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 0:24

Welcome to the Dan Rayburn Podcast. I'm Dan Rayburn, along with co-host Mark Donegan. Happy Friday to everyone, although you're not listening to this on Friday, but we are on Friday, february 21st, mark. We've got a couple of earnings this week that we had Akamai Vimeo. Next week we've got Paramount, WBD, fubo. Yes, we've got a crop of sports news, just interesting little tidbits here and there that we're going to go through this week. So some good sports news, just in terms of what's taking place between NASCAR. We had some investment information here regarding Fubo. I'm sorry, not Fubo. Dazn Direct TV did some stuff, but let's just start off here with baseball. So two baseball pieces here, which you know it's February 21st.

Speaker 4 1:20

It's about 12 degrees in New York today, so it seems a little odd to be talking about baseball, but man, it's less than two months away actually. It's coming up Actually six weeks away. Hey, I'm in Dan, you know, I'm in Arizona already, I feel, and spring training hasn't really started, I don't think. But there's just the airport the other day was just bustling, you know and it's like spring training is here.

Speaker 2 1:41

It is a couple days, First games kick off.

Speaker 4 1:43

Yeah so.

Speaker 2 1:45

MLB and ESPN have confirmed that they're going to end their broadcast deal early after the season, so after the 2025 season. Originally, the contract was due to expire in 2028. It was pretty interesting to sort of just see the comments that MLB put out. They accused ESPN of demanding quote unacceptable reduced rights fees and also said accused ESPN of demanding quote unacceptable reduced rights fees and also said that ESPN's coverage and investment in the sport had continually declined. I mean, they literally called out ESPN and just said we really don't produce our games.

Speaker 1 2:15

very well, we're not happy.

Speaker 2 2:18

It was interesting, just kind of, how they threw them under the bus there. So you know, as a Mets fan not really a sports fan, but I do watch the Mets I love this deal because ESPN Sunday Night Baseball I would say some of the worst baseball coverage ever outside of Apple Friday Night Baseball, which is absolutely terrible as well. The people that have in these games don't understand baseball. I don't know why they spend 10 minutes talking about their golf game. But on ESPNn it's so bad that I would mute the audio or make sure for those few games to the mets I would go to a bar, so I couldn't hear it.

Speaker 2 2:53

Crazy that's how bad it is. So we don't know who's going to bid on this. Uh, there's, there's been rumors of pretty much every company you can think of outside of netflix.

Speaker 4 3:02

Um, so far I don't there's people trying to connect to Netflix too, right.

Speaker 2 3:07

Yeah. I don't know about baseball though that doesn't seem like a wide enough audience. No, no, no it's football, it's football.

Speaker 4 3:12

I think it has to be football.

Speaker 2 3:14

Roku already has some MLB games, so we'll see what's going to happen there, but that's an official done deal at the end of this year. Speaking of sports, so SNY which, if you're not from New York, SNY is the Sportsnet New York is the station here that has the Mets, Rangers. What is it? Islanders, some other New York teams, so they announced that they're launching a standalone streaming service. So I think it's interesting. They called it standalone streaming service for in-market fans, but you watch it through the MLB app. They've partnered with Major League Baseball.

Speaker 2 3:51

So it's $125 for the season but, 15% of the games are excluded because they're on PIX, which is WPIX Channel 11. Yeah, x channel 11. Yeah, so here we have another RSN launching their own direct to consumer, but it doesn't have all the games and it's missing 15% just in channel 11. But then you're also missing the games on Friday night baseball with Apple. You're missing the games from Sunday night baseball on ESPN. This is why fans are so mad. Yeah, and rightfully so. It is so fragmented in terms of where you can get the games. Yeah, so it's still confusing. Also, keep in mind you're not going to have the Fox games either. S&y currently has their own app for the games. That's actually going to be discontinued at the end of March, so everything's going to default inside the MLB TV app, going on to some NASCAR Daytona 500. So I got to take a look at the stream from Max for the Daytona 500 over the weekend.

Speaker 2 4:57

I also was checking out all their multi-view looked really good, and what I loved was when you switched between in-car cameras. Good, and what I loved was when you switched between in-car cameras. I want to say that switch was half a second, but it was too fast for me to even measure.

