Can the Internet Handle the Imminent Streaming Explosion?

had some thoughts on the matter. He's Tom Layton, CEO of acam I, one of the leading company's media businesses turned to to make sure their content makes it to consumers quickly and safely. Thanks for coming in, Tom, It's nice to be here. Thank you, and I'm glad to have you here because I think here in Hollywood we don't talk enough about streaming distribution, and I think the problem stems apart from a lack of education. So I

want to start really simple. I want you to just explain, as they say on Reddit, as if I'm five, what exactly does acam I do for its media business clients. We actually deliver a lot of that streaming and the videos that you watch online. You know, people don't think about it. They turn on the TV or or the device and click on what they want to watch and

it shows up. But how it's actually getting there is a lot different with online streaming than it would be with a cable or satellite, and it does beg the question and concern and whether the Internet can handle the growth of all the video traffic that's coming online and

also the cost. You know, one of the big differences with the online version of streaming and the satellite version is that with satellite, all you had to do was send the TV show or the stream up to the satellite and then people could tune in, and every extra person that tuned in wouldn't cost anything more because you paid a lot to get the satellite. But after that it was free for people to turn on TVs and you didn't have to worry about how many or any

congestion with the satellite. But the Internet is very different. For everybody who's turning on there's a computer somewhere and the Internet that is sending you your stream just for you. And so if you've got you know, ten million people watching, well there's ten million streams being created and being sent over the Internet, and that is a lot of traffic, and every stream costs money to send on the Internet.

And that's where Akamy comes in. Uh. You know, we have a a much better way of getting all those videos and streams and broadcasts to the end user. Uh, so that it's more cost effective, it can scale, and that it comes in good quality. And the vision that I have as you speak, I almost picture of the cloud or the pipes of the Internet is a mountain, and you guys are like the sherpa taking the media client in there. I mean, is it that? I know? I'm curious even about the dynamic with you guys and

media companies. Do they need an ACAM? I could they just build their own network out? I mean, how essential are you to this? Pretty essential? Very very few companies try to build their own because it's really hard to do. You know. The concept behind what we do is that say there's a hundred people watching a show in your neighborhood. Uh, you know, without Akama, you'd be sending that signal that stream in a hundred times and it could start to fill up the pipes in your neighborhood, so that you

couldn't get a good experience. With Akama, you know, we've placed our computer server already in your neighborhood, and we'll just send that signal in once and there's plenty of room to send it once, and from there we'll fan it out and get each person and reach you know, viewer in their homes or offices their copy locally. Uh, So that you're not trying to and ultimately at scale, trying to send millions and millions or you know, someday hundreds of millions of copies of the signal from some

core spot on the Internet. The Internet just couldn't handle it already. The Internet is congested and the peering points. But with Akamai, it does enable it to scale, and it makes it less expensive because you're not sending the signal from far away using up pipes that are really expensive across the country. You're sending it locally and the

pipes they're much shorter and less expensive. So here we are in the early days of the so called streaming wars, where the video market that may have been dominated by saying Netflix, Amazon, and you know, the established media companies. Now we're seeing these Netflix rivals come in, uh, Comcast, Time, Warner, I'm sorry, A T and T old Habits die hard, Apple,

so many players coming in here. Does this even represent this kind of step change moment where the volume of video that you guys are going to have the sort of shepherd becomes much more difficult. Yeah, I think the volume levels are growing dramatically, and I think with the advent of these new O T T offers, which look pretty compelling in terms of the content, more and more watching will be done online and they'll be you'll watch

it higher quality levels. Uh. And people don't think about it, but if you get the h D version, that takes a lot more traffic to produce that high quality image on your screen. Uh. And so that makes the traffic levels be even higher. And of course the more you watch online, the more traffic it creates. So I do think we're seeing a real spike up in traffic due to video O T T offers online. But is it

