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White Paper

Wholesale Content Delivery Networks:
Unlocking New Revenue Streams and Content
Relationships

What You Will Learn

As network operators seek to extend video services to new devices beyond the TV, they are increasingly turning to

content delivery networks (CDNs). CDNs bridge the gap between the traditional closed pay TV infrastructures and

the multiservice, multiprotocol, multiendpoint service capability that network operators need to deliver IP video

services to their subscribers. However, CDNs can also serve as a platform for a new line of business: generating

business-to-business (B2B) revenue by providing wholesale CDN services to content providers, aggregators, and

other B2B customers.

This paper describes the attributes and requirements of a successful wholesale CDN solution and presents the

business case for building an internal CDN versus outsourcing content delivery services. Finally, the paper

discusses the Cisco Videoscape

™

Distribution Suite for Internet Streaming (VDS-IS) solution and the unique

advantages it provides to network operators developing a wholesale CDN capability.

A Growing Market for Content Delivery Networks

Network operators are seeing a proliferation of video traffic traversing their network infrastructures. The challenge

is both to reduce the effects of this massive influx of online video traffic, as well as to take advantage of the market

demand it represents by extending traditional TV services to new devices and screens. To address these growing

needs, network operators are increasingly turning to CDNs.

A number of factors are accelerating CDN market growth, including:

●

Growing IP video traffic: Consumer demand for video is seemingly insatiable, with video consumption

over the Internet and mobile devices growing at unprecedented rates (Figure 1). The

Cisco

Visual

Networking Index forecasts

that video will account for 90 percent of consumer IP traffic by 2015, and 66

percent of mobile traffic. At that time, 1 million minutes of video content will cross worldwide operator

networks every second. However, viewers are not necessarily using online video as a replacement for

traditional TV; rather, they often use it as a complement.

●

Billions of new video-capable devices: Cisco VNI projects there will be two IP-connected devices for

every man, woman, and child on the planet by 2015, many of which will be video-capable. Cisco VNI also

forecasts that video traffic to tablets and smartphones will grow at a CAGR of 216 percent, and 144 percent

respectively in the same time frame. According to a

recent Nielsen survey

, 143 million U.S. consumers

watched video via the Internet on a computer in 2011, and 30 million watched video on their mobile

phones. Nielsen also

reports

that the number of users watching video on their mobile phones grew by

nearly 37 percent between 2010 and 2011.