Speaker 2 5:11

Yeah so it seemed like it was even less than half a second. So, wow, I was talking wbd just in terms of some of the stuff they were doing. Pretty interesting just in terms of making sure that stream startup time is really fast, so really really good to see. They said their max period was 10 megs. Makes sense. It's about what we've seen for a stream like that. Yeah, also interesting note, I was watching it. Video looks good.

Speaker 2 5:37

You see the cars pull over and because it's raining, everything goes black and I'm like why would everything go black and why not have something on the screen that says you know, we're in a rain delay? Yeah, well, it turns out. What wb tells me is that they throw a tarp over the car to keep it dry oh, that makes sense.

Speaker 4 5:57

That's why everything went dark so the camera's still running, camera's running, camera's running, but it's black. But there's a tarp, there's a tarp, yeah, so it was interesting to see that, but the stream looks really, really good.

Speaker 2 6:09

Yeah, let's go next into DAZN. Dazn so Saudi Arabia's what's called SURJ Sports Investment. They've acquired a minority stake in DAZN. Now rumors are it's a $1 billion investment. Financial terms were not released. I saw multiple news outlets saying the $1 billion was for 5%. Some were saying it was for 10% ownership of DAZN. We don't know until one of them says something, and they may not. So the investment is going to help establish DAZN Middle East and North Africa. It's a joint venture. It's going to create, basically, broadcasting opportunities for Saudi Arabia's sports portfolio, which continues to expand. Oh, yeah, oh they. It was a great lineup just in terms of talking about what's going on with sports licensing More licensing and content than really technology. Yeah, but super interesting to see and also interesting timing, because in December, dazn purchased the global broadcast rights to the 2025 FIFA Club World Cup for a billion dollars 2025 FIFA club world cup for a billion dollars. So I also wonder if, because they made that billion, did they have to go get a billion dollars. I don't know.

Speaker 4 7:34

They certainly seem to be well-funded, you think?

Speaker 2 7:40

Yeah, it's. It's a lot of money that they have over the last, you know two or three years it's gone into the company.

Speaker 1 7:42

So, that's.

Speaker 2 7:43

That's interesting to see. We'll keep an eye on that.

Speaker 4 7:45

It's also interesting to me how you know they're investing really heavily and throughout the Middle East, it, it, it seems to be largely the case in media and entertainment you know, not just sports, but you know they're building whole um. You know, in fact, uh, what is it? In Dubai? They have a I can't remember the name of it it's like a media and entertainment city, but you know it's a whole campus, right, and these are massive and they have companies there and they're funding technology and their content production and really, really interesting.

Speaker 2 8:22

Well, Saudi Arabia doesn't tend to ever do anything small. Yeah, exactly. That's not in their culture.

Speaker 1 8:29

They have plenty of oil money.

Speaker 2 8:31

So when they do something, they invest a lot into it.

Speaker 4 8:35

Yeah, yeah, that's right.

Speaker 2 8:36

And sports and, to your point, media entertainment is definitely something that they're doing investment-wise.

Speaker 4 8:41

Gaming and AI. So those are the three areas outside of oil, but they're really diversifying, yeah.

Speaker 2 8:49

Yeah Well, next time you get an invite.

Speaker 4 8:52

just send it to me, Just send it to you.

Speaker 1 8:54

Yeah, just send it to me.

Speaker 4 8:56

I'll attend on your behalf.

Speaker 2 8:58

I'll take great notes. I promise it's a little too far. It takes me away too long.

Speaker 4 9:04

It's far from me too. It's a beautiful location. I've been me away too long. It's far for me too. It's a beautiful location. I've been to Dubai, and I haven't been to Saudi Arabia, though.

Speaker 2 9:10

It's beautiful, but you really have to commit there. You're not going for a day or two, it's a full week Easy.

Speaker 2 9:17

Yeah, directv they announced the stream service that has all this. You know, new sports and this new sports package, now what they call MySports. They added 140 NBC affiliates, which is awesome, and earlier in the month they added 187 Fox affiliates Wow, so they're really building this out into get every sport you want, even RSNs, all in one place for $70. Yeah, it's an interesting package with more coming. A little more sports news here. Prime Video they're hosting League One matches via pay-per-view.