about to get a lot worse? Is it about to get like, let's even say there's a scenario where all these streaming services take off like wildfire, and all of a sudden, everyone is guzzling these news services and maybe not quite at Netflix level, but getting there. Can acam I can the Internet handle all this? Yeah? Acam, I can handle it? On behalf of the Internet. I think the Internet on its own already couldn't do it. It's not architected to do it, and the cost would be

much too great. But we do work with all the major OTT providers that are planning launches in a provision capacity to handle it. And I think you're right. If they're all popular, that's going to be a huge explosion in traffic and uh, you know, and we're prepared for that. That's what we do. Well, I'm assuming it's horrifically complicated, or is it not? Is it? Is it just as simple as look, we're's gonna have a lot of servers

and call it a day. You know, you've got to have all the servers out there, for sure, because otherwise you're you're dead on arrival. Uh. And you've got to have them strategically located. You've got to be in all the neighborhoods, you know, And we locate our servers in four thousand places in a thousand cities. You can't just have one on the East coast or something that just doesn't doesn't work. But it's more than just that. It is very complicated because well, you in this country, you've

got hundreds of millions of people. Globally, You've got billions of people and a lot of people are watching different things at different times, and they've all got to get a good experience. And so managing that efficiently UH does take a lot of effort, and it has to have real time response, so it's all automated. You can't have somebody deciding, Okay, somebody just wanted to watch this movie, what server are they're going to get assigned to to

get the stream. That's a very complicated process that you know, we've been perfecting now for over twenty years, and UH handle pretty much all the world's major events, you know, at scale today Already, we should make clear this is a global service. We're not just talking about the US.

You're active, I think, and it's about a hundred and thirty nine countries, yes, infrastructures in a hundred thirty nine countries, in a thousand cities, and you know, people here think about content in the States at you know, China is probably the world's largest internet market, India probably the largest. When it comes to watching sporting events, you know, we think about the Super Bowl being a big deal here, but you know, cricket they're far, far bigger. And you

look at the crowds online. You know, this past summer for a cricket match we had twenty five million concurrent viewers on mobile devices. Talk about a challenge for delivering content and that just swamps out anything like the Super Bowl here in terms of being online. You know, obviously I'm talking to you on the eve of the streaming war explosion. But as I think you've already alluded to,

you're already seeing increases. I think you guys just noted earlier this month that for the first time Aclamy transmitted over and I hope I get this data point right, A hundred terror bytes per second. Yeah, hundred trillion bits, hundred terror bits per second. We got these numbers so large you can't even think about it. Well, but here's an interesting comparison. It's supposedly the same as download in thirty three hundred two hour HD movies every second. Yeah,

that kind of puts in perspective. That does. Or you can think about a day every day now we're delivering traffic that would be the same as two hundred million DVDs or eight hundred billion web pages including all the pictures. The numbers are staggering, and as you know, I think the exciting part is this is the tip of the iceberg, as big as it is now. We're in the very

early days of everything just moving online. And also we're largely talking about on demand content, but more and more, and I'm sure you're seeing this with your clients both here and internationally. Live content, particularly sports. I assume there's an added demand there. And yet we're on the verge of probably an era not too far in the future where we could see some of the streaming companies take over the rights to major sports, be at NFL, nb A, whatnot.

Uh Are we at a place where the demand or sorry not the demand, just the capacity for that is even possible, Yeah, you know, and doing it live is even harder. If it's v O D, you can get a copy of the show ahead of time and store it in the neighborhood and then it's ready when somebody wants to see it there. When it's live, you don't have it ahead of time, and increasingly you want to see it in real time, which means it just has to becoming streamed and you got to fan it out

everywhere around the world. That's that's a lot harder to do, and also it drives a lot of traffic because people want to see it all at the same time, as opposed to spreading it out of course the across an evening. Say so, that puts a lot of pressure on the internet. Now, live traditionally has been done on TV through satellite, More

