The Internet is definitely going Hollywood!
According to a recent report by Cisco, by 2019 over 80% of all consumer Internet traffic will be video.
That’s a staggering amount of content – nearly a million minutes of video per second flooding across global IP networks. Looking at it another way, if you try to watch all the video hitting the Internet, it would take you about five million years!
But there’s more to the story than sheer volume. By 2019, 70% of video on demand (VOD) traffic will be HD (High Definition), which will put even more pressure on an already stretched global Internet.
The sheer amount of internet traffic and the demand for HD content delivery present a huge opportunity as well as challenge for any on-demand content provider who has an ambition to reach global audiences.
None of these is news to Netflix – the leading on-demand Internet streaming media. With over 65.5 million subscribers spanning across the United States, Europe, Australia and New Zealand, what makes Netflix stand out is that the company has been looking for ways to deliver the best possible VOD experience to its customers beyond geographical boundaries.
Over the rainbow
In fact, Netflix is pinning its hopes, and its business future, on the capabilities of the cloud. According to the news in the Wall Street Journal, the company will have shut down the last of its own physical data centers by end of this summer, counting on public cloud and the services of selected Content Deliver Network (CDN) service providers, that more often than not, reside at large data center providers like Equinix, to keep its customers entertained.
Netflix clearly knows what it is doing. It moved from renting DVDs to an online business model very early. Indeed, the service was so successful that during the first month after launch, demand in the US threatened to overwhelm its original network infrastructure.
That prompted the company to rethink its approach to delivering content. And it has been developing and fine-tuning that critical component ever since, shifting content off its own servers and onto virtual platforms based in the cloud.
Not all CDN providers are created equal
While the scalability of working with a variety of CDN providers -be it a cloud-based or traditional IT-infrastructure player- is an attractive solution, there are plenty of complications. Due to distribution rights, where the data – the movies and TV shows – is located is also important.
The challenge for CDN providers supporting a business like Netflix is not about storing content on servers actually “in-market” but the complexity of distributing the right content to the right region that complies with “in-country” regulations.
This is getting even harder nowadays in light of the prevalence of VPNs, which enable users to side-step the geo-compliance and consume content that may potentially violate in-country content distribution restrictions.
Ramping up downunder
Not every CDN player can accommodate such a wide range of geographical and technical concerns. Fortunately for Netflix, Equinix is among those that can, thanks to our global footprint and turnkey solution – Performance Hub.
Serving as an extension of the private enterprise network into our International Business Exchange™ (IBX®) data center, the Performance Hub allows content providers to securely and reliably connect to a wide range of CDNs and cloud service providers, to build an agile infrastructure to improve application performance and deliver a globally consistent quality of experience to end-users.
When Netflix entered the Australian market earlier this year (2015), it relied on Equinix’s Performance Hub, which enabled the online movie house to sign up and seamlessly support over a million subscribers – from a population of 23.5 million – inside of a month.
The Australian media market, which had a reputation for being somewhat traditional, is still reeling from Netflix’s shattering debut. And the rest of the region is now bracing itself after Netflix announced it will launch in Hong Kong in early 2016 as part of a larger global expansion that will see it roll out coverage to South Korea, Singapore and Taiwan. However, I think the impact of this development reaches far beyond movies or even media companies.
As the Internet continues its transition from ‘static text’ to a ‘full-motion format’, the lessons Netflix has learned are incredibly relevant. Not just for would-be video rental businesses – but any organization interested in leveraging the power of internet video to generate revenue, boost marketing or improve customer service.