Hello Leaseweb Blog readers, Lawton Cheney here, writing to you this month about the debatable practice of peer-delivery (P2P) distribution applications in the online video streaming market.
Yes, I said peer-to-peer. And no, we are not going to “party like it’s 1999” with Napster. What we have for a quick discussion here, is an Internet distribution dynamic that we have seen on the Internet before, but with a twist as seen today in the VOD (video on demand) and OTT (over-the-top streaming) marketplaces. If Internet technology and/or a little bit of ethical business practice are things you like to read about – please carry on.
One trend that we are noticing (one that I find questionable practice) in the streaming market is that some platforms are implementing a “peer-to-peer” solution whereby the end-user (i.e. the end-user’s computer, tablet, etc., and upload link to the Internet) is being utilized by some video players to serve and deliver to other end-user customers located within close geographical proximity of the initial end-user.
Over the past six months we on the Leaseweb CDN team have been pitched by European and American vendors to add a P2P ability to our CDN. In other words, companies are suggesting that we use end user’s computers and their respective internet connectivity to distribute what we are responsible for distributing to end users – and this more often occurs without the computer owner’s knowledge.
I get the business reason behind this – it reduces bandwidth usage from the data origin. Heck, it reduces the overall CDN bill that our customers (sometimes owners of OTT players themselves) would have to pay us. And, in a perfect and efficient marketplace, the end user would benefit from paying a lower bill because the vendor would have reached a more efficient, cost reducing distribution model thereby lowering the fees they charge their customers.
But something tells me this cost benefit is not being passed on to the consumer.
In fact, what struck us most while we were being pitched was the callous way in which it was treated. The P2P solution providers acknowledged to us during their pitch that the end-user customer will have signed-off to authorize this practice within the terms of agreement, but most of the streaming customers are not aware that they are acting as a local PoP (point of presence) and bandwidth provider for the company they are paying for streaming services.
Above board P2P companies are always welcome. They know what they are doing, are transparent to their customers and, quite frankly, make for great customers of our CDN.
But to these sneaky P2P providers that suggested we be sneaky with them – we at Leaseweb CDN politely said: “No thank you.”
My guess is that this will eventually surface as a significant tech-business-legal news item and debate topic this year or next.
In the meantime, I have some questions for you to think about:
- Are you a paying customer to a VOD and/or OTT provider?
- Think your computer might be used to deliver to other customers?
- You haven’t received payment or fee discounts for the computing and bandwidth usage, have you?
Laurence "GreenReaper" ParrySeptember 16, 2014 at 10:57
You imply that this would lead to excess profiteering, but in the natural course of things other companies will adopt the same scheme and will squeeze the profit margin smaller. Eventually, everyone will be doing it. Consumers get a video product at a lower price – because they didn’t have to pay LeaseWeb for more bandwidth – and possibly faster.
Most of your customers’ customers don’t know the difference between peering, transit, and a hole in the wall. All they care about is getting their video fast and at a lower price. Because that is what they care about, it is what *your* customers care about, and therefore what LeaseWeb should care about.