and more it's it's online. And some of the world's major broadcasters now are envisioning the day when it's probably still ten years out, but they won't be using satellites anymore. It'll all be online. And that's a pretty interesting concept, you know. I think five years ago nobody thought that would ever happen. You go back ten years ago and nobody thought you'd ever watch a sporting event online. Why

would you have TV? Well, we all do now, and we're to the point now where people are thinking it'll all be online at some point. I mean, we're having a very video centric conversation. But let's not forget there's more than just video on the internet. Healthcare, banking, all sorts of different kind of industries that create congestion of various kinds. So I guess I want to understand videos

place in the overall sort of band with picture. Is it like, you know, the main band with hog or are we actually kind of missing the forest for the trees here and there's other things going on that videos is a little piker. Well, if you're talking about bandwidth our total traffic, there's two big hawks and they have

almost all the traffic, and that would be video and software. Now, people don't think about software, but if you're playing Fortnite, you know, on a regular basis, you're downloading a gigantic chunk of software to play it. Or all those apps you have on your mobile device, they all have a pretty decent sized chunk of software and they're trying to update it all the time. And so I would say today the big consumers would be updating software on your

devices and video. Now, in the long run, probably video takes over, but today they're they're equal in terms of you know, total traffic. You're banking transaction, buying something online? Tiny tiny tiny, Uh, Now there's a lot of back and forth. It's a very important transaction. Uh. Security is really important if you're buying something or you're doing banking online. But in terms of traffic volume tiny, And we'll get

to security in a second. You know, you mentioned Fortnite, and I'm curious, does one I think we can call it a phenomenon like that have a discernible impact on the networks that you're handling. You can, can you see one thing that becomes so popular that you have to sort of focus on the impact of just this one property. Oh yeah, we worry a lot about having the scale ready for a gaming, big gaming release. Uh. You know, something like that can drive tens and tens of teara

bits per second, you know, which is a lot. You know, it's thirty forty fifty trillion bits a second on the internet. Uh, so that's a that's a whopper, and that today those peak flash crowds for big gaming releases are bigger than the big sporting events or big video releases today, you know, maybe by about a factor of two. Now, overall traffic probably get more from video, and I think long run video takes over. But we worry a lot about a

particular gaming release from the big guys. I'm actually surprised, given you know, the bulk that software represents, that in the longer term, that's not a bigger threat than video, particularly because you know we're here talking about the streaming wars, but we've got another war coming soon in terms of cloud gaming, lots of news services from big companies like Google Stadia. Is all that going to be okay? Because that, to me, what do I know, seems to be uh,

maybe a bigger kettle of fish. That's a great question. You know, today with gaming, the traffic is just getting the software there, and you only do it once a month, say, or maybe there's updated releases on a weekly basis. But as you think about the future, if the video that produces the experience on your screen is coming from the cloud as opposed to being created on your device, which is how it's done you know today, that could create a lot of traffic. Now, the question is will that

ever really be viable commercially? Uh? And people have been thinking about streaming the game to your device that you're actually playing it in what you see on your device comes from the cloud for over a decade. It's never really proved financially viable because now you've got to do the heavy duty compute in the cloud and you're streaming an experience just for that user. It's got to have really low latency, especially if it's a multiplayer game and

has to be a rich experience, and that's that's expensive. Uh, So we'll see, you know how viable that is. Doesn't really take off, but the right commercial models there that hasn't been successful yet, so we'll see if if that will change. I just wonder listening to all this, the incredible demand that all these news services of various kinds you're gonna have on the cloud and so forth, is there like a worst case scenario that consumers need to

keep in mind here? Could are you kept up nights by the notion that we could see something like a giant outage? Or at the end of the day, is the Internet maybe more nimble, more capable than we're giving it credit? Well, our job at ocam I is to make the Internet be okay here, to make it scale, to make it be fast, intelligent and secure, and that's what we do as a business. The Internet by itself is not nimble. Uh. It would already be in big trouble in terms of just the traffic that's there today,

