Here's Why Netflix And Google Are Building Out Their Own Content Distribution Networks

Internet service providers (ISPs) get a lot more attention than any of the other players in the streaming video pipeline. But there’s another piece of the transit ecosystem that is becoming absolutely critical to how content on streaming sites like Netflix finds its way to people’s TVs: Content Distribution Networks (CDNs).

A new report from BI Intelligence on the video transit ecosystem finds that CDNs specialize in delivering large volumes of traffic over multiple ISPs, varying geographies, and piping it through infrastructure including fibre-optic lines and Internet traffic exchange centres. In short, CDNs take the guess-work and heavy lifting out of the complex task of delivering video, in a reliable manner, to millions of viewers served by a variety of different ISPs.

Now, content providers like Netflix and Google are building out their own CDN networks — Netflix OpenConnect and Google Global Cache, respectively — to better deliver content to consumers and attain more control over how their traffic is routed.

Netflix OpenConnect already accounts for 13% of CDN traffic as of 2013.

While custom-built CDNs like OpenConnect give streaming video services greater control over the performance and cost of content delivery, they typically come at a high upfront cost. Just like third-party CDNs, content provider-run CDNs must also establish peering relationships with other network operators.

Netflix, for example, would not have had to establish an individual peering agreement with Comcast, if it had continued to use a third-party CDN service instead of OpenConnect.

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In full, the report:

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