Since its creation in 1998, Netflix has become one of the world's leading Internet television networks. Its billion hours of TV shows and movies per month are enjoyed in over 40 countries by 48 million subscribers, 11.8 million outside the US. The Netflix phenomenon is already so significant that it accounts for almost 35% of bandwidth demand in North America (according to a Sandvine report from May 2014), which is directly affecting the global network.
The company just announced it will launch in Australia in March 2015 and its plans for entry into China and other Asia Pacific markets are under intense speculation. Over the last few months Netflix has already created a stir with a significant number of Asian subscribers to the service via VPN and DNS-redirect services. When it expands further in Asia it is certain that Netflix content will help reshape the Asian media landscape.
What may be more pertinent though, is how network and triple-play operators will cope with this massive broadband-consuming media entertainment provider? How can operators respond efficiently to the upcoming and unavoidable increasing demand? And it's not just Netflix. Competitive players, such as QuickFlix in Australia, or Hulu in Japan will likely expand their service offerings, putting even more strain on the underlying network.
Media entertainment at its peak
With more options much like Netflix to instantly watch TV shows, movies and live events, whenever and wherever they like on whatever they like — Internet TVs, phones, tablets, game consoles and computers — consumers are in charge of when and how they enjoy their entertainment. And these customers are demanding, used to instant satisfaction, which means that as options and competition is increasing, customer loyalty is decreasing.
Operators need a new strategy to compete in this crowded landscape. For instance, just one popular show or live event — such as a sports match or high-profile news story — can cause a huge spike in demand. The underlying infrastructure needs to be robust and able to accommodate these peaks and troughs. However, it is difficult to predict or manage these spikes. Any disruption, issue or hiccup in the quality of service to during a major TV event taking content offline (such as crashes, technical difficulties, slow loading times or error messages) can have serious repercussions, even brand damage, with unforgiving consumers.
The need for network modernisation
Faced with these very real challenges, operators need to prepare their underlying networks to bear the strain of not only Netflix, but 'the next big thing', and fast. They also need to be agile enough to support high-bandwidth content on multiple devices via a multitude of means for different audiences. In addition, it is critical that they are able to accommodate consistent growth in demand for these services as prices drop. In the current environment legacy networks with multiple overlays and technology from multiple vendors across multiple layers, may not be enough.
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