Speaker 1 0:02

Welcome to this week's edition of the Dan Rayburn podcast, the show that curates the streaming media industry news that matters most, unvarnished, unscripted and providing you with the factual data you need to know, without any of the hype, the Pulse of the streaming media industry.

Speaker 2 0:22

Welcome to the Dan Rayburn podcast. I am Dan Rayburn, Long co-host Mark Donegan. Back for another week here on Friday November 29th.

Speaker 3 0:30

Yes, we are Happy Thanksgiving, that's right. Post-thanksgiving yes. Hopefully your Black Friday deals for junk you probably don't need worked out really well, I haven't gone out shopping yet, so we'll see, okay, okay, I mean look look, if you do need a new tv, it's always a great time to get one.

Speaker 2 0:48

It is it also be careful, those tvs that are only sold at like walmart and they're missing a lot of functionality and they don't do hdr and it's only 249 dollars. Yeah, there's a reason for that. There's a reason, but some people don't need that, so that's cool. So, mark, what we're going to cover today is some more details on the assets that akamai has acquired from uh edgy on the bankruptcy filing or what I really should say is contracts, because we yeah, that's right details.

Speaker 2 1:16

Akamai's put out a a press release. Uh, we also have some update in the venue sports and fubo dispute and we've got a little bit of information here around some some netflix, wwe, a few things there, geocinema so we can make this pretty quick. But let's go through akamai in terms of what they've released. So they've provided more details. Earlier in the week, the bankruptcy judge in the case with Egeo did approve the bids that were put in for portions of Egeo's business. So Akamai made a bid of $125 million for contracts customer contracts from Egeo's security and content delivery business as part of Egeo's bankruptcy auction. What Akamai said is that these contracts will give give quote several hundred net new customers and quote the necessary support to migrate smoothly to Akamai. So I don't know exactly how many customers Akamai has not said Now.

Speaker 2 2:17

Akamai did give out what they expect this transaction to add in terms of revenue for the fourth quarter and for full year 2025. So this is helpful. So for fourth quarter, they expect to add $9 to $11 million in revenue and for full year 2025, they anticipate the transaction will add approximately 80 to 100 million in revenue and they'll have approximately 25 to 30 million dollars of transaction service costs. So what are those costs? Well, akamai has agreed to pay between 15 to 17 million dollars in q4 to basically help keep edgio's network up and running. So they paying to keep Egeo the ability to operate its network during the transition and wind down period. Egeo plans to shut off their network. Well, akamai said mid-January, but I'm hearing that the date is January 15th. Now keep in mind, too, that, in addition to acquiring select contracts, they've also gotten a non-exclusive license right to patents in Egeo's portfolio.

Speaker 2 3:27

And just to be very clear, even though we've said it this is from Akamai Quote the transaction does not include acquiring Egeo personnel, technology or assets related to the Egeo network. Yeah, just to be clear, because we got people online getting that wrong. So is this deal good or bad? Everybody keeps asking me. Well, we don't have enough details to know. Overall, akamai's costs will be in the 150 to 160 million range and they expect to generate between on the low, 89 million to 111 million in revenue over the next five quarters 11 million in revenue over the next five quarters. However, those numbers do not include any revenue potential for Akamai upselling customers to cybersecurity, cloud computing. It doesn't include any additional revenue generated from the potential growth of delivery contracts. We also don't know what contracts Akamai may have already recut with some of these customers.

Speaker 2 4:26

If you looked at some of the filings during the bankruptcy case, at one point Microsoft made an objection and then another document was filed that basically said well, microsoft had a conversation with Akamai and they're now happy and Microsoft removed its objection. So we don't know all the different conversations that took place on the back end. Now I also have people online saying you know, akamai overbid for this. Well, first of all, there was no based on the regulatory filing or sorry, not regulatory filing the bankruptcy filing, based on all the documents tied to that. There was no second bidder backup bidder, I should say for the contracts tied to Egeo's delivery business, only in the security and app side, where it was Radware. Does that mean others didn't bid on the business? No, for all we know, there were conversations that took place where it was hey, by the way, anyone who bids below this number, we'll outbid you, and that was the whole reason. Linrock did a stalking horse bid initially. Was that so nobody could just take the company for a dollar?

Speaker 1 5:32

Yeah, oh, I'll pay two.

