Analysts say incumbent content delivery networks (CDNs) Akamai Technologies Inc. (Nasdaq: AKAM - message board) and Limelight Networks Inc. (Nasdaq: LLNW - message board) are competing more aggressively on price, as more companies enter the CDN market and customers become more educated about the cost of delivery.

    Pricing decreases are nothing new in the CDN industry, analysts say. In his research note initiating coverage of Limelight, Morgan Stanley analyst Peter Kuper writes: "Pricing has declined historically and we expect this trend to continue."

    Even so, pricing pressures were prominent players in recent earnings calls by Akamai and Limelight. "We do get more aggressive on the prices and the prices are lower," said Akamai CEO Paul Sagan in his company's call.

    Streaming media.com analyst DanRayburn says Akamai has been very aggressive in its price cuts over the past 60 to 90 days, in some cases cutting prices in half to lock down large media deals.

    "Akamai is feeling the most pressure," Rayburn says, "because they've always been two to three times higher than other providers."

    Merriman Curhan Ford & Co. analyst Colby Synesael says Akamai can still afford to ask a premium price for its services because of its size, scale, and service offerings.

    But the company is starting to see the impact of volume pricing and more competitive pressures, which he says "is a big concern for the investment community."

    Increased competition could drive prices yet lower, as more companies treat content delivery as a low-cost, commodity business. Synesael says certain providers have told their sales force, 'We will not lose a deal on price.' "

    In addition to lower bandwidth costs and increased competition, customer education on the cost of content delivering is also driving CDNs to become more competitively priced.