and it doesn't have any security. I'm bet it at all. You know. That's the kind of capabilities that ocamy adds in on behalf of our customers who are the major enterprises, the major banks, the major commerce companies, the major media and gaming companies. UH. And so it's up to companies to provide that capability to help make it work in

the future. But why is it? It sounds like the Internet is almost like this, you know, infrastructure that is just slowly rotting, and it's good that acomy is there to to help sort of pave over the rough spots. And so I'm curious, why is that, I mean, is there Why aren't we seeing an Internet that, as it gets older, is better paved roads. The Internet is not rotting,

but it's a it's a fixed infrastructure. It's growing. Companies, the telcos have to put a lot of money to add more pipe and they the last mile is getting better and better. UH. And consumers at home offices pay to have a better last mile link. A lot of homes now in many cities have gig a bit per second coming into the home. UH. You look at five g and that will give a much better experience across

the last mile. So improvements are being made to it, but the fundamental protocols don't really change very much, and that's a very slow process. Security is not inherently embedded. Was never designed into the Internet. Uh, it was not built to scale to you know, deliver you know, hundreds of millions of concurrent viewers video high quality video from a central location. That whole it wasn't it's it can't do that, and so you do need companies to come

in and take what's there, which is very valuable. It's it's good, but to make it work for these applications we're thinking about now, and to make it be secure,

because it's it's not set up to be secure. And digging a little deeper into security, what does that mean from a media perspective, This is a business that gets impacted in all sorts of ways by security issues, whether it's piracy that seems to be a scourge that just doesn't go away to you know, notorious incidents like the Sony hack where uh, you know, massive amounts of data privacies are compromised. Um. Does ACA might get involved in all ends of of security when it comes to the

media businesses, Yeah, pretty much. Um. You know, and you have denial of service attacks, you know, a website or a news site is brought down, you have data corruption. This is where you go into a news site, for example, and you change the content. Some pretty famous examples of that. Very dangerous when you start changing what the news is on a site that people would would trust in. You

have account takeover. Uh. That's really bad for banks, you know, when you have your bank account taken over and a criminal organization drains the funds. Uh. You know, that was not thought to be something that media companies had to worry about in the past, but now in the last year they've been targeted so that your O T T account gets stolen, your gaming account where you've built up

all these tools or weapons or prizes or whatever. Those have monetary value with real dollars now and there's a black market for that, and you know, somebody hacks your account, steals all your stuff and then sells it online. We're seeing, you know, massive attacks on people's accounts to take them over. With media companies. Now, you mentioned the Sony hack as

an enterprise. Media companies have a lot of sensitive information and there's third parties that go in there and steal that and then can publish it or do other things with it. Those are all things that acam I you know, is working to stop and building you know, services to keep from happening. Uh, it's a it's an interesting challenge on a daily basis. And it's interesting to hear you say that this has become a bigger problem in the past here, because frankly, at least in my circles, nobody's

talking about it here in Hollywood. And I'm curious, is it because these media businesses don't understand these issues, don't appreciate the gravity of these threats, because it sounds pretty damn serious. Oh, I can assure you that big company media c s, O S, c I O s and

increasingly CEOs are worried about it. Uh, And certainly when you get into data breaches things like happen with Sony there, every media CEO is worried about that our media, your company's targeted more or less than any other industry or is just every industry under attack these I think it

depends on the nature of the attack. For banks, Uh, they're most worried about the accounts being taken over, you know, And what happens there is that human beings today have dozens of accounts online and they'll tend to use the same log in and the same password because who can remember dozens of different passwords and which account there on that's you know, really hard. And then one of the companies gets hacked, take Yahoo, and your credentials are stolen.

