5 ways Netflix is changing telecom networks

In 1997, Netflix started out offering online movie rentals. You paid per movie, delivered directly to your home PC. The company grew, slowly expanded their services from unlimited rentals for one monthly subscription in 1999, to the introduction of streaming in 2007. Being able to instantly watch movies on demand on your own PC changed consumer behavior forever.

Now, Netflix is in the homes of over 60 million subscribers and adding nearly 5 million new subscribers every quarter.

Netflix finds ways to respond to the ever-increasing demand for more online content. They teamed up with electronics companies to make their content available on Internet connected devices. They made the streaming of TV series a reality.

Let’s look at why Netflix’s service is so successful, and how streaming has influenced telecom networks architecture.

Advantages of Netflix video streaming

Agility and efficiency: new services are deployed very quickly using open Internet architecture and cloud computing. Netflix quickly deploys new services to outdo traditional cable and satellite television networks.

Scalability and high availability: are achieved easily by using standard, scalable, cloud computing resources that support geo-redundant high availability over public Internet infrastructure.

Low operational costs: Netflix offers cost advantages to TV consumers by using low-cost cloud infrastructure, based on the Amazon Web Services cloud, that reduces their operational costs. TV over public Internet reuses existing fixed and mobile Internet infrastructure and enables immediate service deployment in new markets without upgrading the network.

Netflix Streaming Architecture

Telecom operators – join the revolution or lose out!

If you want to be a player in the telecoms market, you have to redesign your network architecture to support streaming video, both live and on-demand. Here is how:

   1. Increase network bandwidth with equipment upgrades

Netflix accounts for 37% of all downstream Internet bandwidth in North America during peak periods and at peak periods consumes more bandwidth than YouTube, Amazon and Hulu combined. By comparison, YouTube accounts for 16% of downstream Internet traffic, 6% for web browsing, 2.7% for Facebook, 2.0% for Amazon Instant Video and 1.9% for Hulu.

It would require an infrastructure capacity of 1.6 Terabits per second if just 10% percent of the 8 million New Yorkers wanted to stream a movie at the same time. This type of demand would overload many of today’s networks. Meeting this demand with existing technology is astronomically expensive. However, failure to provide the capacity results in lower quality playbacks accompanied by pixelation, stuttering, and pauses as the network struggles to keep up with demand. And that is something that today’s consumers just won’t accept.

Wireless device demands are similar, if not greater. The use of mobile devices (phones, tablets, eReaders, laptops, etc.) has grown dramatically in the past decade. The worldwide total of mobile devices that will be shipped this year is estimated to be more than 2 billion. At this rate, mobile devices will easily outnumber humans by 2017.

The imminent impact of these trends on operators is a surge in demand for bandwidth in the access and aggregation networks. In fact, the entire network should be redesigned to cope with exploding bandwidth requirements. Low-cost Carrier Ethernet demarcation and aggregation equipment that supports 1Gb ports must be upgraded to high-end switches and routers that support 10Gb and even 100Gb.

2. Deploy distributed video edge caching in the aggregation network

Large content providers, like Google, Facebook, Amazon and Netflix, want to implement their own caching systems at the edge network inside the domain of the telecom network. However, operators aren’t about to accept this. They don’t want to keep integrating other companies’ equipment into their networks. In some cases, the goals of a content company compete with the ISP’s business offering.

The optimal solution is to integrate a generic content-caching system that caches any content, regardless of the originator. The caching solution tracks the videos moving over the ISP’s pipes and caches copies of popular content. A user request is answered promptly from a cached copy and is not rerouted all the way back via the middle and originating distances of the network. In addition, caching cuts down on costs for operators and can also cut down on costs for the content providers because they no longer need to have as large a contract with middle-mile companies.

 3. Implement Carrier Ethernet QoS-based services

Carrier Ethernet architecture enables differentiation of services and improves video streaming Quality of Experience.

Furthermore, Carrier Ethernet offers a wide range of granular bandwidth and QoS options. By defining attributes that are associated with the service, advanced SLAs can be offered to deliver the performance required for live streaming. Carrier Ethernet assures advanced SLAs using QoS guarantees that are made possible by service attributes associated with the service type.

4. Integrate policy control and deep packet inspection technologies

Policy control systems manage how and under what circumstances a subscriber or device can access network resources such as bandwidth and QoS. It integrates with data plane elements such as packet gateways, deep packet inspection devices and optimization servers.

Policy control enables dynamic QoS management of specific applications like live streaming and meter usage, and helps operators monetize streamed traffic in real time.

  5. Accelerate implementation of NFV and SDN technologies

network functions virtualization (NFV) and software-defined networking (SDN) technologies are able to optimize traditional networks for video-streaming services.

NFV is changing the industry’s traditional approach to delivery of network applications from a closed, proprietary, and tightly integrated stack model into an open, layered model, where applications are hosted on a shared, common infrastructure base. NFV leads to cost efficiency, improvements in time-to-market and innovation in network infrastructure and applications.

SDN enables network administrators to manage network services through abstraction of lower-level functionality. This is achieved by decoupling the system that makes decisions about where traffic is sent (the control plane) from the underlying systems that forward traffic to the selected destination (the data plane). Implementation of SDN results in infrastructure savings, operational savings and flexibility.


We are witnessing a transformation in video delivery from broadcast to streaming. The impact has grown from a ripple to an enormous wave on fixed and mobile networks and it will continue. It’s inevitable and is going to happen with or without operator participation. If operators want to be survivors and even profit from the trend, they should start designing new, high bandwidth networks fight away. There is an opportunity that will enable them to expand their networks and position themselves as the infrastructure providers for new exciting video streaming services.


Related posts