Speaker 2 5:34

So we don't know all the things that went. You know behind the scenes here totally legal, which you can do. So anyone who's saying they overpaid, you don't know that, I don't know that. And keep in mind, if we just look at, okay, the numbers here, and if Akamai kept even half of the total revenue in year two, they paid for the deal within two years and that's only if they keep half the business and that's without any upsell. Two years and that's only if they keep half the business and that's without any upsell. So really hard to know.

Speaker 3 6:12

But just also keep in mind here this is the third deal Akamai has done Like this.

Speaker 2 6:14

Yeah, they know how to do these. They know how to do this, they know what this business is worth, they know what they can upsell, they know what they can keep, they know what they can retain. So they are extremely smart. I do not think they overpaid. I think they paid based on what they felt the value was, what the different methodology was. I do not know, I'm not privy to all those details, but it's interesting how quick people are just to say, well, they overpaid, without knowing the details quick people are just to say, well, they overpaid, without knowing the details.

Speaker 3 6:50

Hey, so so I have a question, dan. You know it's kind of interesting, right? Because what about shared customers that had a multi-CDN strategy and they were using Egeo and Akamai? I mean now, like you know that, that, that it's not like your traffic doubles. I mean, I guess, in theory it could. Well, it could, or you reallocate.

Speaker 2 7:08

You re-split it or keep in mind largest customers? Remember too, this is important. That's a good question, mark, is you had a handful, call it less than 25 customers. We don't know the exact number anymore because Limelight sorry Egeo hadn't done a filing in a while, but remember with Limelight, at one point they had 18 customers and made up more than 70% of revenue. Exactly so we already know some of the largest customers Amazon, sony.

Speaker 3 7:32

But is that back when they were carrying Apple iOS updates? No, no, no.

Speaker 2 7:38

Apple didn't account for that. Prime Video, sony, samsung we know some of the largest customers out there, yeah, so keep in mind that they shift traffic also in real time. So let's say they had 30% at Akamai, 30% at Egeo and 30% at AWS. Well, they're still staying at AWS, but now Akamai is getting a larger share.

Speaker 3 8:00

No, but my point is isn't the whole purpose?

Speaker 2 8:05

A multi-CDN strategy.

Speaker 3 8:07

Yeah, yeah. But so if you're just going to bring that now back to Akamai, aren't they going to go find someone else to give that 30% to?

Speaker 2 8:15

Well, that's my point is what if you already have three or four or five?

Speaker 3 8:18

Yeah, in other words, like you have enough. Yeah, you're diversified Because the largest providers out.

Speaker 2 8:23

There are already doing that yeah, okay, he's very rare in that they have two akamai, and fastly, but the majority of others using more than two.

Speaker 2 8:30

But, to your point, keep in mind that edgio had hundreds and hundreds and hundreds and hundreds of customers paying a thousand dollars a month, yeah, or two thousand dollars a month. Like you don't need a multi-seed in strategy. Yeah, yeah, I don't know what percentage of those customers Akamai actually took. I would suggest I would think probably very few. Yeah, because, remember, it's hundreds. Well, hundreds means 100, but it also means 900. Yeah, it's a pretty broad term. Yeah, and then there'll be plenty of customers that just smaller CDNs might pick up in terms of and I'll call them regional service providers, delivery providers. You know, egeo had the a hundred dollar a month customers. So how that all shakes out really to be seen at this point now, as far as Microsoft customers tied to Microsoft's cloud service. So this dates all the way back to when VDMS was the default CDN for Azure. So they had a deep integration with Azure for thousands of customers thousands of them.

Speaker 2 9:38

For those who don't know, microsoft announced that Azure CDN from EdgeGO was going to be retired and they announced this on October 31st. You can see it on microsoft's website, yeah, and what they said was you can move to microsoft's cdn called azure front door or just take your content to some other cdn of your choice. There's a whole bunch of threads online reddit and some other places, where many customers who are using Egeo through Azure are paying $5 a month, $35 a month, are paying nothing. So it was a terrible business for VDMS. They did not get the revenue. They thought it was not a business. Egeo would even stay in if they were still in business.