Speaker 2 9:54

Each game is $2.50. No, this is pounds, so whatever that converts to, it's two and a half pounds. Yeah, exclusive to the UK, well, and Republic of Ireland. You don't need a prime subscription to access the game, so that's cool. So if you just want to buy one game, you can. And for those that don't know how all this worked, the League One Pass, which is 10 pounds a month or 80 pounds for the year pounds a month or 80 pounds for the year that was only created at the start of the season because TNT sports decided not to pick up the broadcasting rates for 2024 and 2025. So that's where that league one pass came in.

Speaker 2 10:35

But, interesting that prime videos is doing pay-per-view for that very small window though, yeah, if you think about the audience size where they are UK and Ireland, it's just not that large in terms of viewership. But interesting to see Another sports deal here. Paramount Everpass Media have cut a deal, so now soccer fans that want to watch UEFA Champions League matches at bars and restaurants can now do so. So Everpass continues to just add more sports content to their offering, which is great. That's certainly good for businesses. Then we've got look.

Speaker 2 11:14

If you're into fishing and you're into fishing for bass, roku is the place for you. So Roku has announced that the Bassmaster tournaments will start on their channel, actually yesterday, february 20th. So apparently it's the elite qualifiers. There's five Bassmaster Open Series events. There's nine Elite Series events. You know I'm not a fisherman, but I've got a friend who fishes for bass and man, they're serious, they don't kid around like it's. It's a serious sport for them and they love consuming that content. So yeah, sure it's not going to be a wide, huge audience, but it's going to be a very loyal audience, that's right and very targeted from an ad standpoint.

Speaker 2 12:00

They know who's watching that, so some more more free content there on the roku channel. Then let's go on to espn and f1. So it's being reported that espn is walking away from the f1 negotiations, so they had an exclusive negotiating window with formula one to see if they wanted to renew their contract past 2025. Now, neither company has publicly come out and said that, but the amount of news outlets and others that have already reported it. This is clearly the case that they are not going to extend that deal.

Speaker 2 12:39

We have heard Netflix's name being dropped with F1 for probably 18 months now. Yeah, and their whole drive to survive did really well, so it'll be interesting to see if Netflix is the one that ends up getting the rights. Yeah, also, I don't have it in front of me, mark, but the F1 rights are only available in certain countries to start. So even if Netflix got some like they'd have to wait another couple years before all the rights from all the territories would come under, yeah, their umbrella. If they wanted them all, yeah, but that's interesting, I like it yeah, that's interesting, it it?

Speaker 4 13:18

it seems like and of course I'm going off the recent NFL deal deals that Netflix struck it seems like they really like to have that kind of content available to all of their members. Um, if that is their strong preference, do they choose to walk away unless they can get it? Or do they, you know, say, well, we get what we can get, and then negotiate, you know?

Speaker 2 13:44

Well, they can't get it all now, because rights in other countries are already locked up for a couple of years.

Speaker 4 13:49

Correct, correct. So I don't think they would wait, because then they would lose the race, they would lose, yeah, and that's, and that's, of course, even if they really want that, they'd have to say well, we, you know, we have to take what we can get today.

Speaker 2 14:01

I think they'd have to Plus.

Speaker 4 14:02

what if?

Speaker 2 14:02

someone comes in and does rights for 10 years.

Speaker 4 14:04

Oh, of course.

Speaker 1 14:05

And you can't get it yeah, yeah.

Speaker 2 14:07

We don't know Again. The rumors are that ESPN was paying $90 million a year. Do we know if that's accurate? No, but let's just say that's in the ballpark. Netflix can afford $100 million a year.

Speaker 2 14:24

Netflix can easily afford it. That's in their sweet spot too. Yeah, so very curious to see what happens. I also just think and I think we talked about this previously that the F1 brand and I think in Netflix just go together really well. Yeah, I agree, the f1 brand and I think in netflix just go together really well. Yeah, I agree, and they've had great success, as far as we know they tell us they have with in terms of viewership of of the racist stuff they've done already yeah, that's true, that's so we'll see what happens, but we're gonna I think we're gonna have some information next couple months.

Speaker 2 14:53

Moving on to netflix, so let's break this down here a little bit. There was an interview that the media is with Netflix, that the media is blowing out of proportions here. So this poor executive.

Speaker 4 15:05

Yeah right, I know the fact that Netflix had to put out a statement afterwards. He answers a lightning round question you know off the cuff and next thing you know it's like yeah, so um so an executive at netflix was was talking to podcast.

