AFI BLOG: Media and Technology

Disney’s Steamboat Invests In Content-Delivery Firm - The Wall Street Journal

Internet infrastructure company EdgeCast Networks Inc. plans to announce today that it has raised $6 million from Walt Disney Co.’s venture-capital arm Steamboat Ventures, in a sign of interest from large media companies in the “content delivery” space.

Content-delivery companies such as EdgeCast transport music downloads and streaming videos over their technology pipelines — essentially a scaled-down, private version of the Internet — to their customers’ Web sites. Over the past two years, the sector has seen tremendous growth as consumers have flocked to popular sites including Google Inc.’s YouTube and Facebook Inc. Online traffic has grown at 60% a year since 2004, according to research firm PriMetrica Inc.’s TeleGeography.

A spokesman for Steamboat said the venture firm invested in EdgeCast because it needs to find companies that can play a major role in the online video market. Earlier this year, the Disney affiliate also participated in an $11 million round of funding for Move Networks Inc., an online video company. “Optimizing the delivery of digital content has become a strategic imperative for all major content and media companies, including Walt Disney,” said the spokesman.

More