CDN usage set to explode

Michelle Clancy | 27-09-2013

Content delivery networks, or CDNs, for pay-TV operators are expected to generate $175 million in 2013 as quality management continues to emerge as an important service differentiator.

Pay-TV operators have been moving an increasing amount of their content online through TV everywhere or multiscreen services, as well as seeing an increasing amount of Internet streaming via OTT services like Netflix and Hulu, noted MRG. As a result, cable, IPTV and satellite operators are seeing an increased need to manage what's happening in their networks, and how to deliver premium video more cost effectively and with higher quality. So, CDN services for pay-TV operators will increase by a CAGR of 57.5% through 2017, the firm found.
"CDNs are a system of computers and caches that place copies of content (web pages or audio/video) in various places around a network in order to more effectively and efficiently deliver that content," MRG explained. "CDNs can help service providers and content owners by reducing delivery costs, as well as ensuring higher quality delivery of content."
MRG found that multiscreen and OTT video are the biggest market drivers for implementing a CDN among pay-TV operators. Asia will be the largest user of CDN services among pay-TV operators by 2017, with 27.4%, followed by Western Europe (23.9%) and North America (21.8%). Asia will also show the largest growth as well with a 76.6% CAGR during the forecast period.
Managed CDN services from vendors like Akamai, Level 3 and Limelight account for about 57% of total forecasted revenues by 2017. MRG does expect continued growth of open source CDNs from operators like Comcast as well as growing use of caches from Netflix's Open Connect CDN, which is available free to broadband providers and operators.