Speaker 2 15:23

He was on a podcast yeah, it was on a podcast and they were just asking some quick questions about what do you think of content and the media. So I actually looked at the transcript and you know the media pulled out just one or two sentences and they didn't look at everything. So the NFL's current right deals, including Sunday afternoon games with CBS and Fox for those that don't know, they expire at the end of the 2033 season, but the league does have an opt out for not all, but most of the individual agreements after 2029. So another four years. So just let's stop right there. For all the folks who are like, oh, netflix is going to get the super bowl next year or they're going to get this in two years, the opt-out isn't for four years. Yeah, nothing's changing for the next four years. Now the interviewer asked the executive at netflix. They said in five years will netflix air a weekly nfl game? And then they said because the answer is obviously yes, which NFL package will you steal from a rival? He asked a question.

Speaker 4 16:22

I like how he asked the question and then he answered the question for him yeah right, and you know that's not the approach I know you're going to say yes.

Speaker 2 16:29

I would take. So the Netflix executive said, quote I say the answer is no because the rights are already tied up. It's tied up. Yeah. The answer is no because the rights are already tied up, it's tied up, yeah. The interviewer said, quote no, there are opt-outs in less than five years. Netflix exec said quote if the answer is yes, then I definitely want the Sunday night, the Sunday games.

Speaker 2 16:49

Now, after the podcast, people went bonkers being like Netflix strategy has changed. It's interesting. Live sports has changed it. Interest in live sports has changed. It has not. Nothing's changed. In January, netflix's co-CEO said quote if there was a path where we could actually make the economics work for both us and the leagues, we would certainly explore it, but right now we believe that the live events business is where we really want to be. So that's, that's very clear. Now to your point, mark. The exec clearly was was getting a lot of flack of, like you know, claiming the they're, they're changing strategy or whatnot. So after the podcast, netflix actually put out a statement clarifying with the media that the comments were informal ones, made in the lightning round portion of the interview, and did not suggest a reworked content strategy. Yeah, so if you're reading headlines of like Netflix just changed their decision on spoiler. It's the media writing for headlines.

Speaker 4 17:53

Yeah, yeah, yeah. And you know the thing that is just so crystal clear it must be dozens of times or it feels like dozens that Ted Sarandos and other executives have almost used the exact statement actually make the economics work around. You know, answering the whole question about um broader rights deals and you know it's like, well, if we could make it work.

Speaker 2 18:22

Well, there's a discussion, but you know, if the business economics don't help our business yeah then no, you know, we're not just buying into this.

Speaker 4 18:31

Oh, netflix has to have sports, so we're gonna, you know I think.

Speaker 2 18:35

I think the reason, mark, did you know some get away with that is simply because netflix always said they wouldn't do live and wouldn't do ads and wouldn't do ads right.

Speaker 2 18:45

So people were like see netflix, said okay but you have to remember the time and when netflix said they wouldn't do sports, it was when, at that time, it didn't make sense for them and with ads it didn't make sense either. Them and with ads it didn't make sense either. But the market changed, netflix changed, but they've been very clear and they've never wavered on the sports. We take more if it works business-wise. Yeah.

Speaker 4 19:05

And it brings it back to the economics has nothing to do with do we like sports or do we think there's a future in sports, or do we like this league or that league it's? You know, we have to spend Economically. Does it work? Can we get a sufficient return Right?

Speaker 2 19:21

It's all that matters. So what I'd suggest is anyone who wants to know more, just listen to the podcast.

Speaker 4 19:26

Read beyond headlines is, I think, the real message here.

Speaker 2 19:30

But honestly, the podcast didn't really give you anything you don't already know? Yeah, I'll just say and were we expecting more than that from a netflix executive? No, they don't go on podcasts and all that. Yeah, exactly give out information that they've never done before.

Speaker 4 19:45

So yeah, I don't really think you need to spend your time there.

Speaker 2 19:48

Yeah, um, if you haven't already seen this, paramount youtube reached a multi-year carriage deal, which is great, so channels won't go black. Um, what's interesting is the deal features what they call an expanded streaming relationship. So, uh, provides google the right to make paramount plus available to qualifying youtube tv customers. Don't know what that means exactly or who qualifies, but, yeah, not surprising with carriage deals.

