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Karri Weston
The goal of the Netflix Open Connect program is to provide our millions of Netflix subscribers the highest-quality viewing experience possible. We achieve this goal by partnering with Internet Service Providers (ISPs) to deliver our content more efficiently. We partner with over a thousand ISPs to localize substantial amounts of traffic with Open Connect Appliance embedded deployments, and we have an open peering policy at our interconnection locations. If you are an ISP with a substantial amount of Netflix traffic, review this information to learn more about the program.
The Netflix Open Connect program provides opportunities for ISP partners to improve their customers' Netflix user experience by localizing Netflix traffic and minimizing the delivery of traffic that is served over a transit provider.
There are two main components of the program, which are architected in partnership with ISPs to provide maximum benefit in each individual situation: embedded Open Connect Appliances and settlement-free interconnection (SFI).
Open Connect Appliances can be embedded in your ISP network. Embedded OCAs have the same capabilities as the OCAs that we use in our 60+ global data centers, and they are provided to qualifying ISP partners at no charge. Each embedded OCA deployment will offload a substantial amount of Netflix content traffic from peering or transport circuits. Multiple physical deployments can be distributed or clustered on a geographic or network basis to maximize local offload.
If you have substantial Netflix traffic destined to your ISP customers, deploying embedded OCAs is usually the most beneficial option. However, embedded OCAs are not always deployed, depending on your traffic levels, data center limitations, or other factors.
Netflix has the ability to interconnect at a number of global data center facilities and public Internet Exchange fabrics as listed on our Peering Locations page. We openly peer with any network at IXP locations where we are mutually present and we consider private interconnection as appropriate. If you are interested in interconnection, please review the information on the Peering Locations page.
ISPs who do not currently participate in public peering might want to consider that a single IX port can support multiple peering sessions, providing direct access to various content, cloud, and network providers. In addition to Netflix, many large organizations such as Akamai, Amazon, Facebook, and Google/YouTube widely participate in public peering and combine to deliver a substantial percentage of traffic to a typical ISP.
From a connectivity standpoint, IX ports can be reached locally in a data center or via transport. We recommend as a detailed source of information that can help you find an IX that best meets your needs.
The following diagram shows an example of an OCA that is embedded in a partner network, in conjunction with SFI peering which is used to provide additional resiliency and to enable nightly content fill and updates.
In contrast, the next diagram shows an example of SFI (peering) without the deployment of embedded OCAs in the partner network. In this scenario, traffic is delivered to end users via SFI from Netflix appliances that are located in local IXPs, to avoid both the cost and congestion that is associated with transit.
Netflix is an American subscription video on-demand over-the-top streaming service. The service primarily distributes original and acquired films and television shows from various genres, and it is available internationally in multiple languages.[6]
Launched on January 16, 2007, nearly a decade after Netflix, Inc. began its pioneering DVD-by-mail movie rental service, Netflix is the most-subscribed video on demand streaming media services, with over 277.7 million paid memberships in more than 190 countries as of July 2024.[5][7] By 2022, "Netflix Original" productions accounted for half of its library in the United States and the namesake company had ventured into other categories, such as video game publishing of mobile games through its flagship service. As of October 2023, Netflix is the 23rd most-visited website in the world, with 23.66% of its traffic coming from the United States, followed by the United Kingdom at 5.84% and Brazil at 5.64%.[8][9]
Initially, Netflix offered a per-rental model for each DVD but introduced a monthly subscription concept in September 1999.[20] The per-rental model was dropped by early 2000, allowing the company to focus on the business model of flat-fee unlimited rentals without due dates, late fees, shipping and handling fees, or per-title rental fees.[21] In September 2000, during the dot-com bubble, while Netflix was suffering losses, Hastings and Randolph offered to sell the company to Blockbuster for $50 million. John Antioco, CEO of Blockbuster, thought the offer was a joke and declined, saying, "The dot-com hysteria is completely overblown."[22][23] While Netflix experienced fast growth in early 2001, the continued effects of the dot-com bubble collapse and the September 11 attacks caused the company to hold off plans for its initial public offering (IPO) and to lay off one-third of its 120 employees.[24]