Speaker 2 10:25

So this idea that all of a sudden you know there's all this revenue that's going to be going to Microsoft's CDN that's not the case. Many people online are talking about how they use Azure CDN just to allow custom domain in front of the Azure storage blob static websites and they talk about what they're paying and you can see hundreds of customers talking about how they use it. So there's not a lot of revenue there. For those that haven't heard already some haven't outside of what Akamai is doing separately, linrock is going to pay 43.5 million for Uplink and the media business. So that is pretty amazing to me. Yes, and that's that's a whole separate conversation. But just.

Speaker 2 11:10

Akamai is not involved in that.

Speaker 3 11:12

Yeah.

Speaker 2 11:13

And then finally, again, I mean it's just, it's such a shame, mark, we, we seem like we got to do this every podcast. But the amount of nonsense going out here since this deal. You know I here since this deal I've seen people say, well, this is just like Lumen that went bankrupt. I was like, okay, what? Lumen never went bankrupt, never filed for bankruptcy and, by the way, in the last year to date, its stock is up 289%. It did not go bankrupt. What are you talking about?

Speaker 2 11:45

Warner, paramount and NBCU do do not have, nor have ever built quote its own private cdn. They don't have it. Akamai was not the world's first cdn, the first commercial cdn with sandpiper networks. We've got some people just making up some crazy stuff, including here's one. Stack path was never a public company, like Like that's as, that's as an easy as a search as you can get. And yet this person said it ceased trading in reference to its stock. It never had any stock. Yeah, meta doesn't have a commercial CDN service. Netflix was not the first one to build its own private CDN. The amount of CDN information thrown out after this deal was almost like, hey, I'll just sort of make up what I want and.

Speaker 2 12:35

I'll throw it in a blog post.

Speaker 1 12:37

Mark.

Speaker 2 12:37

Donegan has the world's largest CDN out of his home, you didn't know that, Dan that dan well I just made it up it's incredible what people are pushing out there for news. So again, just don't listen, ignore that stuff. Go to cdnlistcom. I updated that. It's a history of the entire cdn market dating back to the day one when sandpiper started. It's got a list of almost 100 companies where they went, who acquired them. If you have a question on that, reach out to me. So that's what we've got in Akamai. Now Egeo did internally announce layoffs. I'm not going to go into those details. Those will come out. I'll let the company do that, but unfortunately that's the reality of it. Some employees will stay for a period of time, obviously to help with that transition of the assets. Now how many employees will go to uplink, which will have to be a a new, newly formed company? Right, because uplink isn't a company, it's a product yeah, it's a new legal entity will have to be formed by lynn rock.

Speaker 2 13:43

uh, I don't know if they're keeping the uplink name and people keep asking. I have no insight into the branding, the corporate structure, who's going to lead that, that's all. Is it public, Dan? Is that when Edgecast was acquired at the time it was still Limelight they were in the middle of changing the brand and the name.

Speaker 2 14:17

Yeah, that's right. Those filings do include a breakout of what percentage of revenue was uplink, what percentage was considered delivery, and the reason for that is when edge cast was acquired, there was a chunk of revenue that VDMS was previously counting as CDN. It wasn't really CDN, or I should say delivery, as limelight defined it. So you can find some of those numbers. It's going to date back now what? Two years, but I can't give out any numbers past that.

Speaker 3 14:50

Yeah, Well, yeah, I won't volunteer. But there's a reason why I said I found that price, you know, interesting.

Speaker 2 15:03

Yes, it's interesting, but here's the thing what does it cost to operate this individually?

Speaker 3 15:07

Well, precisely, Precisely, what does it cost? Like are they having to then assume? Well, yeah, they have to assume all operations. They have to acquire or build the infrastructure. Well, they have that because it's running mostly in AWS.

Speaker 2 15:25

They are going to have to go out and find a new CDN.

Speaker 3 15:27

Yeah, since they'll no longer have one in-house.

Speaker 2 15:30

I expect that they'll work with Akamai.

Speaker 3 15:32

I would expect so.

Speaker 2 15:34

I expect they'll do that. So what is the cost? Also, how much is Linrock going to invest in that business? What are their plans for growth? Yeah, the thing with Uplink is that it always was in the shadow of the larger conglomerate, it's true, which was having issues, and then it was like, well, okay, uplink couldn't really focus on being a separate entity, it was just a product kind of lost in a CDN.

