Verizon announced they are launching their own content delivery network (CDN) to “distribute content that Verizon contracts for directly with content owners like movie studios, TV networks, video rental sites and entertainment services…” The CDN is being phased in through a business relationship with Velocix, a U.K.-based digital asset-delivery network provider. Velocix will provide CDN services utilizing p2p technology to Verizon. "Verizon is now positioned to offer content owners and video distributors a competitive choice in delivering their services to our broadband customers," said Marjorie Hsu, Verizon vice president for network technology. "With our new delivery capability, content owners will be drawn to our networks, and our customers will be the beneficiaries of a broad range of compelling content services."

Verizon joins an increasingly crowded CDN landscape. CDN’s are growing as broadband and high capacity network owners aim to leverage their core networks for the growing business of content delivery to a plethora of network connected devices. By creating their own CDN capability, Verizon and others eliminate the need of contracting with other transport networks to distribute content, thus hopefully increasing margins. Companies like Verizon may be attractive to content owners, because in addition to robust CDNs, they also offer millions of existing broadband customer relationships. The first example of this Verizon collaboration is Starz Entertainment's Starz Play broadband entertainment service, which “provides unlimited online subscription access to more than 2,500 movies and video selections on demand, in addition to a live stream of the Starz premium pay TV movie channel.” It’s yet another example of broadband service providers trying to leverage core strengths for competitive advantage.

Level 3 is looking to leverage the exploding business of content delivery and has lowered its CDN pricing to better compete with companies like Akamai and Limelight. Level 3 has basically lowered its CDN pricing to match its IP transport costs. Lisa Guillaume, VP of CDN Product Development for Level 3 tells Light Reading, "We have a significant advantage here.” Level 3 suggests that they have competitive advantage because they own the actual transport network, whereas their competitors have to lease transport for their CDN solution.

CDN is one of the fastest growing applications in telecom. As more and more websites, service providers, and content distributors aim to deliver content across multiple platforms, CDN providers have tremendous room for growth. Level 3 expanded its CDN product line through its acquisition of Savvis.

Read more about Level 3’s CDN strategy on this Light Reading post.

DirecTV is beta testing a near video on demand (VOD) service, utilizing the Internet as its content delivery network (CDN). A far cry from cable and IPTV VOD offerings, DirecTV’s VOD product is not trying to match their competitors head on. Rather, they are using the service to at least assert that they too have a VOD offering. The service has limited content options, but does allow fast forward, rewind, and pause features. The content is downloaded to a partioned hard drive on the subscriber’s set-top-box.

Give DirecTV credit. They are not sitting around and complaining about their platform’s deficiencies (namely the one way nature of their satellite technology, which doesn’t allow for a return path). They are pursuing all avenues that provide them a means to compete. Whether it’s BPL for broadband, or this VOD lite scheme, DirecTV is not conceding their future to anyone. Time will tell whether these strategies are enough. I for one question whether this patchwork for a triple play (never mind wireless) strategy will work over the long term. Seems like the challenges are quite high, and when compared with there competitors offerings, may prove to be inadequate.

For more info on DirecTV's VOD strategy, check out this Light Reading article, and this DBS Talk forum.