Video caching – a cache-rich opportunity?
Video caching, like traditional caching, speeds up response time by storing the most popular internet content and delivering it from the operator’s network rather than repeatedly retrieving it from the remote source.
While traditional caching focusses on improving response time for basic web pages, video caching accelerates video content delivery and reduces bandwidth consumption and costs by storing large video files in the service provider’s network.
The need for basic web caching has diminished over time as network operators have grown bandwidth capacity, whereas the demand for video caching has increased significantly.
Experts have estimated that 1% of all content represents 55% of network traffic during peak viewing hours. The top 10 movies released each week to on-demand will make up the majority of traffic.
Why do we need it?
Over-the-top (OTT) video is delivered over the open internet from third parties, including application providers such as YouTube. Sandvine reported that in the second half of 2012, OTT video content providers Netflix and YouTube accounted for 48% of the total internet traffic in North America.
According to research by Media Research Group (MRG), video-on-demand subscription will grow to more than 120 million subscribers by 2017. Netflix is the market leader, with consumer market research group NPD estimating that it had a 90% share of the video streaming units in the first quarter of 2013.
Carriers are being pushed to upgrade network infrastructure and bandwidth to cope with the demand of video streaming. As a result, operators are looking for ways of reducing the costs associated with providing OTT video content.
Operators can significantly reduce the network load by caching content that is being viewed most frequently. They will not have to access content providers’ servers each time the content is needed, which not only reduces costs but also improves users’ quality of experience.
Video caching benefits all parties involved; the operator benefits as it reduces bandwidth consumption, while the content owner and subscriber benefit through better quality of delivery.
Carriers are also keen to highlight the investments they are making in their networks. Caching allows operators to differentiate their service by reducing response delays and deliver more content at top speeds, which in turn increases subscriber numbers.
How will video caching develop?
Although operators need to invest in their networks to cope with the increasing volumes of traffic, they often do not profit from the revenues generated by the success of OTT video.
Operators are considering ways they can increase their revenues from OTT video content and are attempting to establish new business models. They are keen to move away from a model in which revenues are generated by consumers only and towards a model in which content providers are also a source of revenue.
A common approach has been for carriers to build their own content delivery network (CDN) infrastructure and to offer it as a CDN service to content providers which would enable operators to make a profit from OTT video content. They can then charge content providers to cache the content in the network, to enable a much better quality of experience for the content providers’ users.
Will video caching lead to new partnership models?
A different partnership model between operators and OTT content providers has been developed. YouTube and Netflix have found a way to place their cache in an operator network, free of charge, by using their popular content and large user base.
Google delivers YouTube traffic via its own content delivery network through its own data centres, but these were not enough to handle the fast-growing YouTube traffic. To address this problem, Google has provided telecoms operators with its own edge server, Google Global Cache, which it has been operating for free since 2008. The telecom operators provide rack space for free, as well as GE ports and power, while Google manages the operation. The deal means that neither has to pay for the improved service.
This agreement also takes the strain off telecoms operators due to the decreased YouTube traffic that comes from external networks. Google, meanwhile, can provide YouTube users with improved quality of experience and higher-resolution video services without paying data centre fees.
Netflix introduced the same strategy – under the name Netflix Cache – in June 2012. Netflix Cache has been deployed inside the networks of telecoms operators like Cablevision, Google Fiber and Clearwire in the US, Telus in Canada, BT and Virgin Media in the UK, TDC in Denmark, and Telmex and GVT in Central America. Netflix’s service is more frequently delivered through Netflix Cache than CDNs.
In January 2013, Netflix launched its high-definition and 3D services, which are only available to subscribers of operators that have Netflix cache placed in their network. This aims to incentivise operators to deploy Netflix Cache, helping to bring down CDN costs, while at the same time providing high-resolution services without paying data centre costs.