Akamai and Limelight, two of the largest content delivery network (CDN) players, found that web traffic on their platforms varied during the second quarter due to market fluctuations and usage patterns among their largest media company customers.
As a result of slower-than-expected traffic growth from its media customers, Akamai reported that its Media Division customers which accounted for $276 million in revenue, declined 1% year-over-year.
Similar to earlier quarters, Akamai said the performance of its Media Division was impacted by the six large internet platform customers it serves.
According to the company, these customers contributed $51 million to its revenue in the quarter, down 17% over the same period last year. In the second quarter, these customers accounted for 19% of Media Division revenue and 8% of Akamai’s overall revenue.
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Tom Leighton, CEO of Akamai, told investors during the company's second-quarter earnings call that while traffic has not grown as fast as it expected, it is still rising.
“As we signaled in our last quarterly call, the traffic from our media customers overall has not grown as fast as we had expected for the year,” Leighton said during the earnings call, according to a Seeking Alpha transcript. “To be clear, the traffic from our media customers has been growing. In fact, if you pull out the contribution from the six large internet platform companies, the year-over-year traffic growth rate for our media customers has been well above the 24% growth rate that Cisco reports for the internet overall.”
Leighton added that the problem is “our current traffic growth rate is lower than it’s been historically and lower than we’ve been expecting,” which “impacts the revenue that we receive from media customers for our media products as well as our web performance solutions.”
Video continues to be a large driver of Akamai’s overall traffic sources.
“Video today is now the majority of our traffic,” Leighton said. “We have other media customers, software downloads, gaming, some social networking and so video is not yet all of it. Video is growing at a good clip.”
Limelight was a different story. The company broke its own record for traffic delivery volumes in the second quarter, with a 20% increase from the second quarter of 2016.
At the same time, Limelight said delivery performance has improved, with incident tickets down by more than 20% from the second quarter of 2016.
To build a foundation for new growth, Limelight also expanded its facilities in Canada, South America, the Middle East and South Africa.
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Bob Lento, CEO of Limelight, said during the second-quarter earnings call that these regions are relevant to its customer base.
“Based on feedback from our customers, these geographic locations represent an important opportunity for additional growth,” Lento said during the earnings call, according to a Seeking Alpha transcript.
But traffic growth is only one part of Limelight’s strategy to enhance its network traffic.
The CDN player introduced various improvements to its Orchestrate platform, including its EdgePrism cache management and operating system. Limelight says this new capability can help its customers optimize performance, regardless of connection type or speed, without requiring client-side code.
“We also developed new software technology to accelerate and improve the consistency of video delivery speeds, which will lead to a higher end-user satisfaction,” Lento said. “We believe this new technology makes us the highest performing video CDN in the world.”
As part of this program, any content provider that’s not a Limelight customer can test out the CDN provider's platform for 90 days. If Limelight has not delivered a 10% improvement in rebuffering rates, the trial customer won’t pay anything for that usage period.