Speaker 3 15:57

Now this thing should shine on its own, yeah, but I mean I think people, you know, if it gets disclosed or whatever, like I think people may be a little bit surprised at the, at the revenue they were doing, you know.

Speaker 2 16:09

Um, yeah, maybe. Um, you know, we know it's over a hundred million dollars, because that was more than that number that they put out in the regulatory file. Well, there you go. Small subset of customers make up a large percentage of revenue.

Speaker 3 16:21

I'll bet there's people though. My point, though, dan, is that I'll bet there's people that think uplink is a 15, maybe 20 million dollar business oh no, no, it's definitely not.

Speaker 2 16:30

It's over 100.

Speaker 3 16:31

No, yeah I know that's yeah, it's definitely not. It's definitely not yeah, uh, we'll.

Speaker 2 16:36

We'll see how much of that comes out. But also, you can find some. You can find some of that online through some filings and whatnot. Mark, yeah, I know the number was over 100. I don't want to give out out the numbers.

Speaker 3 16:46

Yeah, no, that's not what we're trying to do, but yeah.

Speaker 2 16:50

You can find it. So that's what we got there. More information comes out, We'll do that. Let's jump into venue sports and FUBO. So basically a couple of different things here. On previous week here the DOJ and 15 attorney generals filed briefs with the US court of appeals and they're reinforcing their opinions that the preliminary injunction granted to Fubo should not be lifted. Um, now, this is I don't know any other way to say this but this has really turned into political posturing, because the 15 attorney generals, uh, are all Republican and the six attorney generals who filed in favor of venue are all Democratic. So I didn't realize this was turning into parties. Why is?

Speaker 3 17:42

this a political? I don't know.

Speaker 2 17:45

It's sports, for goodness sakes, yeah but remember, politicians know sports is important, so they look like they're posturing. Like you know, I'm helping Americans. I'm helping. My job is to help you as an American. Okay. I don't even think you understand how this stuff even works. What?

Speaker 2 18:02

I would love to know here's what I'd love to know, stripping out anything tied to legal wording to know. Here's what I'd love to know, stripping out anything tied to legal wording. You now have 21 attorney generals that have filed one way or the other. I want to break down how many of those 21 actually have Fubo as a service Right now. You don't have Venue it hasn't launched but how many of you even have Fubo right? Just how many of you actually are using a streaming service that is live, linear and understands how this all works? Yeah, I'd love to know. Yeah, so, uh, that's what we've got now how this is going to play out after president elect Donald Trump is in office and the DOJ sees new appointments. I have no idea. I'm not going to speculate. Yeah, I have no idea, I'm not going to speculate.

Speaker 2 18:47

I have no idea how this works from a, you know, anti-competitive. You know it's interesting how people talk about just all of the facts in the case and and and I'm no lawyer, but you know there is no legal duty, there's no law that says Fox, disney, wbd have to provide licensing to the exact, you know, to the same company, at the same price in all the same terms.

Speaker 2 19:14

Right now. There are certain things tied to that from a law standpoint, but that's part of what's being discussed here. The second side of what is considered anti-competitive and all that I don't understand. The language on that is confusing. So we'll see. What bothers me in this Mark is look, if we, if we want this solved in the industry we not that we have any say in it, but this could be solved very easy. Now I'm going to give an idea here. Now you know.

Speaker 3 19:46

So my idea is using common sense which most of these deals never have, I think that's a good place to start.

Speaker 2 19:53

It's a good place to start, but unfortunately it's completely unrealistic. But here's what you do Take all the lawyers out of the room, put the CEO of both companies in the room together by themselves. What do they both want out of this? Remove egos, no lawyers. Squash it. It's in the best interest of consumers, it's in the best interest of fubo stock. It's in the best interest of venue. Wants to hire as an organization company once it becomes one, more than 300 people. 300 people can't get hired right now. Yeah, that's not good for the industry. No, and more and more talk in our industry about suits right, doesn't help us. Lawsuits that doesn't help us. So get together and squash it. Is that going to happen? Maybe it will, if this thing drags on long enough.

