Third-party CDN revenues flatline as major platforms shifting traffic in-house

The structural shift toward in-housing by hyperscale tenants like Amazon Prime Video and TikTok fundamentally caps the addressable market for independent CDNs. As bitrates optimize and 4K adoption plateaus, vendors can no longer rely on organic traffic growth to mask margin compression. The end of annual 20% price declines and the introduction of infrastructure surcharges signal a pivot from land-grab expansion to a sustainability-first model. Watch for mid-tier platforms to follow the 'dynamic allocation' trend, moving traffic at the single-ISP level to squeeze further efficiencies from a narrowing pool of vendors.

The CDN sector has undergone aggressive consolidation following the exit of several major players. Edgio filed for Chapter 11 bankruptcy in September 2024 and subsequently liquidated its assets, with Akamai acquiring its customer contracts for approximately $125 million, per bankruptcy court filings and Light Reading. This followed Lumen Technologies' October 2023 decision to wind down its CDN business and sell select contracts to Akamai for an estimated $40 million to $50 million. These exits reflect a broader industry trend where legacy providers are shedding low-margin delivery divisions to focus on higher-margin security and cloud infrastructure.

Akamai's recent financial pivot highlights this transition. In Q1 2026, the company reported that its security segment remains its largest revenue driver, growing 11% year-over-year, while traditional delivery revenue continued to face pressure. To combat rising input costs, Akamai notified partners in March 2026 that server component prices, specifically for RAM and SSDs, had increased between 75% and 200% compared to early 2025. This cost environment is forcing a shift in market behavior; per StreamingMediaBlog and industry analysts, providers like Hetzner and OVHcloud have also implemented price hikes of up to 50%, ending the decade-long 'race to the bottom' in bandwidth pricing.