As Netflix tells it, the company's streaming subscribers all around the globe are collectively watching a billion hours of movies and TV shows each month. Serving up that amount of content takes some serious bandwidth, and up to this point, Netflix has been relying on third party content delivery networks (CDNs) to pipe petabytes of data to ISPs like Comcast, Charter, and others, who in turn deliver the video to home PCs and living room HDTVs. Now Netflix has its own CDN to play with.
It's called Open Connect, a single-purpose Netflix CDN the streaming provider established to cut costs as the company continues to grow in size.
"The world’s other major Internet video provider, YouTube, has long had its own content delivery network. Given our size and growth, it now makes economic sense for Netflix to have one as well," Ken Florence, VP of Content Delivery at Netflix, explained in a blog post. "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."
As constructed, Netflix claims about 5 percent of its data is being served by Open Connect. The rest is handled by third parties, the biggest distributor being Level 3, though some traffic also flows through Akamai. Shares of the latter were down following Netflix's announcement.