SevenOne Intermedia has selected the CDN services of Level 3 Communications (NYSE:LVLT, news, filings), adding to their success in the European content market. SevenOne is the multimedia arm of ProSiebenSat.1 Media AG, which itself is not exactly a household name in the USA. They offer television mostly in Germany but have a presence in some 13 European countries and are Europe’s second largest broadcasting group. SevenOne operates the company’s web properties and is responsible for all new media services, including teletext, the Internet, games and mobile services. Level 3 will be providing SevenOne with content storage, caching and downloading, and video streaming in support of German language programming. It’s a nice deal, and Level 3 needs more like it.
Level 3 has had more than its share of success in the European CDN market this year. In fact, in terms of raw growth one might guess that it has been their strongest product set. Why the success? I continue to believe that it is because their is no single European CDN market, rather there are dozens of local markets that each crave direct attention. Most CDNs don’t have a wide enough footprint to properly address them all, but Level 3 is able to leverage its network and sales presence. Other European carriers like Teliasonera and BT which have said they would build CDNs could also do this but are simply not yet a threat, and those with network footprints but who resell CDN services like DT and Global Crossing aren’t doing so aggressively. So once you get outside a half dozen competitive locations, the competition from CDNs with real scale gets rather sparse.
In addition, Level 3 did not have the integration issues in Europe that they had in the USA over the past few years, and this has allowed them to spend that extra effort fine tuning a hybrid CDN-bandwidth business model. Hopefully they will be able to apply the same lessons to the US market.
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