Encoding.com, one of the earliest companies to offer video encoding/transcoding as a service, announced yesterday that it would now be using The Rackspace Cloud as its primary cloud computing environment, a switch from Amazon's EC2. The move is significant as it is another indicator of how the still nascent video encoding as a service is evolving to fit into the overall encoding landscape. Jeff Malkin, Encoding.com's COO and Chandler Vaughn, The Rackspace Cloud's director of product development, gave me an update yesterday.
Media companies have traditionally done their encoding and transcoding in-house, using software from companies like Anystream, Telestream, Digital Rapids, Rhozet and others. As I originally wrote last April, companies like Encoding.com, mPoint and HD Cloud have begun offering alternatives that allow these processes to occur in the "cloud." The idea is that media companies can essentially rent encoding/transcoding capabilities as needed for a fee from companies who do their processes on a third party's infrastructure such as The Rackspace Cloud or Amazon's EC2. For media companies, the new encoding/transcoding service providers' primary value propositions are lower overall cost (both opex and capex), elimination of on-site responsibility for hardware and software, and flexibility.
Jeff reported that Encoding.com is now serving 400 customers, with user-generated content sites like StreetFire still a meaningful part of its business. The company has encoded 3.5 million videos to date and is now encoding 30K source videos/day. Jeff said that established companies like MTV and Brightcove are using Encoding.com's services, but noted that larger media companies are still just dipping their toe into encoding as a service. In particular Jeff said that given turnaround times, the ability to do encodes for full-length HD-quality files on a service basis is not yet practical.
This echoes what an executive at a large encoding software company told me recently - that for the biggest media companies, which have large files that need to be turned around quickly, encoding in the cloud doesn't yet make sense. Another issue is the reluctance to move source files outside the media company's firewall.
Encoding.com's move to Rackspace begins to address some of these issues. Jeff highlighted 3 primary reasons for the switch - Rackspace's CPU bursting capability, which can offer 2x the processing performance of EC2 (The Bitsource just posted a performance comparison analysis); closer proximity to customer's files, as Rackspace is the managed hosting provider for thousands of web sites; and Rackspace's customer support, which improves Encoding.com's ability to deliver on its service level guarantees.
With the volume of online and mobile video exploding, this will be a key part of the market to watch. It is still early days for encoding as a service, but as Encoding.com and others continue to strengthen their operations and maintain attractive pricing, it seems likely that they will eventually gain attention from additional media companies.
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