The Waning CDN Flash Tax

Finally, the third theoretical advantage of HTTP streaming is that it doesn’t require a persistent connection between the server and player, so you don’t need a streaming server to communicate with each viewer—any traditional web server will do. In contrast, RTMP streaming does require a persistent connection between server and player, meaning more streaming servers are required to reach the same number of customers. Since Adobe and its competitors charge for the Flash Media Server required for dynamic streaming, this increases the cost of streaming Flash over the other technologies.

Note that both Microsoft and Move require some server-based technology, but only a central server with plain-Jane HTTP servers interfacing with the clients and distributing the video data. Apple’s new adaptive bitrate streaming schema requires no Apple-related server technology at all.

Of course, for large companies acquiring servers for their own use, Adobe’s December 2007 price reduction from $5,000 to $995 for a dynamic-streaming-capable Flash Media Server dramatically lowered the pain levels associated with Flash streaming. While Adobe’s pricing structure with CDNs is more closely guarded, it’s clear that the premium many CDNs charged for Flash delivery is dropping in price and starting to disappear entirely, though the data is a bit dated, unfortunately.

Specifically, in a blog post dated Oct. 6, 2008 (“Most CDNs Still Charging More to Deliver Flash Streaming”), Rayburn reported that, for those CDNs that did charge extra, the premium was about “a penny per GB,” which translated to about “an extra $1,000 a month for every 100TB of transfer.”

In addition, Rayburn wrote, “The good news from all of this is that EdgeCast, Velocix, and Level 3 no longer charge any license fee for Flash streaming. Last year, all CDNs charged a license fee of some kind, so the fact that three CDNs in the FVSS [Flash Video Streaming Service] program are no longer charging customers for Flash streaming is a good thing. Over time, I expect more CDNs will join them in doing away with the license fee as they get more traffic on their networks and ramp up their services.”

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