Netflix looks like it might be getting its groove back and starting to understand how to please its (still-growing) customer base again.
However, this is a change that most users probably wouldn't notice so obviously, which might be a good thing. That's because Netflix is launching its own content delivery network, dubbed Open Connect.
Up until now, Netflix has been delivering digital streaming content on its Watch Instantly service through commercial content delivery networks. With the power of its own network, Netflix has the opportunity to both save a lot of money (which it needs to do after a rather loopy 2011) as well as improve the online viewing experience in a seamless manner.
Internet service providers might actually benefit the most here. Probably already strained by the large amount of content being streamed on Netflix, ISPs will have the option to either install Open Connect appliances within their networks or peer with Netflix directly for the same info. Both options would cost the same, so the ISP has more freedom here.
Ken Florance, vice president of content delivery at Netflix, explained on the official Netflix blog about how this would match up against another major online video service, YouTube.
Now, in addition to these general-purpose commercial CDNs, we are enabling ISPs to get Netflix video data from Open Connect, a single-purpose Netflix content delivery network we’ve established. The world’s other major Internet video provider, YouTube, has long had its own content delivery network. Given our size and growth, it now makes economic sense for Netflix to have one as well. We’ll continue to work with our commercial CDN partners for the next few years, but eventually most of our data will be served by Open Connect.
Netflix's push towards a personal CDN reflects a series of recent strides for the company, including the good news last week that the rental giant surpassed Apple to be named as the top domestic online movie business in 2011.