Speaker 2 20:15

What we seeing, we're seeing more flexibility and offering skinny the ability to offer skinny bundles. So not a surprise there. Quick little stat Sony sold 9.5 million PlayStation 5 consoles in December. To date, it has now sold 74.9 million PS5s lifetime, which is interesting. I asked a question, Mark on LinkedIn of I wonder what the breakdown is of the amount of consumers using the PS5 to consume video for streaming services, let's just call it.

Speaker 2 20:50

In the US, I got a lot of comments not surprising from parents who were saying my kids use it for gaming. The moment they want to go to streaming, they use a different device. Yeah, and I think too, primarily that's how it's thought of. Now I do know some stats from inside some of the streaming services that I can't say, but especially for live events, big live events the ps5 is a very, very, very small percentage of total viewership. You could probably guess the number. That's how small it is. Yeah, Doesn't move the needle at all, but interesting. You know 70, almost 75 million units and think what that costs too. Yeah, Especially the PS5. What is it Pro I think they recently came out with yeah, Not cheap. Yeah, let's go into. So this was fascinating. This week, Meta announced that Facebook Live videos are only going to be stored for 30 days. After 30 days they're going to delete them. Previously they were stored indefinitely and Meta says they're making the change for quote storage policies.

Speaker 4 21:56

It's called we've run out of data centers.

Speaker 2 21:59

What's fascinating is they're saying listen, we don't want to pay for any more storage.

Speaker 4 22:03

Yeah, exactly Like just just delete them and and and why should they when those? I mean, you know it's well known, uh, what the statistics are the viewership beyond. You know a, a initial window. The statistics are the viewership beyond, you know, a, a initial window which can be looked at from different perspectives, but it's, it's, it's weeks and months, it is not, you know, years and decades.

Speaker 2 22:29

Yeah, for facebook live videos, yes, now. Yeah, I wish they'd given out some stats or numbers on that and they didn't. However, two days later, we got that from twitch and that's what's fascinating. So shortly after that twitch now everybody feels comfortable that's right well meta's doing it they're following suit because twitch announced they're going to implement a hundred hour storage limit for highlights and uploads.

Speaker 2 22:54

Now it's a storage limit 100 hours a little bit different. Um, however, twitch came out and gave us information. They said currently, less than 0.5 percent of active streamers on twitch are over the 100 hour storage limit today, meaning when they wrote the post this week. Yeah, but also interesting, twitch said they're making this change because because now listen to this quote, this is important, because mark really just sort of hit the nail on the head. They said quote highlights haven't been very effective in driving discovery or engagement with viewers compared to features like clips, tags and the mobile discovery feed. And the storage of this content is costly end quote hey, this doesn't work well for business and it costs us money.

Speaker 4 23:42

Yeah, yeah so for sure.

Speaker 2 23:44

So they're cutting it.

Speaker 4 23:45

And.

Speaker 2 23:47

Mark. What I like about these two examples is is that there's many people in our industry, and just in the tech world in general, who think, because you're Amazon, because you're Google, because you're Meta, because you're YouTube, because you're NVIDIA, well, you can spend money forever any way you want.

Speaker 1 24:03

You have no implications, and why?

Speaker 2 24:05

should you ever lay people off and like? Who cares and it's like they're running a business and that's not only their responsibility and their job, but that's their responsibility to shareholders as well. So this idea that well, like, oh my God, meta has so much money they could afford it You're missing the point if that's how you think. Yeah, yeah for sure. It has a P&L. Yeah, storage, it's cheap compared to what it was. But could you imagine storage for all of this?

Speaker 4 24:34

Meta. It's a big number Met compared to what it was, but could you imagine storage for all of this? Meta needs to pull some quarters out of the sofa to pay for all those GPUs that Zuckerberg has committed.

Speaker 2 24:41

I was going to say that's the bigger cost. It's not storage. But yes, shifting dollars.

Speaker 4 24:49

Where do we get some extra billions?

Speaker 2 24:51

Yes, that's absolutely right, Shifting CapEx and OpEx spend to other areas of the business.

Speaker 1 24:55

So it's smart A hundred percent.

Speaker 2 24:58

Let's go into some earnings here. We've got two Vimeo. So Vimeo had Q4, 2024 and full year earnings. Revenue in the quarter was 103 million. It was down 2 million from the quarter before. Net income was 2 million. That's down from 9 million in Q3. Self-service and add-on revenue declined 8% year over year. Their OTT platform revenue decreased 16% year over year. Wow, yeah, and that's not too surprising. Their self-service customers spent an average of $17.33 in Q4. So just keep that number in perspective, right? There's a lot of very small customers still in Vimeo. Very small, less than $18 a month.

