cases viewers were not able to begin playing streaming content at all, with 27% of respondents claiming that buffering most often occurs before a video starts and 34% experiencing buffering in the first 15 seconds.  More than 40% of consumers say they will wait only 10 seconds or less before clicking out of a buffering video. Nearly a quarter of all consumers surveyed said buffering during live sporting events causes the most rage.