Optical/IP Networks

EdgeCast Scores Hollywood Cheese

EdgeCast Networks Inc. got some cheese from Mickey Mouse's financing arm today, as the content delivery network (CDN) continued to work its industry connections for cash.

The company received $6 million in Series B financing from Disney-affiliated venture capital firm Steamboat Ventures, bringing total funding to more than $10 million. (See EdgeCast Gets Funding.)

The Steamboat investment comes on top of cash already raised in what EdgeCast president James Segil called a "small strategic funding round raised from individual investors" that included executives at Lions Gate Entertainment, Viacom Inc. (NYSE: VIA), and CinemaNow .

EdgeCast, which calls Los Angeles its home, is hoping that its pull with investors in Hollywood will help open doors for it as the company seeks to score deals with large media players and content owners.

"The visibility and credibility from having a firm like Steamboat invest has a tremendous amount of capital," Segil says. "It gets doors open that would take longer to get open otherwise."

The CDN has approximately 50 customers, about half of which are media companies, according to Segil. Major announced customers include Imax, March Entertainment, and Ampp Media. (See EdgeCast Networks Inc. and Edgecast Launches CDN.)

In addition to working its Hollywood connections, EdgeCast is trying to gain customers by aggressively pricing its video services. Last week, the company lowered the price of its streaming services to match that of its progressive downloads. (See EdgeCast Lowers Prices.)

That means that its content provider customers would no longer pay a premium for live or on-demand streaming services using Adobe Systems Inc. (Nasdaq: ADBE) Flash and Microsoft Corp. (Nasdaq: MSFT) Windows Media and Silverlight.

Segil says EdgeCast was able to do that because a new agreement with Adobe allows the company to take advantage of lower licensing fees for Flash streaming. "In general, they have lowered license costs to CDNs dramatically," he says.

— Ryan Lawler, Reporter, Light Reading

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