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Major business

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Localisation of video content can save TV providers billions

Michelle Clancy

As video content continues to explode, there’s a movement to moving the edge of the Internet closer to subscribers, reducing last-mile lengths in networks and improving quality.

But, new or existing datacentres that exist in underserved markets are not necessarily providing an ‘edge’ or a new edge of the Internet. Creating a new edge of the Internet requires the localisation of content in proximity to the consumers of that content.

According to analyst firm ACG Research, measurable attributes like the reduction of cost for both the broadband provider and the content provider, improved performance related to throughput and download speeds and an improved user experience are what should be used to signify that the Internet is no longer solely served from one of the eight traditional peering locations across the US, but instead is served locally to subscribers within the underserved market.

The report also found that localising traffic to serve content to a subscriber base of 1 million households can produce backbone transport reductions of $110 million over five years. Applied nationwide to a subscriber base of 50 million households, this represents a $5.5 billion reduction in costs.

ACG also applied its expertise in projecting Internet usage by analysing the key drivers of Internet traffic. This included mobile devices, online multimedia, cloud services, gaming, the Internet of Things and 4K TV. In Tier 2 markets, where the regional peering points are far from the metro area, these bandwidth-intensive applications created tremendous backbone transport costs for cable MSOs, mobile operators and other ISPs. Moreover, traditional data centres introduce network latency, which negatively impacts quality of experience, degrading service value and raising customer churn.

“The growth of content consumption directly drives backbone transport utilization for Internet service providers and content providers,” states Michael Kennedy, principal analyst at ACG Research. “Our analysis showed an increase in total costs to the ‘eyeball networks’ even as the cost per gigabit declined.”

Further, the white paper also describes several other benefits of local content proximity, including increased security related to a reduction in Distributed Denial of Service (DDoS) attacks, and improved performance for cloud and IoT services, which are increasingly video-enabled.