Managing the growth of video over IP with content delivery networks

includes three core functions: content delivery network (CDN), transparent internet caching (TIC), and service and performance enhancers (S&PEs). These functions enable fixed and mobile operators to: create new revenue streams via wholesale content distribution and delivery; differentiate through S&PE; and reduce operational costs and capital expenditure. Handling the massive amount of OTT or unmanaged traffic is a major business challenge for network operators. Better compression techniques and improved connections have created a new business model in which countless video-based applications are generating substantial amounts of unmanaged traffic. Examples include YouTube, Apple TV, Netflix and applications from national broadcasters, such as BBC iPlayer, SVT Play, CBS Video and many others. Typically, these types of premium OTT services employ the capabilities of a CDN service provider. The CDN service provider distributes OTT content based on the agreement with the content owner across the internet as far as an exchange point, or in some cases further into an operator’s network when a cooperative agreement has been reached. OTT applications can present network operators with several challenges: rising backhaul transit costs; mounting last-mile bandwidth demands coupled with decreasing subscription revenues; and deeper penetration of CDN service providers’ caches in operator networks. With internet traffic set to double every year over the next few years and the total market for CDN services estimated to exceed USD 5 billion by 2015, Background TV and video consumer behavior is changing. While broadcast TV is still popular for news and live events, consumers are using a wider variety of platforms and different ways to view content. There is a very obvious shift towards media services that focus on the individual, are simple to use, and deliver on-demand content in a way that meets user expectations for quality. There is an increase in on-demand spending among consumers that is driven by the quality of the user experience, ease of access and good content. In short, users are willing to pay if the content, experience and price are right. The change in the way people consume content – 50 percent of consumers now use internet TV on a weekly basis – has led to an increase in network data traffic. Mobile data traffic doubled in 2010 and is set to double every year for the next three years. The growth in connected devices and increased access to video indicate that both the behavior shift and data traffic growth will continue. Content providers want to sell their products at competitive prices, continue to create revenue from advertising and deliver a personalized experience catering for each consumer. They want to do this while maintaining brand value by ensuring that content is delivered according to user expectations and users get what they pay for. Operators will incur increased costs to deliver increasingly large amounts of data efficiently while keeping customers satisfied. There are various business models that operators can adopt to manage the traffic growth and create new revenue streams by developing services.