Once upon a time, content delivery networks (CDNs) were put in place to remotely deliver software updates to computers. But now they're relied on to distribute Internet-delivered video services from some of the world's biggest content owners. CDNs have quickly become essential to the growth of a business.
Renting space on a CDN is the fastest way to get up and running, delivering TV services to today's more connected audiences. But content distributors will quickly reach a point where renting space becomes operationally and financially unsustainable and it begins to make sense for broadcasters or OTT providers to build a private CDN to deliver their own TV services.
For many content distributors, the hard part is identifying when this tipping point will occur. So Edgeware commissioned analyst firm Frost & Sullivan to do some research to identify the factors that influence the "build vs buy" tipping point and put together decision criteria to help content distributors choose the right option for them.
Building your own CDN: why, when and how
Frost & Sullivan's research culminated in a whitepaper that not only lays out the specifics that content distributors need to address when deciding whether to build a TV CDN, but also the reasons that have led to today's entertainment industry becoming so reliant on the use of CDNs to engage viewers.
Analysts at the firm explain that CDNs are now so important because of the shift in the popularity of on-demand consumption across multiple devices from linear TV. As more people become accustomed to high-quality OTT services - whether they're live or on-demand - then reliance on CDNs will only increase.
And the growing delivery of bandwidth-hungry formats will also have a huge effect on CDNs. As programming in higher resolution like 4K becomes the standard for TV services, CDNs will need to handle up to four times the amount of traffic. And that doesn't even touch on virtual reality (VR) or 360-degree camera feeds and replays.
If you're using a rented CDN service, increasing usage to cope with the amount of bandwidth needed to deliver these formats will quickly become very expensive. When using a private delivery network, users can use all available bandwidth without needing to pay for any more.
The "build your own" criteria
According to the Frost & Sullivan paper, content distributors should look at a certain number of criteria when deciding if delivering services themselves is the right option.
A business case that was put together and fed into the report indicates that as a rule of thumb, 100,000 subscribers in proximity of each other, watching around an hour a day of a particular service, would constitute a tipping point for building a private network.
To help broadcasters or content distributors decide if they'd benefit form a private TV CDN, Frost & Sullivan has designed a six-question checklist that covers scale, reach and quality. Answering "yes" to two or more of their questions indicates that a content distributor should seriously consider building their own delivery network.
Scale
- Do your concurrent viewers routinely exceed 50,000 in number?
- Is your traffic volume predictable with few sudden spikes?
Reach
- Is your audience densely packed in or geographically concentrated (vs. sparsely scattered across disparate regions)?
- Is your audience located in regions where commercial CDN traffic costs are high and/or bargaining power is low?
Quality
- Is TVE/OTT a critical part of your viewer engagement strategy?
- Do you offer on-demand HD and 4K content?
The business case for building a delivery network rather than buying capacity on public one is only going to become more attractive as OTT audiences get more connected and expect higher resolutions and more engaging formats. This kind of multiscreen viewing and online video consumption will lead to critical mass where CDN providers will need to heavily adjust business models or content owners will all deliver their content themselves.
The "build vs buy" question is no longer unanswered. The point at which your service would be more effectively delivered over a private network has been identified, and using Frost & Sullivan's criteria, many more content distributors might find they're better off putting in place their own TV CDN.
Johan Bolin is VP of products at Edgeware.
