Content delivery networks (CDNs) are hardly new; they've been a part of the internet's content food chain since the 1990s. A CDN is simply a ring of content storage points that are located near access providers and used to make content experiences both better and cheaper. The basic principle behind the original CDNs was that content delivery would be more reliable, and the experience better, if the content source was closer to the recipient - normally in a temporary storage mechanism called a "cache."
In the commercial CDN market that has evolved since then (with Akamai still the market leader), CDN providers are paid for caching content for delivery. But deeper CDN value propositions are shaping operators' CDN plans.
Once envisioned as free on the internet, video content has become a larger part of paid content models, as evidenced by companies like Netflix and Hulu that offer paid content streaming (usually long TV episodes or movies).
Video content represents a significant and continually growing traffic source. The additional traffic has already created tension between traditional CDN providers and ISPs that want to be paid for handling the transit traffic that comes with video, rather than allowing it to flow freely under existing peering agreements.
But internet peering and transit payments don’t provide much revenue, and ISPs have long seen CDNs as a way of charging content providers for a caching service that helps the operator pay for traffic generated by video. As those operators looked deeper, they realized that CDNs would likely be an element in developing specific strategies to monetize video content, as well as a tool for managing capacity utilization within their networks.
Simply streaming online video in competition with networks or movie services is less attractive than creating social viewing frameworks to share video, supporting the easy migration of a viewing experience from one device to another, or providing customized video metadata to help viewers find the right programming and even link related scenes in multiple videos. Operators are experimenting with all of these approaches, and nearly all cases involve CDNs.