The Economics Of The Streaming Service Provider Business

Performance Matters with a Distributed Network…or does it?
At the onset of streaming, there was much emphasis placed on the delivery of content from a distributed network architecture. The argument went that because of the congestion found on the backbones, and the exponential increases in Internet traffic patterns, distributed networks, where broadband content was served from the "edge" of the network, was necessary for the best performance of streaming media. Streaming experts also argued that a centralized model would fail in times of peak usage.

But what happens when servers in a distributed network fail? A user supposedly gets rerouted to another server, which might not be that close, and on which content might not yet be replicated. Reaching someone over the phone at a data center to solve technical issues is difficult, and every center has its own problem escalation procedures. Also, how good is the connectivity when you purchase it from numerous data centers? Mark Cuban has said that it is difficult to be at the mercy of other providers, who might not have your best interests at heart. When hosting on someone else’s network, your application may never be its primary application.

Upgrading the OS on boxes on a network with thousands of servers is a difficult proposition as well. How quickly can a CDN upgrade its servers, especially with the vast number of versions of software released from Microsoft and Real Networks? This also doesn’t take into account the number of labor hours involved in performing this task, the logistics, as well as the accompanying reporting and monitoring issues.

Customers often complain that large streaming companies fail to address their technical issues. This isn’t necessarily these companies’ fault—it might be better to blame one of the data centers where content is hosted. How might someone know if a server is down in Kuala Lumpur if the other 11,999 servers placed around the globe are working? Reliance on remote monitoring software alone won’t provide the assurance to customers that their content will be replicated and served in time.