After angering customers last summer, Netflix is working to turn its image around by improving its viewing experience. To that end, the streaming video giant has decided to launch its own content delivery network, or CDN.
The move to launch Open Connect, a single-purpose content delivery network, comes at a time when Netflix reports streaming nearly 1 billion hours of television and movies per month.
Until now, Netflix has been delivering these petabytes of data through commercial content delivery networks, which at times had offered spotty performance. Netflix isn't getting ride of these general purpose commercial CDNs -- at least not yet -- it's just beefing up the network by enabling ISPs to get Netflix video data from Open Connect.
Controlling Its Destiny
"The world's other major Internet video provider, YouTube, has long had its own content delivery network," said Ken Florance, vice president of Content Delivery at Netflix. "Given our size and growth, it now makes economic sense for Netflix to have one as well. We'll continue to work with our commercial CDN partners for the next few years, but eventually most of our data will be served by Open Connect."
Florance went on to explain that, like commercial CDNs, Open Connect will provide the Netflix data at no cost to the locations the ISP desires, or ISPs can choose to get the Netflix data at common Internet exchanges. About 5 percent of Netflix data is already being served by Open Connect.
We caught up with Rob Enderle, principal analyst at the Enderle Group, to get his take on Netflix CDN inspiration. He told us Netflix is moving to control its destiny, and called Open Connect a natural progression for a company that wants to own its future.
"Issues with the network and consumer satisfaction were a problem causing a certain amount of customer erosion," Enderle said. "Netflix offering more of the content delivery infrastructure should help them avoid some of those problems, at least with regard to centralized bottlenecking and throttling. So it's critical to Netflix long-term to get their arms around the content delivery and better control it."
This is the latest in a string of Netflix moves. In late May, Netflix named Cindy Holland to a new role as vice president of Original Content. Netflix Originals are being produced by some of the most highly acclaimed talent in Hollywood.
Netflix Originals include "House of Cards," a political thriller that is executive-produced by David Fincher and starring Kevin Spacey and Robin Wright, and "Orange is the New Black," a new drama from "Weeds" creator Jenji Kohan and the long-awaited comeback of cult comedy favorite "Arrested Development."
Also in May, Netflix and Twentieth Century Fox Television Distribution announced a multi-year licensing agreement that will make more TV series and films available for Netflix members in Latin America. Netflix also released an updated, international version of the Netflix App for Windows Phone, increasing the number of devices supported by Netflix in Latin America, the U.K. and Ireland.