Video streaming is going from strength to strength online, with increasing numbers of internet users looking to the internet as a source of highly quality video content. You need only to look at the success of Netflix, Hulu and Amazon Prime to see how content owners are starting to take advantage of the massive demand for their videos from and audience who want to watch high definition content online.
One company benefiting from the popularity of HD video streaming is Akamai. As one of the world’s largest content delivery network providers, Akamai have garnered a reputation for providing lightning fast content delivery regardless of the file type – static content, dynamic content or video streaming. Whilst Akamai have been under pressure recently with the loss of Apple (one of the biggest customers who are reportedly in the process of building their very own CDN), the company is expected to post very positive 2nd quarter revenue results shortly.
Analysts expect that Akamai’s earning per share results will show a 20% improvement, up to 55 US cents, with total revenue expected to reach US$473 million – up 25%. This prediction comes even as CDN prices are falling by around 15%-20% annually.
Video Streaming of the World Cup
The reason for this growth is largely being attributed to Akamai’s video streaming of the FIFA World Cup in Brazil this past June and July. Jim Breen, an analyst at William Blair & Co., noted in a research report that "Akamai directly benefited from the FIFA World Cup, which achieved record streaming traffic. Akamai provided World Cup content delivery services for more than 50 Web broadcasters. The World Cup also has a positive impact on the traffic of Facebook, another Akamai customer."
Furthermore, Pacific Crest analyst Chad Bartley believes that "in addition to the World Cup… video, software and social media contributed to the strength in Q2 traffic. We expect media delivery solutions revenue to grow roughly 25% to $224 million, compared to 19% growth the past two quarters."
With revenue predicted to continue its upwards trend into Q3, with expectations of a 22% increase to $485 million, Akamai is set for a strong year.
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