And then what happens is the criminal organization takes your credential and gives it to a bot army and they will try out your credential on every bank in the world, every commerce site, now every media site, and they look to see did you have an account there and did you use the same password, And invariably they gets what it's called a hit, which means they found a a website where your credentials work. Then they sell that to

organize crime. A different entity comes in and drains your bank account or buy if it's a commerce account by something online you know, and charges it to you. And if it's a media account you know, uses that now to uh steal your tools, you've amassed, anything of monetary value or other people will now be watching the video or buying videos under your account. Uh. And this is a So it's a big problem that started with banks

and has now moved everywhere. If you're a news site, your most vulnerable to a doss attack which brings you down or to data corruption, which means they change the headline, the terrorist organization puts their message as the news headline on your site, or they do something to embarrass somebody because they know lots of people are coming to the news site to see what the news is in the front page. Story will change. I'm wondering whether we're on

the verge of seeing that kind of attack. But with deep fake video, which could be I mean, I can't even contemplate how awful damage like that could be done. Is that something that does ACAM I look at things like deep fakes and how you can stop that kind of thing. What we do is we stop the data corruption from happening, whatever it is. Uh. And so most of the major media news sites around the world use us for security. And if you you don't see these

things happening so much anymore. And that's because we can block those attacks from corrupting the content on a website. So we're not looking to say is this video deep fake or was it the legitimate We're just making sure whatever video on that website came from the people who owned the website, not from some third party putting their own video on the website. Switching gears let's talk a bit about five G, which you know, tremendous amount of

hype about how amazing it is going to be. And I'm curious the impact it has on your business or or maybe your impact on five G. Uh Is this going to be everything that it is being made out to be. Well, five G does a lot of good things. It gives you much better connectivity in the last mile or the end user connecting to the Internet or to the cell tower, much lower latency than traditional cellular, higher throughput uh, and more devices will be able to connect.

And I think this will have the biggest impact on IoT, you know, the Internet of things now. IoT has been a pretty good buzzword, you know for the last five years, but you haven't seen much in the way of killer apps yet. I think that could change with five G. And we do see in our customer base now more and more interesting projects you know around five G. You know, sensors and your sneakers, sensors and your sporting equipment or closed sensors on price tags, sensor sureley in cars, there's

a lot of them in cars today. Your gaming devices, you know, become things in the Internet of things. UH. And interestingly, the communication protocols. It's different. It's not Web, it's other protocols are being used that are a lot lighter weight. There's a lot more compute that will be done on the edge near the end user, and I

think there'll be some pretty interesting applications. Already. Airlines are using it to sense when you're in the airport, pushed you notifications about your flight, get you updated with whatever METEA, or movies you might want to watch before you get on board, because once you're on board is a little harder. I think there'll be a lot of cool stuff with around IoT enabled by five G. In terms of the impact on akam I, it's it's great, you know for

our business. Uh you know, because as you get more activity out at the last mile or the edge of the Internet, um, that's what we accommodate, you know, and it will put more stress on the core of the Internet.

And our whole thesis is you want to serve the end user close to the end user, and as the last mile gets better, are that increases the need for the kind of things that we do, and we'll be helping the Internet to accommodate the load that will get put on it from five G. Listening to all this, I I think about I guess let's call it the last foot of the last mile, which is in my own home. You know. Look, I deal with issues like

buffering maybe a little more often than i'd like. Um, and I assume all these things have more to do with my in home WiFi and whatever uh drawbacks that has At the end of the day, is there only so much you could do to deliver video as quick as possible when at the end of the day, I don't know what kind of control you have over, say, my faulty WiFi. Well, yeah, we don't have control of your faulty WiFi. But in a lot of the world

today that's not the problem. Uh. It really is bottlenecks in the core of the Internet, and that's where it's breaking down, and that's what we get around. Uh. So what docummy, we can make that problem go away. Increasingly, we'll have software on your device and in your home that will make things better there. But I don't I don't think the home is the really the problem. You've been in my home, then well, okay, maybe in your