Speaker 2 25:42

Now, enterprise customers again, we've highlighted this that's not our term. Vimeo uses the term enterprise and they define it as anyone who talks to a sales rep. Enterprise customers spent an average of $1,916 monthly. They ended Q4 with $325 million in cash and cash equivalents and they ended the year with 100, sorry, 1,102 employees. So they do expect 2025 full year revenue to grow in the low single digits. So that's good. Maybe some some growth coming back to the company, cause it's been pretty flat, uh, and an operating loss of approximately 5 million for full year 2025, but they did not give out any revenue guidance. So a little bit of growth with, you know. Loss of operating loss of 5 million Okay, I, I think. Operating loss of $5 million okay, I think some people would be happy with that. Now, shareholders were not happy, or I should say Wall Street was not happy.

Speaker 2 26:47

Stock got pretty crushed afterwards. So the stock was at $6.78 and it dropped down to $5.28. It closed today at 540. So it's down almost 19% this week and the last let's just call it year. To date it's down almost 17%, but still max, since they went went public, they're down almost 91 percent. Let's go to akamai. So there's a couple things here in akamai. They did give an update on their delivery business, so let's break that down here.

Speaker 2 27:27

So akamai q4 and full year, uh 2024 earnings mm-hmm so let's focus on just the highlight here in terms of the breakout of revenue. So total revenue for the year was 3.99 billion, which was up 5% year over year for full year 2024. Delivery revenue was 1.3 billion down 15%. No surprise. Security revenue was just over $2 billion, so that was up 16%. Compute revenue was $630 million. That was up 25%. So in 2024, security and compute revenue represented 67% of total revenue and that share is up 18%. Their gap net income for 2024 was $505 million, which is great.

Speaker 1 28:19

but it's still down 8%.

Speaker 2 28:21

Yeah, akamai did give out full year financial guidance for 2025, which calls for total revenue between $4 billion to $4.2 billion. So Wall Street did not like their numbers? No, because that's the question. Yeah, it's. You know, wall street wants them growing a lot faster than they are, and it was interesting to listen to the earnings call and have some people ask questions that were basically saying hey, when are you guys going to grow like you used to at the rate you did 15 years ago? And akamai made it very clear listen, all right, those were businesses at the time that were still new, obviously growing faster than they are today. We've gotten to a certain size and scale, like, come on, guys. However, they did make it clear compute revenue. I think that's going to become their next billion dollar business. Yeah, yeah, for sure, that's growing fast, but their stock got hammered. Today they fell almost 22%. They were down just over $21.

Speaker 4 29:18

I think I'm going to need to add some Akamai to my portfolio.

Speaker 2 29:21

You can, I can't, I can't. Since you brought that up, I'll just clarify I've never bought, sold or traded a single share of stock in any public. Cdn ever? Yeah, I'm not compensated in any way based on any CDN stock, even my managed portfolios. They're stripped out, yeah.

Speaker 2 29:39

Just before earnings Akamai was, let's see, thursday. They closed Thursday at $98. And today they closed at $76.73. So now let's go into delivery.

Speaker 2 29:52

Here there's quite a bit that they gave an update on it. I'm sure many in the industry have missed, because they don't listen to the hour and 40 minute long call which they should be doing if you really want to know what's going on. So they provided an update on the delivery business for 2025 and beyond. So first, egeo contracts that they acquired contributed 9 million in revenue in 2024, q4. Contracts that they acquired contributed $9 million of revenue in 2024, q4. And then for full year 2025, akamai expects those Egeo contracts to contribute between $85 million to $105 million, which is right in line with the guidance they previously gave out and they thought it would do a little bit better than they previously thought. They also said its CapEx spend will increase by approximately 1% of revenue to accommodate the increased traffic resulting from the Egeo transaction of the contracts they acquired.

Speaker 2 30:44

Yes, they also gave out this stat, which we didn't have before, which was over 100, that's their term of the Egeo contracts were new customers for the company. The company also stated that they do not expect quote significant churn of those customers that they acquired. That sounds good. They also said that they are quote beginning to see signs of improvement in the delivery marketplace, with more customers willing to sign multi-year contracts and with predictable pricing, a more stable pricing environment generally and early signs of stabilizing traffic growth. So that's good.

