Telecom & Wireless
Netflix to Build Its Own Content Network (NFLX, INTC, GOOG, AAPL, AMZN, MSFT, AKAM, LVLT, LLNW)
Published:
Yesterday’s announcement from Netflix Inc. (NASDAQ: NFLX) that the company would its own content delivery network (CDN) based on the Open Connect standard. White-box provider Intequus will build the servers which will feature 100 terabytes of disk storage, 10 gigabytes on network throughput, and a Quad Core Sandy Bridge CPU from Intel Corp. (NASDAQ: INTC).
Netflix announced the CDN on its corporate blog and noted that Google Inc. (NASDAQ: GOOG) “has long had its own content delivery network” for the company’s YouTube video service. Netflix joins other major Internet traffic generators like Apple Inc. (NASDAQ: AAPL), Amazon.com Inc. (NASDAQ: AMZN), and Microsoft Corp. (NASDAQ: MSFT) among the few companies with enough traffic to warrant building out a private CDN.
The news has hit other CDN providers hard. Akamai Technologies, Inc. (NASDAQ: AKAM) is down -5% in the first half-hour of trading this morning and Level 3 Communications Inc. (NYSE: LVLT) is down about -1.3%. Limelight Networks Inc. (NASDAQ: LLNW) is the hardest hit, down about -9.3%. Netflix generated 11% of Limelight’s revenues in 2011.
It’s hard to see how a private CDN is going to improve Netflix’s bottom line. Netflix needs to expand its content offerings to keep ahead of Amazon and Hulu and the many other streaming video challengers to the company’s once indomitable position. And content now costs more, which has hurt both the top and bottom lines at Netflix. How a CDN helps with that is not immediately apparent.
Netflix shares are up about 1% this morning at $ 65.59 in a 52-week range of $60.70-$304.79.
Paul Ausick
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
