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The debate about the impact of video on an operator’s broadband network is over. Video consumption is outpacing every other use of the Internet today and the growth is showing no signs of a slowdown.
Internet video will be more than 50 percent of consumer Internet traffic by the end of 2012 according to Cisco’s VNI study. PeerApp’s U.S. deployments regularly see Netflix alone account for over 35% of peak traffic.
At the same time, the video delivery value chain includes the operator as a transport mechanism, but excludes the operator from participation in the revenue stream. Operators world-wide are developing defensive and offensive strategies to cope with the tremendous consumer demand for Internet content.
Operators are creating opportunities for direct participation in the value chain of content delivery as they build their own content delivery infrastructure, the Operator CDN. The primary drivers for operator CDN deployments vary from operator to operator, but are typically summarized as:
1. Revenue Generation – product and service revenue resulting from new business models made possible by the newly deployed infrastructure.
2. Network Optimization – core network traffic offload, infrastructure upgrade deferment, and reduction of transit costs.
3. Subscriber Benefit – higher Quality of Experience (QoE) and product stickiness to the operator’s own subscribers and wholesale customers, as well as opportunities to create emerging value-added or subscriber retention services like “TV Everywhere”