Managed and Vendor-based CDNs for Pay-TV Operator

Content delivery networks (CDNs) are a system of computers and caches that place copies of content (web pages or audio/video) in various places around a network in order to more effectively and efficiently deliver that content. CDNs can help service providers and content owners by reducing delivery costs, as well as ensuring higher quality delivery of content.

From the early days of the Internet, websites, media companies and content owners have used CDN providers like Akamai, Limelight and Level 3 to deliver their HTML and audio/video files. But more recently, pay-TV operators are realizing the benefits of CDNs, especially as they are carrying large amounts of OTT video traffic like Netflix, Hulu, Amazon and others on their broadband networks.

MRG expects the market for CDN services for pay-TV operators to reach nearly US$175 million in 2013 increasing by a CAGR of 57.5% through 2017. This number relies on the pay-TV subscribers watching multiscreen or OTT services and using CDN services during the forecast period. It includes a breakdown of managed CDNs such as Akamai, Level 3 and Limelight as well as vendor CDN services and software/hardware systems.

This report is focused on how pay-TV operators are implementing CDNs, as a way to help deliver Internet video not just for multiscreen but also for OTT services. It outlines the current market for CDNs, and looks at the top vendors for CDNs, including transparent caching, analytics, and video optimizations.

Included in the report is a breakdown of CDN vendors, revenue forecasts for both vendor-based and managed CDNs, and analyst recommendations on the current market for pay-TV operators using CDNs in their networks.

Table of Contents

Introduction. 1

Introduction and Definition of Video Content Delivery Networks 6

CDN Infrastructure: Edge-Based Delivery 6

Telco or Operator CDNs 6

The CDN Market Overview. 7

Build vs. Buy 7

Transparent Caching. 8

CDN Federation. 9

CDN Vendor Solutions 11

Pure-Play Managed CDN Providers 11

CDN Market Share. 11

Managed CDN Providers 12

Cloud-Based CDNs 13

CDN Services 14

CDN Equipment and Software. 15

Transparent Caching. 16

CDN Analytics 17

Video Optimization. 17

Open Source CDNs 18

Hardware and Technology Companies 19

Vendor Survey Results: CDNs for Pay-TV Operators 20

What Are the Market Drivers for Pay-TV Operators Using CDNs? 20

CDN Market Forecast 2013 to 2017. 22

Forecast Model Assumptions 23

Average Hours Viewed Per Day by Technology 23

Average Hours Viewed Per Day by Region. 24

Average Bitrates by Technology 25

Average Bitrates by Region. 25

CDN Forecast for Pay-TV Operators (2013 to 2017) 26

Total Forecast By Industry 26

Managed CDN Forecast 27

Vendor CDN Forecast 29

Limitations to the Forecast 31

Opportunities, Challenges and Recommendations 32

Opportunities 32

Challenges 33

Analyst Recommendations 34