Content owners and distributors should consider building their own television-focused CDN for their OTT services, according to Edgeware, which will use NAB to present research it commissioned showing when it makes sense to build rather than hire capacity. “This [build your own] is an approach that the major players like Netflix have taken. But as the popularity of OTT TV grows, it is becoming clear that it’s not just for the big guys,” says Edgeware CEO Joachim Roos. “Many of our customers have built their own TV CDNs, either to improve viewing quality or simply because the economics work better than paying into a CDN service every month.”
According to Richard Brandon, CMO at Edgeware, there are several metrics that drive the business case for or against a CDN service. “At a certain stage, there is a tipping point that makes it worthwhile for content owners to begin delivering programming themselves, using their own system. If viewers are dispersed around the world, or popular content is only available a few times a week, then a CDN service is always going to be more cost-effective. But for many TV operators, who serve a well-defined geography and have a growing number of viewers watching every day, a self-built TV CDN can pay for itself within a matter of months.”
Edgeware has pioneered what it calls TV content delivery network (TV CDN) technology and the company has modelled the business case for a self-built TV CDN. This is based on the balance between the number of regular users and how long they view content versus the cost of equipment, software licenses, backhaul capacity, rack-space, power and operational staff. The company argues that wider adoption of 4K video will strengthen the case for self-build as its higher bit rates drive up the costs of a third-party CDN service.
The analyst firm Frost & Sullivan has also tackled this issue in its recent report, ‘Building Your Own CDN For Video Delivery: Why, When, And How’. The firm notes that ‘as content volumes grow, the cost of owning and operating a private CDN begins to look more attractive than pay-as-you-go.’
Avni Rambhia, Principal Analyst at Frost & Sullivan says: “The unicast nature of on-demand TV Everywhere strains infrastructure. As OTT consumption grows, operators are aggressively seeking options to optimize use of their existing broadband infrastructure to maximize delivery capacity.”