DVD players were a popular gift for holiday sales in late 2001, and demand for DVD subscription services were "growing like crazy", according to chief talent officer Patty McCord.[25] The company went public on May 23, 2002, selling 5.5 million shares of common stock at US$15.00 per share.[26] In 2003, Netflix was issued a patent by the U.S. Patent & Trademark Office to cover its subscription rental service and several extensions.[27] Netflix posted its first profit in 2003, earning $6.5 million on revenues of $272 million; by 2004, profit had increased to $49 million on over $500 million in revenues.[28] In 2005, 35,000 different films were available, and Netflix shipped 1 million DVDs out every day.[29]
In 2004, Blockbuster introduced a DVD rental service, which not only allowed users to check out titles through online sites but allowed for them to return them at brick and-mortar stores.[30] By 2006, Blockbuster's service reached two million users, and while trailing Netflix's subscriber count, was drawing business away from Netflix. Netflix lowered fees in 2007.[28] While it was an urban legend that Netflix ultimately "killed" Blockbuster in the DVD rental market, Blockbuster's debt load and internal disagreements hurt the company.[30]
On April 4, 2006, Netflix filed a patent infringement lawsuit in which it demanded a jury trial in the United States District Court for the Northern District of California, alleging that Blockbuster's online DVD rental subscription program violated two patents held by Netflix. The first cause of action alleged Blockbuster's infringement of copying the "dynamic queue" of DVDs available for each customer, Netflix's method of using the ranked preferences in the queue to send DVDs to subscribers, and Netflix's method permitting the queue to be updated and reordered.[31] The second cause of action alleged infringement of the subscription rental service as well as Netflix's methods of communication and delivery.[32] The companies settled their dispute on June 25, 2007; terms were not disclosed.[33][34][35][36]
On October 1, 2006, Netflix announced the Netflix Prize, $1,000,000 to the first developer of a video-recommendation algorithm that could beat its existing algorithm Cinematch, at predicting customer ratings by more than 10%. On September 21, 2009, it awarded the $1,000,000 prize to team "BellKor's Pragmatic Chaos".[37] Cinematch, launched in 2000, was a system that recommended movies to its users, many of which might have been entirely new to the user.[38][39]
Through its division Red Envelope Entertainment, Netflix licensed and distributed independent films such as Born into Brothels and Sherrybaby. In late 2006, Red Envelope Entertainment also expanded into producing original content with filmmakers such as John Waters.[40] Netflix closed Red Envelope Entertainment in 2008.[41][42]
In January 2007, the company launched a streaming media service, introducing video on demand via the Internet. However, at that time it only had 1,000 films available for streaming, compared to 70,000 available on DVD.[43] The company had for some time considered offering movies online, but it was only in the mid-2000s that data speeds and bandwidth costs had improved sufficiently to allow customers to download movies from the net. The original idea was a "Netflix box" that could download movies overnight, and be ready to watch the next day. By 2005, Netflix had acquired movie rights and designed the box and service. But after witnessing how popular streaming services such as YouTube were despite the lack of high-definition content, the concept of using a hardware device was scrapped and replaced with a streaming concept.[44]
In February 2007, Netflix delivered its billionth DVD, a copy of Babel to a customer in Texas.[45][46] In April 2007, Netflix recruited ReplayTV founder Anthony Wood, to build a "Netflix Player" that would allow streaming content to be played directly on a television rather than a desktop or laptop.[47] Hastings eventually shut down the project to help encourage other hardware manufacturers to include built-in Netflix support, which would be spun off as the digital media player product Roku.[48][49][50]
In January 2008, all rental-disc subscribers became entitled to unlimited streaming at no additional cost. This change came in a response to the introduction of Hulu and to Apple's new video-rental services.[51][52][page needed] In August 2008, the Netflix database was corrupted and the company was not able to ship DVDs to customers for 3 days, leading the company to move all its data to the Amazon Web Services cloud.[53] In November 2008, Netflix began offering subscribers rentals on Blu-ray and discontinued its sale of used DVDs.[54] In 2009, Netflix streams overtook DVD shipments.[55]
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