Speaker 2 20:43

I don't know, but it's just tiring that we spend so much time talking about lawsuits amongst companies. Now it's really sad, frankly. And then finally, there was another court filing An oral argument is going to start or be on December 13th. Basically, it's WD's motion to dismiss. Fubo wants to it looks like like here move the venue from one location to another. I didn't really care about that too much, I didn't read into it, um, but there's. There's going to be a hearing on december 13th. Now also, hopefully there's going to be hearing soon January maybe don't have an exact date because Fubo's combined entity filed a motion to have an emergency hearing based on the injunction. They haven't had that as of yet. When will that happen? I don't know, but hopefully it's in the new year, because even if it's, hey, okay, you can launch it, but you have these parameters or you have these limitations just get the thing off the ground yeah or exactly.

Speaker 2 21:58

Hey, if this thing is injunction is staying, maybe that forces disney and its peers to get in a room and say all right, what is it going to take to fix this?

Speaker 2 22:06

yeah, I think either way, this should just, this should just be solved. It's just. It's not good for anybody involved. A couple of final things here. Mark, we're not going to go through all the Black Friday deals, but let's just say, if you want Hulu, disney Plus, max Peacock, they're running deals right now the usual $1 up Peacock's $20 for the annual plan. Amazon is doing streaming deals on a whole bunch of streaming services for $1 per month, but keep in mind most are only for two months, so not super helpful. I did see the lowest price I've ever seen today on Amazon fire TV 4k.

Speaker 3 22:45

Really.

Speaker 2 22:45

Uh $21.

Speaker 3 22:47

Wow, yeah, 4k, 4k Not the max max, but the 4k not the max. Okay, so does that support dolby vision?

Speaker 2 22:56

yes, I believe it does. Double check on that, but I believe it does, and I mean I mean the dolby, the dolby ip license for dolby vision.

Speaker 3 23:05

I don't know what it costs per device yeah, um, I yeah. I don't know what they negotiated, but it's like that's a good portion of that $21.

Speaker 2 23:14

Now I looked up historically because I buy a lot of these devices as thank yous and giveaways. Historically, the lowest price I ever paid Mark was $27, just over $27. Yeah, so it's the lowest price I've ever seen, and keep in mind too. If you try and buy them from Amazon and you buy more than two or three, you will not be allowed to check out. The limit is always two, sometimes it's three.

Speaker 3 23:35

Can't buy more than that. So if you NFL Christmas games on Netflix can now be seen in bars and restaurants.

Speaker 2 23:40

I didn't look at what that cost is and I don't know if they broke that out, yeah, but I wonder what that cost is, being it's only two games in one day. Also, I was wondering, mark, how many bars and restaurants are open on Christmas? I don't know.

Speaker 3 24:13

I don't know, I don't know. Well, you know what? If I owned one, I think I just might open, because guess what You're a friendly guy. Well, there are people that want to get away from family. Yeah, sure, these people don't celebrate.

Speaker 2 24:27

Christmas.

Speaker 3 24:28

Yeah, but curious as to how many there was.

Speaker 2 24:31

I'm sure there's a number we can Google Now. Next Netflix news January 1st WWE Network will shut down in Europe. No surprise, the Raw content library is moving to Netflix. Wwe Network will remain active in those international markets where Netflix doesn't yet have the rights to stream WWE programming. Also, because of the Mike Tyson, jake Paul fight, florida man has filed a class action lawsuit over Netflix against Netflix over the poor quality streaming. Now you're ready for this, mark? He's seeking at least $50 million in damages. Of course, yeah, it traumatized him. Yeah, I don't really know. He says Netflix is guilty of breach of contract over the frequent glitches. He's asking for class action status. That'll be a fun one to watch. I will bet anybody who wants to take that 100% odds that he will lose.

Speaker 1 25:34

That's not going to go anywhere, but okay, and then two other things.

Speaker 2 25:38

Here Again, let's talk about another lawsuit. This happens from shareholders, but a shareholder filed a lawsuit against Warner Bros Discovery saying they violated sec laws as it pertains to the agreement with the nba. So they weren't happy with that. Uh, and then this is, I think, interesting to note mark. I didn't get a chance to dig into this, but you had users reporting live streaming issues with geocinema. They had a ipl mega auction, uh, and very popular, not that I understand cricket and all that stuff. They were auctioning but, uh, users were getting error message 419, which means they couldn't even get to the live stream. You're also having authentication issues getting in.