home it's the problem. Interesting data point that acam I interacts with a hundred and thirty terror bytes of data on over one billion devices. That is a scale I can't even wrap my head around. Yeah, we're serving well, actually, billions of people every day. A lot of what billions of people do around the world every day runs through us, and our goal is to make it be really fast, efficient,

and importantly to be secure. I feel like we've kind of been talking, perhaps interchangeably about what I think are sort of two different transmission modes wire line and wire lists. You know, I have different issues on my phone related than to my TV or my MacBook. Um, are there a different set of channel just from an Acomi perspective in terms of how you manage the Internet across those two different pipes, so to speak at a high level, No,

at a high level, it's it's similar. Uh. You know, cellular short of five G, but three G four G has higher latency. Uh. Then again, a lot of cable networks have high latency into your home with land lines. Um, So the and the capacities can be different. You know, three G and four G capacity through put is not so great if you're the only person at the tower, fine, but if you've got a lot of people using the tower,

you can have capacity problems. You know, the connection into the homes now is actually pretty good in a lot of places, although you can get aggregation and congestion at the neighborhood or the community, you know, city level that will reduce your throughput. So the challenges at a high level of the saying the technology is a little bit different. Our goal in both cases is to make it a

good experience. There was a time not too long ago where there was a lot of conversation really is net neutrality started to become a bigger issue about things like peering agreements and you know, all sorts of negotiations between say, pay TV distributors and content delivery networks that seem to

be all about holding the Internet together. I don't hear about that stuff as much anymore, and I'm curious, wise, is everything kind of settled and everyone's just sort of playing on the same page or or those conversations still as fractious as they've always been. We're just not hearing about it. I think the the the things that motivated

that are the same things. On the one hand, you have the economic uh issues between some big content providers people who want to distribute movies, say, and big carriers who also have movies and uh and uh, you know, content channels that they want to distribute, and the question about who should pay to distribute that content, you know, should the carrier build out a lot of infrastructure and bear a lot of costs to distribute their competitors videos.

You know, well, the some the competitor who has those videos think so and and did a very good job at getting the administration to agree, and that forced net neutrality laws. Then there is a new administration and so the control changed of who makes the decisions, and all those decisions got reversed, and so now it's not the case that the big carrier needs to pay. Now there's also a technical issue here that is really important that didn't that people didn't think about, and that is it

doesn't matter so much who's paying. You just can't pay enough to distribute videos at scale from these core data centers from outside. There's just even if the carrier wanted to, which they did, and they couldn't afford to build all these gigantic pipes, you know, from the data centers into the neighborhoods, it's just not the right model. You need

to be distributing locally. Uh. And the reason we had congestion and do and people were complaining they couldn't watch the movie without rebuffers, they couldn't watch a high quality wasn't so much the dispute between the media company and the carriers, because you need a different technical model. You need to be distributing that movie from from the edge or you know, inside way deep in the carrier. Uh. And that was what was really causing the equality problems. Uh.

So all those issues are the same. It's just there's a different uh party in control today and they have a different view on how net neutrality should go. And on that front, one last question, I mean, do you guys have a dog in that hunt of net neutrality? Is there a company position about what you I think should be as it continues to be kind of a hot potato in d C. Yeah, so it sounds funny,

but it's true. We're neutral on net neutrality. Uh. You know, we we help advise the government to educate them what's going on. We work with the big media companies because for a lot of them, we distribute their video, almost all of them, and obviously we work with the big carriers. They're big partners for us were embedded deep in their infrastructure and we help them be efficient and help their users get a good experience. So we work closely with with both sides, and uh so we don't have a

you know, a stake really in net neutrality. Well, rest assured that will be a topic that I'm sure I will both continue to hear about for quite some time. But Tom, thanks for coming in. Really appreciate your education on an important subject. Thank you very much. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation media movers and shakers, and please make sure you subscribe to the podcast to

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