Speaker 2 31:24

Now what I love and thank you, akamai, for doing this. That's a very high level generic comment, but they actually tied numbers to that. So they said, if these trends continue, they expect its delivery revenue to decline 10% year over year in 2025, versus the 15% decline it saw in 2024. And they said, if those positive trends continue, they expect the decline to shrink even further in 2026 and beyond. So that's good to see. Now, also, keep in mind I've already seen three or four articles talking about Akamai's CDN revenue. I don't know how many times we have to say that they do not break out revenue based on CDN. It's called delivery, called delivery. It's called delivery Now to put87 billion. In 2024,.

Speaker 2 32:18

It ended at 1.31 billion.

Speaker 2 32:21

So, we can see the decline there. Now they also went into TikTok. Of course, they didn't mention TikTok by name, but they mentioned that their largest customer is still navigating political challenges in the US and pursuing a DIY strategy, which means CDN. So this is TikTok. Now both of those factors could really impact Akamai's revenue if all of a sudden TikTok is banned in the US and moves a lot of traffic in-house. But this was really good news they announced in Q4, they signed a five-year contract that includes a substantial minimum annual spend and, as a result, it provides greater predictability and reduces Akamai's exposure to the customer's political situation in the US. Oh, wow, yeah. Now they actually put out a separate press release talking about the $100 million. A five-year contract is valued at over 100 million dollars. Again, they didn't mention tiktok, but we all know yeah yeah, yeah, we, yeah.

Speaker 4 33:21

We all know it's tiktok uh also on tiktok's diy cdn.

Speaker 2 33:24

Just before everyone starts going crazy like, oh my god, diy. Yeah, tiktok is a very unique animal. They've been doing their own diy cdn mix for three to four years at least. I've talked to them in detail about it. They do it in very specific locations for a specific type of content. They're not just defaulting to DIY overnight. Also, they use many providers outside of just Akamai and other regions of the world too that are region specific. So they have a very unique and blended content distribution strategy.

Speaker 2 33:58

Yeah, going back to Akamai here, just let's run some numbers. Akamai paid $125 million for select customer contracts in the Egeo bankruptcy. We know that number. In addition, they disclosed. They spent $25 to $30 million on transaction service costs and they also had to pay some money to keep the Egeo network up and running during the transition period. So that's part of these transaction service costs. So if you look at the number, all in, akamai spent somewhere between $150 to $160 million on the deal Mm-hmm. Based on their guidance of $85 million to $105 million in revenue from those contracts just this year. It appears that this deal pays off for Akamai by year.

Speaker 2 34:47

Two Mm-hmm Now could you lose some of those customers you could Some could bleed off, but they've also come. These customers have you already sold new services to higher margin security, whatnot, and I forget who? In Akamai answered it on the call but they said well, we just finished migrating these customers over. We want to make sure they're happy running for a bit before we just start trying to sell them every service we have. I thought, man, that's a good approach. Build a relationship with them, yeah.

Speaker 4 35:27

Let's make sure they're successful where we started before Correct.

Speaker 2 35:32

That's such a great approach. So I do believe that some of these customers and we have the list of all of them, at least I provided a link to them online because it was public from the filing Some of these customers no doubt are going to take other services from Akamai at higher margins outside of delivery. So I think it's a fair assumption. Yes, it is a guess, but if we look at the numbers, we already have that by year two or the end of year two at least Akamai breaks even on this deal. So I think that's important to point out.

Speaker 2 36:04

Mark, because you had a bunch of naysayers. You know, when akamai acquired and was like man, you paid 125 million. That's just dumb. You should have paid a lot less. You'll never get your money back and it's like guys. Akamai knows what they're doing and the numbers prove that. And they just said they don't expect quote significant churn. They've given Wall Street all the points that they need and Wall Street's comfortable with the deal. Of course, what Wall Street wants to know is okay, but can you sell X number of those customers an additional service on top of delivery where you really make better margins, and that's to be seen really make better margins, yeah, and that's to be seen, sure.

Speaker 2 36:42

So that's what we've got this week on the NAB show streaming summit Uh, we still got more speakers dropping in. Uh, if you go to any B show, no, if you go to any B streaming summitcom uh programs now online. I'd say about 85% of it's up there. Uh, I still have three to four sessions to add round table and now I'm dropping in a lot of uh speakers. So who went up in the last few days? A crunchy roll? That's great.