Speaker 2 26:25

This was also happening when I thought was interesting. Mark. Here was happening on mobile devices. It was also browser based on the computer, so clearly it wasn't just one device type either. I don't know what percentage of users were impacted. No information was given on that. I did not see a post as of yet. If I missed it, my apologies. I've not seen it, so it might be out there, but many times Geo Cinema will say afterwards a little something about we're aware of this or that, and here's what we did. I've not seen that as of yet this was about a week ago, based on what we're recording now. So that's what we've got. The week of Thanksgiving, you know, here we were thinking we'd take the week off, but there was enough news to do a podcast.

Speaker 3 27:10

Yeah, absolutely.

Speaker 2 27:12

So all this is on LinkedIn. All this is already up, Other than the Black Friday deals. I got a couple of them up. We hope everyone had a good Thanksgiving.

Speaker 1 27:20

Yeah.

Speaker 2 27:21

You know, as I said last year at the show Mark or in April, you know we're here to talk. We're talking about business content, technology, right, and we're talking about that on the podcast. We're talking about that at the NEB Show Streaming Summit. But we're in the business of people. All of us are Invest in people, not ideas. That's when your company grows. That's where you have the right culture. It's the same with people in life. You invest in people, not ideas, and that's what Thanksgiving is about. So hopefully a lot of people had some downtime. I'm seeing a lot of away messages of not back till December 1st. I see a lot of people took the week off. That's great. Hopefully they're getting some rest. They're not hosting too many people at their house.

Speaker 2 28:01

That's not always restful, most cases it's not but hopefully everybody comes back ready to go for the last month here of the year because, as you all know, especially anyone in account management and sales it's the time to close out Q4 in the full year. For people in marketing, it's okay. What is our go-to market plan? What is our budgeting? What's our budget going to be? Mark, I got three emails, just actually, two of them on Thanksgiving and one today asking about hey, nab Show Streaming Summit. When can we chat? We've got some marketing ideas. I think one was from me. No, I didn't get yours yet.

Speaker 3 28:35

Oh, okay, if you sent one, I didn't get it. You know what, maybe it didn't go out. There's one coming, okay.

Speaker 2 28:42

If you sent it, please resend it, because I definitely did not get it yeah.

Speaker 2 28:51

If get it. If anyone sends me an email and I do not reply within 24 hours, it's best to send it to me again because I didn't get it. But I'm excited for that. I'm excited to get people together, but we hope everyone had a great week. Hopefully you're still spending time with family. If you have any questions, reach out to Mark at any time. We're going to have some end of year things to wrap up. In December We'll do three podcasts and we're also going to do a special podcast the day after Christmas for Netflix's stream Cover that's right If the stream is straightforward, good to go and we see no issues.

Speaker 2 29:19

It's going to be our shortest podcast ever.

Speaker 3 29:22

Or maybe we won't do it, It'll be. What did you think of the game? Yeah, maybe that's it. Did your team win?

Speaker 2 29:28

And I am hoping it is such a great stream that we actually decide you know what? We've got nothing to talk about. Let's just cancel the podcast.

Speaker 3 29:37

So you know, I have heard through the proverbial grapevine, as I'm sure a lot of people have, that it is all hands on deck inside Netflix.

Speaker 2 29:48

That would be an understatement?

Speaker 3 29:50

Yeah, you know which? Of course, uh, that would be an understatement, yeah, uh, you know which? Of course, no, no surprise, right, um? But yeah, there's a lot of smart people, um, who have, you know, explored very deeply what all happened and how they're going to fix it.

Speaker 2 30:03

Yes, and I've traded quite a lot of interesting emails, none of which I will discuss but absolutely not. They are. They are certainly working very hard to do everything they can to make sure that that stream is perfect for as many people as they can, for things in their control where you're still going to have issues with people who just something set up at their house.

Speaker 2 30:23

It's just not going to work or an issue or what may be. But that's what we got lined up for the rest of the month. We appreciate you all listening. Any questions reach out to Mark or I, anytime. Hopefully, everyone had a good holiday and is back. I don't know when we're dropping this, mark, but you're probably listening to it and Thanksgiving is over. We appreciate you listening. Hope everyone has a great week and we'll talk to you again soon.

Speaker 1 30:45

If you enjoyed the show, send it to a friend, have questions for Dan or Mark, connect with them on LinkedIn at any time, and be sure to check out Dan's blog at streamingmediablogcom.