Netflix Announces Open Connect CDN
There is no doubt that Netflix has become an Internet video streaming juggernaut. They generate more traffic and have cornered more money in the market than just about anyone else. Streaming video over the Internet may be cheaper in the long run than shipping discs through the mail, but it's a safe bet that a goodly chunk of the distribution costs go straight to content delivery network operators such as Akamai and Level 3. CDNs essentially operate as middle-men, taking Netflix's streaming bits across the Internet and moving those bits into the ISP networks. Netflix is looking to cut out these virtual middle-men by launching its own CDN dubbed Open Connect. If Open Connect takes off and Netflix can establish peering relationships with the major ISPs, then the company stands to save money and reduce its network footprint on the Internet and on ISP networks.
Through Open Connect, ISPs can choose to peer directly with Netflix at one of eight settlement-free peering exchanges. Or, if they want to, they can install one of Netflix’s Open Connect appliances into their own network. That would allow them to cache the content locally so that it doesn’t have to be transferred over the network whenever it’s requested. Either way, doing so could reduce the strain of Netflix traffic going over their networks.