Speaker 2 37:08

Uh mbcu on the streaming side so there's been a bunch of customers um end user broadcasters, content owners that have coming in that have just been starting to put online in different sessions. That's great to see.

Speaker 2 37:23

I already put up the information about fox and the super bowl that they're going to do. And then I announced today mark that on day two, one of the fireside keynote chats I'm going to do is with the trade desk talking about their streaming tv os ventura. So super interesting there because we know just the tvOS business is pretty fascinating with all the players. But the trade desk being from the CTV side, very interested to hear what they're going to talk about there in terms of how they're trying to empower advertisers and content owners and publishers. So that information is now online as well. So that information is now online as well.

Speaker 2 38:02

I'm also doing a current stated CDM market sessions that'll have a bunch of. It'll have all CDM customers on it. We've got sessions on live sports streaming workflows. Another new session that I just added this morning was best practices for providing a personalized playback experience. So ui, ux, discoverability how do you reduce that friction in terms of viewers getting into content right away so they don't have to hunt around forever? Um, we've got a technical presentation on optimizing cmaf for lowly and c video streaming. That'll be interesting as well so a lot of great content.

Speaker 2 38:43

Uh, check it out online. Hennybstreaming summitcom. If you still need a pass, want a discount code, hit me up and then mark. Uh, finally, if you're out of work, if you've recently been laid off, I made the same offer online this week as I did last year, which is you can get a free pass to the streaming summit. You have to reach out to me on linkedin or and also your LinkedIn profile has to say you're looking for a job. I've had half a dozen people reach out who have not been an employee for six months or a year and I say, when I look at your LinkedIn, there's no post saying you're looking for a job and it still says you work at the employer you work for. And it's fascinating, marco. Every single one of them said to me well, companies don't want to hire someone who's been laid off. That's a thousand percent wrong. I don't know who you're talking to or hearing that from but you should stop listening to them.

Speaker 2 39:31

Because I talk to recruiters every single day that call like who do you know who's looking, who's hiring? That is just not accurate.

Speaker 4 39:38

So yeah, also it. It is a very poor look when you're representing that. You are somewhere and you're not Right. You know it. Just, it just screams. You know the very next. Oh you're too lazy to update it.

Speaker 4 39:54

Yeah, yeah, exactly. Either you don't care enough about, you know, really finding a job so you're just not updating, or you know what else is being misrepresented on your profile. You know, and that's the, that's the very first thing that goes through my mind. You know, when I get approached marketers and you know, you start talking and I'm like, oh, so how are things going out? They're like, well, I haven't been there since you know last, you know last October. It's so weird. Like well, so what else isn't true on your profile? It's the wrong approach.

Speaker 2 40:29

So I will do that presentation I did again last year at the show, just talking about here's how you need to set yourself up on LinkedIn with your resume, here's what you highlight, here's the words you use, here's how you communicate with clarity, consistency and candor, and so I want to help as many people as possible with that. It's something that people need, and a lot of it is. They just need confidence as well to be able to speak and present intelligently and intelligibly, and that's what I'll talk about at the streaming summit. So if you're going to be there and you need a pass, you don't have a job. Reach out to me, I'll be happy to give one to you. We want to help as many people as we can at the show, but I'm super excited.

Speaker 2 41:06

Mark, ticket sales are great, far better than they are I don't have the exact number in front of me, but they're far ahead by a wide margin at the same time for the show at this time last year. And there's one or two other big potential keynotes here that I'm working on that are interested in sitting with me for a fireside chat that I'm just they're trying to get sort of final clearance and most of it is as usual the executives their schedule. Yeah, can they be there? Will they be there? Does that time in the day work? So hopefully I've got one or two more I can talk about soon. But any questions around Streaming Summit hit me up. Mark and I appreciate everyone listening. We'll be back. Actually, we just figured out shockingly we're going to be back for the next five weeks straight before we have to travel, so every week we'll have something for you leading up to the show.

Speaker 2 41:55

Next week we have earnings from Paramount, wbd and Fubo. That will then close out Q4 and full year calendar. Full year uh, earnings from everybody. So we'll cover that next week. But any questions reach out to Mark and I. We appreciate you listening. Everyone, stay safe, have a good week.

Speaker 1 42:14

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.